cash back

This Is When It Pays to Stay Loyal to a Rewards Credit Card

Holly Johnson — Tue, 11 Sep 2018 08:00:11 +0000

The best travel and rewards credit cards offer a tantalizing game of risk. If you can charge your purchases and rack up rewards without carrying a balance or paying interest, you usually win. If you overspend with credit and wind up in debt, on the other hand, you lose the game — and will pay through the nose.

Still, there are more facets to this game that extend far beyond the risk of debt. If you choose your rewards and travel cards wisely and use them strategically, you can earn a lot more points and miles over time. Staying loyal to a brand can also help you make the most of your efforts, but only in certain situations.

This is why it's important to know when loyalty pays off. Here are some scenarios where sticking to one rewards credit card or one loyalty program can work in your favor.

When you can reach your redemption goals faster

Staying loyal to a rewards brand can pay off by helping you reach optimal redemptions faster. For example, let's say you mostly stick with flexible rewards programs that let you transfer points to your favorite airline loyalty program. If you were to focus all your spending with one brand of cards that lets you transfer miles, your collective efforts with a single card brand would let you rack up points you can transfer a lot faster than attempting the same thing with several cards from different brands.

Or perhaps you're loyal to a single airline or hotel loyalty program. So, imagine you want to fly first class with a particular airline to Europe for 115,000 miles round-trip. It might be difficult to secure this redemption if you were earning miles and sign-up bonuses with several airlines within a year. However, it would be a much easier task to earn the miles for this flight if you specifically used that airline's co-branded credit card, cashed in any sign-up bonuses, and flew mostly with that airline for a while.

When you can earn free hotel stays

There are also situations in which pooling your points can help you earn better redemptions. One example is with hotel loyalty programs that let you earn a fifth night stay for free. With fifth-night-free promotions, keeping all your hotel in points with one brand makes a lot of sense since you get to book five nights for the price of four. (See also: 6 Ways My Family Scores Free Travel With Credit Cards)

However, this only works when you have enough points to book four consecutive nights, which may not happen if you're enrolled in several hotel programs at once.

When you can earn category bonus points

If your goal is earning a ton of points and miles, you need to make sure you're maximizing the travel cards you have. By and large, this means using the right card for the right purchase and making the most of category bonuses when you can (e.g. using a card that offers bonus points on dining when you eat at a restaurant).

Take the guesswork out of that by downloading an app like Reward Summit. This service will take a look at your rewards cards before you make a purchase and tells you which card would be optimal based on the rewards you will earn.

When you strategically pursue sign-up bonuses

While ongoing rewards can be lucrative, credit card sign-up bonuses are where the real value is at. Many cards let you earn bonuses worth $500 or more just for spending $3,000 or $4,000 on your card within a few months.

To get the most out of these offers, expect to sign up for a new rewards card with your preferred card issuer or rewards program every year. This way, you're always working toward a minimum spending requirement and a big chunk of cashback, airline miles, or flexible travel rewards.

When you get your spouse or partner on board

Remember that you don't have to chase sign-up bonuses or ongoing rewards alone. Your spouse or partner can earn the same rewards you are, including sign-up bonuses — and this is true even if you share the same address.

When you get your spouse involved, you can easily earn double the rewards in the same amount of time. You could even do better if you're able to pool your points with a spouse for optimal redemptions. (See also: 9 Surprising Ways Marriage Can Make You Richer)

When you pay all your expenses with credit

Don't forget the importance of paying all or most of your bills with credit — at least the ones that don't charge a fee for paying with plastic. This should include bills like groceries, gas, insurance premiums, utility bills, and dining out. The more expenses you can pay with a rewards card, the more points and miles you will rack up by default.

When you pay your balances in full

It's important to remember the ultimate credit card hack: Paying your balances in full every month. None of these tips and tricks will work in your favor if you're carrying a balance and paying credit card interest every month. With the average credit card now charging over 17% APR, that interest will wipe out your rewards and then some. (See also: 15 Ways Your Life Is Better When You Have Good Credit)

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This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is It Smart to Pay College Tuition With a Credit Card?

Dan Rafter — Tue, 29 May 2018 08:30:46 +0000

At first, the answer seems obvious: Using a credit card to pay your college tuition is a terrible idea. With the high rates that come with plastic, you could rack up thousands of dollars in interest by charging your tuition.

But, there's another way to look at it: If you can pay off your credit card bill in full each month, using a card to pay your tuition could generate significant cash back rewards, airline miles, or free hotel stays.

It all comes down to your discipline, the type of credit card, and what you can afford to charge. Here are a few things to consider before charging your tuition. (See also: The 5 Best Credit Cards for College Students)

College isn't cheap

The cost of college isn't shrinking any time soon. CollegeBoard reports that the average yearly tuition for a public, four-year in-state college stood at $9,970 for 2017–2018, up 3.1 percent from the previous year. Private colleges averaged $25,620 for the same school year, an increase of 3.2 percent. Neither of those figures include the average $10,800 cost for room and board.

If you're going to be charging tuition or room and board to a credit card, you should have the cash on hand to pay it off in a timely fashion — ideally, the first billing cycle. And that won't be a small amount. Otherwise, you put yourself at risk of falling deeply into credit card debt.

Very few people go this route

According to the 2017 edition of Sallie Mae's How America Pays for College report, just 3 percent of families used credit cards to help cover college tuition for their kids, while 4 percent of students used plastic to pay for some or all of their tuition. Parents charged an average $4,450 for tuition in 2017, while students charged an average $1,626.

It's evident that paying for college with plastic is not the popular route. Why do so few students or parents turn to their credit cards? Most probably don't have the cash they'd need to pay off these cards in full each month in order to avoid interest charges. Others might not have a high enough credit limit on their cards to charge any more than a few thousand dollars at a time. Students may not have enough of a credit history yet to even be approved for a credit card. (See also: 4 Important Ways College Students Should Use Credit Cards)

Don't chase rewards without a repayment plan

If you can afford to charge tuition and pay off your credit card bill each month, it might make sense to do so, especially if you have a credit card that provides cash back bonuses, rewards, or miles. Charging $10,000 in tuition, for example, could be a great way to earn fast cash or travel credit.

Other cards might provide bonuses if you spend a certain amount of money during a set number of months. For instance, if you spend $5,000 during a three-month period, you might get a $200 cash back bonus. Charging your tuition can easily get you to that spending threshold. (See also: 5 Smart Ways to Meet a Rewards Card Minimum Spending Requirement)

The key, again, is that you pay off your card's balance in full when the bill comes due. It's not unusual for credit cards to come with interest rates of 18 percent or higher. If you carry a balance, that interest rate will cause your debt to grow quickly, and no amount of cash back, bonuses, or miles is worth that financial pain.

Watch out for fees

There is another potential pitfall with credit cards depending on the school you attend. If your college or university allows you to charge tuition (some don't), many will charge an additional fee for credit card processing. You'll have to determine if the rewards, miles, or cash back bonuses you're after are enough to make up for the fee your university or college charges.

According to a 2016 survey from CreditCards.com, 85 percent of the country's largest colleges allow credit cards for tuition payments. The survey found that 57 percent of schools charge fees for credit card payments, with the average fee being 2.62 percent.

Say you charge $4,500 in tuition for your upcoming semester. If your school charged a fee of 2.62 percent, you'd pay about $118 extra for the privilege of using your card. If that $118 is higher than the cash back bonus or rewards points you'd generate from charging it, you're better off paying for your tuition in another way.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Biggest Ways You're Wasting Money at the Pump

Ashley Eneriz — Tue, 27 Mar 2018 10:00:06 +0000

Ever feel conflicted at the pump when you need to choose between premium gas and standard grade? Consumers as a whole have been led to believe that items with the "premium" name tag are worth the money — and can even save us money long-term. However, this is not true when it comes to premium gas.

A recent AAA report found that the higher cost of premium gas offers little to no benefit for vehicles that are recommended, but not required, to use the fuel. The same goes for cars that do not recommend nor require the higher octane gasoline. According to the report, over 1.5 million new cars sold last year came with the recommendation to use higher octane gas, but it was not required for car functionality. So, unless your car requires the premium stuff, you're better off skipping it.

If you are in the market for a new vehicle, consider choosing a car that does not require premium gas. Driving a car that needs premium fuel will cost you about 20 to 25 percent more at the pump, which translates to about 50 cents a gallon. For a 15-gallon car, that can tack on an additional $7.50 per fill up. (See also: 7 Ways You're Wasting Gas Without Realizing It)

Here are other ways drivers are wasting money at the pump.

Not shopping around

Many times, drivers will pay more for gas due to poor planning. You are desperate to find the closest gas station before you run on empty, and you don't care if you have to pay more. If this describes you, stop living this way. Not only are you slowly draining your budget, but you put yourself at risk if an emergency were to happen.

Once your tank hits the halfway mark, use an app like GasBuddy to find the cheapest gas in your area. Plan to stop when you are near that station for another errand. When you find a good deal on gas, fill up the tank.

