Taking Advantage of
Loyalty Programs & Cash Back Rewards
I think I'm going to make this one a series as I have a lot to cover. If you have a tight budget, you really need to start thinking of ways you can earn rewards on every bit of money that you are spending. This can apply to your grocery shopping, clothing and accessories purchases, car buying, and the list goes on. I've worked for various types of retailers, and I've noticed that many people who come from a wealthy lifestyle truly take advantage of money-saving offers, rewards, and cash back opportunities. Many people claim that they absolutely hate math, but being able to perform some quick math (or at least being resourceful enough to use the right tools) can truly help you save A LOT of money on a daily basis.
Why Loyalty & Rewards Programs?
Ok, so the truth is... companies want to know your spending habits. By signing up for rewards programs and loyalty programs, you are giving the company permission to analyze your spending habits. Is it really that big of a deal? This is basically the same way that social media websites track your internet usage, search history, likes, clicks, and favorites (are you surprised?). The difference here is... social media sites aren't paying you. Companies are willing to reward you for sharing what it is that you like.
Of course, you'll want to weigh the pros and cons of the programs you are looking to join. Some programs just really aren't worth your time. I like to utilize programs that have apps or allow you to plug your phone number in during checkout so you never have to worry about lugging around a little loyalty card. The best loyalty programs I have found so far are for food. One of my favorite rewards programs is from Chick Fil A!
Credit Card Cash Back
There are many instances where there just isn't a loyalty program for earning any rewards like paying for your electricity, cell phone bills, internet services, gas bills, etc. In this case, you will want to pay for these services with a credit card or debit card that will give you some sort of cash back for your purchases. Some cards will only offer 1 % or 2% while others may reward up to 5% or higher. My utility bill companies charge customers a convenience fee for using a credit card while paying with an electronic check has $0 fees. This is where you'll want to do some math.
The convenience fee in my area is $3.95 per transaction. So that's $3.95... every month... for 12 months! A grand total of $47.40 that I'm literally just throwing away every year. I'm sure there's something else you would rather do with that $47.40.
So why not just use an electronic check? Sure, you won't pay any money in fees but you also won't get anything in return either. Let's say you have a credit or debit card that gives you 3% back on purchases. I'll say the average utility bill in my area is $250 a month. At 3%, you'll be receiving $7.50 back every month, minus the convenience fee of $3.95. You'll still be earning $42.60 in rewards every year with this strategy. Again, it doesn't seem like much but in 5 years you could have saved an extra $200 and if you're putting that extra money aside, it will grow.
As time goes on, you will learn to stack rewards. For example, you'll want to use a cash back website to make purchases online, utilize the store's loyalty program to earn store credits, and pay for the purchase with a card that gives you cash back. If you purchased a $300 pair of headphones via a website like Rakuten that gives you 3% cash back on popular brands, from a company that gives you $5 back for every $200 spent, on top of receiving 4% cash back on electronics purchases, you will have saved $26. And save even more by waiting until those headphones go on sale first!
Make sure you're using your loyalty card for every purchase especially during the holidays where you're bound to be spending a little more than usual and on larger ticket items. Companies will usually offer additional bonuses for just taking the time to shop with them.