Every Monday through Friday, at 6pm in San Francisco where I live, you’ll hear a collective groan from the city’s professionals as they grapple with the daily question of to gym or not to gym?
And while my idea of recharging on a weeknight is resting my brain cells with a healthy dose of trashy reality television, the secret to happiness is forming good habits in all areas of our lives, and a key part of that is good financial health.
But good financial health can be difficult to build into your routine, so let’s focus on how to improve the way we spend rather than how much we spend.
TRUE OR FALSE: maximizing credit card reward points is considered fiscally responsible behavior.
Naturally, paying off your credit card balance in full each month is fundamental to maintaining good financial health, but did you know that you could earn thousands of dollars annually through card reward programs? In spite of this, recent studies indicate that the majority of middle- to upper-income Americans do not take consistent advantage of their credit card rewards.
Why? Well first, cards are often not the preferred or even accepted form of payment by businesses. Second, for most people, collecting card reward points is an afterthought.
What’s even more interesting is that the segment of our population who considers themselves “reward junkies” tend to score the highest on the financial responsibility scale, regardless of income level. This notion illustrates a key finding, that credit card reward programs help with conscious spending.
By simply spending more on card versus using check or cash, you not only earn more reward points but also are more aware of your purchasing behavior, and this leads to smarter spending.
Think that you’ve tapped out on ways to optimize your card rewards? Here are some simple hacks to help you further maximize your card rewards.
Hack #1: During social gatherings, always volunteer to put your card down for the bill
Think back on the number of times you went out to eat with a group of friends and what happens when it comes time to split the bill. If the restaurant does not accept multiple cards, make sure to be the first person to offer your credit card for the bill and have your friends PayPal or Venmo you their share at the table. If you’re a social foodie like myself, this is a surefire way to collect more card rewards.
This strategy works beyond dining. The next time you take a trip with friends, offer to put down your card for the lodging, car rental, etc.
Hack #2: Pay your rent on credit card
The monthly rent price for a 2-bedroom apartment in a U.S. metropolitan city is on average $1,650 (if you live in San Francisco or New York, multiply that number by at least three). That’s almost $20,000 that you and your roommate or spouse can put on card and earn in card rewards!
Hack #3: Pay your business expenses on card
Do you work for or own a small business? You can actually put all of your vendor expenses on card.
Are you traveling internationally for a work trip? Most cards charge a 3-4% foreign transaction fee for any payments made abroad, and NerdWallet has some great recommendations on cards with no foreign fees. This will allow you to earn big cash bonuses and rewards.
The possibilities of maximizing reward points are endless. Do you have any clever tips or tricks that have worked well? Share them in the comments below!