Not paying the right way

There are really only two options that are beneficial to your finances when it comes to paying for gas. The first option is to pay with cash. Some gas stations will offer a small discount per gallon if you pay with cash over plastic. The other option is to purchase gas with a credit card that offers rewards or cash back for gas. Make sure you're able to pay your credit card bill in full each month to truly benefit from the rewards.

Using your debit card at the pump doesn't benefit your bank account, and it can also put you at risk. Skimmers and card fraud are increasingly common at gas stations. If you pay with a credit card, it is easier to stop fraudulent charges, and your personal bank account will not be in limbo as the bank sorts out the mess.

Not keeping your car well maintained

Several small factors can add up to wasted money at the gas pump. For example, poorly inflated tires and dirty air filters can make your vehicle work harder than it needs to. This translates to more gas wasted on the road.

Similarly, the heavier your car is, the more gas you will burn. Having a little extra junk in the trunk isn't going to throw off your gas budget, but if you regularly keep heavy equipment or tools in the back of your vehicle, consider lightening the load on days you don't need the items.

Not driving smarter

It seems like common knowledge that a steady driving speed is better for your gas tank than overly accelerating or braking your car. However, each time I drive into Los Angeles, I am amazed by how many drivers accelerate for extended periods of time, brake hard for no reason, or drive over 90 MPH.

Driving at a slower, steadier pace will extend your time between gas fuel ups and keep you away from pricey speeding tickets. For longer commutes, plan your trip so you can avoid heavy times of traffic.

Using these tips can save you as much as $10 to $20 per fuel up, which adds up quickly. Wouldn't you rather spend that money on something fun than at the pump?

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This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Little Ways to Boost Your Savings Account Every Day

Tim Lemke — Thu, 01 Feb 2018 09:00:06 +0000

Saving money is not always simple or straightforward. It's easy to get discouraged when faced with a big, long-term savings goal or mountain of debt. That's why it might make sense to start small. Rather than worry about saving thousands for that down payment or paying off that massive student loan, focus on reasonable things you can do each day to give your savings account a boost.

None of these suggestions will make you rich by themselves. But collectively and over time, they can add up to a meaningful sum.

1. Drive less, or at least smarter

Every time you get in your car, you're spending money. You are spending money on gas, and your car is depreciating and getting closer to needing repairs. It may be impossible to ditch your car altogether, but there are small things you can do each day to reduce your costs.

Research shorter and faster ways of getting to your destination. Consider planning your errands so that you can get more done in one trip, and plan your route for greatest efficiency. Drive when traffic is light, so you're not wasting time and gas. Turn your air conditioner or heater off if you don't really need them, and make sure your tires are inflated properly. These are small things, but they can add up to some savings over time. (See also: Cutting Your Car Payment Is Easier Than You Think)

2. Save and deposit your change

Let's face it, we're all reckless when it comes to change. We drop it on the ground. We leave it laying around. We spend it on candy bars and gum. We put it in large jars and forget about it.

It's time to get smarter about change. Go to the bank and deposit it. Even though it may seem like a trivial amount of money, that's still money that can collect interest and add value to your savings account over time. We get hundreds of dollars in change back from purchases throughout the year. Make that money work for you and put it directly into savings. (See also: 20 Smart Ways to Spend Your Loose Change)

3. Round up credit card purchases and deposit the difference

This is just like depositing your change from cash purchases. Let's say you go to a restaurant and are charged $12.65 for a sandwich. If you pay with a credit card, consider mentally rounding that purchase up to $13 and transferring 35 cents into a special savings account. If you do this with every purchase, you'll be banking several additional dollars each week, or potentially hundreds of dollars annually. (See also: 7 Ways to Save Loads of Money Using Credit Cards)

4. Adjust your thermostat

We all want to be comfortable when at home, but making even a small tweak to the indoor temperature can add up to significant savings over time. If it's winter time, consider turning the heat down and just throwing on an extra layer instead. In the summer, open some windows and use fans for part of the day. Always set the temperature differently when you aren't at home — a programmable thermostat can be hugely helpful in this area. (See also: 34 Smart Ways to Cut Your Electric Bill)

5. Use loyalty cards

I know some people don't like to sign up for loyalty cards because they aren't keen on sharing information or being bombarded with promotions. But I say get over it. Whether it's for Dunkin' Donuts, J. Crew, or your local grocery store, these cards can give you access to discounts you may not otherwise get.

The caveat to this is that if having a loyalty card encourages you to spend money you may not have otherwise spent, don't do it. But if the card is for a store you shop at frequently anyway, sign up! (See also: 9 Store Loyalty Programs That Are Worth It)

6. Clip coupons

Searching and cutting out coupons can seem like a real pain, but it's often worth it. Start by finding circulars or online flyers for stores you shop at regularly. Look for places that will double or even triple coupons. If you use a coupon to buy an item, consider taking the amount of money saved and diverting that into a special high-interest savings account. By doing this, you're saving double anytime you get a discounted item. (See also: 9 Online Retailers Who Let You Stack Coupons)

7. Get a credit card offering cash back

There are a million credit cards out there with various rewards, but I am partial to those that offer straight cash back on purchases. That's because rather than spending the reward, you can transfer it directly into a bank account. Other credit card rewards offering shopping discounts or airline miles are nice, but they don't help you increase your savings. I use a card that offers as much as 5 percent cash back on purchases, and it has saved me a significant amount of money over the years. (See also: The Best Cash Back Credit Cards)

8. Eat in

More and more people are eating out these days, because we're all busy, and who has the time to cook? But if you are willing to spend some time in the kitchen, you will almost always save money.

It costs far less to purchase ingredients and prepare meals at home than to go out to a restaurant. This is especially true if you spend money on beverages and appetizers when eating out. If you do cook at home, add up the cost of ingredients and calculate the price of a comparable restaurant meal. Take that savings and place it in a special account. (See also: 8 Ways to Save on Dinner — No Meal Planning Required)

9. Do quick jobs

You may already be employed and don't think you have the time or energy for additional work, especially if it does not pay well. But everyone has a few spare moments where they can make some easy cash. Freelance sites like Fiverr offer access to creative jobs that can be done quickly. There are a number of apps and websites that will give you cash just for answering surveys. Services such as TaskRabbit allow you to make money by offering quick, simple services, like giving someone a ride to the doctor's office. (See also: 14 Best Side Jobs For Fast Cash)

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Millennials Guide to Avoiding Credit Card Debt

Tim Lemke — Mon, 22 Jan 2018 10:00:06 +0000

Americans owe billions of dollars in credit card debt, and the high interest rates that come with it can lead to a debt spiral that is very challenging to overcome.

Millennials, having lived through the financial crisis and other economic downturns, appear to be more wary of credit cards than other generations, according to several recent surveys from sources including Bankrate and TransUnion. This wariness is healthy, but it's important for this younger generation to know that credit cards by themselves can be harmless and perhaps even beneficial if used wisely. (See also: Why Millennials Should Embrace Credit Cards)

If you're a millennial, consider these tips on how to use credit cards while avoiding getting into dangerous debt.

Pay attention to interest rates

Sometimes when you're in a financial pinch, you may be relieved to see a new credit card application come in the mail. But it's a bad idea to apply without looking at the terms first. Not all credit cards are created equal, and some have very high interest rates that could cripple you financially. An annual percentage rate of about 15 percent is standard, but some can go well above 20 percent, and it's possible to find rates below 12 percent. Be sure to read the fine print on all cards, and compare rates to find the best card available for you. (See also: Best Credit Cards for Millennials)

Also, don't get too enamored with low introductory rates; remember that all introductory rates eventually aren't introductory anymore. If you're struggling to get out of debt, it may be helpful to transfer a balance to a card with a 0% introductory APR, but be aware that rate will jump after a certain amount of time. (See also: The Best 0% Balance Transfer Credit Cards)

Avoid fees

Some credit cards will charge you an annual fee just to have them. Sometimes, this annual fee allows you to receive special benefits, but the average person should never feel the need to pay money just to have access to credit. You may feel like you've "arrived" because you are spending $550 per year for that platinum card, but it's a silly expense if you're only using the card to pay for lunch and fill your gas tank. These premium credit cards come with many perks and benefits that only benefit certain people. (See also: How to Decide if an Annual Fee Credit Card Is Worth It for You)

Pay on time

The nice thing about credit cards is that if you pay off the balance every month, on time, you're not charged any extra fees or interest. There's really no down side to using a credit card to buy items and paying the bill in full each month.

