For seven years, I had two credit cards. The first, a Target RedCard had a $200 credit limit.
I could barely pay for groceries without maxing out the card. The second a credit card from my bank that my mom cosigned when I turned 18.
I stayed away from rewards credit cards because I had better things to do with my time than study rewards programs… like earn money and raise my children.
Over the years, I passed on countless intro bonuses and cash back rewards in the name of saving my sanity. But almost exactly one year ago, I jumped into the rewards “game”. The intro bonuses were just too compelling, and Aldi finally started accepting credit cards.
When I started trying to maximize my rewards, I thought to myself, “Someone should make an app that helps me maximize rewards points.”
Birch Finance is an app that does just that. It’s an easy to use app that analyzes your spending habits, and helps you maximize your credit card rewards. It also recommends better credit cards based on their analysis. Check our our Birch Finance review.
Birch Finance Basics
Birch Finance is a credit card rewards maximizing app. It’s not a debt payoff app. It’s not a budgeting app. 58% of American Adults with credit cards have credit card debt.
If you have credit card debt, this isn’t an app for you. Your primary focus should be on paying off the debt as fast as possible. In most cases, that means using balance transfer and 0% APR credit cards.
This app is for the 42% of consumers who pay off their credit card bill in full every month. If you’re part of the minority of consumers who pay off their bills in full each month, this is what you need to know about the app.
First, the app analyzes your spending using a financial aggregator. You’ll log in and connect all your debit and credit cards to the app. Birch Finance then analyzes all your transactions (over at least six months if you have that much history). Birch grades each transaction on a scale of A to F. A means you earned as many rewards as possible on that transaction (given your current credit card set). F indicates you missed at least 40% of the available rewards.
How does Birch know whether you got the right rewards?
They have a database with hundreds of the most common rewards credit cards. They match the transaction’s merchant code to your rewards cards to determine if you got the most rewards possible. Their algorithm even considers whether a transaction pushes you towards an intro bonus or not.
The beauty of Birch is that it isn’t just backwards looking. You can ask Birch to recommend a card based on where you plan to spend. Birch will even use geo-location to find the specific merchant you have in mind.
Where Birch Finance Shines
Birch Finance shines in three areas.
First, I love that the app focuses on credit cards you already have on hand. I don’t want to sign up for five new credit cards. I just want to maximize my rewards with the cards I already have on hand.
Second, the credit card recommendation algorithm is amazing. Their database doesn’t have every single credit card, but it covers the biggest. If you want an accurate recommendation, this card will give it to you.
Finally, the app does a great job highlighting spending that you could realistically put on a credit card. Like a lot of young people, I’m quicker to pull out my debit card than my credit card. The result? I’m missing out on hundreds of dollars of rewards each year.
Where Birch Finance Struggles
The Birch Finance app does a lot well, but I would like to see quite a few improvements. These are a few areas where consumers need to be wary when they use Birch Finance.
First, Birch Finance doesn’t have an intro bonus tracking module. Consider a scenario where you’ve recently signed up for a credit card with a large intro bonus (such as earn 50,000 points when you spend $4000 in three months).
Birch Finance is smart enough to tell you to use the credit card that will push you to the intro bonus. But it won’t tell you how much you’ve spent on the card, and how much more you have to spend to earn your bonus. Thankfully, such a module is in the works according to Birch founder, Alex Cohen.
Next, I would love to see Birch implement a fee analyzer. If you’ve got multiple rewards credit cards, you might pay multiple annual fees. I would love for Birch to show what credit card fees you paid each year, and whether you “outearned” the fee. It would be even better if they could recommend credit cards to cancel.
I would also love to see Birch focus on building credit scores. It’s true that most people with rewards credit cards will have excellent credit behaviors in place. But even people with excellent credit need to remember the basics. You need to know your credit score.
You need to pay your bill on time and in full each month. You need to keep your credit utilization low. If you’re a young person with your first rewards credit card, you may have a tiny credit limit. It is prudent to keep your spending on the card low, even if you miss out on credit card rewards. You never want to max out a credit card just to earn rewards. That’s true even if you can pay off your bill in full each month.
Finally, I want Birch to build out their credit card recommendation engine. I would love to see their engine recommend a greater variety of products, and I would love to have the options to view multiple cards instead of three at a time. The cards that Birch recommends maximize rewards, but they don’t necessarily maximize intro bonuses which are much more lucrative. It would be good to add that as an option.
Final Thoughts on Birch
In my mind, Birch fills a needed gap in the marketplace. There are tons of people like me who qualify for credit card rewards, but we’re too lazy to take advantage of them. If that’s you, consider a download. It’s an easy to use app, and it will help you earn more rewards.
Birch has a long way to go before it becomes my favorite credit related app, but I recommend it today to people who can stay away from credit card debt. Those who struggle with credit card debt or who are new to rewards credit cards should be extremely cautious with this app. You don’t want to fall into credit card debt because you’re lured in by enticing rewards.
Do you have credit cards that offer rewards? Do you think you're fully optimizing those rewards opportunities?
Birch Finance Review
Commission & Fees - 100
Customer Service - 90
Ease Of Use - 80
Features & Options - 50
Birch Finance is a free online tool that aims to help you maximize your credit card rewards and ensure that you’re spending wisely.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.