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Wednesday, April 23, 2008

Getting the Most Rewards out of Buying Stuff

I enjoy shopping for some cool things, especially video games and some expensive stuff. As always, gasoline prices are not going to go down to $1.50 a gallon anytime soon, so maybe its time to get a little payback for what you buy.

Many of you may have a rewards credit card that usually gives you about 1% of your purchases, back; but how about if I can get you a better return rate on your purchases?

Here's my list of tips on what to do to get back even more money, sometimes up to 5% back.

  • Talking about gasoline prices, there are a few gas stations that have "cash only" options for slightly less than credit only. But in about 85% of cases, the gas station you visit does not really care which way you pay, as long as they get their money and you got gas in your tank. Here's how you can get back more.
    • First of all, always use your credit card with a rewards program. If you pay in cash all the time, you get ZERO PERCENT BACK. Remember that by using a credit card, you do not pay interest if you pay the entire amount back when your next bill comes along.
      • Most rewards cards are 1%, but here's one that can get you 3% or even 5% if you have a business. I use the Costco American Express card and it provides me 3% back at all gas stations, including Costco gas, where it is relatively cheap. 5% is for any business member that gets a business American Express card. Do your research, you might find a better return if you get the right card.
      • I spend about $1,000 a year on gas, so 3% back is $30 of fun money I can spend on something else... say more gas. As for my folks, I don't know why they use a gas station credit card, they can only use it at one brand of gasoline, and the REFUSE to fill-up at another gas station that's cheaper. Sheesh, did you know that San Francisco's gasoline only comes from two refineries?
  • How about shopping online? Here's how you can kill three birds with one stone, and it only takes a little bit of extra effort to do. Here's the steps:
    • First of all, get a free membership with Mileage Plus on United Airlines and once you get your registration done, go to the "earn miles" section and you find the Mileage Plus Online mall. There, you can go shop at many of your favorite online stores, including places like Best Buy and Barnes and Noble.
    • Second, make sure to charge your purchase to a rewards credit card.
    • Third, make sure you are registered for that store's loyalty program.
  • Now, it's time to use all three. I'll give a perfect example, let's use Best Buy!
    • The United Airlines Mileage Plus online shopping mall offers Best Buy, where you get one mile for every two dollars you spend. You click on the link to enter Best Buy, go shopping and pick what you want, choose for your item to be shipped or express pick-up, charge it to your rewards card, and register your "Best Buy Reward Zone" loyalty membership to your purchase (Every $250 gets you $5).
      • Lets do the return rate math:
        • United miles earned: 0.50% return rate
        • Rewards credit card: 1% (or possibly more)
        • Best Buy loyalty membership: 2%
        • TOTAL: 3.5% return rate.
So... think creatively! You can get back more than you think you can.

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