As many of you know, I'm trying to raise an additional $10k this year in income -- extra income outside my regular job. (The numbers I ran show that making this amount and socking it away year after year can yield quite a sizeable next egg.) One way I'm doing this is to maximize the cash back on my reward credit card. I thought you all would like an update on how this is going.
As background, I use the Blue Cash from American Express card which I consider to be the best cash-back credit card. In 2006, it earned me almost $500 and I have been working to better that in 2007.
Last year, I had total charges of $26,279.67 and I earned a $482.38 rebate. This gave me a rebate rate of 1.84% -- well above the "industry standard" of 1%. (BTW, if you're settling for 1% on a cash-back credit card, you're leaving a TON of money on the table.)
Through July of last year, here's where I stood:
- Total charges: $9,777.51
- Rebate earned so far: $127.20
- Rebate rate: 1.30%
Through July of this year (my August statement had results through July), here's where I stand:
- Total charges: $14,743.53
- Rebate earned so far: $226.40
- Rebate rate: 1.54%
A few thoughts on my progress so far:
1. I've been working hard to put as much as possible on the card and obviously it's working. While the primary increases in charges versus last year are one-time events (trip to Disney and a new road bike), we have also been diligent in adding all possible charges to the card.
2. There are several ways to look at the amount I've earned so far to predict what I'll end up earning. It's obviously dependent on how much I charge in the remainder of the year, what I charge on (the card has higher rates on gas, grocery, and drugstore purchases), and the like. But I think it's safe to say that I should be well over $500 by the end of the year. Can I make $600 or even $700? We'll see, but these are certainly possibilities.
3. My rate will keep on increasing throughout the year as I'm now safely into the second-tier rebate level on the card. I'm now earning 1.5% cash back on everything except gas/grocery/drugstores where I earn 5%.
Is there any annual fee on this card?
Posted by: Easy Finance | September 10, 2007 at 10:22 AM
Easy Finance --
Nope! It's free.
Posted by: FMF | September 10, 2007 at 10:35 AM
Is there a maximum allowed? My husband and I charge approximately $150K per year between our personal lives and our businesses. Right now we earn airline miles so we travel free and/or first class. But maybe cash is a better deal. Do they have a limit on how much you can earn?
Posted by: Kim | September 10, 2007 at 10:43 AM
Kim -- I don't think there is a limit, but you could find out easily by calling them.
You may also want to consider a combination strategy as outlined here:
http://www.freemoneyfinance.com/2007/09/how-you-can-ear.html
Posted by: FMF | September 10, 2007 at 10:56 AM
there is no limit and no fee. The only problem is finding places that take AMEX. I have the same card and I love it. My yearly reward was just shy of $700 this year, which was around 1.9%. Of course, the balance is paid off every month so it really is $700 earned. All possible bills are paid with the card, all gas, all groceries. The only places that don't take it are a few restaurants. I usually throw that on my miles card.
The only knock about it is that the payment is in the form of a credit to your card (or is it debit?). I'd rather have the cash, but you put money on that card anyway so the net results are the same.
Posted by: Thomas | September 11, 2007 at 02:33 AM
Thomas --
Good stuff, but with spending like you have, you will probably make more with a dual card strategy (it can earn you up to 2.6%). Check this out:
http://www.freemoneyfinance.com/2007/09/how-you-can-ear.html
Posted by: FMF | September 11, 2007 at 08:04 AM