If you've had the same credit card for a few years, happy to be collecting enough points to get a free domestic flight or a few hundred dollars in cash back every year, Gary Leff has two words for you: Wake up.
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Leff, co-founder of frequent flier community Milepoint.com, says credit card rewards have never been better. Maximizing your points is just a matter of paying attention and making the right choices. Do you pay for everything possible with your credit card, including your nanny and your yard guy? Do you look for opportunities to double and triple your points? "It's free money," Leff says. "It's like the banks want you to fly internationally in premium cabins for free."
We asked Leff and other savvy reward chasers for their favorite -- and most creative -- tips for racking up credit card rewards. Remember, none of these tricks is worth pursuing unless you pay off your card every month; otherwise, interest charges cancel out any gain.
1. Sign up for four to six cards a year. Competition has really pushed up the value of sign-up bonuses, which are often worth hundreds of dollars, if not more, in points or miles. "I remember I got excited when Chase offered a 20,000-mile bonus," Leff says. "Now it's a totally different world. Fifty thousand miles is the new 15,000, and we're seeing 100,000-mile sign-up bonuses with some regularity. It's incredible." With that many miles, you can get two coach tickets to anywhere in Europe, worth several thousand dollars. Many credit card gurus have found that signing up for four to six credit cards a year, and then canceling them once the rewards have been issued, has had only a small impact on their credit scores. Of course, it's probably not a good idea to do that if you know you're going to refinance or apply for a big loan like a mortgage soon.
2. Lend money to someone in Kenya. Through Kiva.org, an international micro-lender, you can use your credit card to loan money to a screened applicant from one of 60 countries. The borrower pays you back over time, and Kiva claims a low 1% default rate. "You get the points, and you know you're doing something worthwhile," says Rick Ingersoll, who blogs about credit card rewards at FrugalTravelGuy.com. "Is it 100% guaranteed? No. But I've been doing it two and a half years, and I've never had a problem."
3. Transfer money to a friend or family member. Offering to put dinner on your card when you go out with friends is a no-brainer, but you can also use your card to pay friends back by using a payment service such as Amazon Payments, PayPal or Venmo. Some rewards buffs report in travel forums that they take that to the next level, using payment services to regularly pay a family member large amounts and then get reimbursed, just to get the reward points, though some experts say that tactic is questionable.
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4. Register your cards at iDine. Register up to five credit cards with this program and you can earn miles or cash for eating out at participating restaurants. Get up to 15 miles or 15% cash back per $1 spent, depending how often you eat out and whether you're willing to fill out surveys about your experience. "This is a really good way to earn rewards with very little effort," says Gary Steiger, webmaster of Freefrequentflyermiles.com. "Sometimes you don't even realize the restaurant is included, especially if you're traveling, and you get points anyway."
5. Segregate your spending. Some cards give you extra points for gas; others give you a bonus when you use them for groceries or travel. Make sure you're making a conscious choice about which card to use where. "Everybody should have three or four or five cards in their pocket," Ingersoll says. "For dining, you can use the Citi Forward card that pays five points on dollar. For gas and grocery shopping, use the Hilton HHonors American Express that pays six points on the dollar. And if you're buying an airline ticket, use the one that gives you one point per purchase plus one point for every mile you fly."
6. Use shopping portals. Never go directly to a store's website, the experts say. Always check first to see if it's listed at the shopping portal of the bank, airline or hotel associated with your credit card. If it is, you'll earn the typical reward for your spending, plus additional points, miles or cash back, depending on the program. Many retailers even ship straight to the store for you so you don't have to pay shipping. One caveat: Comparison shop before pushing the portal's "buy" button. Some portals' prices far exceed the retail value of items, making your extra points very costly.
7. Get reimbursed manually from your flexible spending account. If you pay your medical expenses out of a flexible spending account, don't use the card they give you, says Daraius Dubash, who blogs about traveling using miles and points at Millionmilesecrets.com. Pay for those expenses with your rewards credit card instead, and then manually file for reimbursement. "It's slightly more time consuming, but the points add up quickly," says Dubash, who together with his wife has 3.8 million miles.
8. Get creative with sitters, contractors. Ask your nanny, house cleaner, pet sitter and yard man if you can pay them with American Express gift cards instead of cash, Dubash suggests. Or see if you can pay them through Paypal, Venmo or Amazon Payments. Another way to rack up points: If you're doing a lot of work on your house and you trust your contractor, give him your credit card to buy what he needs for the job.