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When it comes to saving money or making money, I love easy wins. Things like changing my cell phone carrier and cutting my bill in half, or shopping at a discount grocery store to save significantly each week are some of my favorite ways to save money. I don’t have to do very much at all, and it keeps my expenses down without negatively impacting my life.
One of the easiest ways I’ve made or saved money is through credit card rewards. I use a credit card for just about everything. On any given day (including today while I am writing this article) I probably have $0 cash in my wallet.
I know some financial experts recommend never using credit cards because it is too easy to spend with them, but for me that’s not really the case. I’m 39 years old and I’ve had credit cards since I was 18. Typically, I pay the balance in full each month to avoid debt and interest. I’ve paid interest twice in my two decades with a credit card, in both cases because I forgot to pay the month before.
A few years ago I read Dave Ramsey‘s book The Total Money Makeover after hearing a lot of good things about the book. While I really liked the book, I didn’t agree with everything, at least, not for my own situation.
Dave recommends using cash or debit cards and not having a credit card. I think that’s a great idea if you have trouble disciplining yourself with a credit card, but if you’re able to manage a credit card, rewards can be an easy way to make some money.
In 2017 I earned $1,315 in credit card rewards. That includes sign up bonuses of $550 and $765 rewards from purchases. I signed up for 3 different credit cards to get that $550, and the $765 in rewards is a total from several different credit cards.
What I love most about this is it was extremely easy. The only work required was to apply to a few new credit cards. I got the applications in the mail, so I didn’t even need to go out and find the offers.
While I’m happy with the $1,315 in earned in rewards, there are many people who get significantly more than that. In past years I never signed up for credit cards just to get the cash back bonus. Last year I did go for a few credit cards, and I’ll probably do it again in the future. I’ve already closed a few of the cards so I don’t have too many accounts open at once.
Applying for credit cards can hurt your credit score in some situations, so don’t go nuts with the credit applications. Last time I checked my credit score I didn’t see any negative impact from applying to a few different credit cards. I only applied for 3 and they were spread out, so it’s really not that big of a number, but I saw no impact on my credit score.
If you have bad credit or if you apply for a bunch of credit cards in a short period of time your credit score is more likely to be negatively impacted.
My approach with credit cards is to use them to maximize my rewards without spending any money that I wouldn’t spend otherwise. In other words, I don’t ever want to make a purchase just to get cash back. That would be stupid, despite the fact that credit card commercials like to show people picking up a tab just so they can earn 1% cash back.
My Citi Double Cash credit card pays 2% in rewards (1% when you buy, and 1% when you pay), so that is the card I use the most.
My Chase Freemdom card earns 1% on all purchases, but 5% on certain purchases, and those details change each quarter. For example, in the 4th quarter of 2017 Chase Freedom gave 5% cash back for purchase at Wal-Mart. In the first quarter of 2018 the 5% cash back is for purchases at gas stations. I’ll use the Chase Freedom card for purchases that fall in that 5% category, but that is typically all.
I also currently have a Chase Freedom Unlimited card, which gives 1.5% cash back on all purchases.
The new credit cards that I signed up for required me to spend $500 in the first 90 days to earn the bonus, so I would use those cards until I hit the $500 level. And with those cards I earned 1-3% in rewards (the 3% was only on gas). Then after getting the rewards I cancelled those cards.
I only apply to credit cards with no annual fee. I know some of the cards that give the best travel rewards come with an annual fee, but I’ve never used any of those cards. Personally, I don’t care about the interest rates because I plan to pay the balance in full each month rather than paying interest.
If you’re applying to a new credit card be sure that you read the terms of the offer. Most of the bonuses require you to spend at least a certain amount within the first few months of opening the account.
Do you use rewards credit cards? If so, which ones?
Disclosure: Information presented on Vital Dollar and through related email marketing is intended for informational purposes only and is not meant to be taken as financial advice. Please see our Disclosure for further information.
I've been working in internet marketing full-time since 2008. I started VitalDollar.com to share from my experience and to help others who want to improve their own financial situation. You can read my full bio here.
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