Making money with your credit cards

[bssc]

While we have discussed this before, this Washington Post article highlights making money from credit cards. What surprised me is that they indicate that this was a game that many people fail at. The quote "for every consumer who games the system there's probably 25 consumers who are ratcheting up credit card debt and never are redeeming the rewards" from the guy at PIRG does not seem to match the numbers that I have seen. I think that some people don't do well at this, my BIL is a whiz at Fantasy Football but money is not his strong suit. Still, we are on track for getting back $900 or so, tax free so I am more than willing to play that game.

 

[cantlogin]

Here’s how I do it:

I have my girlfriend troll the pump islands at the mega gas station by the interstate offering to pay for gas with my credit card in exchange for cash. She is rarely refused and can spend as much as $1,000 in two hours. The 5% cash back on that card for fuel purchases yields about $25 per hour.

How do you like that?


Just kidding, but it seems like it could work.

 

[Maurice]

I can't imagine spending the effort on something like that.

 

[mickeyd]

So far this year, the Chengs have spent $47,800 to get $1,093 in rebates. "Mind-boggling," Michael Cheng, 42, admits.

I get a kickback on my CC purchases also and since we charge about 99.9% of our stuff I only consider the kickback as a way to reduce what is owed on my monthly statement. I have better financial things to do rather than tracking a monthly kickback of $30-$40.

 

[Spanky]

Not for me. One mistake (or some late payment) can wipe out the value of the rebates.

 

[Zoocat]

Anyone thinking about trying this needs to consider that credit card companies are looking out for their own best interest. There are no loopholes. There's no way to game the system, not without lots of time and energy.

One thing CC companies can do is to raise your interest rate whenever and for whatever reason they want. One reason might be that you have too high a balance or too many credit cards. This could be one way that a person could end up in the toilet

 

[Texas Proud]

If it is just the rebates.... I don't see where you can go wrong... just buy what you would normally buy and get the money back... NOW, if you are stupid and buy MORE just for a rebate then yes you are stupid..

Now, for the people who took out cash and wanted to arbitrage interest I can see a lot getting caught... but that is not what the article is about...

 

[samclem]

Here’s how I do it:

I have my girlfriend troll the pump islands at the mega gas station by the interstate offering to pay for gas with my credit card in exchange for cash. She is rarely refused and can spend as much as $1,000 in two hours. The 5% cash back on that card for fuel purchases yields about $25 per hour.

How do you like that?


Just kidding, but it seems like it could work.

If she's trolling truck stops and only bringing in $25/hour . . . . I think there might be another way to do better.

 

[SecondCor521]

I'm playing the arbitrage game TexasProud alludes to. Year to date I have earned $4,867.06. This has cost me $75 in bank fees as well as probably dozens of hours applying for the cards, making the required purchases, tracking and redeeming the bonuses, and making sure I make my monthly payments on time. But that's time I would probably waste on financial sites anyway, so I consider it a paid hobby. I hope to double that amount next year.

You do have to be very organized, though. One slip can cost a bunch.

2Cor521

 

[Sue J]

In August I put my son's college tuition of $4400 on a charge card. The card pays a 1% cash reward, so that's $44. This card has a 0% rate until mid February so I left the $4400 in EmigrantDirect (4.75%) instead of paying the bill, so that it will earn $104.50 by the time the bill is due.

His old university charged a fee for using a charge card to pay the bursar bill but his current university does not charge a fee for this.

 

[dex]

I choose the cash back option on all my credit cards. I would estimate I get back about $250/year. It isn't a lot of money but better than nothing.

I wonder how much I would save it customers had the option of paying with cash and getting a cash discount. I know a gun store that charges 3% more for credit card purchases or gives a 3% cash discount; if you prefer.

So, if I put $10K on my credit cards I'm paying an extra $300/year for the priveliage of using them - pretty expensive for the convience.

 

[d]

i put most of my purchases on credit cards ... always pay them off in full in a timely manner ... on about $20k/yr, i "earn" about $750 in cash rebates.

 

[JohnEyles]

I can't believe no one has brought up "stoozing", taking the
max from a zero-percent balance transfer offer and depositing it
in something like Vanguard Prime Money Mkt.

Sounded kinda silly to me, but I decided to try it and see how it
works. I guess I spent several hours getting the card, and getting
a balance transfer check and depositing it with Vanguard. Now I
spend about 5 minutes each month, while paying bills, to make
the minimum payment. I'll pocket $400-500 by year's end.

