(The following is a transcription from a video Linda and I recorded. Please excuse any typos or errors.)
We had a reader, one of our readers, one of our really smart readers reached out and sent me an email of how she generates $175 a month using her credit cards. She earns less than $500 a month at her job and she earns a third of that from just credit cards, how she uses her credit cards. We’ve talked about basically how we use one or two different Chase credit cards because I like to keep things super simple, but when I hear stuff like this it’s just fascinating to me because if you do want to spend some more energy on this and have multiple cards and be a bit more strategic, there’s a lot of potential there. Yeah, we’re going to kind of dissect her strategy here for you and show what’s going on.
Amex Blue Cash Preferred Card
Okay. Groceries, using the Amex Blue Cash Preferred Card, you get 6% back at grocery stores and up to $6,000 in purchases per year.6% is a lot. I wish there was no limit here, but 6% back is really good.
There’s one thing you should be aware of with the Amex card. There is an annual fee on this one. But, the reader says the rewards at 6% more than covers the annual fee. A good bit beyond I would think.
Capital One Savor Card
The next one is the Capital One Savor Card. When they dine out she uses this credit card. They get back 4% at restaurants. So if you eat out a lot, this would be a good card for you to earn cash back with
Chase Amazon Rewards Card
Amazon. When shopping on Amazon, she gets 5% back on all her purchases at Amazon. Can you imagine how much money you would have if you got 5% back on Amazon purchases? That is using the Chase Amazon Rewards Card.
And if you shop through Amazon’s Subscribe and Save program, with this card you get an additional 5% savings. Even if you don’t get this credit card you can save a good amount of money with the Subscribe and Save program.
Citibank Costco Card
The next one is the Citibank Costco Card. She saves extra at Costco and on Costco gasoline. She earns 4% on gas. Our reader says that cashed earned back pays for her membership per year.
Costco is another thing that we don’t use because of convenience. But, I think there’s a lot of money to save at Costco if you can buy in bulk, smart. That is if you can not buy extra stuff, but buy the things that you’re actually going to use. I think there’s a big win there for a lot of people.
Citibank Double Cash Card
Citibank Double Cash Card earns 2% back on all purchases. Okay, which is great. This is one of the … I think it’s the highest cashback rate that I’m aware of. If you are specifically looking for cash back, that’s what I like about this card.
Chase Credit Cards
We use this Chase Freedom Unlimited as kind of our primary card right now. We’ve used the Sapphire Preferred a lot. The Chase cards give you Ultimate Rewards points. What I like about Chase is if you’re using Hyatt hotels, and we talked about this in this other video, I’ll have it linked here, how we travel for free, but it uses Ultimate Rewards points. If you’re using Ultimate Rewards points, they go so much further at Southwest and at Hyatt hotels, and you can get a whole lot more value than just 2% cash back. If you’re willing to do that on travel, you can still get cash back with them, but it’s only like 1.5%, but that’s just not the best way to spend them.
Huntington Voice Card
She gets 3% back on her utility payments by using the Huntington Voice Card. That’s amazing being able to do that on utilities.
She can earn this 3% back because you get to pick a category. It’s one of those rotating category cards where you can pick which category you can earn cash back on. I’m also seeing here that certain credit cards you can pick whatever category you want to get a discount on.
Many cards will say on dining you can get 5% back, or on gas you can get 5%. So you can choose whatever one you want. It’s a rotating one or you pick. They give you that option, which is kind of cool.
Melaleuca Visa
The last credit card that she uses is the Melaleuca Visa. To be honest, I don’t know what Melaleuca is. It looks like it might be like Young Living or something like that where they have health products. There’s a whole bunch of products and stuff like that.
What’s good about this card is that our reader gets 6% back there. And then also 4% back on product purchases when dining out. When she eats out, 4% of that goes towards her next purchase.
I think the good point of this maybe is just that someplace where you can become a member and kind of work that system a little bit. Costco falls under the same category. She is a numbers nerd like me and added all this up and concluded that ultimately she’s earning $175 in tax-free income doing this, which is really, really cool!
