Early in 2013, deal site guru Brad Wilson made headlines by racking up 4 million frequent flyer miles without spending a dime. What he did was genius: he used his rewards credit card to buy dollar coins. The US Mint ran a promotion where they sold coins to purchasers with free shipping to encourage people to adopt the one dollar coin. So, Brad would purchase the coins, deposit them in his bank account, then pay off his credit card with the cash. Over an eight month period, he made several purchases of thousands in coins, which totaled $3 million. Each dollar equaled a point on the card; he then used those to purchase frequent flyer miles at a ratio of 1 and a quarter per point.
While Brad’s holds the black belt in credit reward maximization, there are many other great ways to get the most bang for your plastic buck:
Keep a List of What to Buy with Which Card
The Amazon Chase card gives you three points for everything you buy on Amazon. Discover has rotating rewards with a different category highlighted each quarter. Other cards offer big bucks back in categories like restaurant meals, groceries or office supplies. Carry a range of cards so that you can always get the best return.
Put Everything Through Your Cards
The most skillful reward card ninjas move every purchase possible through their credit cards. They pay their rent or mortgage with the card and pay in full during the grace period. They pull out the card for groceries. They even set up accounts on services like Amazon Payments to pay people like the babysitter and fund the accounts with the rewards card. Think about how much you earn and spend each month; the rewards could be substantial over time.
A Miniature Version of the US Mint Scheme
While the US Mint has discontinued their program, it’s still possible to pull off the same results on a smaller scale. Find a card that has great rewards at drug stores; then, use your credit card to buy gift cards at the shop. If you buy American Express or Visa gift cards, these can be used wherever you’d usually use plastic but get a smaller reward. Just make sure that the fees for the cards don’t exceed the benefit you’d get from the points.
Double and Triple Rewards
Reward cards can be used to buy discounted gift cards at sites like CardPool or Plastic Jungle. Discover is offering their 5% bounty on online purchases this quarter, so, this is a great time to stock up. You will earn the higher cash back rate and also get a discount on the cards. Some CardPool cards are offered at discounts of up to 25%. If those cards are on an item you need, you score. Then, move your purchase through another rewards gateway like eBates or SwagBucks. You’ll get paid again to make your purchase at your final destination.
As always, read carefully when using rewards cards to make sure you get credit. And, don’t spend more than you’d otherwise spend. But, if you are careful, rewards cards can put a little perk back in your pocket.
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