Paying your bill on time is the number one factor in determining your credit history. Miss a payment, and you are subjecting yourself to late charges and a hefty amount of interest. Additionally, you could see your credit score suffer. (See also: 5 Simple Ways to Never Make a Late Credit Card Payment)

Watch the revolving balance

Even if you pay your bill on time every month, your credit score could be hurt if you have a high balance each month. Credit bureaus don't like it when you are bumping up against your credit limit on a regular basis. In fact, as much as one-third of your credit score is based on "credit utilization," or the amount of debt you have versus the amount of credit you have available. In other words, you should still try to avoid racking up a large credit card bill, even if you're diligent about paying on time. (See also: This One Ratio Is the Key to a Good Credit Score)

Use them to build credit

When used responsibly, credit cards can help you build a credit history and make it easier to get favorable terms when borrowing money elsewhere. If you are applying for a mortgage, for example, a lender will review your credit score and payment history to determine the rate and size of the loan that you are eligible for. Without a lengthy credit history, lenders may find it hard to give you good terms, or you may be turned down altogether. (See also: 5 Ways to Improve Your Credit Score Fast)

Have multiple cards, but be careful

People with high credit scores tend to have more cards than those with lower scores. This is because your credit score is partially based on how much debt you have compared to your overall availability of credit. Since more cards will generally mean more available credit, there is an advantage to having multiple cards. The very, very big caveat to this is that if you have more cards, you have more ability to borrow and rack up debt.

Having multiple cards can give you flexibility, because not all cards are accepted everywhere. Additionally, it may be helpful to have credit cards with varying kinds of rewards. There is no universal rule of thumb regarding the optimal number of credit cards, but it's likely that you can get away with having two or three.

Track your spending

One nice advantage to using credit cards is that it will allow you to keep a real-time record of your purchases. If you use cash instead, recording your spending is more of a manual chore.

Most credit card companies allow you to check your transactions online and will even categorize your purchases, thus helping with budgeting. If you use credit cards, don't just mindlessly pay your bill when it comes. Take the time to review what you spent during the previous month, and try to identify where you may be able to cut expenditures and boost your savings.

Use your rewards

There's a healthy competition among credit cards to offer rewards to cardholders when they make purchases. Some cards give you cash back. Many offer airline points or other travel rewards. There are cards offering cash back to be used at Disney theme parks, and some that allow you to direct money into retirement accounts.

When used responsibly, these credit cards can save you a lot of money. Do some research to find the credit cards with the best rewards for you, and try to stay away from cards with an annual fee, if possible. (See also: 5 Tricks to Making the Most of Your Reward Miles)

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

11 Ways to Prepare for Your Best Black Friday

Mikey Rox — Thu, 09 Nov 2017 09:00:07 +0000

Don't let the success of Cyber Monday fool you: Black Friday is still a massive holiday spending day. According to the National Retail Federation, over 154 million consumers shopped over Black Friday weekend in 2016 — up from 151 million the year before.

Chances are, you're going to be one of those many consumers shopping on Black Friday this year. But you don't have to totally blow your budget in the process. There are ways you can soften the blow to your bank account with advance preparation. Here's how.

1. Put your common indulgences on hold

I like to have my hair cut every two weeks. But when I'm trying to save, I push the cut out to every three weeks. My haircuts cost $17 including tip, and if I adhered to this schedule on a regular basis, I'd save a whopping $148 a year. You may have an indulgence like this that you can honor less frequently or stop altogether while you try to budget more strictly during the holidays. These indulgences usually aren't cheap, and forgoing them will provide a sizable amount of extra dough for you to use for gift shopping.

2. Focus on paying off any existing credit card debt

Before you start swiping your cards left and right, it's important to tackle any existing credit card debt, especially if you've only been making minimum payments up to this point. Concentrate on the highest-interest cards first; you'll save more in the long run by paying those down or off as soon as possible. (See also: 5 Ways to Pay Off High Interest Credit Card Debt)

3. Pause or change your media subscriptions

The holidays are busy. Shopping, parties, pageants — you know the drill. All that running around probably leaves you with little time to use the subscription services for which you're paying a premium. So don't.

"Consider pausing subscriptions for a few months, or temporarily changing services to a lower-priced tier," advises Lindsay Sakraida, director of content marketing with DealNews. "For example, if you pay extra for Hulu without ads, premium Netflix, or extra data cell service, you might want to adjust all of them for a month or two to save some cash for Black Friday and the holidays."

4. Pick up short-term gigs and odd jobs for quick cash

I participate in several "gig" services throughout the year, but this side work really picks up around the holidays — and that helps my disposable income swell. Pet sit via Rover.com, pick up passengers using Lyft, host guests in your home through Airbnb, and deliver groceries with the help of Instacart. I do it all, and I highly recommend looking into any one of these opportunities for quick cash. (See also: 8 Seasonal Side Hustles That'll Cover Your Holiday Spending)

5. Make a gift list and establish a firm maximum budget

Make your list, check it twice, and decide how much you want to spend on each recipient. Once that budget is set, stick to it. Better yet, make it your goal to come in under the amounts you've established for each person so you can treat yourself to a little something special when all is said and done. (See also: The Simple Holiday Budget Anyone Can Follow)

6. Research the Black Friday deals ahead of time

News of many Black Friday offers will be released well in advance — several retailers, like Walmart, Costco, Kohl's, and JCPenny have already whetted consumers' appetites with "leaked" deals — which allows you plenty of time to research the best of the best. There are entire sites, such as Best of Black Friday, dedicated to compiling the deals in one place.

7. Start shopping early to spread out your spending

Why wait until Black Friday if you recognize a great deal when you see one? Just because the day after Thanksgiving receives heavy promotion doesn't mean there aren't other great deals before the stampedes begin.

"Make it a point to get a jump-start on planning and shopping early so you have a few months to purchase gifts instead of waiting until the holiday season," suggests Natasha Rachel Smith, personal finance expert at TopCashback.com. "Also, don't forget about deals on Thanksgiving. Every year Black Friday has crept up earlier and earlier. In fact, in recent years, some deals sell out before Black Friday." (See also: 6 Ways to Score a Black Friday Deal Without Leaving Home)

8. Have a game plan before stepping foot in the store

Similar to never going to the supermarket on an empty stomach, don't head into the holiday season without a game plan.

"Most major retailers will release their deals for Black Friday the week before to give consumers time to plan and get excited about what they want to purchase," Smith says. "Use this time wisely to see what is going to be on sale and compare deals at each retailer. By creating a game plan, you can prioritize any items that sell fast or are at the best-discounted price. Not only will you save time but you'll save money too by planning what to get, when, and where." (See also: 8 Frugal Skills You Need to Survive Black Friday)

9. Consult your cash back apps before heading out

I've been killing it in the cash back game lately, thanks to apps like Ibotta and Checkout 51. The trick is to consult these apps before you go shopping so you know what's available and opt in if required. With Ibotta, for instance, many times it requires you to make purchases through its app — it will launch the retailers' sites for you, like Under Armour, as an example — so it can track your purchase and deposit the cash back you've earned. Every penny returned to you helps. Trust me — you will be thankful for this at holiday time. (See also: 7 Apps That Actually Pay You to Shop)

10. Consider your method of payment for maximum savings

You might think that cash in hand is the best way to shop on Black Friday (it certainly can help avoid overspending if you're disciplined), but you could be disqualifying yourself for deals available through other methods of payment. Capitalize on your Black Friday spending by deciding how you're going to buy things — cash, debit, or credit card — to reap the best benefits.

Scope out all your payment options and use the bonuses and rewards in your favor. If you do the research and find that you want to apply for a specific card, do so a couple weeks in advance to ensure you receive it in time to use it. Using the shopping season to get bonus cash back that has a spending requirement can give you help ease the holiday costs. (See also: Read This to Maximize Your Rewards and Cash Back This Holiday Season)

11. Renew your commitment to financial freedom

It's easy to go overboard during the holidays, whether it's on gifts or social activities. Don't let yourself off the hook on your financial goals just because it's the holidays. Stay committed to them and use the holidays to focus on gratitude rather than the mad dash to grab discounts.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Ways to Tidy Up Your Finances Before the Holidays

Mikey Rox — Wed, 04 Oct 2017 08:30:12 +0000

Summer is over. This fall, fortify your finances to take the end of the year in stride. These helpful tips will get you back on track (and help you stay on track) budget-wise.

1. Start your holiday shopping now

Instead of making a mad rush for last-minute deals, spread out your gift buying over the course of the next couple months. Watch your local circulars and emails for discounts and promo codes, and strike while the proverbial iron seems hot.

For instance, I just purchased several packs of Calvin Klein undies as a Christmas gift for my boo because I received an email for 25 percent off, plus I had an additional 15 percent off coupon with free shipping. Will there be steeper discounts in the near future? I can't be sure, but I had enough savings stacked up to feel like I made a smart choice, and now I can check one more gift off my list.

2. Max out retirement plan contributions

If you haven't already — and your budget can tolerate it — try to max out your 401(k) and 403(b) contributions at work. The employee contribution limit for 2017 is $18,000, and if you haven't reached that, it's time to come as close as you can. Those over age 50 can contribute an additional $6,000 as a catch-up contribution. If your employer offers matching funds, this should be a top financial priority, lest you fail to claim thousands of dollars in free money.

