Boosting Your Budget With Rewards Programs
Have you ever watched those commercials on TV that offer you credit cards with supposedly great rewards programs attached? They say when you use the card to purchase items you'll receive cash back, frequent flier miles, and even free hotel stays. But how often are you able to take advantage of those programs and how great are they anyway? Keep reading and I'll go over a few of the basic things you should know about these rewards programs and how they can help you enhance your budget on a monthly basis.
Credit Card Programs
Lets start off with credit cards. When used properly, credit cards can be a great addition to your financial game plan. They offer convenience, security, and some extra cash flow in a pinch. If you have one of the qualifying cards, you can earn points in many ways including making purchases, spending a certain amount within a few months of opening an account, or referring a friend.
However, taking advantage of the huge number of perks that come with a credit card can sometimes feel overwhelming. What you need to know is that the basics of these perks comes down to three types of rewards: credit card points, cash back, and miles.
Credit Card Points and Perks
Most credit card points can be redeemed for gift cards or merchandise depending on the rewards program. During the introductory period you can also receive discounts on purchases at selected stores or reduced interest rates on outstanding account balances. Many times they also include free car rental insurance in their perks package.
Cash Back Rewards
Receiving cash back on things you're going to purchase anyway such as groceries and gas is never a bad thing. Just make sure you're not roped into buying things you don't need just because of the temptation of getting cash back on the purchase. During the introductory period (many times up to and including the first year you have the card) you can often receive double the cash back rewards as a percentage of your purchases (2% instead of 1% for example).
Generally you accumulate a pool of points you can apply towards air travel miles. After accumulating a certain amount of points, you can get free or reduced flights. (See below)
Travel Rewards Programs
Travel rewards programs are often linked to a specific credit card sponsor such as an airline, hotel chain, or car rental company. When you fly with their airline, stay at one of their properties, or rent one of their vehicles, they'll give you a number of points based on how much you spend. You can then trade in these points for free or discounted flights and hotel stays at a later date. The downside of these cards is that if you fly with a different airline, stay with a different hotel chain, or rent from a different car rental company, you can't use the points. This can restrict you to using a service that's at a higher price than you could get elsewhere.
Airline Points and Frequent Flier Miles
Many airlines offer credit cards where you receive discounted travel miles for flying on their airline, special admittance into their exclusive waiting areas in airports, or free flights to specific destinations. The downside is that to get the benefits, you need to fly on their airline rather than compare flights with other, possibly less expensive, airlines.
Hotel Stay Rewards Programs
If you're a business traveler, receiving points for your frequent hotel stays can be a great thing. A friend of mine is a frequent business traveler and managed to accumulate enough points that he was able to take his entire family on a two-week trip to Europe completely free just by using his frequent hotel guest points.
Rental Car Rewards Programs
When you're traveling long distances a lot of times you'll find that you need to rent a car and many credit cards offer free car rental insurance as part of their perks. This can help reduce your exposure to risk while at the same time freeing up cash in your travel budget. Another perk you can look forward to is that sometimes your car rental company will give you a free vehicle upgrade at no extra cost just for being a frequent customer.
Monthly Budget Boosters
Your money is important to you and you should take advantage of every opportunity to stretch your purchasing dollars while still getting the things you need to survive and thrive. Here are a few areas of your budget where you can take advantage of customer loyalty cards and programs.
Gas Station Rewards Programs
Millions of Americans buy gas for their cars each week but how many of them are maximizing their purchases with a customer loyalty card? Personally, I buy a lot of my gas either at Speedway or at Giant Eagle's Get Go gas stations. When I buy gas at Speedway, I receive points which I can use at their in-store kiosk to either get a discount on my gas purchases or to buy items in their convenience store. This was really convenient when I worked as a delivery driver and would purchase gas on a daily basis. Saving money was a budgeting necessity! Not only was I able to get a business discount on the gas but I was also able to get it at a discounted price just about every day.
Now, Giant Eagle is great because they offer a customer loyalty card where you accumulate points on your grocery purchases which you can use to either get a discount on future food purchases or on gas at their Get Go convenience store gas stations. They also offer a discount at the pump of five to thirty cents per gallon when you tie your purchase to a bank debit card. This can really add up over time when you use them to fill up on a regular basis.
Another place I sometimes buy gas is at BJ's Wholesale Club. They're a direct competitor of Sam's Club and their gas is usually ten to thirty cents a gallon cheaper than the going rate at other gas stations. Unfortunately, there aren't nearly as many of these locations as there are regular gas stations and so I only buy gas there when I'm nearby.