Not really sure it's worth it, but it gives me a great deal of personal
satisfaction to take these (the credit-card companies') scumbags
money !

 

[mickeyd]

Not really sure it's worth it, but it gives me a great deal of personal
satisfaction to take these (the credit-card companies') scumbags
money !

I'd say that it is worth it. Hey, you're getting paid to be entertained, what is better than that? Well, what is second best...

 

[bssc]

I can't believe no one has brought up "stoozing", taking the max from a zero-percent balance transfer offer and depositing it
in something like Vanguard Prime Money Mkt.

Yes, I did an mini App o Rama and got $5000 interest free from Juniper Bank.

 

[Texas Proud]

John... my BIL has been doing it for three years... and at a balance of $150K... and being stupid he put it in the stock market and made a killing..

Now is cashing it in and keeping it in MM and paying it off as the cards become due... kind of having to stop as the zero interest offers have dried up and even the 1.9 and 2.9 has stopped for him...

 

[Kwirk]

I have a Chase card that I like. It pays only 1% back on most purchases but automatically credits that rebate to my account each month. The card also automatically deducts the full balance from my checking account monthly. No fees.

I don't have to do a thing except use the card and be sure my checking account can cover the full payment.

 

[Ronstar]

I use my credit card for almost every purchase and get enough reward points to fly free once every 3 months

 

[Gumby]

John... my BIL has been doing it for three years... and at a balance of $150K... and being stupid he put it in the stock market and made a killing..

Now is cashing it in and keeping it in MM and paying it off as the cards become due... kind of having to stop as the zero interest offers have dried up and even the 1.9 and 2.9 has stopped for him...

The zero interest has not dried up, but the card companies have gotten smart and started charging 3% balance transfer fees. I am successfully stoozed to $40k worth until next May, but I may be reaching the end of the line. I don't really need the $1500 or so I get per year, but it does please me to stick it to the card companies.

 

[Goonie]

I wanted to 'top off' my Roth IRA, so I took advantage of a 0% CC offer about a month ago. Paying the small transaction fee is well worth the returns that I'm making (and will most likely continue to make for the many years until I start withdrawing from the Roth). I make the monthly minimum payment, and I'll pay of the CC balance in full at the end of the 0% period.

Easy money!

 

[justin]

I've still got $75000 or so in the stoozing game. Most offers have dried up, but there are still a few out there. I may be out of the game in another 6 months...

Year to date - probably around $4000-$5000 including sign up rewards.

 

[inquisitive]

In addition to signing up for multiple credit cards for different purchases, it seems to me it would make great financial sense to sign up for new offers with a signup bonus and then cancel the card.

For example, I have done a lot of traveling recently and signed up for multiple hotel reward programs. Once of them just sent me a notice that if I sign up for their credit card I will get enough points in the rewards program for a free hotel stay plus one free hotel stay. Reading the fine print, there is no annual fee for the first year, I must make a purchase to get the reward, and I have to have the card for at least 6 months or they remove the rewards. This works out to a lot better than the 1-2% I can get with any other card. I may sign up for this and think about repeating the process on several other cards.

 

[clifp]

The zero interest has not dried up, but the card companies have gotten smart and started charging 3% balance transfer fees. I am successfully stoozed to $40k worth until next May, but I may be reaching the end of the line. I don't really need the $1500 or so I get per year, but it does please me to stick it to the card companies.

I did this for a while, I made one mistake and paid more than $500 in interest expense (partly offset by $250 of interest earned.)

To me the 3% balance transfer with no max fee that they are now charging makes the days of stoozing numbered.

Rebates though are pretty much forever.

I also like apply for airline credit cards with 10-20k frequent flyer miles bonus, and waving the first year fee.

 

[mickeyd]

no annual fee for the first year, I must make a purchase to get the reward, and I have to have the card for at least 6 months or they remove the rewards.

This is how they reel you in and this is how they will screw you. Remember: it is their contract that you sign (many pages of micro print rules and regs for you to obey).)

 

[DAYDREAMER]

Stoozing is very risky. One wrong move and you are screwed, especially with high balances. Credit Card Companies have many tricks up they're sleeve to catch you. The risk is not worth the rewards. NO such thing as easy money! If it is too good to be true, it probably is.