At first, spending money and saving it doesn’t seem to have much in common. However, as Money.com’s Jason Steele found out, the two share more similarities than people think. He spoke to Winnie Sun, an independent wealth advisor, CNBC contributor, and host of financial lifestyle TV show, Level Up with Winnie Sun. The two agreed that earning points and bonuses from rewards credit cards can be a key element in cultivating financial health.
Travel Rewards Cards During The COVID-19 Pandemic
Sun and Steele are two credit card experts who frequently used their rewards for discounted or even free travel before the pandemic. But now that the virus threatens public safety and health, Sun, Steele, and thousands of other travel rewards credit cardholders have had to modify how they use their cards.
Sun noted that she intends to travel soon, so she hasn’t adjusted how she uses her card to collect points or plans to redeem them. “We are fully focused on just continuing to rack up miles and points, and using them in a smart mindful way, for not only today, but also in the future, because at some point this pandemic will be behind us.”
Steele, who has continued to use his travel credit card throughout the year, agreed. He expressed hope that 2021 will be a safer year for travel, so he has focused on accumulating rewards.
Using Travel Credit Cards On Non-Travel Spending
Although Sun and Steele still swipe their plastic and earn travel points, they understand that not every cardholder feels as optimistic as they do. Steele observed that many credit card companies have adapted their rewards programs to accommodate customers with more pressing needs than travel.
Like Chase, several are offering points on grocery store purchases when cardholders use their travel card at qualifying supermarkets.
Chase’s “Pay Yourelf Back” feature lets cardholders exchange travel benefits for statement credits good for spending at the grocery store, home improvement retailers, and restaurants. Chase Sapphire Preferred members can get 1.25 cents for every point for these perks, while those with a Sapphire Reserve card can earn 1.5 cents when they redeem their points.
What About Travel Credit Cards With Costly Annual Fees?
When asked if cardholders who pay steep annual fees should cancel their card, Sun answered, “I think so.”
Other than canceling a travel account, cardholders can either downgrade to a more affordable account (then upgrade once traveling is safer) or make the most of issuers’ new benefits programs.
For instance, the American Express Platinum has a $550 annual fee. But it’s now extending $20 worth of statement credits every month for phone bills, plus an additional $20 for specific streaming platforms. This, on top of the other perks this card has to offer, may offset its hefty annual fee, even for those stuck at home.
What Are The Best Credit Card Sign Up Bonuses Available Right Now?
Sun and Steele recommend these credit cards, whose benefits are more appropriate for the current economic situation.
- Chase Freedom Unlimited: This card offers 5% cash back on the first $12,000 spent on groceries during the first year of opening the account, a $200 reward for spending $5000 in the first three months, 1.5% cashback on everything else, and zero annual fees. It’s ideal for people who have been cooking more at home since the pandemic.
- Discover it Cash Back: This card gives customers 5% cash back on the first $1,500 they spend every quarter on qualifying purchases, 1% cashback on everything else, 0% APR for 14 months on balance transfers and transactions, automatic cashback match on every point cardholders earn during their first year, and no annual fee. This card is best for people who want a credit card with an excellent cashback program.
- American Express Gold: Cardholders can earn 4x the points on all grocery and dining purchases (plus GrubHub transactions), a $10 credit for qualifying restaurants and GrubHub each month, 50,000 points for spending $4,000 in the first three months after signing up, a $100 annual airline credit, and a $250 annual fee. This credit card is ideal for those who feel optimistic about the future of travel next year and want big rewards on everyday purchases.
- Steele, Jason. “What’s the Best Way to Use Credit Cards Now? A Financial Advisor and a Card Expert Talk Shop.” Money, 30 Sept. 2020, money.com/best-credit-cards-use-rewards-2020/.