3. Take advantage of layaway

Layaway has had its up and downs over the years. What was once a common practice during the Great Depression started to fall out of favor by the 1980s thanks to the rising popularity of credit cards. Walmart all but left the service for dead in 2006 when it announced it would stop offering it, but by 2012, many retailers were back on the layaway bandwagon to make buying easier on customers in a tumultuous economy. (See also: Is Layaway Still Worth It?)

Personally, I loved layaway in my early 20s when I was on a shoestring budget. It allowed me to plan ahead and make scheduled payments so everything would be ready to go by Christmas. It's certainly a helpful buying tactic to look into if your finances are tight but you still want to participate in gift giving.

3. Use or lose flexible spending dollars

If you're lucky enough to have a flexible spending account through your employer, your FSA may need to be spent by year's end. Try to use up the balance so you're not losing cash. In doing so, you'll free up funds elsewhere that you don't have to use on medical needs.

"Since 2013, your employer may offer one of two carry-over options," says Ryan McPherson, founder of the financial planning firm Intelligent Worth in Atlanta, Georgia. "One — roll up to $500 of unused funds into the following year or two, offer a two-and-a-half month grace period during which you may use your unspent FSA balance. Check with your employer, because offering one of these options is not a requirement. If you don't have either of these carry-over options and expect to have money left in your FSA, try to move appointments and medical/dental-related purchases (i.e., eye glasses or contacts) into 2017."

If you're unsure where your FSA funds apply, IRS publication 502 offers guidance on what counts as a "qualified medical expense." (See also: 8 Ways to Spend Your Last-Minute Health Care FSA Funds)

4. Make a gift list and check it twice

I use to get in this mindset — especially when I started making a little more money — that everybody needed a gift. That logic is false. Everybody doesn't need a gift for the sake of giving them a gift. Now, I make a list of the usual suspects with whom I exchange — immediate family, boyfriend, a few friends — but even then I give it a second glance to see where I can make cuts. Will I see this aunt or that buddy this year? If the answer is no, decide whether a gift is necessary at all to put some more money back in your pocket. (See also: 9 Gifts That Won't Become Clutter)

5. Revise your winter budget

Everything about winter costs more than other times of the year, and you should prepare by revising your budget to make sure all bases are covered.

"In addition to holiday expenses, as the weather gets colder, heating costs also increase," says Roslyn Lash, an accredited financial counselor. "It's imperative that you also set some money aside for inclement weather expenses. Unfortunately, when ice/snow is the forecast, schools typically close, and this could mean paying someone to baby-sit the kiddos. It could also prevent you from going to work, which means lost revenue." (See also: 5 Big Winter Expenses That Could Freeze Your Budget)

6. Determine what's necessary for the holidays and cut back from there

I love all things holiday — the decorations, the parties, the gifts, the endless array of baked goods — and if I'm not participating in someone else's festivities, I'm hosting my own. Of course that can get expensive, so I take a one-year-on, one-year-off approach to the latter part of that equation. Two years ago I hosted a holiday party in my home, but last year I didn't. I bought more holiday decorations for the house last year, but this year I won't. This practice not only helps me save money, but it also lets me cycle through things that I need to get rid of in a timely manner (like half-full bottles of liquor, for instance) and cut down on overall holiday clutter. (See also: Avoid These 5 Common Holiday Budget Pitfalls)

7. Get into a cash back state of mind

Upfront coupons and savings are great, but there's plenty more to be had on the back end if you know where to look. Apps like Ibotta and Fetch Rewards provide cash back on purchases made on preset items or at selected retailers. Last month I scored more than $50 cash back (which was on top of other savings I received on the front end) by shopping through Ibotta.

If you're responsible at managing credit, now's also a great time to take advantage of a cash back credit card on your day to day purchases. By using a cash back card on necessities like groceries or gas, you'll earn cash to bolster your budget. Just be sure to pay off your balance in full every month, or else this method isn't worth it. (See also: 11 Ways Your Credit Card Will Save You Money While Holiday Shopping)

8. Rebid your insurance policies

You may be able to shave some money off your bills this fall by reviewing your insurance coverage.

Michael Landsberg, CFP and founder of Landsberg Bennett Private Wealth Management in Punta Gorda, Florida, recommends rebidding your auto and home insurance policies to at least three independent agents (but not the online ones that are all owned by the same companies).

"Often times, this rebidding process puts hundreds if not thousands back in people's pockets right before the holidays," he explains. "It's very easy. Just take your current policy declaration page and send that to an independent agent and let them do the work. The worst that can happen is you find out you've got a good program in place already."

9. Book travel before demand pricing kicks in

If you're traveling this fall or holiday season, book your mode of transportation and accommodations as soon as possible so you're not looking at ultra expensive rates at the last minute. Hotels and rental cars in particular go fast, and they're subject to on-demand pricing, which means your wallet could end up getting walloped if you're not shut out altogether. (See also: Do These 9 Things Now to Make Holiday Air Travel Easier)

10. Investigate a balance transfer

If you're carrying a high balance on a credit card, now is a great time to give yourself a credit card checkup.

"Explore what's out there," advises Han Chang, co-founder of InvestmentZen. "Many lenders are beginning to offer deals now to get a jump on the holidays. Consolidating credit card debt via a balance transfer can be pretty enticing, especially with those 0 percent introductory APR offers, which usually last for six to 12 months. If you can find a good offer, you could potentially pay down a significant amount of debt before November and December."

But nothing is ever free; offers like this often come with a one-time balance transfer fee ranging from 3 percent to 10 percent of the total balance transfer. That can really add up and, if you're not careful, completely negate any savings that 0 percent APR offers. Be sure to make your payments on time. (See also: Is a Balance Transfer Offer a Good Deal?)

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Reasons Cash Back Is Better Than Travel Rewards

Jason Steele — Tue, 12 Sep 2017 08:30:10 +0000

When you apply for a rewards credit card, you usually have to choose between cash back and travel rewards. To help sway your decision, the companies that offer travel rewards credit cards often try to seduce you with images of exciting vacation destinations that you can supposedly use your rewards for. (See also: How Travel Rewards Credit Cards Really Work)

For people who travel often, these rewards programs can be very valuable. Some expensive airfares, for instance, can be had for rewards rates that no cash-back card can compete with. (See also: Which Airlines Offer the Best Value for Their Miles?)

But most people don't travel enough to earn the points needed to score such deals. You may find the points and miles that these travel reward cards offer to be difficult, or sometimes impossible, to redeem for reservations you need. As a result, cash back credit cards are the better choice for many people. (See also: How Cash Rewards Credit Cards Really Work)

Here are six reasons that cash-back cards could be a better choice than travel rewards.

1. Cash back offers consistent value

What's a point or mile worth with your favorite airline or hotel program? You may never know, as you could receive excellent value from your rewards one day, and very poor value at another time. But with cash back, you always know exactly what your rewards are worth (usually 1 cent per point or a certain percentage of your purchases).

2. Cash-back cards have gotten more competitive

It used to be that a strong cash-back card allowed you to earn 1 percent on most purchases, and perhaps 2 percent on a few bonus categories such as groceries or gas. But now, there are plenty of cards that offer as much as 5 or 6 percent bonus cash back on purchases from eligible merchants such as gas stations, grocery stores, and office supply stores. (See also: How Credit Card Issuers Classify Your Purchases for Bonus Points)

3. Frequent traveler programs are less valuable

If you've tried to redeem your airline miles or hotel points recently, then you know how hard it can be to get substantial value from your rewards. For example, most airlines now charge a "standard" rate that requires at least double the miles of the traditional rates, often referred to now as the "saver" rates. Unfortunately, airlines have gotten stingy about the amount of award seats available at the saver rate. (See also: Which Credit Cards Have the Best Travel Redemption Value?)

Likewise, hotel programs may claim to make every standard room available as an award for points, but many independently owned properties have gotten around this by curtailing the number of rooms that are labeled "standard." As a result, you may well be told that no rooms are available for your points, as the remaining ones have a superior "city view" or "garden view."

4. Cash back is more flexible

Even when you can earn travel rewards that are equal in value to the cash back that you could have earned, you may find yourself wanting cash instead. By using a travel rewards card, you are limiting yourself to travel rewards, whether or not you actually want or need to travel. For example, if you have several thousand dollars' worth of travel rewards, you might regret not earning cash back if you decide not to travel next year due to illness, job loss, or just a busy work schedule.

In short, you can always use your cash back to pay for travel reservations, but you can't pay your bills with frequent flyer miles. (See also: Best Ways to Earn Cash Back Without Spending Extra)

5. Points and miles depreciate, while cash earns interest

As travel reward programs have become less valuable, your points and miles have fallen in value as a "currency." And there's seemingly no end to this process. It's a fair bet to say you can expect the miles that you've already earned to fall in value each year. This is important as it can take some people years to save up enough travel points for a big trip. On the other hand, you can invest your cash back rewards and earn interest just as you would on your other savings.

6. Travel prices are falling

Flying is less expensive than it once was, thanks in part to low fuel prices and increased competition from ultra low-cost airlines. It's actually common to find sales offering domestic airfare for less than $100 each way. While that's great news for travelers, it also means that your frequent flyer miles are worth less than they were when flights were more expensive. In addition, home sharing services like Airbnb have reduced the cost of lodging for many travelers. This makes hotel stays less necessary and their rewards points less valuable.

