Tip #10: Use the free rewards from your credit card, car insurance, and workplace

November 17th, 2008 - 51 Comments

This is tip #10 of the Save $1,000 in 30 Days Challenge.

Today’s tip is to use the perks offered by your car insurance, credit card, and even your job — the ones most people ignore.

work-perks.jpg

Think about the places you belong to as a member: your credit card, auto insurance, Costco, or your job. Each of these offers perks that most people ignore. But by simply being a member, you get perks that can add up to thousands of dollars each year. In fact, every time you make a major purchase, you should be checking these perks first. Here are some examples from my own memberships:

#1: My car insurance offers discounts on most major retailers. I was already planning to buy flowers and get movie tickets next month, so I’m adding a calendar reminder to use these coupon codes then.

geico-perks.png

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#2: My Costco membership gives discounts on pharmacy drugs, buying cars, mortgages, roadside assistance, travel, car tires, and many business services.

costco-perks.png

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#3: My credit card offers discounts on most major retailers, plus discounts on concert tickets and a “Make a Wish” service, which recently got me orchestra tickets I couldn’t get anywhere else.

thankyounetwork-perks.png

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#4: There’s more on your credit card, which is the BEST source of perks. All credit card include automatic extended warranties, travel insurance, car-rental discounts, and a bunch of other perks. Check out my appearance on CNBC, where I cover credit card perks in more detail.

#5: Your workplace probably offers a bunch of perks that nobody takes advantage of. At PBwiki, we offer weekly massages, free food, free headphones, and if you want to take a co-worker out to lunch, we’ll cover it. At bigger companies, you may find perks like public-transit reimbursement and discounts on entertainment tickets/attractions. Most people don’t use the perks, so ask the HR person for a list of benefits you have available and use them!

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Here’s how to use this tip effectively: First, log in to see what your memberships offer you. If anything catches your eye, set a calendar reminder for when to log back in and use it (e.g., “Booking vacation in February — check Geico for discount”). Try to defer all major purchases until later (otherwise, how are you going to save $1,000?), but if you know how much you’ll save, feel free to count it towards the $1,000 Challenge.

One final thing: This is a powerful tip because you can get discounts on places you already shop — especially for large purchases, which can save thousands per year. The first time I used my credit card’s travel rewards, I saved $600. Using my discounts, I’ve saved thousands on travel, auto purchases, computers, clothes, and home decorations. The key is that nobody is going to spoonfeed you the places to look. If your workplace doesn’t offer discounts, check your car insurance. If that doesn’t offer perks, check your credit card (it definitely will). Check your library. And your homeowner’s association. The more you check, the more you can save.

Total Saved: $100 to $2,000.

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Last thing to do
Leave a comment on this post describing how much you’re saving with this tip and any unusual techniques you use to make this tip work.

If you liked this tip, check out my Premium tips — one long, tactical tip per week. Save money or get a 100% refund.

scrooge

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51 Comments

 

Comments

  1. Another tip is to use a site like http://www.retailmenot.com/ where you can get lots of great coupons/codes for discounts online.

  2. Excellent tip, Ramit. That is just the incentive I needed to join the gym my employer pays for (100%!). I can beat the New Year’s resolution rush. :)

  3. I’m not sure if this is the same thing but I have two of my bills automatically charged to my credit card. In so doing I then get 1% in rewards which can be exchanged for cash or Amazon.com gift certificates. Of course, I pay the balance in full every month.

    Total savings a month: about $2 but hey, $2 for consolidating my bills and no work on my behalf? Sounds good to me! Granted if I had a card with better cash back I could get more but I really don’t want a new card at this point.

  4. Ramit, A Costco recently opened up near where I live, but I’m still unsure if dropping $50/year for a membership is worth it. I live alone so I don’t think buying 30 rolls of toilet paper or 20lbs potatoes, etc. at a time is a smart move. What’s your take?

  5. Don’t belong to membership clubs, don’t travel, don’t have credit cards, don’t have an employer. I do use Retail-me-not, including their nice widget for Firefox, and have discounts from PayPal. If we end up purchasing for this holiday season, we will probably go with the best deal we can get from local B&Ms rather than shopping online, due to time constraints. I got a Staples Reward check in the mail yesterday that I’ve already spent on gifts, so I guess I’ll count that.

