Putting a year of expenses on the right credit card can get you more than $900 toward travel, or even more than 50 free hotel nights
Alila Villas Uluwatu
- According to the Bureau of Labor Statistics, the average American household spent $40,814 on non-housing costs from 2017 to 2018.
- By putting that spending on one rewards credit card, you can earn substantial cash back or travel points.
- For example, using the Chase Freedom Unlimited could get you as much as $918 toward travel (when you also have the Chase Sapphire Reserve).
- If you open a Southwest credit card like the Southwest Rapid Rewards Priority Credit Card, you could even earn the Companion Pass and get two-for-one travel.
- Or, leverage the current sign-up offer on the IHG Rewards Club Premier Credit Card to get a staggering 276,256 points.
Have you ever wondered what type of rewards your household expenses could get you if you managed to put it all on one credit card? If your spending patterns are in line with the average American household's, you could earn substantial points, miles, or cash back.
According to the Bureau of Labor Statistics, the average American household had $40,814 worth of non-housing expenditures between 2017 to 2018. Let's take a look at what kind of rewards that spending can get you.
Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.
When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.
Chase Freedom Unlimited: Up to $918 toward travel
The Chase Freedom Unlimited is a great card for everyday spending. It earns 1.5% cash back on every purchase with no limit. That may sound unremarkable, but if you have a Chase card that earns Ultimate Rewards points, like the Chase Sapphire Preferred Card, you can essentially convert your cash back to points. This can help you get more value through premium redemptions at high-end Hyatt hotels or airfare through one of Chase's many airline transfer partners.
Putting $40,814 worth of spending on the Chase Freedom Unlimited would generate $612.21 in cash back or 61,221 Ultimate Rewards points. That's enough for a round-trip economy-class ticket to Europe or two free nights at incredible hotels like the Park Hyatt Maldives, Alila Villas Uluwatu, or Ventana Big Sur. All of these hotels regularly go for $500+ per night, so redeeming your rewards this way could get you incredible value.
If you'd rather use points for direct bookings through the Chase Ultimate Rewards Travel portal, you might get more than $612.21 worth of value. Chase Sapphire Reserve cardholders who redeem 61,221 points through Ultimate Rewards get 1.50 cents per point, totaling $918.32 in travel credits.
Southwest credit cards: Earn the Companion Pass
Southwest offers three personal credit cards, all of which earn 1 point per dollar on non-bonus category spending. While that will generate just 40,814 points on $40,814, you may get another worthy perk out of it: the Southwest Companion Pass, which lets you bring along a friend for free on all your Southwest flights (you'll just have to pay taxes and fees, which are typically just $5.60).
The Companion Pass requires 110,000 points earned via flying or credit card spending every year. While 40,814 points only gets you 37% of the way there, picking up a new Southwest credit card or two can take care of the rest.
All three personal Southwest credit cards are currently offering 40,000 points after you spend $1,000 in the first three months, plus another 20,000 points after you spend $12,000 in the first 12 months. Here are the three cards and their respective annual fees:
- Southwest Rapid Rewards Plus Card Credit Card - $69
- Southwest Rapid Rewards Premier Credit Card - $99
- Southwest Rapid Rewards Priority Credit Card - $149
The Southwest Rapid Rewards Premier Business Credit Card offers 60,000 points after $3,000 spent within the first three months. Combining this with the 40,814 points earned via household spending leaves you just under 7,000 miles shy of earning the Companion Pass.
IHG Rewards Club Premier Credit Card: Up to 55 free hotel nights
The IHG Rewards Club Premier Card is currently offering new applicants 4 points per dollar spent on all purchases during the first year, so putting $40,814 worth of spending on this card would generate 163,256 points. And that's not even factoring in the other aspect of the current sign-up bonus: 125,000 points after you spend $3,000 in the first three months. So you could earn a whopping 276,256 points if you spend $40,814 on the card in your first year.
What are some of the hotels you can book with 163,256 points? That depends on your travel style and preference. IHG typically requires 10,000 to 70,000 points for a free night, or as few as 5,000 points for a PointBreaks hotel. Luxury travelers will appreciate three nights at a high-end property like the InterContinental Le Moana Bora Bora.
If you're willing to be flexible with your travel dates, you can book up to 55 free nights at PointBreaks properties. That's a lot of travel in return for charging all of your expenses to a single credit card.
Citi® Double Cash Card: $816.28 in cash back
When you don't want to deal with complicated award programs and maximizing points, cash is king. That's where 2% cash-back cards like the Citi Double Cash Card come in. The card has no annual fee and pays out a flat 2% cash back on every single purchase: 1% when you buy and another 1% when you pay it off.
That's a great incentive not to acquire debt, not to mention an easy way to earn rewards without worrying about maximizing category bonuses.
Putting $40,814 worth of spending on the Citi Double Cash would generate $816.28 worth of cash-back rewards. Depending on how you use those rewards, $816.28 can go a long way. For example, we've recently seen roundtrip tickets to Europe for as low as $350. So with the rewards from the Citi Double Cash, you could book two round-trip tickets to Europe.
If you already have airfare covered for an upcoming trip, the cas-back rewards could cover hotels or even activities. The flexibility of cash-back enables you to redeem your rewards in virtually any way you want, so if you aren't traveling anytime soon, you can use that money back to cover other everyday expenses.
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