Maximize Your Credit Rewards Programs

Guest: Mike Vichich

Want to earn the most from your credit card rewards program? Whether you prefer travel rewards or cash rewards, chances are you are leaving money on the table. In this interview with Mike Vichich, you’ll learn about a simple free way to make sure you maximize your credit card rewards.

Note: Since our interview, the company has become and will be adding some cool new tools. Check out their new website and follow @MikeVichich on Twitter!

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Transcript of the interview:

Gerri: Six hundred dollars, what would you do with it? I know I have summer travel coming up, so it would definitely come in handy on my end.

My next guest Mike Vichich is the co-founder and CEO of Glyph. It’s an Ann Arbor, Michigan-based tech company. He also has been in the consulting world and together with his co-founder he has founded a company designed to help consumers take advantage of their credit card rewards.

He found the average American leaves about $600 on the table. We’re going to ask him how to save money and how to make sure we’re taking advantage of all of those rewards. 

You say that consumers are losing out on an average of $600 in credit card rewards each year. Where did you get that figure?

Mike: The fed estimates that the average American family makes about $50,000 a year. They say that about half of that income is spent on plastic cards whether it’s a credit card or a debit card. About half of your income, so about $25,000 gets spent on plastic.

What we did was we said, if you assume that on the low end of things people are earning about a percent, maybe even sometimes lower than that to a half of a percent on rewards, that’s anywhere between $125 or $250 a year in rewards just across the board. But we think based on using Glyph that we can bring that number up higher somewhere in the 3.5%, 4% depending on your credit score potentially - even higher than that.

If you just said 3.5% that’s about $850.00 a year in rewards, so taking you from $850 from $250 gives you the $600 number.  Like I said if you have a higher credit score you’re able to apply and get cards that are more valuable in terms of rewards, then that number can even be higher and moreover if you earn more than the average American family chances are that that number will also be higher, but $600 is roughly the average.

Gerri: Mike, we’re going to talk in a moment about what Glyph does and how it helps consumers maximize their rewards, but let’s talk first about some of the mistakes that consumers make when it comes to their rewards credit cards. What are some common mistakes you see that basically have consumers leaving money on the table? 

Mike: First of all I don’t think people obviously don’t intend to do it. But when you’re out at the store purchasing something, whether it’s the grocery store or department store, you’ve just gone through this thought process of what products should I buy, right? You just pick your favorite toothpaste, or your favorite cereal, whatever, laundry detergent. 

Typically, by the point you come to the cash register you’re ready to just pull out a card and swipe it and be done.  We think the card you use is also a product choice.  Putting the same level of thought into that as you do which laundry detergent you buy or which other household products you buy we think is equally important.

Over time, we’ve seen the complexity of rewards increase and first and foremost now you have to deal with things like 5% rotating categories and there are even cards that have the first Friday of the month they offer extra points on dining, right? As a consumer it’s a lot to keep in mind when you’re out buying things. It’s kind of the last thing on your mind, which card should I use. 

The other part of this too is that most of these programs or many of these programs consumers actually have to enroll in.  Even if you have the card you still have to go to the website and sign-up or reply via text message and sign-up. That’s only one issue on a list of potentially many gotchas, but I think it’s a key one in terms of complexity and then having people sign up.

Gerri: Mike, this can be such a complicated industry. There are so many different rewards programs out there. Just like you mentioned there are so many different ways to get rewards. You have to sign-up with your card’s dining program to get extra rewards when you eat out. You may have to register quarterly to get the bonus reward categories for that quarter. It gets really complicated, so first of all I want to know how you manage (to track) this industry?

Mike: It is, yes. Fortunately, this is our job. Most people don’t have that luxury. What we have is a fairly sophisticated system that finds these things and keeps track of them and then using our services - mainly our iPhone app or our website - we’re also working on an Android app, but using one of our apps we’re able to tell you, “Hey, it’s time to sign-up for your 5% cash back for your Chase card, or you need to sign up for the other rewards cards that you’re offering. 

We try to keep it simple because consumers don’t want to spend this kind of time thinking about this stuff, but they do want the money. We try to make it as easy as possible for consumers to get the money that they earned from their rewards programs.

Gerri: I have to say I absolutely love what technology is doing for consumers and I absolutely love this idea. It’s truly an idea whose time has come because it is so complicated. 

A lot of times right now I think the scenario is if you’re a credit card rewards junkie you follow the forums and you hear tips and you analyze the offers. But most people like you say don’t have the time to do that, so they don’t end up using all these rewards.

Let’s go back and just describe what Glyph is and how it works and how it helps consumers.

Mike: Sure. First, I’ll describe what happens when you’re actually about to pay for something and then secondly I’ll go back and describe what it actually takes to sign-up, but first imagine you get a bill at a restaurant or you step into line at the store or you just pull up to the gas station, you’re about to buy some gas. 

The way it works right now is you open up your Glyph app that you can download for free in the iTunes app store.  With a touch of a couple of buttons you tell us what merchant you’re at and then the very next screen we tell you which credit card will maximize your rewards. It takes less than ten seconds to get through the whole thing. If you can spare the ten seconds or less to get that answer you can stand to earn a lot of money each year. 

