Free moneyJust like yours, my wallet is stuffed with rewards cards and loyalty cards. 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 so close to getting a free coffee!). And apparently I'm a light user: The average American is a member of 18 of these programs. But research shows we're 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.
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Go for the Money...
There are few rewards better than cold, hard cash. 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% back on groceries, 2% back at gas stations and department stores, and 1% back on everything else. Plus, grab an extra $100 cash back if you spend $1,000 within the first 90 days. Upgrade to a 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%. Why it's worth it: Six percent cash back on $150 worth of groceries a week is $36 a month (more than $400 a year!).
KEEP IN MIND: These cards work best if you don't carry a balance; paying interest can cancel out your savings.
...Or, 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 can probably earn an even bigger reward bonus. The Chase Sapphire Preferred card (the Visa or MasterCard name just tells you who 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% could cost you $632 in interest if you pay only the minimum every month.
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Being Organized Saves Bucks
That "lost" $200 a year in rewards mentioned earlier? That's partly due to people failing to keep track of reward and loyalty points and expiration dates - which means they can't use 'em! I avoid this problem by using only one rewards credit card for nearly all my spending - so I can see all my 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 chain plus...) as well as retail loyalty cards, it's time to consolidate. Awardwallet.com does this for you, and for free. You don't have to enter the rewards earned each month manually; the site automatically updates this info for you once you enroll in a program. You can't actually redeem rewards on awardwallet.com, but it helps you track what you've got.
What if you've hoarded several thousand airline reward points but know you won't be flying at all this year? Don't just let them expire; usually there are easy and inexpensive ways to extend the validity of your points. But if you know you will never use them, consider points.com, where you can exchange them for other rewards you can really use, like a Starbucks rewards card (though some value is lost in the exchange). Or, you can often use them to fund your PayPal account or shop for gift cards from favorite retailers.
KEEP IN MIND: These secure services keep your account info encrypted.
Phone In Rewards
With a smartphone, you can now earn rewards just for walking into a store.
CheckPoints (iPhone and Android, free), for instance, is an app that has you "check in" inside a store; you can then unlock special deals and earn points just by scanning particular products' bar codes (you don't actually have to buy anything). Then redeem your rewards in the form of retailer gift cards, airline miles, or even actual products. (Note: You can scan each participating product only once per day at each store.) CheckPoints says its shoppers earn the equivalent of a $2 gift card at every store - around $208 a year.
Shopkick (iPhone and Android, free) is another app that rewards you for visiting stores and scanning certain products; Target, Toys "R" Us, and Crate & Barrel are among the service's 11-plus retailers.
KEEP IN MIND Having retailers know where you are and what you're shopping for may feel a little creepy, but the info is similar to what's gathered when you shop online. At least you get compensated for this.
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Stick to a Single Chain
How many different drugstores, online and in person, do you shop at? How's that 20 points here, 10 points there, and 15 points somewhere else working for you? I thought so. If the prices are similar among stores, move all your drugstore shopping to one retailer to rack up more savings. For example, the Rite Aid Wellness+ loyalty program will net you 10% off nearly everything in the store for a year if you earn 500 points (one point per dollar spent on most items and, in most states, 25 points for prescriptions). Even if you decide to shop at another chain, you'll earn more rewards if you focus on one retailer.
KEEP IN MIND: If you live near several stores, quickly compare the prices of the items you buy most often. Rewards are great, but if prices are higher (say, 10% or more) at one location, your loyalty rewards may be moot.
As for all those other cards plumping up your purse? Stash them in a drawer - then revisit them during the coming holidays, when your shopping behavior changes, and you could get a big boost!
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Surprise: That bonus you get when you sign up for a rewards card, before you even use it, may be taxable under IRS policy.
It can be considered income, rather than an untaxable rebate (which is how rewards granted to you after you spend money are classified). So keep an eye out for a 1099 form from your card issuer in January. If you received, say, 25,000 bonus points upon signing up - that's about $250 of free spending on the card - then paying taxes may still benefit you: Your bill from Uncle Sam on this amount would be about $70 if you're in a 28% tax bracket.
What's your favorite rewards program? Let me know in the comments.
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