    This tip: $33
    Cumulative total: $40.75

  6. Borders Rewards is also a great site, free membership and TONS of discounts

  7. You met Carmen? I have the biggest crush on her. She’s beautiful, nice, AND she teaches me about personal finance and investing!

  8. I work for a major university medical center and the University has a deal worked out where employees can take the public bus to work for free.
    My daily commute goes from 60 miles to 10 miles. A tank of gas could last 3 weeks instead of one week.
    Savings: @ $100 – $150 per month in gas costs (@ $2.00 a gallon) just riding the bus.
    http://diyjoe.blogspot.com/2008/10/how-i-value-public-bus-system.html

  9. This is one I definitely use, and need to explore more. I am fortunate to work at a university and have a boatload of perks available. I take advantage of a few including:
    Free gym access (no real savings as I belong to a racket club, but I do workout there about 1 time per week)
    Free bus rides (~$50 per year)
    Discounts on eye exams and contacts (~$50 per year)
    Lots of free food (~$100 per year)
    Some free health services ($100 per year)

    I also just switched my car insurance from AAA to an agency that specializes in education employees. Save $110 annually.

    I probably have more stuff available to me and need to check that out.

    Savings this tip: $410

  10. I like this tip, definitely worth a second look even if it’s not going to save me any money this month.

    One thing I’d like to add is that there is a way to turn those reward points into savings. I use the reward points not to treat myself to something special, but to put towards something I was going to buy anyways. For instance, if I use $20 worth of points from my credit card to buy groceries, I transfer the $20 saved into my savings account. (It’s not much, but every little bit helps.

  11. Just used this tip this weekend; received coupons in the mail from my MasterCard for $25 off a $100 purchase at Lord & Taylor. I got a wallet each for my mother- and father-in law for $100 and saved 25%!

    This tip: $25
    Cumulative savings: $30

    As an aside, Ramit, if you plan on buying flowers, I *do not* recommend 1-800-Flowers. I used them to send flowers to my mother for her 70th birthday and they arrived … DEAD. Not exactly the message I wanted to send my mother on her 70th birthday. They were only marginally helpful when I called to complain –would not offer a credit when I asked for one, only said they would send my mother another bunch of flowers (which fortunately, arrived alive the second time around). Still. The thought was ruined and they definitely lost a customer in me (and anybody else who I tell this story–I hope!)

  12. I work for a university and get to use the gym for free. I wouldn’t go to a gym if I had to pay for it, but since I get free access I feel obligated to take advantage of it. We also get one free class a semester. It can be tricky to find a class that’s scheduled around work, but I’ve had fun taking the “fluff” classes that I didn’t want to take when I was working toward my degree.

    Also, My husband and I use our credit card for all our purchases and pay as many bills as we can automatically with it. We get 1% cash back on every purchase. (Yes it’s that card.) We’ve set up auto bill pay with our bank, so it’s just like using an ATM card. (We are exceptionally careful not to spend what we don’t have and as an added perk we get a tiny bit of interest on the money in our checking account.)

    We found that we can increase our cash back reward dollars by getting certain gift cards. This year we got gift cards for Bed Bath and Beyond ($20 cash back gets a $25 gift card) and comboed the gift cards with all those 20% off coupons they keep sending. We ended up with a VERY nice toaster oven and bunch of other kitchen stuff that we wanted without paying a cent for it. All of it was high quality stuff that’s out of our budget range so having these things is a real treat.

    Granted this all falls apart if we don’t pay the cards off entirely every month, but if you’re disciplined I really recommend it.

  13. I forgot to mention that my work bought me a Wii Fit as they consider it eligible under their Fitness Reimbursement program.

    $80 saved there! (or a free item I might no’t have bought otherwise)

  14. I JUST did this over the weekend: my BoA Visa gets reward points ($1 = 1 point), which I haven’t used since I got the credit card. I purchased my Christmas travel home through the rewards website, and instead of a $555 flight on Southwest, I paid $175.75 plus all my accumlated points for a similar US Air flight!

    Savings this tip: $379.25 !!

    Savings so far: $584.25

    I’m already halfway there!

  15. Matt – Get the Costco membership.

    From USAToday: “Nothing at Costco costs more than 14% above what Costco paid. The average markup is more like 10%”

    I save the membership fee in just the cheese I buy every year. (Probably a couple times over) Plus, not everything is bulk.

