Paid for by American Express
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If 2020 isn’t a year for doing everything I can to maximize my money, I don’t know what is.
As a nationally recognized money expert, I’m on a mission to help ambitious people do just that, especially this season. One of my favorite strategies is leveraging the cash back I typically earn through my credit card rewards on things like travel, entertainment, dining out and a bunch of other things I haven’t been doing quite so much of this year.
And while I’m still supporting some of my favorite restaurants with take out and planning the occasional staycation, I’m also looking for new opportunities to earn cash back on the spending I’m actually doing these days — which mostly boils down to streaming almost every season of almost every television show I’ve ever watched, while shopping online for just about everything I need so that I don’t have to leave the house too much – 2020 in a nutshell, right?
Anyway, the point is, because I’m not spending so much on the things I usually do, but spending a lot more in other places, I’ve been rethinking how I can maximize my reward potential this year and moving forward into next year. If you’re looking to do the same, here are a few things to keep in mind.
1. Understand the rewards structure
To figure out which card works best for you, take a look back at your credit card spending for the last month or two to see where your money is actually going. It’s important to understand how much cash back you’ll be getting on each purchase — and what categories of spending will give you the most rewards.
For example, the American Express Blue Cash Preferred Card offers 6% cash back on select U.S. streaming subscriptions — which works pretty great with my recent spending habits.
It also offers 6% cash back on up to $6,000 per year in eligible purchases at supermarkets — which means that if my grocery bill is $450 each month, and I redeem my Reward Dollars monthly, I’ll earn $27 cash back in the form of a statement credit, just from using my cash back card at the supermarket, which can definitely add up.
Ideally, you want to find a credit card that offers larger rewards in the places you spend the most.
2. Take advantage of sign up bonuses
If you’ve been eyeing a big purchase, opening a new card can be a great opportunity to take advantage of welcome offers and introductory interest rates. Some cards offer low or no interest for a period of time so you can pay down your balance without interest. And cash back credit cards that come with sign up bonuses give you additional rewards just for using your card and spending a certain dollar amount on it within a set period of time.
For example, right now the American Express Blue Cash Everyday Card offers $100 back after you spend $1,000 on purchases on the card in your first six months, as well as 20% back on eligible Amazon.com purchases, up to $200, in the first six months — learn more about this welcome offer here. The American Express Blue Cash Preferred Card offers new card members an opportunity to earn $250 back after you spend $1,000 on purchases on your card in your first three months, with a $95 annual fee (rates and fees). You can check out the offer here.
To take advantage of these sign up bonuses, it can be helpful to plan on opening your credit card, when you already have big purchases planned — like holiday gifts or a winter getaway. That way, you can put the purchases on the card, take advantage of rewards and have the money to pay your bill.
3. Keep track of your rewards
Once you have your new card in hand, it can be a good idea to set up a system, so that each purchase you make is going on the card that gives you the maximum reward for that purchase. For example, some people carry their cash back card in their wallet, and then have a travel-focused card that they keep at home and only use when booking trips.
If I had the Blue Cash Everyday Card from American Express, with its great Amazon offer, I’d want it saved in my Amazon wallet for online shopping.
While you don’t necessarily need a complicated spreadsheet system to track all of your rewards, having a sense of which card does what and using those cards accordingly will help you maximize your benefits.
4. Find a cash back card that works for you
Before you sign up for any credit card, you’ll want to make sure you understand the foundational elements of each you apply for — for example, annual fees, membership agreements and interest rates. Different cards come with different terms and conditions, so make sure to understand and compare across different cash back credit cards before applying.
Additionally, cash back cards from just one issuer can vary — both in terms of the reward structure and the foundational elements of annual fees and annual percentage rate, or APR. Don’t forget to learn the basics before you apply.
Keeping all these tips in mind can help you make your money go farther. Which is what I’m all about this year, more than ever.
From American Express:
Cash back cards from American Express are a great way to maximize benefits this year. Bring your Blue Cash Preferred Card to the supermarket and earn 6% cash back (on up to $6,000 per year in purchases, then 1%). Make those same purchases with cash or a debit card and you may miss out on hundreds per year in cash back. And with the American Express Blue Cash Everyday card, you can earn cash back at supermarkets, gas stations, select department stores and other purchases. To learn more, visit AmericanExpress.com.