5 ways to strategically open and use a credit card now to earn rewards for a trip, event, or major purchase later

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• If you’re planning a trip, wedding, or big purchase, using credit card rewards can save you money.
• Opening new credit cards now can set you up with rewards for when you’re ready to use them.
• Set a goal and work from there to determine which credit cards will suit your needs.
• Read Insider’s guide to the best travel rewards credit cards.

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When it comes to personal finance, I’ve been trying really hard to set goals and plan ahead of time to make sure those goals are met. It took me years to set a budget and stick with it for more than just a few weeks.

It took me even longer to stick with the goal of doing monthly inventory on all of my credit card rewards and points. But as this year comes to an end, I’ve already found myself thinking about goals for next year and ways I can start getting organized now so it benefits me later.

Let’s say you’re planning something big next year, whether it’s a wedding, a vacation, or a move to a new city. You can start working now on getting a plan in place to maximize how you pay for that big-ticket item, especially if you want to use credit card rewards to cover your costs.

Read more: How credit card points and benefits saved me $500 on my first trip home to see family since the pandemic started

Here’s a guide to help you get going now to hit your goal later.

Set a goal for your credit card rewards

Before you open up a new credit card or even take inventory of your current rewards, look at the calendar for the year ahead and set your goals. Perhaps you’re planning a summer vacation to Greece in 2022 and want to pay for 75% of it using credit card points or you want to use credit card cash-back rewards to cover 25% of your move to a new city.

Read more: How to use credit card rewards to fly to Europe

Think through the goal you want to hit. Make that goal specific so it’s something you can start to strategize and plan for.

Plan out the costs

Sort through all the expenses of the goal that you’ve set. Map out a budget of how much everything will cost. If you’re planning a trip, create line items for the travel, accommodations, activities, food, fees, and even souvenirs.

The more costs you identify ahead of time, the more you’ll be able to plan for in advance. Then go through that list and mark the things you want to pay for with cash.

Read more: If you’re dreaming of travel, start earning points and miles now so you’ll be ready to book your next vacation

After that, determine how much you want to cover using either credit card rewards, points, or cash back. Knowing that will let you reverse engineer a game plan and help you pick the right credit card to open.

Tap into existing resources

Look at any existing rewards you have and see the best way you can use them. Check the benefits your card offers and make a list of which card gives you the opportunity to redeem points for shopping (for example, some credit cards let you use points to pay for Amazon purchases), for travel or activities, or to convert to cash.

Read more: The best Chase credit cards in 2021

Let’s say one credit card gives you the option to book a rental car using your points – for example, a card that earns Chase Ultimate Rewards or Amex Membership Rewards points. Write that down so as you go to budget and plan, you’ll have a clear understanding of which existing rewards and points to use for what budgeted item.

Determine the type of credit card you need

Chase Sapphire Preferred® Card

Start to understand what credit card rewards offering fits in best with what you need the most.

If you’re looking to cover the expenses of this big goal with cash, consider a cash-back credit card like the Blue Cash Preferred® Card from American Express or Chase Freedom Unlimited®, both of which offer strong welcome bonuses and bonus categories.

Read more: The best rewards credit cards of 2021

If your goal revolves around travel, pick a card from a transferable rewards program that allows you to use your points for many different parts of the trip (travel, hotels, activities, rental cars, etc.) and also offers a big welcome bonus. For instance, the Chase Sapphire Preferred® Card is currently offering a record-high bonus of Chase Sapphire Preferred® Card after you spend $4,000 on purchases in the first three months of account opening.

If your goal involves a strategy of using both points and also cash back, find a card that offers good flexible rewards.

Be strategic about how you use the card

Once you earn the welcome bonus from opening the new card, be sure to factor that into your goal’s budget. Take a look at all your cards and their benefits and bonus categories to plan out, every week, what card to use for items you plan to buy.

Read more: I have 26 credit cards – here’s how I decide which one to use

For example, the Blue Cash Preferred® Card from American Express offers 6% cash back on your first $6,000 in U.S. supermarket spending each year (then 1% back), so using it for grocery purchases can help you maximize rewards (cash back is received in the form of Reward Dollars). Other cards offer bonus points in a wide variety of categories – like the Citi Premier® Card, which earns 3x points at supermarkets, restaurants, gas stations, and on air travel and hotels, and 1x on everything else.

Doing this will help you accumulate more rewards and points, helping you inch closer to your big goal.

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