Summary: Learn the top five insider tips on how to maximize your credit card rewards. Strategies to take advantage of free bonus categories, the benefits of paying your taxes with your credit card, and how to earn free hotel nights.
I have been using Airline Miles and Credit Card rewards points since 2014.
It has actually changed my life as it has unlocked tons of amazing experiences that I was able to experience either for free (or nearly free), and has made long haul flying enjoyable to me.
I used to dread having to fly 6 or 8 hours on a plane.
However, using some of the strategies I will discuss in this post makes flying first-class part of the fun of the trip!
1. Maximize Miles Earned on Your Normal Spending
First, I never advocate carrying a balance on points or airline credit cards. I simply advocate that you maximize your points earning potential on your daily purchases.
If you want a simple strategy, you can always stick to a 2% cash back card like the Capital One Venture, or the Citi Double Cash. However, if you are willing to pay attention to a few key bonus categories like me, you can earn 6-10% in value on many purchases and potentially even more value if you are able to redeem your points and miles for premium air or hotel travel.
To maximize the rewards available, you may want to focus on the two most frequented key bonus categories, restaurants and grocery stores.
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Restaurants and Grocery Stores
For most people, this is one of their highest monthly expenses outside of housing expenses..
I use the following cards for these expenses:
American Express Gold Card for all of my restaurants and groceries.
This card earns 4 Membership Rewards points per dollar on restaurant spend. It also earns 4X points on Grocery spend on the first $25,000 per year, and then 1X per point afterward.
There is an annual fee for this card, however, there are also numerous other benefits that help offset the fee.
American Express Everyday Card
An alternative to the Gold card is the Amex Everyday Card. This card has no annual fee and offers 2X points on grocery store purchases up to $6,000 annually.
This card also earns 3X points on gas purchases as well.
If you are serious about earning points and miles, efficiently holding both of these cards can be a winning strategy!
2. Don't Waste Your Points and Miles
There are many promotions offering to let you use your points or airline miles for purchases. This is generally not a good deal.
I’ve seen promotions to redeem miles for gift cards or purchases at or around 1 cent per point in value.
Don’t use points for Amazon purchases. Don’t use points to pay at McDonald’s! The redemption value they provide is not good!
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I personally seek to redeem for at least 1.5 cents of value when redeeming points.
Most of my personal redemptions have been for premium airline tickets. I do this by utilizing Membership Rewards Travel Partners.
I recently transferred 95,000 Amex Member Rewards points to Delta Airlines to fly business class to Asia.
The cash price of the ticket was over $5,000 dollars so for 95,000 points, I redeemed these points for over 5 cents per point.
One of the keys to getting high value for your points is to pay attention to the transferrable points currencies offered by American Express, Chase, Citi, and Capital One, and Mariott.
These programs allow you to transfer to many different airline partners and often your points earning on these cards are better than spending on the actual card itself.
3. Pay Your Taxes with a Credit Card
I expect that most people do not like paying taxes. I also generally avoid paying a surcharge on a purchase just to get points. However, there are a few exceptions.
For business owners that need to pay the IRS for taxes annually or quarterly, there is an option to purchase points cheaply. Last year, I used a service called Pay1040.com
They do charge a 1.87% fee. However, when I use my Amex Business Platinum Card from American Express, I earn 1.5 points per dollar spent.
I value Amex points at 1.8 cents per point so I look at this as a profitable transaction even after paying the fee.
4. Earn Status
While I generally advocate using credit cards that provide transferrable currencies, I do like to use my Delta Reserve Card to help me earn status on Delta Airlines.
The Reserve card offers the opportunity to earn 60,000 Medallion Qualification Miles over the course of the year which can get you Gold Status with the airline.
It's essential to understand how your different cards can work together to give you maximum points.
This also puts you almost halfway towards Diamond status with Delta which comes with a number of perks including Global Upgrade certificates which allow you to purchase an economy ticket and upgrade into Delta One.
The card also includes a buy-one, get-one-free certificate for First Class or Delta One travel within the continental United States.
5. Earn Free Hotel Nights
There are a number of hotel credit cards that provide benefits with the hotel chain and offer a free night certificate annually.
Many of these cards have an annual fee. However, the value of the free night, if you use it, far exceeds the annual fee and benefits.
I hold the World of Hyatt Credit Card which does have an $89 Dollar annual fee. I recently stayed at the Hyatt Regency Coral Gables for free one night where the nightly rate was $237 per night.
The Hyatt card also provides 10 nights per year towards status automatically for holding the card so if you travel even a few times a year for business or pleasure it can help you obtain Globalist or Explorist Status with the hotel.
Jack Krupey is a points and miles enthusiast who has traveled over 150,000 miles a year each of the last 5 years primarily in Business or First class using points and miles strategies he writes about. Full time is a consultant, investor and fund manager in the distressed real estate and mortgage industry. In his spare time he also runs his own blog Creditshout.com.