How to Save an Extra $1,334.67 a Year

By Jason Steele. Last updated 20 May 2019. 3 comments

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A typical American family can save over $1,000 a year by using these four credit cards.

Because credit cards try to differentiate themselves, they specialize in different spending categories. You win by using the right card for each everyday purchase you already make.

To come up with the $1,334.67 total annual cash back earned, I use actual numbers of what the average American household is already spending (according to the U.S. Bureau of Labor Statistics, 2014), then choose the best credit card for each category. I take into account the cash back percentage, annual fee, and sign-up bonuses; and assume you keep the card for two years.

Gasoline

The Bank of America® Cash Rewards credit card offers 3% cash back on the category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement /furnishings), 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases), and unlimited 1% on all other purchases. There is a $200 online cash rewards bonus after you spend at least $1000 on purchases in the first 90 days of account opening.

Since the average American spends $2,468 on gas, that works out to $74.04 in cash back. Combined with the $200 sign-up bonus, that gets you $174.04 in earnings each year for the first two years.

Click here or call 866-349-6262 to learn more and apply for the Bank of America® Cash Rewards credit card today!

Groceries

Blue Cash Preferred® Card from American Express offers a whopping 6% cash back on up to $6,000 spent at U.S. supermarkets each calendar year (then 1% cash back applies). There is an annual fee of $95. See rates and fees.

The average American household spends $3,971 on food at home. This works out to $238.26 in cash back on groceries alone. It’s worth even more if you count all the non-food items that you can purchases at a grocery store that will still qualify for the 6% cash back.

It also comes with a $250 bonus after new cardholders spend $1,000 within three months of account opening. After subtracting the annual fee, this card offers an average of $268.26 in earnings at grocery stores each year for the first two years. Terms apply.

For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.

Click here to learn more and apply for the Blue Cash Preferred® Card from American Express today!

Restaurants

Chase Sapphire Preferred® Card offers 2x points on dining and travel, a 60,000 bonus point offer, and has a $95 annual fee.

Americans spend an average of $2,787 on food away from home each year. This equals 5,574 points just on dining out. Any travel purchases will earn more rewards, but we won’t include them in our calculations, and not counting any rewards earned from travel purchases.

What makes this card special is the 25% bonus you get when you redeem these Chase Ultimate Rewards points towards travel reservations. So every dollar spent on travel and dining earns you 2.5 cents worth of travel, making your annual rewards worth $69.68.

In addition, earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 in travel when you redeem through Chase Ultimate Rewards®

There is a $95 annual fee for this card.

Adding up the rewards, sign-up bonus, and annual fee, the Sapphire Preferred offers about $350 in rewards each year for the first two years.

Click here to learn more and apply for the Chase Sapphire Preferred® Card today!

Easy Way to Save a Thousand Dollars

Adding up our annual rewards calculated above, we see that the average American household can save $1,334.67 (or more) each year just by using these four cards on regular day-to-day purchases. The best part is that it’s so darn easy. Of course, this only works if you pay off your balance in full, every month. Otherwise, no amount of rewards could outweigh the interest you'd be paying.

Pro tip: write the spending category (gas, groceries, restaurant, all) on the card with a permanent marker to help you remember which card to use.

If you’re already spending this money on everyday purchases, there’s no reason not to save an extra thousand dollars a year.

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Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Guest's picture
Yvonne

Unless its for a single person, the grocery numbers are way off. If you look at the USDA report families of four are spending between $800 - 1298 per month. That's what it cost to feed your family on the west coast at least.

Having said that, using credit cards to buy everything is a slippery slope. Unless you are incredibly organized and disciplined, the danger of overspending is extremely high. The biggest risk being that people use cards and then think their cash from paychecks is "available" to use on a lot of other non-essentials like entertainment and $8 coffees or cocktails etc. With so many people struggling with debt and job loss its likely a very small percentage that could make this process truly safe for their families where they would actually "save" money by year's end.

Guest's picture
Guest

It is possible to accumulate points this way, but I'm not sure it's the best strategy because the points are so spread out. It takes much longer for them to accumulate to a useful level and the other poster is correct that you have to make sure you keep careful records. My strategy may not gain the highest level of points, but it's simple and it works for me. I pay almost everything with my credit card groceries, gas, insurance,medical bills, etc), and then pay it off with part of every paycheck every other week. I've discovered that my points have higher value once they reach 20,000, so I always let them accumulate to at least that level. My bank also has an online shopping site that includes nearly every store; points are multiplied two to six times when I shop through that portal. Use the points for cash or airline tickets because those are the best value.

Guest's picture
Carey @ wiserdollar.com

While on members can apply, Sam's Club Master Card is the best I've found for money back on gasoline; they give 5%!