  16. It’s important that everytime you save money like this, you stick that amount in savings! If you don’t, it just gets spent…

    I save every extra money that I save or that comes my way — birthdays, Christmas, saving half off of internet when we complained about service, getting $20 cash back rewards, saving $40/month on cheaper health insurance. It adds up!

  17. As some people above mention, it’s also worth looking into what benefits you can get as a student/employee/ alumnus of a university. I wrote a post about alumni benefits a few months ago – http://www.frugalfruitlands.net/2008/08/20/ten-other-ways-to-make-your-college-education-pay-dividends/

    Another benefit that is not to be neglected is your public library. You pay the taxes for it – why not make us of it? Libraries have come a long way over the past ten years, and these days mine, at least, is a treasure trove of free entertainment.

  18. Recently, I switched my auto insurance from AIG to State Farm. My six month premium dropped from $944 to $543. Seriously!

    I’ve gotten three 10,000 reward point bonuses by activating a new Citi credit card. I put monthly expenses on the card, then rack up points! There are lots of bonus point offers on the Thank You Network website, and I go through there if I purchase something online. I NEVER keep a balance on the cards, but pay them in full every month.

    In that time I’ve gotten three $100 gift cards and a $350 flight home for Thanksgiving. (Points accumulated over two years)

    My employer (a large cable company) often has free or discounted event tickets. Employees also receive free premium digital cable including movie on demand channels, DVR boxes, high speed internet, and a VERY discounted landline phone. (I estimate this benefit at about $1500 per year)

    http://www.becomingthemarshmallow.com

    Becoming The Marshmallow

  19. I would suggest you go to your college/university’s website and see what they offer for alumni. Not only do most schools have sites that can help you network with other alumni, they also offer insurance deals and other bargains.

  20. @ Greta: I use the “combo” method too. I like to use redeem my points for BBB or Kohl’s gift certificates and take them in on huge sale events or when I have coupons. This summer we redeemed enough points to go to Sears for the BBQ grill hubby had wanted for 2 years–and got free assembly.

  21. I am a AAA member, which also offers discounts if you shop online through their website. I have a list near my computer of sites I think I might ever use that offer a discount (like 5% off at Target, which I used when I had to purchase and ship a wedding gift!), and a list of places to buy through my Discover card, which also offers extra cash back for certain sites. But I don’t really shop much online…

    I’ll second the opinion NOT to use 1800 Flowers. It still goes through a florist and they do not place priority on those outside orders. Call a florist in your mom’s hometown to have them delivered, if you don’t have a favorite florist in your town.

  22. Agree with Jennifer–Borders Rewards are great! I don’t think I’ve paid full price for a new book in a couple of years. They have great discounts on flowers and other retailers.

  23. Just had the most awesome thing happen, so I am posting again. Today somebody sent out an email at the university where I work that one of the offices was giving away unused printer cartridges/supplies for various printers…and one of them just happened to match the printer I have at home (which just happened to run out of toner YESTERDAY!) Got 2 toner cartridges, listed online as $122 each, for free!

    This tip (updated): $269
    Total savings: $274

  24. Costco Rewards? Not so much. For car buying, the really good cars aren’t on the list (or I should say the high demand ones, which is to be expected).

    I looked for either an RDX or XC90, neither are in the program.

    Membership programs are a mixed bag, and I’ve had to be careful that what I buy isn’t demoted by the merchant b/c of the program I am using.

  25. I use my Hilton Honors American Express rewards to get free hotel rooms. I’ve had this card for about two years now and have yet to pay a single finance charge since I pay my bill in full every month. I estimate that I save anywhere from $500 to $700 per year using these rewards.

    Since I have GEICO auto insurance, I went to the website to check out some of the discounts. Besides finding Regal Cinemas movie tickets for $6.50, I noticed I qualified for a discount for being a member of the American Association of University Women. I called up GEICO and got the discount for belonging to this professional organization, as well as a discount for having a low mileage vehicle. I take public transit to work. Savings on auto insurance amounts to $128 per year. Thanks for the tip!

