I Made Close to $500 by Using the Right Credit Card

In the past, I've detailed why I use the Blue Cash from American Express credit card including the fact that last year using the card made me $330. And now the results are in for this year -- and I did even better! Here's the final tally for 2006:

• Amount charged to the card: $26,279.67
• Amount earned back as rebate: $482.38
• Rate of rebate: 1.84%

A few thoughts on this:

1. Wow! I am really happy with the amount! Almost $500 for doing nothing that what I'd do anyway! That's my idea of earning some extra income.

2. The rate is good as well. Last year I earned 1.68% and thought that was pretty good. However, I had more charges this year which meant more money rebated at a higher rate (the card has a tiered system -- the more you charge, the higher the rebate) and thus a higher total percentage. And when looked at in the absolute, it's a good number too. From what I've seen regarding credit card rebates, 2% seems to be the gold standard and is difficult to achieve. But I'm almost there!

3. 2007 may be even better. I have two major purchases planned and a few big ones are bound to pop up to supplement these. Maybe I'll earn more than $500 this year.

For those of you interested, here's a link that gives details and an application for the Blue Cash from American Express card.

Comments

[LivingAlmostLarge]

I prefer the Amex true earnings card it gives 3% back eating out, 2% travel, and 1% back everything else. I also flip between CC because I use a Citibank and discover depending on the time of year.

[hanna]

my Chase card - 1% on everything, 5% on gas and groceries! adds up $300-400 annually:-)

[Terry]

Sounds great, where do I sign up?

[Lenny]

I got 3 free roundtrip tickets to Orlando last year for the week between Christmas and New Years. If I bought them myself, it would have cost over $1400 for that time of year. I use the Citibank Premier Pass card. You get miles for everything but the best part is that you get miles for the actual miles you fly for any airline. 25,000 points buys you a round trip ticket anywhere in the continental US. With points, 1000 points roughly equals $1.00. Tickets were over $400 that week and I was still able to get these free tickets for 25,000 points each.

[FMF]

Lenny --

Any idea how much you spent to get those tickets? It would be interesting to compare results.

[Brubaker]

Anyone who thinks they are "earning" money from these credit card companies has been duped.

[FMF]

Brubaker --

In what way? If I:

1. Do what I'd do/spend what I'd spend anyway

and

2. Never have a balance/pay any sort of fee

then how am I being duped/not earning anything from them?

[Dave]

You are being "duped" in a sense because the cash back you "earn" is less than the value of what you'd receive using a different card. Sure you're getting close to 2% in cash, but using a rewards card like the premier pass you could redeem rewards that have a far higher value. Anyways, that's my take on it. True, if you're not carrying a balance, you're not really paying anything, but you could still get better rewards by doing the same thing you're doing already.

[FMF]

Ok, I'll bite. What is the Premier Pass? I'm all about earning a higher reward if possible, but I'm not familiar with it.

[FMF]

Ok, after two seconds of searching, I see you're referring to an air miles card.

While I'd be interested in seeing a comparison of what I would have earned using it versus the Amex card, I'm skeptical that it would be a better deal. I've documented my thoughts on air mileage cards (I don't fly much, don't want to be locked into miles (prefer cash), can find better deals on flights by paying cash, etc.) and am not sure why this particular one would be any better.

[Tom]

Ok... here is the deal on the Premier Pass Card Elite Level (it gets a bit complex):

Thank You Network Points are accrued by flying and purchasing stuff

For every mile you fly you get 1 flight point.
For every dollar you spend you get one purchase point (extra points are also added for grocery store, some merchants, etc.).
Purchase points automatically become Thank You Network Ponts at the end of a billing period.
Flight points only become Thank You Network Points when they are combined with Purchase Points (say you fly 4000 miles, you must spend $4000 to get all 4000 miles = 8000 Thank you points. If you spend $3500, you only get 3500 miles = 7000 thank you points, but the remaining flight points go into your "fight bank".)
There is a $75 annual fee.
1 free roundtrip ticket w/ Saturday night stay costs 25,000 thank you points.
There are hundreds of other thing you can get in the Thank You Network.

SO.... If you fly over 3250 miles in a year (the more the better), and spend over $3250 in a year, then this card is 10x better than any card out there. For example... I fly about once a month, and in 1 year, I have purchased 5 free roundtrip tickets, worth at least $2000 total. I'll get back to you on how much I spent in the year, I'm thinking around $3000 a month or $36,000 total. That's about 6% return. Even if i don't fly often in the future, i still have a bank of flight miles waiting to be transfered (9,000).

[FMF]

1. I don't fly much, so it would be hard for me to rack up any serious credits.

2. I fly even less for non-business, so the flight credits would be useless.

3. I don't do annual fee cards.

4. 6% return is not 10x better than any other card out there.

This said, if it works for you, go for it.

But just to note, the Blue Cash card was voted one of the best reward credit cards recently by Money magazine. I can't remember if Premier Pass was listed or not.

[Tom]

Whatever works in your specific situation, just as long as you use some type of rewards card. You may not get much back, but at least it's something.

[Bad Debts]

My question would be, how much did you spend on interest charges over that same time period? I'm sure that almost $500 rebate didn't cover the interest on $26,279.67 charged to the card. How good of a deal is that now?

[FMF]

I have NEVER paid interest charges. Otherwise, what's the point?

[Moneymonk]

Almost $500 for doing nothing that what I'd do anyway! That's my idea of earning some extra income.

You did do something you have to charge almost 30K just to get a few hundred dollars. I rather have 26K a let it sit in a mm acct. and make the same.

[argh]

y'all are so silly! how can you not understand that he's basically charging all his normal bills and paying them off at the end of the month, therefore getting the "free" money? why the hate? good job utilizing the system in a positive way! :)

[Brutus]

I am looking for the best cash back card program period, I use this for business purchases, typically charge about $50,000+ each month. They all get categorized as Merchandise/Retail from what I can see on my Discover Statement. I do not care about the other things, just that, anyone know of a card that has some serious cash back?
B.

[FMF]

Brutus --

I've heard that the Amex Blue card is the best for "heavy chargers", but you're REALLY charging a lot. Not sure if it has a limit, but you should check it out to get details.

Potentially, a combination of cards might work the best for you.

[Kristi]

We earned $775 on our Chase business card this year. We probably charged an average of $10,000/month on it. It's a rewards program that gives you the choice of turning in the points for giftcards to various places or just taking the cash. I did get a few giftcards for Christmas gifts but then turned the rest in for cash.

We also use Paypal a lot for business and they give us 3% cash back for using their debit card. That adds up to quite a chunk with all the product we buy with it. It earned us around $800 this past year.

[FMF]

Kristi --

Maybe I'm reading your comment incorrectly. Are you saying you charged $120k last year and only earned $775 (or even just $1,575)? If so, you could have done a LOT better with the right card(s).