Grocery Store Rewards Programs
Everybody's gotta eat, right? But does everyone need to pay full price at checkout? I don't think so. That's why I have a loyalty card at my local grocery store. I shop at Giant Eagle which gives me a percentage off of my groceries when I trade in my accumulated purchasing points. For every certain number of dollars of groceries I purchase, they give me either 1% off my grocery purchase when I trade them in or for money off my gasoline purchases at their Get Go gas stations. Also, they have weekly specials in the newspaper which are available to their loyal customers only. My philosophy is “Why pay full price for something when you don't have to?”
Retail Store Rewards Programs
Grocery stores aren't the only places you can stretch your budgeting dollars. There are several stores you can patronize such as Sam's Club, BJ's Wholesale Club, and Costco where you'll find deals on purchases in wholesale quantities. Personally, I've been a member of BJ's for about fifteen years and often shop there for discounted prices on bulk grocery items and for their great prices on gasoline. They also mail me monthly coupon books for many of the items I shop for on my weekly grocery list. Although it's out of my way, if I'm planning to be in the area, I definitely take the time to check my go-to grocery list for anything I'm low on.
Another big department store that really promotes their customer loyalty program is Kohl's. Not a week goes by that they're not having a sale of some sort or another and they really stack their sales discounts with their Kohl's Cash. One time I purchased a new pair of New Balance sneakers for $8 after all the discounts and customer loyalty points. Now, I did need to purchase other items in the weeks and months beforehand, but these other items were also on my list of needed items and not items I purchased just to get the bonus points.
A useful app on my phone is for Shopkick. When I scan the barcodes for items listed on the app, I accumulate points that I can redeem for gift cards to stores like Walmart or websites like Amazon. It's like getting free money for walking around shopping for items I'm already going to buy. Although it's not a lot and I don't always remember to use it, I have managed to accumulate over $50 in Walmart gift cards over the past year. That's an additional $50 in my wallet that I can use to bolster my budget.
Restaurant Rewards Programs
To be honest, I'm a foodie and proud of it. Eating out at amazing restaurants is just something I love to do. That doesn't mean, however, that I spend outside my budget for a good meal. Before I leave home, I always check my phone and laptop for discounts at my favorite restaurants and many times find they're running discounts on meals I'm especially hungry for. Not only do I save money on the meal but I also accumulate points towards my next one. It's like getting a twofer on something I'm going to buy anyway!
Let me give you an example. I love the Great Harvest Bread Company. They have an amazing selection of daily baked specialty breads, cookies, and scones and just the smell of baked bread as I walk into the store is heavenly. (My favorite is their oatmeal chocolate chip walnut molasses cookies. YUM!) What's great about them is that for every five loaves of bread you buy, you get one free as a loyal customer when you get your ticket fully stamped. If you're going to purchase something anyway, why not get a bonus when you do?
Pharmacy Rewards Programs
These days prescription medications are a way of life for millions of people around the world and I'm one of them. My pharmacy of choice is CVS although other members of my family prefer RiteAid or the ones in our local grocery stores. One of the perks of using CVS is that for every ten prescriptions they fill for me, they give me $5 of their CVS Bucks to spend in the store. Now, while I do feel that their items are a bit over priced compared to what I would pay at other stores, I do put the free money to good use by purchasing things I already have on my shopping list like toilet paper and toothpaste. It may only be a few dollars each month that I save but over the course of a year, it can add up.
Online Shopping Rewards Programs
With the rise of the Covid-19 virus, more and more people are buying things online and having them delivered to their homes. One of the main players in this trend is Amazon and they've really upped their game when it comes to convenience and customer loyalty programs. Amazon Prime is their flagship program where (for a monthly subscription fee) you can receive free shipping on your orders as well as watch your favorite old TV shows and movies, read ebooks on their Kindle platform, and purchase items on sale through their Daily Deals page.
I love having the opportunity to save money. Looking for bargains and shopping for discounts is fun for me. That's why I carry probably a dozen or more discount cards in my wallet. I carry everything from pharmacy cards to gas cards to restaurant reward program cards which I use on a regular basis. But do I buy stuff just because it's on sale? Nope. I check my budget first. Then, if it's something I need, I'll take every advantage to buy it at the best price I can. That's smart shopping at its best.