  26. [...] to be rich, Day 10 Posted in November 17th, 2008 10:56pm MST in Computer Day 10: Take full advantage of free rewards and perks I’m starting to wonder if Ramit is either doing Professor Xavier-style long-distance-mind-reading [...]

  27. @Matt- You can split the Costco membership with a friend. You can register up to two people per membership, so that will make your yearly membership fee $25.
    Now, is it worth it? I think it is. Is there a Costco gas station at the new Costco that just opened up? Costco gas stations are typically $0.20 cheaper per gallon than gas stations nearby, at least where I live. I use my Costco membership for gas, tires (they frequently have excellent deals on tires) toilet papers and cleaning products like swiffer. I rarely buy food in bulk.

  28. Great advice (and great site, I’ve been following it for a while now). I’m writin for Spain and just wish to make two remarks:

    a) Hard to save 1000 $ / month in countries where salaries are often less than that. I think it would be fairer to choose a % of your income as a universal goal. I read somewhere (maybe here?) that you should aim to save 10-15% of your anual income as a good habit and to avoid any finantial trouble in the future.

    b) Not every discount if fully disclosed, probably in order to prevent too many people to use it. I have a few discounts with my Journalists Association membership here in Spain but you have to ask everywhere you go, there is no comperehensive listing of them.

  29. Excellent! This is the best tip of all.

    Here i thot i was soooo savvy and didn’t even think about tracking down services thru’ Costco–except for the kickback on the Costco AMEX card.

    If you work for a college or university, nearby merchants offer all sorts of discounts for students & faculty. Often lists of participating merchants are posted at the school’s HR site. I’ve gotten into the habit of routinely asking any- and everyone if they’ll give a discount for Great Desert University employees. Amazingly, sometimes merchants located 20 or 30 miles from the campus will do so.

    Another source of discounts for us old buzzards is AARP. Your AARP card will get you any number of unforeseen cut rates–once I discovered that AARP members get a bigger discount on Dunn-Edwards paint than I could wangle through the GDU discount. Who’d've thunk it?

  30. Inspired by other posters, I actually looked up borders rewards perks. They are quite amazing! I had no idea I could get so many discounts from retailers I commonly use.

    I also took another perusal of the upromise site. I’ve been reminded that it is worth the effort to go through their site to get money back for student loans. I have no problems taking free money. They also have tons of free shipping and other coupons for tons of retailers.

  31. Ramit could you elaborate on why a single guy like you has a Costco membership. It will be interesting to get your perspective on this. $50/- some annual membership fee and then to buy things in bulk 3/4 of which one may never use in a years time! I have tagged along with friends who had memberships and split some items but never deemed it financially viable to take membership.

  32. Good question, JaM. I literally got membership for one event I threw where it nearly made the annual fee back in one shot. The key is that I have to use it once more to break even. For example, there’s a Costco near my office that I need to check out for gas!

  33. My credit card company referred me to http://www.benefitinformationcenter.com for a list of all benefits associated with my card. I think this site covers most credit cards.

  34. Regrading Costco—yes I have found even a household of one or two people can benefit –without buying 30 rolls of toilet paper.

    One of the ways it may benefit people is during gift giving season alone. Prices on books are excellent – frequently half price. Also sell gift cards at a discount. Last year we wanted to take my mother-in-law to her first Broadway Play and dinner in NYC for her birthday milestone and Christmas. I belong to McCormick and Schmicks Customers club. Costco had started selling gift cards to M&S –$100 gift cards for $80. We bought two of the packages ($200 worth for $160), plus I had a coupon from my M&S customer program, plus I eared additional points on the meal.

    This year Costco is selling Starbucks cards (5 -$20 cards) for $80. We give a lot of these $20 cards for various gifts so we are really excited about this. Plus I have an executive membership to Costco so I earn cash back.

  35. I love Continental OnePass. Registration is free and you earn miles towards free airlines tickets by making purchases or signing up for services. I signed up for my electricity through this program and got 1000 miles for registering and 2 miles for every dollar spent on my monthly bill. I also get 125 points for every $250 i spend at the grocery store.

  36. This is a great tip. I am shopping around for a new cell phone plan as my contract is up soon and I found out that I can get a 15% discount on my plan along with waived activation fee and the post rebate price on any phone through Verizon because of my employer – which actually makes Verizon prices almost cheap for me.