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This article is from Jason Steele of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Money a Mess? Try This Personal Finance Starter Kit

Emily Guy Birken — Tue, 22 Aug 2017 09:00:05 +0000

I recently joined a meal delivery kit service, which has completely changed my cooking game. Every week, I receive a couple of boxes of pre-chopped and presorted fresh ingredients, along with a step-by-step recipe that helps me get a meal on the table in under 30 minutes. (See also: Are Meal Prep Subscription Boxes Worth It?)

As I put together one of these meals last week, I started wondering why we haven't applied this concept to money yet. Where is the deliverable personal finance starter kit that will make handling your finances as easy as putting a quick and delicious meal on the table?

Since we probably won't be seeing any "Hello Cash" or "Green Apron" boxes arriving in our homes anytime soon, I figured I could take matters into my own hands and create such a starter kit for adult-level finances. Here are the specific "ingredients" you need to go from broke to bank.

What you need: A checking account

Opening a checking account is the first step to conquering your adult-level finances. That's because having a bank hold onto your money is the safest and least expensive way for you to access and spend it. Putting your money in a checking account gives you several benefits:

Security and protection of your money: Up to $250,000 of your money is FDIC insured by banks and NCUA insured by federal credit unions, meaning you do not have to worry that your money will be wiped out if the banking institution fails. State-chartered credit unions are backed by private insurers. (See also: Here's the Difference Between a Federal and Non-Federal Credit Union)

Free check cashing: Without a checking account, it is nearly impossible to cash a check without having to pay a fee, and those fees can take up to 3 percent of the value of the check. It's tough to get ahead financially if you have to pay to access your own money.

Free bill pay: A checking account gives you access to paper checks and online bill pay. Without such an account, you will have to pay your bills with money orders, which also cost as much as $1 per money order. (See also: 5 Reasons Paper Checks Are Still Relevant)

Access to a debit card: We live in a digital world, and it can be very difficult to handle your finances without a debit card or credit card. The majority of checking accounts these days come with a check card, which allows you to use your debit card like a credit card. (See also: Debit or Credit? Which One Should You Choose at the Checkout?)

To find the best checking account for you, consider your needs ― do you need an account with a low minimum balance, or do you plan to keep a high balance and want to earn some interest? Will an online bank cover all of your needs, or do you need a local branch? How often will you need to access the ATM? (See also: 8 Ways to Make Sure You Never Pay an ATM Fee)

Taking the time to find a checking account and bank that will fit your financial needs will help you keep more money where it belongs ― in your account and in your wallet.

What you need: A savings account

The next financial ingredient you need is a savings account. While the interest rates on savings accounts are still depressingly low, that does not change the fact that an FDIC or NCUA-insured savings account serves as the foundation for financial planning for the future. Here's why.

It makes it easier to pay yourself first: It's very hard to save money without a place to put it that is separate from your checking account. Opening a savings account gives you a more difficult-to-access spot for your money to grow. (See also: 4 Easy-to-Fix Reasons Your Savings Account Isn't Growing)
It can serve as your emergency fund: Financial hiccups, mistakes, and emergencies can hit anyone at any time. The difference between a financial emergency just being a nuisance and it becoming a catastrophe comes down to whether or not you have an emergency fund. Without one, you will be left scrambling to find money. With one, your emergency fund can simply absorb the cost of the emergency without affecting your usual spending. (See also: Where to Turn for Help When You Don't Have an Emergency Fund)

While it may be easy to open a savings account with the same bank where you already have a checking account, you might want to consider an account at a different bank. This can help keep the money out of your reach if you're likely to spend it, and could possibly get you a better interest rate, especially if you're willing to put your savings into an online bank. (See also: The Pros and Cons of Keeping All Your Accounts in One Bank)

Of course, opening a savings account is not enough. You need to actually use it regularly. The trick to getting the most out of your savings account is to set up regular, automatic transfers into it, so that your savings will grow without you having to think about it. (See also: Earn More Interest by Reducing Savings Friction)

What you need: A simple budget

Once you have a checking account, a savings account, and automatic transfers into savings, then you are ready for the next ingredient: your budget.

This is often the portion of financial adulting that makes the fainthearted run screaming into the distance. But budgeting is really about organizing your money so that you can spend it on the things that matter and scrimp on the things that don't.

The basis of budgeting is keeping track of your income and expenses. There are several ways to do this without having to break out a spreadsheet. You can use sites like Mint.com to track your spending for you and declutter the financial information coming in to you so that it's easier to track. (See also: Build Your First Budget in 5 Easy Steps)

When you have a decent idea of what you bring in and what you spend, then it's time to start managing your funds so that you spend less than you earn. How you manage your money is up to you, but the main idea is to save your splurges for the things you really value, and cut back your spending everywhere else. (See also: How to Manage Your Money — No Budgeting Required)

What you need: A Roth IRA

Your financial life is really starting to look good at this point, so it's time to add the next ingredient: a Roth IRA. This tax-advantaged retirement account is a great way to save for your future.

Roth IRAs are funded with post-tax dollars, which means you will not get a tax break when you make a contribution ― but any investment gains can be withdrawn tax-free anytime after age 59½. Since it's very likely that you'll be in a higher tax bracket by then, this makes the Roth IRA a great deal for newly-minted financial adults. You may contribute up to $5,500 per year to your Roth IRA, and there is no age limit on contributions since you will never be forced to take minimum required distributions on this account, unlike traditional IRAs and 401(k)s. (See also: Which Retirement Account Is Right for You?)

In addition, you can access up to $10,000 of your earnings penalty-free from your Roth IRA to put toward buying your first home. You may also access your principal at any time without having to pay a penalty, which is not possible with traditional IRAs and 401(k)s.

That being said, if you do have access to a 401(k) retirement savings account at work and there is an employer match for your contributions, you will want to make sure you contribute up to the full employer match before funding your Roth IRA. The employer match is free money, after all. (See also: 7 Retirement Planning Steps Late Starters Must Make)

The best way to make sure you max out your Roth IRA contributions is to make them completely automated, just like your savings.

The optional garnish: A rewards credit card

At this point, your adult-level finances should be working well and taking good care of you. The next level of financial expertise is to start using your regular spending to help you achieve more of your financial goals. You can do this with a rewards credit card that rewards you for your regular spending. With savvy use of such cards, you can earn anything from flights to hotel stays to plain old cash back.

But, there is a reason why this is an optional garnish, rather than one of the main ingredients of financial adulthood. Banks and credit card companies don't offer rewards cards to be nice to their customers ― credit card rewards can make even the most frugal financial grown-up forget their budget limitations. If you are able to pay off your credit card in full each month and just reap the free rewards, then a rewards credit card can be a delicious topper to your financial adulthood. (See also: How to Escape Reward Card Spending Traps)

If, on the other hand, you know that you will struggle to pay off your balance every month, then feel free to enjoy your financial adulthood sans rewards credit card. It's not a necessary part of your financial starter kit ― it just makes for a nice addition. (See also: 6 Smart Reasons to Pay Your Credit Card Bill Before It's Due)

Whipping up a financial adulthood

While it would be convenient if you could order a financial adulthood starter kit to show up at your doorstep, it's actually pretty simple to put together one of your own. Just know the basic ingredients you need, find the ones that work best for you, be consistent ― and, voilà! You'll go from broke to bank before you know it.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Credit Card Transactions That Don't Earn Rewards

Holly Johnson — Wed, 14 Jun 2017 08:31:17 +0000

Rewards credit cards can be a great way of earning a little something extra for the purchases you make every day. Most rewards cards dole out 1–5 points for each dollar you spend. But there are a few transactions that never earn rewards. Keep these in mind so you don't end up disappointed when you look at your rewards statement later on (and instead try the strategies that follow to boost your rewards earnings).

1. Cash advances at an ATM

If you use your credit card for a cash advance at an ATM, you are running up a balance on your credit card. Unfortunately, that balance won't earn you any rewards points — or any love from your card issuer. Whenever you take out a cash advance from an ATM, you should plan on paying a higher interest rate immediately on the advance amount, as well as a cash advance fee of 2–5 percent and any fees that the individual ATM charges.

2. Cash advance checks you receive in the mail

Those cash advance checks you receive in the mail might seem like an awesome deal. You write the check out to yourself, cash it, and the money is yours. Unfortunately, that money will need to be paid back, along with fees, of course.

You can expect to pay the same fees as you pay for withdrawing cash from an ATM, except for the ATM fee. You'll still pay a transaction fee and a higher interest rate on your cash advance, though. There will be no grace period before interest starts accruing on the cash advance, either. And just like a cash advance from an ATM, you won't earn any rewards for the privilege.

3. Balance transfers

In a perfect world, we could all earn millions of credit card points by endlessly transferring balances. We could transfer the same balance back and forth for years, earning oodles of welcome bonuses and points for our spending.

