From cash-back cards to frequent-buyer clubs, personal finance expert Carmen Wong Ulrich reveals the best ways to maximize your money and the offers to avoid.
"Just like yours, my wallet is stuffed with rewards cards and loyalty cards," Ulrich said. "I've got at least six four retail loyalty cards, two credit cards with reward programs and a couple of stamp-earning cards for use in local food shops. I'm not even close to getting a free coffee."
Apparently, Ulrich is a light user. The average American is a member of 18 of these programs. But research shows that most consumers are leaving one-third of our rewards (around $200 worth) unused each year. You can avoid that and rack up every bit of "bonus" that you can with these smart strategies.
Go for the money
When it comes to credit cards, the American Express Blue Cash Everyday Card is a winner, especially for families with big grocery and gas bills. With no annual fee and unlimited rewards, it gives you 3 percent back on groceries, 2 percent back at gas stations and department stores, and 1 percent back on everything else. Plus, grab an extra $100 cash back if you spend $1,000 within the first 90 days. Upgrade to the Premier version of the card (with an annual fee of $75) to double your grocery rewards and bring gas-and-department store savings to 3 percent. Keep in mind that these cards work best if you don't carry a balance; paying interest can cancel out your savings.
Go for the bonus
A $100 signing bonus may not be enough incentive to open another line of credit and jam one more card into your wallet. No worries. In this super-competitive card climate, if you have great credit (say, a FICO score of 760 or more), you probably can earn an even bigger reward bonus. The Chase Sapphire Preferred Card (the Visa or MasterCard name just tells you which company processes transactions) offers 40,000 bonus points (which translates to $500 for travel booked through Ultimate Rewards), plus two points per dollar on travel (including airfare, hotels and car rental) and dining, plus one point per dollar on all other purchases. There is an annual fee of $95 after the first year.
Keep in mind you will need to spend a hefty $3,000 on the card within three months to get those rewards. And be cautious about charging that amount to snag those perks. Carrying a $3,000 balance at the card's regular rate of 15.24 percent could cost you $632 in interest if you pay only the minimum every month.
That "lost" $200 a year in rewards mentioned earlier? That's partly tied to people failing to keep track of reward and loyalty points and expiration dates which means they can't use them. You can avoid this problem by using only one rewards credit card for nearly all your spending, so you can see all your points in one place on the card's website. If you've got multiple rewards cards (one for an airline, plus one for a hotel), as well as retail loyalty cards, it's time to consolidate. If you have racked up on points toward flights or purchases you know you won't use, head to points.com, where you can exchange them for other rewards that are more worthwhile.