  37. [...] the second strategy is by far more fun.  Along these lines, I recently enjoyed this post over at I Will Teach You To Be Rich about how to use your credit cards’ free rewards. [...]

  38. Thanks for the tip on Costco! I just opened up a savings account and will be transferring to their road side service in the future.

    BTW, I use them currently for the dental service and I would highly recommend NOT using their health insurance plans due to their extremely high deductible. You’re better off getting an HSA account instead.

  39. even though it’s late, i thought i’d comment on why we have a Costco membership. i analyze our use and what they offer every year to see if we want to renew. since it’s just the two of us and we don’t need a 12# bag of apples or 65 juice boxes, questioning the $50 membership is fair.

    1) the gas price had been the lowest around. while we don’t commute regularly, even the 15-20 cent price differential offered significant enough savings until the Major Brand Gas station a block from our house started competing.

    2) the liquor prices are some of the best around. yes, of course, *you’re* super frugal and *you* don’t drink anything but water. we know, we know. at my house though, we’re social, and liquor is occasionally part of that. it’s nice when that liquor is cheaper than what you get at the regular store.

    3) you can get certain items of equal quality under the house label. we needed to buy a new mattress and had settled on a memory foam one. however, the leading brands were well over $1000 and up to $3000. the Costco one was rated just as good by people who had tried both and was around $800.

    4) some prescriptions are cheaper. you need to doublecheck yours to be sure.

    5) i could consolidate trips. instead of going to a gas station, the drug store, and the grocery store, i could go to Costco.

    that said, it’s not worth it to get the $100 membership they try to upsell you to, unless you’re planning to make a high-dollar purchase (like a mattress, a trip, new tires, a flatscreen, etc.).

  40. Abby, I recently got a membership too :) They had a deal on where if a friend referred you, you both got $10 gift cards, so that brought down the cost a bit.

    I don’t know if it’s going to save me much money over the year, but I’ve already saved money on gifts I’ve bought (clothes, CDs, etc). I happen to like some of the products you can get there that you can’t get anywhere else too.

    They’ve also got great photo developing!

  41. This is a great idea but be careful on this one. Often the 20% off on that Hertz car rental because you have a AAA membership is still way higher than Enterprise for example. You still need to compare prices.

  42. [...]  Drastically cut expenses until you have at least a month or two of expenses saved. See if you can receive rewards/discounts with from your bank or memberships. Cut down on transportation [...]

  43. [...] Use the free rewards from your credit card [...]

  44. [...] the 7th of each month. I prefer to pay my bills using my credit card, because I earn points, I get automatic consumer protection and little-known benefits, and I can easily track my spending on online sites like Mint, Quicken, or [...]

  45. You are so right I work for Sprint and we get discounts on everything, I also have credit cards, AAA and Costco…I figure any plan purchase no matter large or small should run through these sites first…!!!

  46. [...] through Costco offered auto insurance coverage for $58/month. That saves us $60/month for an annual savings of [...]

  47. I try to not think too much about where my money goes but more so how to bring more in.. below is my advice to anyone looking to do a financial overhaul in their every day atitude..

    Simplify your life.. Cut the fat.. ride a bike.. take a walk… cut the tv.. the cable bill, use the internet, recycle, buy waste conscious products but always healthy products.. take public transit, always fill the dishwasher and washer / dryer and run them during off peak hours, shower with your lover, get free refills and unlimited internet at starbucks with starbucks card.. buy 1000 minute tmobile recharge for 100 bucks, find 4-5 good value restaurants and good happy hour bars and work them into your schedule. If u need a car please get a low emissions vehicle and good mileage.. rent instead of buy… travel, live, experience the world, never carry cash, ( i know this is america. so have have an emergency 20 on you at all times) i love the book.. some good insights into automation.. good luck everyone..

  48. Great post, will be including in my next update with the appropriate link love.

  49. [...] get me wrong, getting good rewards is important. But it’s a solitary search: people spend on totally different things, pay some or all of [...]

  50. [...] people don’t realize they can receive some great perks from their credit card companies. Those who use credit cards for the rewards typically are aware of them and take full advantage [...]

  51. [...] Tip #10: Use the free rewards from your credit card, car insurance, and workplace, Jenni says: “I JUST did this over the weekend: my BoA Visa gets reward points ($1 = 1 [...]