Now, obviously you do have to spend money to get these cashback rewards. But, the point is, is that if you’re not spending extra money you have to pay your utility bill every month.
You also have to buy food every month. If you’re doing this, it’s like we’re not spending extra money on our credit cards to get the rewards, but we’re going to spend the money anyway so we might as well get the rewards.
Carrying Credit Card Balances
Now, the caveat here that I always want to give any time I’m talking about credit cards, every single time you hear me talking about credit cards I’ll say this, is that there’s no benefit to this if you’re carrying a balance. You have to be a person who is paying off your balance every single month, otherwise, this is just a complete waste of your time, because those interest charges are going to quickly offset any benefit that you’re going to get.
If you aren’t a person who pays off your balance every single month, then just skip using credit cards to earn cashback rewards. It will not be worth it. Get focused on your budget instead.
Focus On Your Budget
Focus on getting your budget really solid and just getting out of debt to a point where you can pay your credit cards off every single month. Then once you’re solid, then you can explore earning cashback with credit cards.
Anyway, I just thought this cashback earning strategy was a really cool idea and wanted to share with you, because I know some of you money nerds out there are like us who might get a kick out of this.
That’s it for now. If you have any cashback credit cards that we haven’t discussed, let us know in the comments below!
Be blessed. Be a blessing!
Hello Bob,
Interesting article on maximizing use of credit cards with cash back. I am trying to understands how a $175 cash back per month can be obtained in real life. Using the Chase Amazon card example, it would take a total of $3,500 in purchases to get $175 (5%) back. This is obviously impractical on less than $500 at her job. Can you please enlighten us if the necessary income comes from a spouse or other means? Now semi-retired, but during my working career I used several credit cards providing airline miles. I actually still have unused mileage from those years. Seeing the miles/cash back adding up can become quite a lure into spending more than necessary using such credit cards. My experience is that such benefits are easily offset by making unnecessary purchases even if the cards are paid off every month. Definitely agree with your suggestion to “explore earning cashback with credit cards” only after being on a solid budget and debt is paid.
God’s best always,
Franz
Thought I would chime in about Melaleuca. I was a member about 10 years ago, so things may have changed since that time, but here is what I remember: It is a membership company where you sign up people to be a member, then the members need to spend a certain amount each month to stay a member (the person who signs you up can earn a small commission from the products you purchase). They do sell healthcare products (they have great vitamins), and they also sell chemical free household cleaning products (which were good). I stopped being a member because the prices were rising and the only thing I was really interested in was the vitamins. I found I could do almost the same thing with Young Living oils for less and Young Living didn’t charge annual membership fees. I was a member with Melaleuca for about 3 years and used several of their products, but I found I got more bang for my buck with Young Living Oils and switched.
Amazon is not a business Christians should be doing business with. They have been caught selling recently children’s wear that read: “Daddy’s Little “Sl**”. They removed it only after an outcry. They ban books by former homosexuals and former lesbians. They have sex dolls on their website that look like children. The atrocious treatment of their employees has been the subject of many news stories. Their home security doorbell company Ring, enlisted police departments to push their products. And this are just some of the examples of how Amazon operates. Years ago, when they only sold books, they defended selling books advocating adult-child sex. They even defended selling it after an outcry. They only took it down after the continuous outcry continued. This is how Jeff Bezos thinks and how Amazon operates. While all companies seem to have problems for Christians today, Amazon has made it clear that it will sell anything it can to make money and it has no moral conscience in doing so.
Are you serious? That’s disgusting! Not surprised though. I was at Target a few months back and noticed a little girl’s shirt that said something about Whining and it had a wine glass on the front of the shirt! I let management know of my displeasure.
I have gone through your blog and got glued to some interesting posts related to finance, and how you related it to the Bible got me wowed. About how to earn with credit cards, this will be very useful and helpful to especially US citizens. Nice post.