But in this world, you never earn rewards on balance transfers. Banks would simply lose too much money if they offered this option, so they don't.

While you don't earn rewards with balance transfers, that doesn't mean they're not valuable. Many of the best 0 percent APR cards charge no interest on the amount transferred for 12–21 months. You can gain huge savings on interest while you pay off your debt.

And while it's usually best not to use a balance transfer card to make new purchases, if you do have to do that, some balance transfer cards offer rewards on purchases. (See also: 6 Hidden Dangers of Balance Transfers)

4. Purchases made with points

When your credit card has a rewards program, it's easy to conflate your cash spending with rewards purchases. But if you use points for a purchase (instead of cash), you won't earn any points when you buy. The bank only wants to reward you for spending actual money on the card.

Here's an example. Imagine you have a travel credit card and you decide to book an excursion through the card's travel portal. You set your sights on a snorkeling tour in Grand Cayman, and find you have the option to pay with points or to fork over $70 per person.

If you pay with cash, you'll absolutely earn rewards for the purchase. But if you turn in your points instead, you'll be out of luck. (See also: Once-In-A-Lifetime Experiences I've Earned With Credit Card Rewards)

How to boost your rewards over time

Fortunately, there are plenty of safe, reliable methods to beef up your point balances on your favorite rewards credit card. Best of all, nothing we're about to suggest involves paying interest or upfront fees at all.

Here are four ways to earn more rewards over time.

1. Use your rewards credit card for everyday purchases

The best way to earn more rewards isn't complicated. By simply using your card for all your regular purchases (think gas, groceries, and miscellaneous), you can earn a ton of points over time. If you spend $1,000 on your card every month and earn an average 2 percent back, for example, you'll rack up $20 per month in rewards — or $240 per year. (See also: How to Save an Extra $1,094.86 a Year)

2. Pay all your bills on credit

Another strategy to boost your rewards is to put your regularly occurring expenses on your credit card. Think of anything you have on automatic payments — life insurance, cellphone bill, utility payments. If they're currently set up to be paid via debit automatically, you could earn more rewards by setting them up on your favorite credit card instead. Just be sure to check with the provider to make sure you won't have to pay a fee for using credit. (See also: Paying Your Bills With a Credit Card)

3. Shop through online portals when possible

Many rewards card issuers offer their own online shopping portals that make earning rewards even easier. You'll need to log in to the portal, then you can click through to major retailers to earn extra points for every dollar you spend. Options vary and deals change often, but you can usually earn at least one or two bonus points for every dollar you spend on that card.

Sometimes you'll see deals for as many as 30 bonus points. Merchants include online stores like Kohls, Best Buy, Macy's, and many others. (See also: 5 Ways to Earn Cashback Rewards Without Extra Spending)

Of course, if you want to make your rewards card work for you, avoid running a balance. While earning 1–5 percent back on your purchases is certainly appealing, those rewards will disappear quickly if you're forking over the average credit card interest rate.

When it comes to credit, tread carefully and only charge what you can afford to repay. If you wind up in debt in pursuit of rewards, you'll regret it.

This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways to Turn Credit Card Rewards Into Real Wealth

Holly Johnson — Mon, 22 May 2017 08:30:16 +0000

Using a rewards credit card is an easy way to pocket a few hundred dollars a year in cash back rewards, or earn free travel. And if you're willing to put in the effort, you'll find there are plenty of ways to parlay your points into something more meaningful and long-lasting.

1. Invest your cash back for the long haul

The simplest way to make cash back rewards even more rewarding is to put the money into a retirement account and let compound interest work its magic. For example, we've worked out how to save over a thousand dollars a year using credit cards.

Let's say you banked your $1,000 in rewards and savings and invested them in a Roth IRA each year for 20 years. If you earned an average return of 6 percent, you'd have almost $40,000 after 20 years, before fees.

2. Invest in experiences

Ask any dying person what they value most, and it won't be money they speak of. Most people look back on their lives and cherish the memories they've made — the sight of beautiful places, the laughter of their children, and the life-changing moments they've spent with the people they love.

Travel rewards cards may not help anyone grow rich, but they can help them afford a wide range of experiences that may otherwise be out of reach. An Alaskan cruise may fit into even a modest budget with the smart use of credit card rewards. Meanwhile, a $1000+ economy flight to Europe can be had for as little as 45,000 American Airlines frequent flyer miles, which you can earn with an American Airlines credit card.

Used wisely, travel rewards can help families make memories they'll cherish for a lifetime. At the very least, they make it possible to travel farther, participate in more activities, and stay longer once you're there. (See also: How to Earn a Free Vacation in 9 Months With Credit Card Rewards)

3. Donate rewards to a worthy cause

Even if you aren't remotely interested in spending rewards, you can make a difference. Some credit cards give rewards directly to charities. Other credit card programs let you donate your points to charity, letting you turn your regular spending into a boon for someone else.

While each credit card rewards program works differently, most make it possible to donate your rewards to causes you believe in. And if you don't want to donate through your issuer's official program, you can always simply give the cash back you earn to your favorite charity.

4. Use rewards to pay down debt and save money on interest

If you have credit card debt, you shouldn't be chasing credit card rewards. But if you have other debt that you'd like to pay off sooner, like a car loan, you can rack up cash rewards and make an extra payment each year. This will help you reduce interest on that debt as well as pay it off sooner.

5. Avoid a high-interest loan

If you have a huge expense coming up and need to take out a loan, you can avoid interest payments and earn rewards in one fell swoop. With a credit card that offers 0% APR on new purchases you essentially get an interest-free loan for a limited time.

For example, let's say you plan to finance a roomful of furniture to the tune of $5,000. You want to pay it off over a year or so, and hope to avoid huge interest payments. You can get a card that offers 0% APR for the first 15 months, allowing you to pay off that $5,000 interest free. Remember though that you have to stay committed to your plan to pay off that amount during that period. Rewards cards typically charge higher interest rates. If you don't think you'll be able to pay off your balance, you'll want instead to look into low interest credit cards to keep a handle on your debt. Before you pursue rewards, make sure you're prepared to use credit responsibly.

This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Easy Way to Save Up a Big Travel Budget

Amanda Gokee — Thu, 20 Apr 2017 08:30:13 +0000

Traveling is an undeniably amazing experience, but as with so many of the finer things in life, it does come with a price tag attached. Cost is unfortunately one of the biggest factors that prevents people from traveling.

However, if getting to see the world is a serious goal of yours, this may be the perfect time to renew your focus on savings so that you can afford to pay for your wanderlust. (See also: 15 Ways to Save for Your Dream Vacation)

Set a goal and deadline

To help you get motivated to save more, set a clear goal and a timeline. The more specific the goal, the better, since it will allow you to visualize your trip and get excited about it. For instance, if you've dreamed about taking a trip to Europe for years, decide on your top destinations and how long you want the trip to last. That will help set a ballpark budget figure to aim for.

Next, attach a savings deadline — for example, decide that you will buy your plane tickets within the next six to 12 months. Don't give yourself much more time, or you'll lose the urgency to put money away now.

Having this type of a clear savings goal will help you stay motivated and make your trip feel more like a reality and less like a distant dream. It will also give you a schedule for your savings, allowing you to calculate how much you need to set aside each month to be able to afford your upcoming trip.

Slash unnecessary spending

Your goal will help you find the motivation to make some of the sacrifices that come with putting more money toward savings. You will want to shift your mindset from the short-term gratification of an immediate purchase (whose charm almost always wears off quickly) to the long-term gratification that comes from an experience that will leave you with memories for a lifetime.

You may be surprised to realize how much of your spending is discretionary. Think of anything you are spending money on that you could live without. For instance, you can save a lot of money by cooking for yourself, instead of going out to eat. Even less-than-fancy meals at restaurants like Panera or Chipotle can cost $7 and up. If you indulge in this convenience three times a week, you're spending $84 a month. Substitute each of those meals with frugal home cooked meals and save.

A car can be a significant expense, so if you can do without it you are setting yourself up for big savings. According to AAA, it costs the average American car owner around $8,558 to own and maintain their vehicle each year (this includes $3,759 in depreciation but doesn't include car payments). Even if you factor out the depreciation, that still means Americans are averaging $4,799 a year just to run our cars.

In contrast, Numbeo.com reports the average cost of a monthly transport pass in the United States is around $70, or $840 a year. If you live in an area with good public transportation, you could potentially pocket more than $3,900 a year by giving up your car.

If you can't completely forego having a car, you could still reduce your transportation expenses by driving less often. Walk, bike, carpool, or take public transportation instead. You'll not only save on gas, but also parking.

Need inspiration to cut costs? Consider this woman from the U.K. who essentially spent nothing for an entire year. While that may sound drastic, her savings while living in notoriously expensive London added up to nearly $27,000. Even half that amount would make a significant travel budget.

