In 2005 I experienced a lot of firsts. I had graduated from college, I had started my first full-time job, I opened up my first retirement account, and I started using my first rewards credit card. For the longest time (or at least it felt like it) I thought I would never build a credit history. But this card—which I have diligently paid off each and every month (with only one pesky $39 charge when I closed a bank account and forgot that I had an automatic payment set up)—has reached its 8 year anniversary on my credit report.
My First Credit Card
It’s probably not the most lucrative rewards credit card out there right now, something that Madison has gotten great about researching finding offers that are worth our time. But it has established my credit history while giving me points for purchases I was going to make anyway. Plus it has no annual fee, and I received a $100 gift card bonus for opening it up (I still have the three-tier, wicker drawer that I purchased from Bed Bath and Beyond using my free bounty). Basically I receive one reward point for each purchase that I make. Periodically they send me reward point boosters where I just need to register on their website (for free—no purchases of any kind) and receive twice the number of points for a month or so. I used to receive one reward point for each mile flown, but that program ended about two years ago.
Over the last 7 years I have been the happy recipient of $1,910 in gift cards to retailers of my choice (Home Depot, Lowe’s, Starbucks, Bed Bath and Beyond, JCPenney, Macy’s, etc.), and am just a few months shy of reaching another $100 gift card threshold. Not bad for only ever paying one $39 fee! On top of this, I recently have begun opening a few other credit cards to use for the sign-up bonuses and have received a $500 gift card to Home Depot, and two free roundtrip tickets on Southwest Airlines (those came in handy last Thanksgiving and saved us lots of money, even after the $99 fee).
How to Maximize Credit Card Points
So what are the ways that I have found to maximize earning points (and no, my bills have not been extravagant as I am a very frugal person)?
- Charge Your Rent: I lived in an apartment complex in my mid-twenties that allowed me to charge my rent to a credit card. That was practically $1,000 points per month in and of itself! If you find yourself in this situation and have a roommate (as I did for several years), offer to charge the rent to your credit card and have the roommate pay you each month. Of course you will only want to do this if your roommate is trustworthy.
- Offer to Pay the Bill at Restaurants and Have People Give You Cash: Have you ever found yourself in one of those situations where a lot of people are on the same check at the restaurant? Instead of making the waiter or waitress divvy everything up, charge the bill to your credit card, figure out what everyone owes, and have them pay you cash. It’s like an interest-free way to get cash out of your credit card along with earning extra points. Once again, only do this in crowds where you are confident you will be reimbursed.
- Charge Your Business Trip Expenses: I have been fortunate to take many business trips over the last decade: Fargo, North Dakota (my first business trip ever!), Ohio, Austin, TX, San Antonio, TX, Virginia, etc. For each of the companies that I worked for, I had to pay my way upfront and submit for reimbursement. This meant that not only did I get frequent flyer miles for free, but also I reaped reward points!
- Take Advantage of Free Offers: Do not automatically discard all of those junk mail envelopes from your credit card company. I learned this when I opened up my first offer to double my point earnings for a month by simply going to a website and registering (for free, with no purchase necessary). This has happened roughly four times in the last two years. In addition, you can increase your points for cards that rotate quarterly.
For more ways to earn points on your credit card see:
Credit cards aren’t for everyone, and remember that you received no deal at all if you rack up finance charges and large annual fees. But for people with discipline, you can really get some great perks by using a credit card. On top of the financial perks, charging something on a credit card gives you a layer of protection; more than once I have called my credit card company and successfully disputed a charge that they took off of my bill. Had I paid with cash or check, I would have been stuck in the situation.
How do you maximize earning credit card reward points? What does your credit card offer you?