Rewards credit cards are great, but to really maximize your return, you need to be smart. For starters, get one of those cards that gives you 2% or 3% cash back at grocery stores. Then, buy gift cards to other stores that you already shop at (like Amazon) from the supermarket's gift card mall. All of a sudden, it's like you're getting 3% cash back on everything...because that's exactly what's happening.
Listen, you don't need these credit cards. The companies need you. That's why, every so often, you should call them up to close your account. You'll be connected to a retention specialist who will more than likely throw several bonus offers at you, such as double points, fringe benefits, and even monetary credits...just to get you to stay.
Of course, don't actually make the call unless you're fully willing to close up your account, because they can smell an empty bluff from a mile away.
4. Shop Through Your Card's Online Shopping Portal
Just about every credit card and frequent flyer program has some sort of proprietary online shopping portal. Find it. Then, before you buy anything online, go through their referral link to automatically get extra reward points (on top of the points you're already getting by using your card for the purchase).
Hey, you're so good at shopping, it's about time somebody paid you to do it.
Most reward credit cards are top-loaded, in that their best offers are to new customers. There are some crazy huge bonuses if you open up a new account and then are able to meet a spending requirement within the first few months. That's the time to strike.
6. Hit Your Minimum Spend With Prepaid Credit Cards
Once you've got your new card, you'll need to hit a minimum spend requirement (say, $5,000 in the first three months) to unlock a crazy huge reward (such as 75,000 frequent flier miles).
At most big box retail stores, you can load up prepaid Visa, Amex and MasterCards for a fee of only a few dollars. You can put a lump of cash into one of those to hit your minimum threshold, and then spend that money at your leisure throughout the rest of the year.
7. Pay Your Rent With Your Credit Card (It's Possible!)
Many apartment complexes allow you to pay your rent on your credit card. If so, do it. That's a huge amount of points you could be earning.
If your landlord still requires the old-fashioned personal check, that's ok, too. There are services like American Express's Serve that will allow you to set up and write fee-free checks from an account that you can load via those prepaid Visas that you just learned about.
Sure, it's a little bit of extra work, but why leave any potential rewards on the table?
8. Close Cards Before Annual Fee Creeps In
Most of the good reward cards have annual fees, usually ranging in the $75-100 range (which tend to be waived for the first year of card ownership).
It is crucial that you close your account before hitting your one-year anniversary or else they'll hit you with a renewal fee. And after all, we opened these cards to save money, not spend it.
Did you end up owing Uncle Sam this year? That's another expense that not many people know they can fit onto their rewards cards. Just make sure to do your due diligence because, unlike most merchants, the US government will not front the credit card fee themselves. So, it's a great opportunity for points, but not if you're being hit with a 3% transaction fee.
Almost every frequent flier program has dining perks, where you are rewarded with bonus miles or points for money spent at participating restaurants. The best part is, you can register any card (not just the airline's proprietary ones). Do that.
There's nothing sweeter than getting a surprise email saying you've just been awarded 300 bonus miles for eating at a restaurant you were going out to anyway.
11. Redeem Frequent Flyer Points for International Travel
As mentioned earlier, redeeming frequent flier miles for free tickets is not a terribly good value when it comes to domestic travel. International flights, however, are a whole other ballgame. They're an astonishingly good way to spend your points.
Take, for instance, American Airlines, where 20,000 miles could buy you a one-way flight from New York to Minnesota. But, for as low as 35,000 miles, you can get a one-way flight from New York to Hong Kong!
You've always said you wanted to travel more. Now's you chance to do it.
eBay is another great way to churn points and manufacture spending. Here's how:
Use your credit card's shopping portal to refer you to eBay.com. Then, buy an eBay gift card. You'll earn something like 5 points for every dollar you spend.
Once the gift card arrives, use the shopping portal to refer you to eBay again. Now, you can make purchases with your in-hand eBay gift card to earn another 5 points for every dollar you "spend." Heck, use your gift card to buy more gift cards! See how long you can let this system ride.
13. Sell Your Gift Cards to Get Money Back
It happens to all of us. Sometimes we get too excited and end up buying gift cards that we'll never actually use. ($300 to Applebee's? What was I thinking?!)
Thankfully, there are services like Cardpool and Gift Card Granny which will buy those plastic nuisances off of you, sometimes for upwards of 94% of the gift card's value. If you bought them at an already-discounted rate via the eBay trick, then you're not looking so bad.
When saving up bonus miles and points, it's crucial to have an end goal in mind. Maybe it's a dream vacation. Figure out how many frequent flyer points it would take for a business class, round-trip flight to, say, Bangkok, and then work towards reaching that.
If you can see actual progress being made towards an attainable goal, you'll be much less likely to give up.
Above all else, though, only play this game with money you can actually afford to have tied up for a little while. Otherwise, you might feel like a bigshot with your piles of credit card reward points...until a $3,000 bill comes in the mail next month. At that point, you'll find that most banks don't accept Outback Steakhouse gift cards as payment. (What's their problem?)
The key to techniques like manufactured spending is to start SLOWLY. Test the waters and figure out what works for you...because even one credit card late fee can negate all the money you saved.