I earned $1,734 in credit card rewards last year—here's how you can, too

Credit card rewards may seem confusing, but if you use your cards right, they can be lucrative.

In 2019, I racked up $1,734 in credit card rewards. That includes the approximate value of all the cash back and points I earned across seven credit cards. (I excluded the two store cards I have.)

Earning $1,734 didn't require much work on my part, beyond deciding which expenses to put on which card. Granted, I have more than the average four credit cards, which helps me maximize rewards. But even if you have fewer cards, you can still earn over a thousand dollars each year.

Below, I detail how I earned $1,734 last year, and how you can too by following my tips for using credit cards and redeeming rewards.

If you have more than one credit card, it's key to know the rewards each card offers. That way you'll know which card earns extra on common spending categories, such as groceries, gas and dining out.

Last year, I had five cash-back cards, two rewards cards and two store cards (currently, I have 10 cards). The card I use depends on which earns the most rewards in any given category. For example, I have four cards that provide bonus rewards on grocery purchases. Here's the breakdown:

• Blue Cash Preferred® Card from American Express: 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%) Terms apply.
• Prime Visa: 5% cash back at Whole Foods Market
• American Express® Gold Card: 4X Membership Rewards® points when you dine at restaurants and shop at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X) Terms apply.
• Citi Rewards+® Card: 2X ThankYou® points at supermarkets (up to $6,000 per year in supermarket and gas purchases, then 1X) (See rates and fees).

The Blue Cash Preferred card earns the most rewards on supermarket purchases, so it's become my default for grocery runs — but that wasn't always the case. Before I had the Blue Cash Preferred card, I alternated between the Prime Visa and Amex Gold card, depending on whether I was shopping at Whole Foods or another supermarket.

Whenever you open a new credit card, it's important to reevaluate how you use your cards. There's a good chance you may need to switch your default rewards card for certain expenses.

When it comes to redeeming card rewards, I generally stick to simple redemption options, such as cash back, that provide at least a 1:1 value. That means one point is worth at least a penny.

I saved over $350 on vacation last year, partially by redeeming Membership Rewards® points from my Amex Gold card. The remaining savings came from taking advantage of The Hotel Collection benefits, such as complimentary breakfast for two and a $100 experience credit with a minimum two-night stay when you book The Hotel Collection through American Express Travel. Experience credit varies by property.

This year, I'm on track to save over $1,000 on my next vacation, thanks to a generous welcome bonus and using the Chase Ultimate Rewards® portal for the first time.

I earn a significant number of rewards each year and have learned from research and personal mistakes the best and worst ways to redeem rewards. Here are some hacks I've figured out along my journey.

1. Avoid Shop with Points options

Many rewards credit cards boast the ability to 'shop with points,' but this is rarely the best value. While you're still saving money by paying for an Amazon purchase with your points, the redemption value is much lower than the one-to-one value you should aim for.

For example, 10,000 Amex Membership Rewards® points are worth $70 when shopping with points at Amazon checkout. That makes one point worth $0.007. But if you redeem points for a gift card or airfare, the value increases by 30% to $100.

A simple way to see if you're getting a 1:1 value is by taking the cost of the purchase and dividing it by how many points are needed. So, if there's a $20 Amazon purchase and 2,857 points are required, one point will be worth $0.007.

2. Don't redeem points for statement credits

For certain cards, redeeming points for statement credits offers low return rates, similar to shopping with points. This rule generally applies to rewards cards that earn points or miles. If you have a cash-back card, go ahead and redeem for statement credits — the value is 1:1.

The redemption value for non-cash-back cards varies based on the credit card you have, but expect one point to be worth less than a dollar. For my Amex points-earning cards, 1 point is worth $0.006 as a statement credit, so I avoid this option.

3. Review travel redemption rates

While travel can be a great way to maximize rewards, double check that you're getting a minimum 1:1 value. Some cards may offer higher redemption rates for airline tickets compared to hotels. Trust me, I made the mistake of booking a prepaid hotel with Amex points and missed out on getting roughly 30% more value from my points if I had used them to buy a plane ticket.

4. When in doubt, go for a gift card

Gift cards are undervalued redemption options. In my redemption experience, I've never come across a gift card that didn't provide at least a 1:1 value. Last year, I redeemed Citi ThankYou® points for a Crate and Barrel e-gift card that I used to purchase a new set of drinking glasses.

And sometimes card issuers have gift card sales, where you can receive a discount on gift cards from select retailers when you redeem points. I've redeemed Citi ThankYou® points for a Fandango e-gift card and received a 15% discount. Currently, you can save 10% on eligible gift cards via Chase Ultimate Rewards.

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