How to maximize points while staying on budget

People ask me frequently how they can earn miles without getting lots of credit cards, and I’ll admit it’s pretty tough.  Flying, after all, isn’t a great way to earn miles (it takes too much time).  Many people are resistant to getting more credit cards for plenty of (absolutely legitimate) reasons: impending home/car purchase, don’t believe in it, don’t want to keep track of everything, etc.

I hosted a travel/points seminar late in 2013 to share secrets I’ve picked up along the way, and this was one of the most well-received: use credit cards to help you budget better.  Stay with me, Dave Ramsey fans.  What I’m going to tell you is obvious but odds are you haven’t thought of it this way before.

Category Bonus Multipliers

You probably have a credit card that gives you a bonus if you spend in certain categories.  Most airline cards, for example, will give you 2x the points for every dollar you spend with that airline.  Other cards, like my favorite, the Chase Sapphire Preferred, gives you multipliers for purchases at restaurants.  Another card I like, the American Express Premier Rewards Gold card, gives you 3x points for money spent on travel and 2x points spent at gas stations or grocery stores.

The grandaddy of them all in the category multiplier game is the Chase Freedom card, where you can earn 5x points (or 5% cash back) on categories that rotate quarterly (category rotation calendar located here).

So here’s what you do

If you have a card that gives you a category bonus, here’s how to use it to budget better.  I spend about $75/month on gasoline, occasionally up to $100.  It’s easy: I purchase a Shell gift card from a gas station for $100 at the beginning of the month with my American Express Premier Rewards Gold card.  I then toss that gift card in my glove compartment and leave the Amex at home so I’m not tempted to go all apocalyptical with my spending.

Same thing for movies.  I don’t see movies that often, maybe one every other month.  I use the same Amex card for this one.  “But it doesn’t give a category bonus for movie theaters, do they?” I hear you saying, and you’re right.  But it does give a bonus for purchases at grocery stores.  You know what almost every grocery store in America has prominently displayed?  Gift cards.  Racks of them.  And some of them just so happen to be for movie theaters.  So I’ll pick up a few $25 gift cards and don’t worry about carrying my credit cards with me.

A great, consistent multiplier out there is Chase Sapphire Preferred’s First Friday promotion.  Normally you’ll earn 2x the points for dolalrs spent at restaurants, but the First Friday of every month you earn 3x.  So, what do you do?  Is there a restaurant you find yourself eating at fairly often?  I bet they’ll sell you a gift certificate.  And I bet they’ll sell you that gift certificate on the first Friday of the month.

Business cards are a great way of capitalizing on these opportunities as well.  Many business cards give 5x the points for money spent at office supply stores like Office Depot and Staples.  Very similar to grocery stores, most office supply stores will have a gift card display with plenty of different gift cards from which to choose.

Wrapping it up

Just like a budget, when my gift card balances run out, I don’t do any more of that thing until the next month.  This way you get all of the convenience of using a credit card without having to carry one with you.  If credit cards make you uncomfortable, there’s no judgment here.  Leave them at home so you’re not tempted to spend money with them.  But instead of an envelope system or carrying around a lot of cash, use the tips above to maximize the points-earning potential of your budget.

(Disclosure: none of the above companies have a financial relationship with this blog.  They have not read, endorsed, or provided editorial oversight regarding the content of this post.  Always consult your financial advisor before making important financial decisions.  Andy’s Travel Blog and its staff are not responsible for any misuse or overuse of credit cards resulting from information provided herein.)