First Person: I’ve Saved Over $1,500 With My Credit Card Rewards Program

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Every year, I save hundreds of dollars just by using one credit card. Here’s how I do it. Instead of using cash to pay for everyday purchases such as groceries, gas, entertainment, utility bills, household goods, etc., I pay with one particular credit card. As a result, I accumulate points for every dollar spent which are converted each month into reward coupons that can be used to purchase merchandise from the issuer of the card as well as its affiliated retailers. At the end of each calendar year, I receive a savings summary. Here is a breakdown of yearly earnings over the last three years for a grand total of $1718.

2011 – $588

2010 – $450

2009 – $680

With two growing boys in our household, these reward coupons have proven to be of great benefit when it comes to savings because we rarely need to spend money on new clothes or shoes for them. The reward coupons are enough to cover the majority of these necessities each year.

There was a time when I had a few credit cards that offered some type of reward program. Examples of such cards include the one issued by my favorite retail store, one through which I could accumulate points toward free air travel, and another that offered points which could be traded in for things like electronics, hotel stays, or gift cards. The problem with having all of these different cards was that I rarely accumulated enough points on any one card to benefit much from its reward program. At my husband’s urging, I decided to cancel all but one so that we could maximize the rewards. After considering the fact that my husband was already putting an airline reward card and a hotel reward card to good use due to business travels, I decided to keep the retail store’s card, and it has paid off tremendously.

A credit card reward program is a great way to get something in return for simply using the card to make everyday purchases. Choosing the right card to match your spending needs will affect how much you save each year though. Some credit cards offer cash back rewards, while others offer reward points that can be used to purchase a variety of items.

As a result of using only one credit card for all of my purchases and always paying the balance off in full each month, we enjoy hundreds of dollars of free clothing and footwear every year. Not paying off the balance does not affect the amount of our reward certificates, but paying interest would mean that we would be wasting some of our savings. The way I see it, why would anyone use cash instead of a credit card when using certain cards can produce substantial savings?

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