I love rewards credit cards. I’m not a hardcore user, one of those people who spends time opening and closing cards to max out benefits, but I have two rewards cards that I use regularly and appreciate the rewards coming to me.
In choosing two cards, I picked rewards that would be easiest for me to earn and rewards that I would use. My main card is a Chase Amazon.com Visa. I use Amazon.com a lot, and I have Amazon Prime, so I earn 5% back at Amazon.com and Whole Foods (though I rarely shop there), 2% at restaurants, drugstores, and gas stations, and 1% on everything else.
Amazon makes it really easy to spend your rewards too. You can just choose to pay with points at checkout. It’s a great deal! Free stuff at Amazon, just for spending money that I would have spent anyway.
Except I’m not maximizing benefits. Or at least I wasn’t until now.
Maximizing Rewards Benefits
My Chase Visa gives me multiple options for spending my rewards points. I can use them at Amazon.com as I mentioned. I can use them to get gift cards to other stores. Or I can apply them to my account as a statement credit or get cash transferred to my bank account.
I realized recently that by using my points as a credit towards spending at Amazon, I wasn’t getting the most out of my points. Why? Because I’m not earning cash back on those points.
Okay, let me simplify. Let’s say I have $25 available in points. I can just spend those on Amazon. Then they’re worth $25.
But if I transfer that $25 to my bank account, then spend it on Amazon, I get 5% cash back on that $25. That’s an additional $1.25 in points. It may not seem like a lot, but that all adds up.
I frequently treat my credit cards rewards as a bonus. I like to spend them on “wants” rather than “needs.” After all, I’ve earned them from doing things like paying bills and buying groceries. Making a point to get the cash back rather than just transferring the points directly to an Amazon payment doesn’t mean I have to change that policy. I just have to track the cash back in my budget.
So from now on, no more paying with points. I’m going to maximize those rewards and squeeze every cent out of them that I can!