Like I said, you basically tell us what location you’re at, whether a BP gas station or you’re at Macy’s, you’re at Red Robin with your family for dinner and then we’ll tell you which card is best for you. Keeping track of all that complexity and making it very simple. 

The other thing we’ll show you at that exact moment is we’ll tell you what the credit balances are on each of your accounts, so that you can see whether or not you’re spending too much on one card, or maybe you’re spending too much overall. It’s a very quick way to just see how much money and credit do I actually have. 

Next to that we also report your credit utilization. Most consumers actually don’t realize this, but if your credit utilization gets too high, then that can actually be a negative effect on your credit score. 

What we try to do is help people stay under roughly the 30% utilization threshold across their accounts and on each individual account. Long story short, you spend a few seconds at the point of purchase and you get a lot of insight on which card is best for you to use. Does that answer the question Gerri in terms of how it is used? If so, I can tell you how people should sign-up.

Gerri: Yes, and now I’m waiting for you to get the Android version out!

Mike: We’re working on it. 

Gerri: Based on that how many rewards cards do you think consumers should carry, or how many do they typically carry?

Mike:  The average consumer carries - again this is according to the Fed, but 3.4 credit cards in their wallet. There’s a variety of other studies out there that said 60% of all consumers have at least one rewards card. If you look at those reward cards, as it relates to overall credit cards, 80% of credit card spend goes on reward cards. 

The vast majority of spend as it relates to credit goes on a rewards card. I don’t actually have any numbers to quote for you as far as how many reward cards does the average consumer have, but I can tell you that mine, I have four that I use and I rotate them depending on the situation. My yield in terms of rewards is probably close to 5% on every purchase. 

With a good credit score and the right set of credit cards, you don’t need that many. You’re talking two, three. You can choose to have fewer if you don’t want the complexity, but the right set of cards you could get close to 5% on almost every purchase including 6% on groceries too, which is a good one. 

Gerri: 6% on groceries is a fabulous one, that’s the card I need!

Mike:  My guess is that most consumers listening to your program like to eat food, so there’s a big one.

Gerri: Yes, we do. We’re in Sarasota, Florida and we like to eat out a lot. We like our organic groceries. We definitely spend our money on food in Sarasota. Right now it’s an app for the iPhone and it’s downloadable for free?

Mike: That’s right, yes in the app store.

Gerri: is the website for that. One of the other things that I’ve found that traps consumers is they won’t sign up for a new reward card, even if it’s a better card because, they’re worried about how it will affect their credit and that’s certainly something I talk about here on Talk Credit Radio. 

I don’t think anyone should feel like they are being held hostage to a credit card that’s not serving them. If you’re going to apply for a mortgage, yes I think you should hold off on getting a new credit card. If you know you’re going to get a new auto loan in the next month or two, wait until after that is done, before you apply for a new credit card.

Getting one new credit card for most people should not be a significant dip in their credit scores, provided they’re paying their bills on time and like you said trying to keep the utilization level down. 

Mike: Right and if you think about it too, when you apply for a credit card your credit score gets about a two to five point ding immediately, but then you also over the course of time you get the benefit of having more available credit which as you know is another huge factor in your credit score. 

Over time, applying for another card can actually cause your credit score to go up again assuming that you’re managing your expenses responsibly and not just spending more, simply because you have the credit. We don’t advocate that at all. We think where it makes sense, if it can save you money that’s what we’re trying to do.

Gerri: I’m talking to Mike Vichich, the website is and he is the co-founder and CEO of that company.  When it comes to your reward programs, Mike, are there certain rewards that you think are more valuable over other ones? Are there certain ones that you personally for example try to optimize?

Mike: Yes, that’s a good question. Beauty is in the eye of the beholder in many cases. One major question to ask is, “do you like travel rewards?” If the answer to that is yes, then there are a lot of very beneficial offers. I like the Starwood American Express Card. 

My wife and I have gone to Europe several times, Hawaii twice and South Africa and used Starwood SPG points as kind of the payment type every single time when we go.  From our perspective it makes sense. If you don’t like to travel I think cash back is a good way to go. 

As I was saying there are plenty of cards out there where they have offers on 5% on gas, or 6% on groceries, 5% on dining.  You just have to either take the time to look into it and study it or use Glyph and that’s kind of what our job is to do is to help consumers find that stuff usually.

Gerri: Consumers who use debit cards, can get one credit card and pay it off in full. Make it a reward card and you actually get something for nothing as long as you pick the right card and maximize your rewards.  It’s a great way to go. 

Mike: Yes. You do get a little bit of consumer protection too. 

Gerri: You get some great consumer protection.  We’ve talked about that here on Talk Credit Radio. Quick question before we wrap up, Mike. What about you? How much do you estimate your rewards are worth personally?

Mike: It’s funny. Before I quit my job to start the company, I wanted to make sure that there was value in doing this. When I left Accenture I found that with the right portfolio of three to four cards it was talking roughly $3500 a year in rewards.

Gerri: $3500, okay. I want to do this. You’ve got to get the Android version now because (when you do) I’m downloading it.  I want to earn those rewards. Mike, thanks for joining me. 

Mike: Thank you, I appreciate it.

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