My credit card strategy got me nearly 15% off

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  • I have credit cards that offer a 5% refund on rolling categories, but I don’t always shop at those stores.
  • To take advantage of the offer, I purchase gift cards using my credit cards so that I can block savings for future purchases.
  • I have a system for cataloging which gift cards I have and how much is left on them.

As inflation peaked in 40 years and the cost of many goods and services continues to rise, I have been looking for ways to stay within budget. In addition to my usual strategies for navigating in leaner times (such as reducing discretionary expenses and negotiating deals where possible), I use more and more categories of credit card bonuses and refund offers to save on essential purchases like gas and groceries, and even not essential purchases like dining and traveling.

I don’t always prioritize maximizing credit card rewards in normal economic times, but cutting a small percentage from each transaction becomes more tempting as prices go up. Here’s how I do it.

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My first step is to have the right credit cards

Having credit cards that earn more than the standard 1 or 2 points per dollar is essential to my strategy. In my credit card wallet, I have many that offer bonus points on select transactions. For example, my Chase Freedom®

card earns 5% cash refund of up to $ 1,500 spend in rolling quarterly bonus categories – for the third quarter of 2022, those categories are gas stations, car rental agencies, cinemas and select live entertainment.

Earning 5% back is easy when my purchase needs align with the available bonus categories. If I want to earn 5% back on gas purchases this quarter, I simply use my Chase Freedom® card and I’m done. The real trick is to get a similar return when the bonus categories Not corresponds to what I have to buy. To do that, I have to get creative.

Purchase of third party gift cards

Retailers commonly sell gift cards to use in their stores, but many also sell gift cards that you can use to shop elsewhere. Head to your local Home Depot, Kroger, Bed Bath & Beyond, or another major retail outlet and you’ll likely find shelves of gift cards for everything from pizza, coffee shops, and streaming services to drugstores, wireless service providers, and airlines. Paired with profitable credit card bonus categories, these gift cards create an opportunity to increase my return (and thus reduce costs) on a wide range of purchases.

Using gas as an example again, my wife and I mostly refuel at the Shell station a few blocks from our home. I can purchase Shell Gift Cards at a variety of stores, including Walgreen’s, Safeway, Best Buy, and most notably for my own purposes, Staples and Office Depot.

Since I have a Chase Ink Business Cash® credit card that earns 5% cash at office supply stores, I can purchase Shell gift cards at Staples or Office Depot and lock in that higher yield for future gas purchases. This means I always earn 5% on gasoline, not just when it is offered as a rolling bonus category.

This strategy extends to other purchases. Many of the merchants we do business with have easy-to-find gift cards, including Amazon, Target, Safeway, Lowe’s, REI, eBay, Best Buy, Airbnb, Guitar Center, and others. Many of these merchants are not normally included in the credit card bonus categories, even on a rolling basis. Buying gift cards from a store that is eligible allows me to bypass the limits of those bonus categories and extend my savings to a wider range of purchases.

Other strategies I use to save on gift cards

The savings opportunities extend beyond credit card bonus categories. Most major credit card issuers have targeted offer programs (such as Amex Offers ** and Bank of America’s BankAmeriDeals) that provide customized discounts or bonuses for eligible purchases. Many of these are for items that I don’t care about and will never buy, but I regularly find helpful offers that can cover the cost of planned purchases.

For example, my Amex Platinum card currently has a $ 10 back offer on purchases of $ 100 or more in supermarkets; the offer can be used three times, for a total of $ 30 back.

I rarely spend $ 100 on a single grocery round and do most of my grocery shopping at our local co-op, but the Safeway near my home sells a variety of third-party gift cards. With this Amex offer, I can get a 10% discount on future purchases at many of the merchants mentioned above.

Another way to save is to look for discounts or bonuses on gift card purchases. For example, Best Buy might offer a 10% discount on Netflix gift cards, or Lowe’s might offer a bonus $ 15 Lowe gift card to customers who purchase a $ 100 third-party gift card. As long as those are eligible gift cards. which I will use, the discount or bonus is as good as cash for me.

