How much can you make by optimizing your credit card rewards? Assuming that you are a responsible spender with solid money management skills, acquiring the right reward cards can mean a big difference in the rewards earned.

Based on the numbers for Consumer Expenditures from the U.S. Bureau of Statistics, the following examples illustrate what the impact could be for an average American family[1]. The examples assume that the first family utilizes a common credit card providing 1% cash back on all purchases. The second family utilizes the strategy of using credit cards based on the type of transaction. 


Family 1 - Regular cash back card

  Annual Amount Spent Cash Back Rewards Earned
Groceries $3,465 1% $35
Gas $2,384 1% $24
Dining out $3,125 1% $31
Entertainment $2,698 1% $27
Total $11,672   $117
Assumptions: Family uses a regular credit card providing 1% cash back

Family 2 - Optimal use of reward cards

  Annual Amount Spent Cash Back Rewards Earned
Groceries $3,465 6% $208
Gas $2,384 5% $119
Dining out $3,125 5% $156
Entertainment $2,698 5% $135
Annual fee     -$75
Total $11,672   $543

Assumptions: Family pays with different credit cards based on the type of transaction. Example based on the following cards: American Express® Blue Cash Preferred, PenFed® Platinum cash rewards, and the Citi Forward® credit card.  


As you can see from the example, utilizing multiple reward cards can make a big difference for households. The difference in the two examples above amounted to $426. And that is only for $11,672 worth of spending! Imagine how much of a difference it could make if you spend more in the above categories or have other categories where the same tactics can be applied. You might think that $426 is not that much, but put it this way, once you have the cards it requires no extra effort from your side. In other words, if you don’t apply this strategy, you are actually ignoring “free” money. To read more about how to optimize the type of reward cards you have, have a look at the following article

Another way to look at it is considering how much that could amount to throughout your working career. Let’s assume that you have the same spending during your 40 years of working. Over the course of those 40 years, the $426 dollars could amount to $17,040, which you could buy a brand new car for.

Once you have mastered the art of reaping credit card rewards, be sure to give your entire family budget an overhaul. Oftentimes, sitting down and going through your expenses can be eye opening, as you will come accross expenses that you had either forgotten about or simply did not know would add up to such a big amount over the course of a year.