How to 10x Your Credit Card Rewards, Part 1
Most credit cards these days give you 1% cash back (or points or frequent flyer miles that’s the equivalent of 1% cash back.) Sometimes, if you’re lucky, you’ll come across a card that offers 2% cash back. A few offer 5% back for special circumstances (revolving categories, only at certain stores/merchants, etc.) What if I told you that 10% or more cash back (or the equivalent in points) is possible with a little bit of extra effort?
Please note: this tactic is NOT for everyone. It can be overwhelming for people who don’t wish to micromanage their finances or the idea of having dozens of credit cards is uncomfortable. Here’s a list of people who should STOP reading this article right now:
- People with bad credit, who don’t pay their balances off in full, and/or have money problems.
- People who don’t have a keen attention to detail when it comes to personal finance.
- People who are planning to get a mortgage within a year (unless their credit score is 800+)
- People who NEVER travel.
- People who think minor mistakes like an occasional late fee is the end of the world.
- People who can’t adapt to a constantly changing environment of rules, offers, policies, etc
- EVERYONE, after, say, 2020 or so when the information in this article is probably out of date.
Let’s Go Over These in Detail
People with money problems
You will be signing up for new credit cards on a regular basis to chase the bonus rewards. New credit cards and money problems don’t mix. If you end up spending more money when you receive a new shiny card or end up going further in debt, then these bonus rewards are definitely not worth it in the long run.
People who don’t pay attention to detail
Payment due dates, bonus reward deadlines, annual fee due dates, etc. : all of these are enough to make your head spin even for one card. Imagine dealing with 10 sets of these details for different cards! You WILL need a system for managing your finances if you want to proceed. Read my basic system and the bill paying reminders I’ve set up in Evernote if you don’t already have one of your own.
People who are getting a mortgage soon
It’s best to stay away from opening new credit cards if you’re getting a mortgage soon UNLESS your credit score is ridiculously high (800+). The reason I make this exception is because I had already started signing up for several credit cards and harvesting rewards when I decided at the last minute to apply for a mortgage and buy a house. Before I started my round of credit card applications, I had a score in the low 800s and my score was still in the high 700s when I applied for the mortgage and got the best rate possible. Not only that, but my lender also requested that I cancel several of my cards (which I only restricted to the ones that I’ve already collected the bonus rewards from.) If you don’t have the luxury of a very high credit score, it’s probably best to refrain from this until after securing the mortgage.
Increasing your mortgage rate by 1% or more usually isn’t worth the thousands of dollars worth of free plane tickets, hotel stays, and gift cards.
People who never travel
Most of the rewards offered will be in the form of frequent flyer miles and hotel points. Sure, you can sometimes redeem them for cashback or gift cards but the travel related rewards generally offer the biggest bang for the buck.
People who can’t stand an occasional late fee
If you feel a sense of shame or want to pound your desk every time you’re charged a late fee, then this approach is not for you. Unless you’re very negligent, you’ll still come out ahead with an occasional late fee (which usually doesn’t get reported to the credit bureaus anyways if you’re less than 30 days late.) Btw, if you do get hit with a late fee, at least try to nicely ask your credit card to waive it.
People who can’t adapt quickly
The rules are constantly changing. Old reward cards and programs are phased out while new reward cards with a different set of rules appear. You’ll definitely want to stay up to date with the news in this industry if you plan on maximizing your rewards. Regularly check a credit card related niche site like FlyerTalk or Nerdwallet.
This article was written in 2015 but the information may be outdated if you’ve stumbled on this article several years later so take it with a grain of salt then.
10x Credit Card Rewards Tactic in a Nutshell
Ever see those credit card offers where you spend $X in the first 90 or so days to receive N bonus points, miles, cashback, etc. $X is usually a few thousand dollars and N is usually at least 10 times X. Sign up for a few of these offers and try to meet their minimum spending requirements in the first 3 or so months. Generally, you shouldn’t sign up for so many cards that you’ll need to spend a lot more money than usual to meet those requirements (unless you already have an upcoming big ticket purchase like a car, wedding, major appliance, etc. that can be paid with credit.)
That’s it! That’s the 80/20 to getting the most credit card points with the least effort (not necessarily maximizing the most points you can possibly get.) In Part 2, I’ll delve into further details including additional ways to make even better use of these points, ways to earn points on non-credit purchases, ways to avoid common pitfalls, etc.