Finally, I keep an eye on offers on Visa, Mastercard and Amex prepaid gift cards, which I can then use pretty much anywhere that accepts credit cards. These prepaid cards typically charge a purchase fee, but Staples and Office Depot (among others) often offer promotions that forgo those fees, meaning I can purchase them at no additional cost by earning 5% refund on my Chase Ink card. . I therefore use prepaid cards for purchases where otherwise I would earn fewer rewards, such as in the gym or in a mechanic.

I accumulate savings for an even greater net discount

A great aspect of these strategies is that they can be combined not only with each other, but also with other savings and rewards such as online shopping portals and member discounts. A recent example is a sale Staples made in early July on several brands of gift cards, including $ 100 to $ 90 Airbnb gift cards. By paying with my Chase Ink Business Cash® credit card, I earned a extra 5% ($ 4.50), resulting in a total discount of 14.5%.

Another common example is using my Shell Fuel Rewards membership to save 5 cents per gallon on top of the discount I got on my Shell gift cards. There are many creative ways to stack, depending on how much effort I feel like putting into it.

The disadvantage of gift cards

Speaking of fatigue, when I consider a way to save money, I try to look at the big picture. Saving is great, but at what cost?

First of all, I am protective of my time. Saving a few bucks isn’t personally worth it if I have to waste a lot of time in the process, so I’m aware of how much time I spend taking advantage of the offers. If I can save money by buying a gift card online or tossing it in the cart when I’m already in the store, that’s an easy win. If I have to go all out, then the savings must be commensurate with the extra time spent.

Part of this calculation is the time I spend keeping my gift cards organized. I just threw them in a box, and while I don’t think I’ve ever thrown away a loaded card, I can’t say for sure. I now have a system to catalog gift cards when I receive them and dispose of them when they are out of stock. It doesn’t take long, but ignoring the time I spend on that extra step would result in dishonest accounting of my process.

The system I use to organize my gift cards

There are two parts to my system. One is to keep them physically organized; to do this, I use a cardboard box which I think is meant for storing baseball cards. I arrange them alphabetically by brand so they are easy to find and all cards from the same brand stay together. I kept them loose in a box and either forgot some or didn’t realize I had multiples for a single merchant, so I didn’t use them together when the opportunity arose.

The other component of my organization is keeping track of their value, which I do in an Excel spreadsheet. When purchasing a gift card, I note the brand, dollar amount, date of purchase, and gift card number / PIN, where applicable. This helps me keep track of partial balances and is useful if I lose a gift card or need to return an item that I used to purchase a gift card. Once a gift card is used up and I’m sure I won’t need it anymore, I move it to another spreadsheet tab.

Aside from the effort I put into buying gift cards, I try to keep some potential pitfalls in mind. First, shopping with a gift card means that I can’t rely on benefits like purchase protection or return protection that I get when I use a credit card. This is not an issue for purchases I consume quickly, such as gas or groceries, but it is a concern for goods such as electronics or household items, or anything else that I may want to return, as funds typically return to the method of original payment. The less confident I am about a purchase, the less likely I am to use a gift card.

Subsequently, gift card purchases are generally reliable, but not foolproof. Sometimes the cards do not activate properly or have been compromised and the balance runs out as soon as they are loaded. Both scenarios only happened to me once, but getting my money back was a hassle either way.

Gift cards can also have unexpected rules or limits on redemption, like the Shell station I attend only accepts gift card payments inside, not at the pump. This adds time to the refueling process, which I have to consider as discussed above.

Finally, like the gift cards themselves, the rewards or discounts I expect to earn don’t always work as expected. For example, the Amex supermarket offer terms described above specify that gift card purchases are not eligible. I know basically third party gift cards Do activate such offers, but there is always a chance that I won’t get that extra cash.

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