How to save an extra $1,000 with this credit card rewards trick

|
How to save an extra $1,000 with this credit card rewards trick
Image Credit: Dreamstime
Team Clark is adamant that we will never write content influenced by or paid for by an advertiser. To support our work, we do make money from some links to companies and deals on our site. Learn more about our guarantee here.
Advertisement

How would you like an extra $1,000 or more in your bank account? You can easily stash away that much money over the next 12 months by applying a simple strategy involving your credit card rewards.

If you pay off your credit cards monthly, rewards programs are a great way to earn free travel, cash back and gift cards.

RELATED: Clark Howard’s philosophy on credit cards

Credit card rewards trick: How to turn a pile of points into a pile of cash!  

It’s not hard to earn more than $1,000 in rewards every year by taking advantage of new card sign-up bonuses, redeeming miles for plane tickets and even statement credits.

Most people will spend those rewards as quickly as they can, but let me explain my idea that was inspired by Discover…

Cashback Match is a perk that Discover offers cardholders by automatically matching the rewards they’ve earned at the end of their first year as a member.

If you earned $100 in rewards during your first year with Discover, they’ll match it with another $100. It’s that simple!

Now that got me thinking about how I could turn the credit card rewards that I typically redeem to buy more stuff into a personal challenge to save more money.

Don’t worry — I’m not asking that you give up your credit card rewards.

Instead, what I’ve started to do is match the value of the credit card rewards that I redeem and transfer that dollar amount to an online savings account.

Take a look at how you could put an extra $1,000 in the bank within a year:

  • Redeem miles for a flight that would normally cost $300? Put $300 in your savings account!
  • Take advantage of a sign-up bonus worth $500? Put $500 in your savings account!
  • Redeem points for a $200 statement credit? Put $200 in your savings account!

When I started this challenge less than a month ago, I opened a savings account just for this credit card rewards trick so that I can easily track my progress.

I’m thrilled to report that I already have $163 in my new bank account just from matching my rewards.

I only began this challenge a few weeks ago, but I think it’s helping me focus on using my rewards credit cards strategically at various retailers to get the most out of them.

Here are the four easy steps to get started with this challenge:

  • Step 1: Review credit card terms and conditions to maximize rewards
  • Step 2: Redeem your points/miles
  • Step 3: Determine the dollar value of the redeemed rewards
  • Step 4: Transfer the amount to an online savings account

This strategy is similar to the simple trick involving retail receipts that I implemented 10 months ago. Read more about how it has saved me more than $1,000 so far!

More Clark.com stories you may like: 

Advertisement
Michael Timmermann paid off his mortgage in two years. Now, he shares his money-saving tips on his blog, MichaelSaves.com.
View More Articles
  • Show Comments Hide Comments