Make Money Work Harder (MMWH) - how to make credit cards work harder for you

I have a dozen of cards in my wallet and while I need to do lots of bill payment to different banks every month, the savings or rewards I get make it all worth it. My rationale is that since the money has to be spent, make it work harder for you. 

Here's my algorithm for using my cards to maximise my rewards. This runs inside my head prior to every card transaction I make. The order matters. 

If it's all too confusing or too much hassle for you , fret not. Just focus on 3 questions, what is your total expenditure per month on things that are chargeable to cards? Is there a few spend categories that make up most of your spend? What's your preferred reward type? Then, you can identify what's the best way to make your money work harder for you. 

1. Immediate discount at Point of Sale

If a certain card gives an upfront discount just by using a certain card , just use it. So you can typically save 10-20% off the price just like that. 

Examples: look out for the tentcard in store where they say use this card for this x% discount or rebate. 

2. Spend category 

Is the transaction for dining? Grocery? Shopping? Pharmacy? Petrol ? Paywave (the one that you tap and go) transaction? Online ? Local spend or Foreign Currency spend ?

These are the common categories where you earn extra points or miles for those transactions. As such, if you find that your monthly spend is primarily in certain categories, it makes sense for you to find a card that rewards you the most on that. However, do note that the higher cash rebate cards usually come with a minimum spend per Month and a cap on the rebate per month or per year. 

Examples:

- I use OCBC 365 to get 6% on dining spend on weekends & 3% on weekdays. I also charge my utility bills and online spend to it to earn 3% rebate. Petrol earn 5% rebate , this is on top of any extra discount at selected petrol stations. All this is possible if I use $600/month on any spend category. (There's also 3% for supermarket spend if you like to shop across different supermarkets).

- I use Maybank Family card at NTUC, Toy R Us, Guardian, Watsons to get 5% rebate. This is possible if I use $500/mth in any spend category. For NTUC spend, this makes lots of sense as this rebate is on top of the NTUC linkpoints I will receive with my NtUc membership. Every year end, I will get an additional 5% rebate from ntuc as a NTUC member which is more than the $117 per year for the membership given our average monthly spend of around $400 at NTUC. So for a family of 4 adults and 1 kid who's drinking milk powder, this translates to annual save of around 10% which is $400! 

- I use Citibank Rewards to get 10x rewards on all shopping for bags, shoes and clothes (akin to $1=4 miles). 

- I use Citibank Premiermiles to charge all my insurance premiums as there's no cap to how many miles I can earn (unlike rebate cards) and the miles never expire. For insurance premiums, do note that not all cards are accepted in all cases so you need to ask your financial advisor being deciding on the best card to use.

- I charge all other miscellaneous spend that doesn't fall into rhe above spend category onto UOB Privimiles for any merchant that accepts Amex card to earn 1.4 miles for every $ of local spend and 2 .4 miles for every $ of overseas spend. 

- I'm trying out the new CIMB Visa Signature card which gives 3.8% on dining all week , and on payWave transactions. If this works, I will use this on weekday dining spend and Ocbc 365 for weekend dining spend. However, it's troublesome to monitor because need to spend $500 and 3 transactions per month and each transaction has to at least $50 per transaction to get the 3.8% rebate.

3. Preferred reward type 

Are you a miles junkie? Or do you like to exchange your points for shopping vouchers or other awards? There are some miles card that makes converting miles easy automatically every month. There are those that give higher miles for the same dollar spend. And there's some cards that you can earn more miles by spending only in the categories that earn you the most miles equivalent. 

Do you collect your points/ miles slowly or rather fast? If you accumulate miles/ points slowly, then you may want to find a card with miles that doesn't expire. 

I like cash rebate and miles hence, you realise my algorithm doesn't consider other privileges like free gym visits, free golfing or priority pass visits. In any case, those usually have a cap of how many people can enjoy per day or is limited to a cap on the number of visits per year. So to me, it's not a priority and doesn't feature in my algorithm.

4. Big ticket transaction 

Are you expecting to spend a big amount this month? Have an annual insurance premium coming up ? Had an unexpected big ticket doctor's bill ? There are some cards that give higher cash rebate for accumulating a certain spend so it makes sense to use it when you have a lump sum spending. 

Example: 

When I have a medical bill or some big expenses that doesn't fit into any spend category above,  I will whip out my Standard Chartered Manhattan card that will earn me 1% rebate for spend from $1000-2999 and 3% for spend more than $3000. However, I will not put more than $6666 on this card per quarter as there is a $200 rebate cap per quarter. 

5. Spending / usage promotions by banks 

Some months, you can spend a certain amount of $ and redeem a guaranteed gift or cash rebate. So in those periods, you may want to ignore step 2-4 and consolidate spend on 1 card. I still like to practise step 1 as it guarantees the bird in hand. Sometimes these promotions have fine print like only 1st 100 or 1st 500 apply or you have to spend a certain number of transaction and certain dollar amount so it may not always be guaranteed. 

Example: 

What I have won or "earned" over the years using such tactical promotions 

- a $500 rebate in a lucky draw - that transaction was free! 

- an iPod nano 

- a sound system 

- a coffee machine 

- rebates or vouchers ranging from $10-$50 

To sum it up, you can make your money work harder for you by spending on credit cards instead of using cash. However, please pay up the balance in full & on time every month or all the savings will go towards paying interest & late charges on the cards.

Caveat: Anyway, all the above is my personal approach to maximising the benefits on any inevitable spend. This doesn't represent any bank's view and I didn't receive any endorsement fees from recommending these cards.