Work more, spend less

During one six-month period of my life I saved $12,000, which then allowed me to travel comfortably for the next six months without any income. I was able to do this by ensuring that my costs were as low as possible

I split a $500 studio apartment with a roommate, so my rent was only $250 a month. Living quarters were cramped, but I was hardly ever there. I worked three jobs so I could make more money (around $2,500 a month). My 50-60 hours-a-week work schedule also meant that I had less time to spend my earnings.

I was able to keep grocery costs to $100 a month because I was working in the food industry at the time. My other main costs were gas ($50 a month), and the cheapest cellphone plan I could find ($30 a month).

For fun, I mostly did free activities, taking advantage of the fact that I lived in the mountains in California. I could go hiking and biking for free and there were often free concerts in the evenings. When I needed new clothes for work, I would get them from the local thrift store for $10–$15.

Get rewarded for your purchases

There are many ways to use various types of credit cards so that you get rewarded for your necessary expenditures. Especially for major expenses such as gas, groceries, and plane tickets, selecting the appropriate credit card can help you save a significant amount of money. (See also: How to Save an Extra $1,095 a Year)

Grocery credit card

Groceries are a big expense for most people. Since you can't avoid spending at least something on groceries, you may as well get rewarded for your spending. Use a credit card that gives you extra rewards points for every dollar you spend at supermarkets. (See also: 5 Best Credit Cards for Groceries)

You may even be able to stack rewards by using a loyalty card from the supermarket chain where you do most of your shopping. Often these loyalty programs offer you cash discounts that can help cut your overall grocery bill.

Gas credit card

If you just can't live without a car, you can still save on the cost of gas by opening the right credit card. Cards that are co-branded with a particular gas station give you discounts at the pump, usually a few cents per gallon. These cards tend to have high interest rates, though, so if you tend to carry a balance, you'll usually be better off with a rewards credit card that gives you bonus points for purchases made at gas stations. If fuel is one of your bigger expenses, it's worth opening a gas rewards card. (See also: 5 Best Gas Rewards Credit Cards)

Travel credit card

Although you may not be traveling a lot while you save up for your big trip, it's worth getting a travel rewards credit card well in advance of your trip. By using your travel card for everyday purchases, you can rack up points toward free flights or hotel stays when it comes time to hit the road. (See also: 5 Steps to a Free Vacation in 9 Months or Less)

What's more, most travel cards offer significant points bonuses when you spend a certain amount within the first few months after opening the account. These bonuses can be worth hundreds of dollars in travel, but you'll need time to meet the required spending amount and wait for the bonus points to be posted to your account.

Finally, airline cards often come with free checked baggage and other perks such as free rental car insurance, lost baggage coverage, and trip interruption insurance. (See also: 6 Types of Travel Insurance That Credit Cards Include)

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This article is from Amanda Gokee of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Things You Should Never Do With Your Travel Rewards Credit Cards

Holly Johnson — Wed, 01 Mar 2017 10:30:34 +0000

Getting the most out of a travel rewards credit card isn't as easy as it might seem. Sure, the basic premise is simple: Rewards credit cards dole out points when you make a purchase with your card. Then you redeem them for free or discounted travel. But there are plenty of pitfalls to watch out for. (See also: Get Started With Travel Rewards With These Simple Steps)

Before you put too much effort into earning travel rewards, it's crucial to know what you're getting into. If you don't, you could end up with expired or useless points, or worse, debt.

If you're angling to use credit card rewards to your advantage — not the card issuer's — here are some mistakes to avoid along the way.

1. Missing the Minimum Spending Requirement for a Bonus

Most top travel rewards credit cards offer a sign-up bonus for hitting a minimum spending requirement within a specific length of time when you first get the card. For example, you might earn 50,000 points if you spend $4,000 within the first three months of card ownership. (See also: Best Travel Rewards Credit Cards)

If you should happen to fall short, however, you'll never see that bonus hit your account. That's true whether you're $20 short or $200 short. Unless you meet the minimum spending requirement in its entirety, you're out of luck.

If you get a new card for the bonus, make sure you're prepared to spend enough to hit the minimum with ease. You should also remember that the clock generally starts ticking on the day you're approved for the card — not the day you received it or activated it. So, if your card takes 10 days to show up in the mail, that's 10 days less you have to meet the spending requirement. If you're unsure of the exact date you were approved, call the number on the back of your card and ask. (See also: 5 Smart Ways to Meet a Rewards Card Minimum Spending Requirement)

2. Earning Loyalty Points You Can't Use

Racking up Hyatt Gold Passport points for a trip to Denmark sounds like a genius plan until you realize there are no Hyatt properties in the entire country. And earning Southwest Rapid Rewards points sounds smart — that is, until you realize Southwest doesn't even fly out of your home airport.

This might sound crazy, but it happens all the time. Believe it or not, some people get so excited about earning points or miles that they don't even check whether they can use them. (See also: Choose the Best Travel Rewards Credit Card With This Guide)

Before you sign up for a co-branded card that only works with a specific loyalty program, it's crucial to figure out if those points will leave you better off. If you're unsure or want more flexibility, steer clear of co-branded cards and instead choose a flexible travel rewards card that lets you use points for multiple airlines and hotel chains.

3. Carrying a Balance

Paying interest on your credit card charges is never a good idea, but that's especially true if you're using the card to earn rewards. Since rewards credit cards typically charge higher interest rates than non-rewards cards, your misguided pursuit of points and frequent flyer miles can leave you worse off than if you had a low-interest credit card.

Before you chase credit card rewards, you should be debt-free. Even better, you should track your spending to make sure you're on track with your goals.

4. Forgetting About Annual Fees

While many cash back credit cards don't come with annual fees, the same cannot be said about travel rewards cards. Some excellent premium cards come with annual fees as steep as $450, while more basic cards cost anywhere from $59 to $95.

Before you sign up for a rewards card, make sure you know about fees and when they come due. You should also make sure you're going to extract enough value from the card to make the experience worth it. (See also: Simple Guide to Evaluating Whether a Credit Card With an Annual Fee Is Worth It)

5. Letting Your Points Expire

Some points expire if you let them sit idle for too long, while others never expire. Of course, the burden falls squarely on you to keep up with expiration policies and deadlines. If you fail to plan and don't ensure your points stay active, you could see thousands of points disappear overnight.

Before you get too wrapped up in any rewards program, make sure you know what it takes to keep your points active. Some airline programs will wipe out your point haul after 12–24 months of inactivity, but you can keep your account active by using your co-branded credit card for a purchase or transferring points.

Either way, make sure you know the rules and stay organized enough to follow them. (See also: 4 Best Tools for Keeping Track of Your Rewards)

6. Not Using the Right Card for Your Goals

A friend of mine had been using her only rewards card — a cash back card — to save up points for an international flight that normally costs around $1,500. At the rate she was going (earning around 30,000 points per year), it would easily take her five years to earn that round-trip ticket — and that's only if the price didn't surge in the meantime.

Once I realized this, I guided her toward the Chase Sapphire Preferred® card for its generous sign up bonus. Once she earned the bonus, she would have more than enough points to transfer to the United MileagePlus program to pay for the same international ticket right away. Overnight, her strategy morphed from one that would take up to five years to a plan that would culminate in just a few short months. (Keep in mind the card has an annual fee.)

The bottom line: If you have a specific goal in mind, you can save time and heartache by optimizing your rewards from the start. (See also: 5 Steps to Getting a Free (or Close to Free) Vacation Quickly With Credit Cards)

7. Overspending to Earn More Rewards

Because rewards credit cards dole out points based on your spending, it can be tempting to spend more to earn more rewards. This is especially true when certain bonus categories come into play. If you can earn five times the points on a brand-new flat screen television, for example, you might feel inclined to buy one, even if you didn't need it.

But if your rewards goal is truly getting ahead, you should think long and hard before buying anything out of the ordinary. After all, spending money you wouldn't spend otherwise won't help you save money in the long run.

Remember, the best credit card rewards strategy is a simple one: When you use your cards for bills you were going to pay anyway, you'll truly be rewarded. But if you use credit card rewards to justify a spending spree, you're not really helping yourself. (See also: 7 Credit Card Reward Tips Many People Don't Follow)

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This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Ways to Use Miles and Points for Holiday Gifts

Carrie Kirby — Fri, 09 Dec 2016 10:00:08 +0000

Although shopping isn't always the best way to get value out of your credit card or other loyalty rewards — international flights and upgrades typically get more punch for the point — there are lots of good reasons to consider spending some points on holiday gifts.

If you're short on cash, tapping your miles and points is an easy way to come through for loved ones without racking up debt. It's a sneaky way to treat a spouse who shares your checking and credit accounts without having a bill for the "gift" arrive in January. Shopping can also be an expedient way to use up small caches of points that might otherwise expire, which should be part of your year-end financial cleanup anyway.

Check out some of these easy ways to turn points into presents under the tree. (See also: 25+ Ways to Save Money But Still Get What You Want During Holiday Shoppin)

1. Shop Amazon With Points

This is so easy that even I, usually a die hard "save points for travel" girl, bought my kids some toys using this method this year. Some credit cards allow you to link your Amazon account directly to easily use points for purchases. Amazon is also a popular vendor in shopping portals. Check your credit card issuer to see if they have a members-only shopping portal that allows you to use points (or earn bonus ones) when you shop with their partners.

2. Buy Gift Cards With Points

Many rewards programs offer gift cards as a redemption option. You can usually exchange your points at a $0.01 rate, so if you have 500 points, you can usually get a $5 gift card to a popular store, like Starbucks, Home Depot, or Banana Republic. Make sure to check whether your gift cards will arrive by mail or email, and if by mail, when they will be shipped.

3. Give the Gift of Travel

If you have a lot of points, you can always use them where you get the best value: airline flights. This is a great gift idea for a loved one you'd like to visit you. Simply use your points to book a ticket in his name. Southwest is a good candidate for this kind of gift, since your recipient can change the flight itinerary at no charge if your proposed travel dates don't work. (See also: Why Southweest Is the Best Domestic Airline for Families)

4. Give Subscriptions

If you have a few points close to expiration, you may have received an offer in the mail to trade points for magazine and newspaper subscriptions. This is a good way to squeeze some value out of miles for an airline you're unlikely to fly, or points from any program where you don't expect to accumulate enough to redeem anything big.

For instance, while 3,200 miles is not enough for even a short flight on American Airlines, it can get you a yearlong subscription to The Wall Street Journal, a $278 value. Through Mags for Miles, you can redeem United, Spirit, and a number of other types of miles for People, Sports Illustrated, or many other titles. This is a particularly good idea for Spirit miles, since they expire quickly.

5. Redeem Points for Merchandise

This usually ends up giving you the worst value for your points, but if it prevents you from actually spending your cash, it can still be worthwhile. Look at your options for points redemption, and you'll usually find a "merchandise" option, which lists gadgets and gifts you can get with your points. If the gift you really want to get is there, or you really wouldn't be able to use the points in a better way, why not?

6. Give Exclusive Experiences

Sometimes Broadway shows, sporting events, and other experience vendors offer exclusive opportunities to cardholders. Members might get offered pre-sale tickets for popular shows or access a VIP experience at a special event. (See also: Once-In-A-Lifetime Experiences I've Earned with Credit Card Rewards)

7. Redeem Points for Cash

Even if your credit card isn't labeled a "cash back" credit card, you may still be able to redeem your points for cash or a statement credit. Sometimes they don't advertise this option, so dig a little into their rewards center to see whether it's an option.

8. Make a Donation

If your giftee is the type of person who would appreciate a charitable donation in their name, many issuers will allow you to donate your points to charities. Check your rewards center for options and availability.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Ways Millennials Have Changed Money (So Far)

Mikey Rox — Fri, 02 Dec 2016 11:00:10 +0000

Every generation of Americans have changed the face of this nation in its own way.

In the 1990s, our country was very different from it was in the '70s, which, itself, was a far cry from the 1950s. Today, Millennials are overhauling our political, social, and financial landscape so much that it's barely recognizable from just 10 years ago, and that's not necessarily a bad thing (depending on where you stand on certain issues.)

As far as money is concerned at least, the "Me Generation" is making it easier to earn money and more efficient to spend it, while reinventing entire aspects of personal finance, like investing. They're living up to the old idiom of putting their money where their mouth is — and here's how.

1. Cash Back Is Growing While Coupons Fall Behind

I used to be a major coupon clipper, once saving more than $80 on my grocery bill on double-coupon day at my local supermarket. My couponing prowess (and interest) has consistently waned over the years. Instead, substituting my savings with cash back deals through my bank and grocery apps, like Ibotta, Checkout 51, and SavingStar, has skyrocketed.

I'm not alone. Millennials are hopping aboard the rebate train in droves.

If you're not familiar with the concept of the cash back service, it's basically the opposite of the upfront savings that coupons provide. Instead, these rebate providers pay out the consumer on the back-end, after the shopping trip is complete.

SavingStar, for instance, offers deals from popular grocery brands like Cheerios, Yoplait, Dove, and more. For some chains, it'll link deals directly to shoppers' loyalty cards. For other stores, shoppers can submit a picture of their receipt through the app or website. In either case, shoppers earn cash back into their SavingStar accounts, which can be paid out to a bank or PayPal account, or as gift cards from Starbucks, iTunes, and AMC Theatres.

Of course, cash-back-adopting Millennials would maximize their savings by using both coupons and the rebate services, but, ya know — kids these days.

2. Investing Is Being Completely Reinvented

As an investor myself, I've avoided putting money in stocks (I just don't trust that market), preferring to invest in real estate or other entrepreneurs' business ideas. Michael Banks, founder of investing and personal finance blog Fortunate Investor, says I'm in good company. Millennials are turning the investment industry on its head by rethinking long-held strategies, perhaps out of necessity.

"As the generation with the largest student debt and toughest-looking future, traditional investing is out of the picture," Banks says. "Instead, more Millennials are relying on micro-investing — investing small amounts of money frequently — to accomplish their savings goals."

Micro-investing allows would-be investors with little starting capital to bypass the roadblocks that usually keep them out of the game — minimum investment levels, trading costs, market research, and really just not having a ton of money.

"Investing has always had a high buy-in value, which you would think eliminates the generation that is doing everything they can to save whatever they have — but a handful of apps are changing that, and opening the doors for Millennials to try their hands at creating their own investment portfolios," adds Banks.

3. Hardly Anyone Under Age 35 Walks Into a Bank Anymore

Your grandma probably still goes to the brick-and-mortar bank. Heck, maybe even your dad likes to roll in from time to time for a withdrawal and a lollipop, but you'll be hard-pressed to find a Millennial in a bank, unless it's to grab cash from an ATM for after-work drinks (or working there). Rather, they prefer the easy-breezy mobile banking that accommodates their fast-paced lifestyle.

According to a recent study, 75% of Millennials are at least somewhat reliant on a mobile banking app to interact with their bank for tasks such as depositing or sending checks, checking their balance, and paying bills.

"This seems like somewhat of a no-brainer, but the power of convenience and control often goes overlooked," writes creative media agency Brokaw. "Within mobile interactions, there are multiple avenues in which banks can increase their influence and exposure, including text messages and push notifications. Take FirstMerit Bank's text banking and alerts, for example: It allows their customers to request activity alerts for different aspects of their account right from their phone."

Legit, though — mobile depositing is one of the best inventions of the 21st century. I will stand by that until my retinas are replaced with laser scanners that do all my banking for me. Which is totally gonna happen, ya know.

4. The Monetization of Ideas

Think you need to push product to turn a profit? Old school. Millennials' intellectual property is their bread and butter — and they're fiercely protective of it.

"The increasing monetization of ideas is one trend Millennials are driving, which doesn't look to be slowing down anytime soon." explains Monica Mizzi, editor of LegalTemplates.net, a website that equips people with the tools to be their own legal advocates. "The boom in startup culture can be largely attributed to the throng of Millennials who are taking the plunge to make their 'one in a million' idea come to life."

Successive studies highlight that a growing number of Millennials are bucking the trend of traditional employment to try their hand at entrepreneurship. With this has come an increasing interest in using nondisclosure agreements to protect their business ideas.

"While using an NDA to protect business ideas is not a novel concept, growing market competition has led Millennials to become more proactive in legally protecting their ideas — even before they have come to fruition," Mizzi continues. "It's not uncommon to hear reports of big companies pinching ideas or being 'inspired' by their competitors' ideas, so Millennials wanting to become entrepreneurs are more conscious of ensuring their ideas are never compromised."

5. Instant Financial Transactions Are Becoming More Common

When do Millennials want their money? Now!

Domestic instant transaction service has become commonplace for this demographic — I get paid instantly via Venmo when I deposit money from my Lyft earnings (like a boss!) — and its expansion to international exchanges is inevitable. The problem is, sending money internationally is a bit trickier with more complex compliance and regulations needs. But at least one service right now, Remitly, has built compliance and regulation rules into their app making it possible to meet Millennials' need for speed and convenience.

6. Digital Currency Has Real Value

Digital, or cryptocurrency as it's formally known, went mainstream with the runaway success of Bitcoin — a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency (as explained by Wikipedia). In layman's terms, it's cyber money that you can spend wherever cyber money is accepted, which is a real thing in this day and age.

But Bitcoin isn't the be-all or end-all of digital currency. Imitators have popped up, relevant in their own rights. Using a digital currency called Steem, for example, users of brand-new social network Steemit (which looks a lot like Reddit) get paid for posting and curating content. And it's become wildly popular. After launching this past May, Steemit (which has a 26-year-old CEO) already has nearly 120,000 registered users and posts nearly 1,000,000 unique visitors per month. They've also paid out more than $4,000,000 in rewards to users to date.

While digital currency is still in its infancy despite these successes, you can expect to see more and more of it infiltrating sectors of industry. Will it ever replace cash or credit? Probably not. But it's certainly an interesting concept as a new form of legitimate currency as we've move forward with Millennials at the helm.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: