Free Money (if you’re smart)

This is 100% not necessary for the majority of people. However, I’ve made a fun hobby out of this, receiving $1000s of dollars in cash and other perks over the past few years. It doesn’t require much effort but it does take a fair amount of self discipline.

It’s completely legal, but the companies I’m going to mention don’t want you learning about it. The reason that it’s allowed is that most consumers don’t care enough to make the extra thought before buying something.

TLDR; How to Game the Credit Card System

Welcome to my personal rabbit hole of Credit Cards, Gift Cards, and Cash Back. You may have heard of some of what I’m going to talk about, you may even have a credit card of your own. This is great, but I’m going to share how you can take it to the next level.

Ever seen an offer like the one above? 75,000 points for XYZ dollars of spend? For a “small” fee of $550 a year you can carry around one of the top tier credit cards available to your average person. You shouldn’t start here, but maybe one day with enough hard work and dedication you can get to this point… (sarcasm)

How to get free money? (Beginner)

Before following any thing written below, please do the following self assessment:

• Am I insanely impulsive and spend money as soon as it enters my bank account?
• Was I lying about the above answer?

⚠️ If your answer to either of the above questions was yes, then you should probably stop skip this section. You may benefit more from the section about gift cards / cash back.

For everyone still here, let’s get to the good stuff.

There’s 3 different ways you can make money from Credit Cards:

1. Intro Bonuses (my favorite)
2. Cash Back (also good)
3. Rewards & Perks

Intro Bonuses

What you saw in the screenshot above is called an intro bonus. You spend XYZ amount (aka the Min Spend) and receive ABC dollars for spending that amount. The reward is either points or a statement credit.

The statement credit is the easiest to understand and what you’ll want to look for. If you’re more advanced, you can calculate the monetary value of the points. This is going to vary from card to card, but what you want to know is the Return on Spending (ROS). It may sound counterintuitive; stay with me.

ROS = (Intro Bonus + Cash Back) / Min Spend

Let’s say you spend $1000 in 3 months and for that you get a $200 statement credit. That’s a 20% ROS (without including cash back). You’ve essentially spent $800 for $1000 worth of stuff. The trick here is not spending any differently than you would without the credit card. If you’re reading this far, you passed the self assessment, so we’ll assume you can handle this.

20% ROS is great, so when I see offer with that or better ROS, I make sure to go for them. Two of my favorite recommendations right now (especially for credit card newbies) are the Chase Freedom Unlimited and Freedom Flex cards.

Their intro offer is amazing for anyone in college or recently graduated. A $200 bonus for spending $500 is 40% ROS. I personally have both already and currently use the Freedom Unlimited the most out of any of the cards I have. Both cards also offer 5% back on groceries which is personally my biggest expense outside of rent.

If you take away one thing from this article, it would be sign up for a Chase Freedom card. I’d even recommend signing up for both, you’ll get the bonus for each card. I would wait between signup times at least 2–3 months so you can easily hit the spending requirement without spending on unnecessary things. If you do this, in 3 months you will be $200 better off with no work involved on your part. We’ll get to some of the more advanced tactics and next steps later on.

Cash Back

Intro bonuses are the shiny objects that get you interested. Cash Back is the reason why you stick around. If a card has a good intro bonus and bad cash back, it might not be a good fit long term. In the advanced section, I’ll layout why you still might want to get those cards.

Cash back is a simple as it sounds. It’s a percentage or set point value that you get every time you spend money on a certain category. For example, a card might give you 2% cash back on gas. Every time you use that credit card to buy gas, you’ll get 2% of your total back in the form of credit card points. 2% may not sound like a lot, but why wouldn’t you want free money? Let’s say you spend $2000 on gas a year. That’s $40 a year that you’re missing out on. It’s not going to change your life, which is why I put it as a secondary benefit of owning a credit card.

Something more significant would be a higher percentage cash back on things you have to buy regardless of if you’re driving or not: groceries. Both Chase Cards offer 5% cash back on groceries. If you’re like me, you spend roughly $3000 a year at the grocery store. Over the course of the year you’ve recouped $150 if you use the right credit card.

Focusing on cash back is mostly for the people who like to over optimize certain aspects of their life. 5% back is not going to change anyones life. Most people will be fine with 1 or 2 credit cards. A select group (myself included) will fall down the rabbit hole and know exactly which card I should use for everything I purchase. At that point, it’s as much about having fun with the process as the money saved.

My cards and why I got them:

Chase Sapphire Preferred:

I use this mostly for the perks. Some perks include free / discounted memberships to services such as Doordash and Instacart.

This also allows you to get a 25% bonus on all Chase Ultimate Reward Points. This means the bonuses that get from signing on to the Freedom cards can actually be worth more.

Amazon Rewards Visa:

5% back on any purchase on Amazon is huge. Most of the non food items I buy are from Amazon so why not get cash back on those purchases?

Apple Card:

Decent cash back using Apple Pay, that’s good when there’s a rare case where I have to buy something online not from Amazon.

It’s also really great for splitting Apple Product prices over time.

Chase Freedom:

This card has been replaced by the Freedom Flex but they are essentially the same. It’s a good backup card. It’s not as reliable as the main benefit is 5% from rotating categories. That makes it a bit harder to remember what to actually use it on. It’s best for the intro bonus.

Chase Freedom Unlimited:

Best overall card here. If you were to choose one, choose this one.

American Express Everyday Cash:

I hardly use this anymore. American Express has some decent perks but they don’t give much to these card holders. I used to use it for groceries but now there are a lot of cards who are competing on the grocery front.

IHG Rewards Club Premier:

I cancelled this card. I originally planned to use the sign on bonus to take a trip. I missed the period to hit the sign on bonus because I didn’t really have anything I needed to buy. Hotel credit cards are super interesting though. This one has an annual fee but gives you a free night stay every year.

Venmo Credit Card:

I signed up for the intro bonus exclusively. I think it was $150 for $500 in spend. Not sure if this is still available. There’s nothing super compelling about this card IMO unless you have a weird category of store that you purchase from that is not already accounted for in the other major cards.

If this doesn’t give you an instant headache, join me in the advanced section.

Rewards & Perks

Credit cards also provide a lot of nice perks. These perks vary a lot over time but can provide you access to some good discounts and free memberships. Think of the rewards & perks section as the cherry on top. These also generally don’t apply to free cards as much as they do to cards that have an annual fee.

If you sign up for one of the Chase Freedom cards above, don’t expect many perks. They are good cash back cards and have a nice intro bonus but there’s not much else.

The Chase Sapphire Preferred is better as it is an annual fee card ($95/year). There’s a lot of smaller perks that I don’t take advantage of. The ones that have been helpful to me are 50% off Instacart Express ($50) and Free Doordash DashPass ($100/year).

My American Express has some good free memberships as well, especially for no annual fee. I recently signed on for a free year of Blinkist ($100). They also do some great statement credit rewards for example they gave $5 in statement credit every time I shopped at a small business for a couple months. This totaled ($50) and again was free money since I used it at the places I was already at (haircut, coffee shops, restaurants, etc).

American Express’ paid cards are where the real perks come in. Their Platinum Card, with an annual fee of $550/year, comes with an array of credits. These credits are pretty travel oriented but well worth the money if you travel a lot. You’ll get $200 in Uber credits each year as well as $200 in Airline credits. The real benefit for most people with this card is access to a variety of Airport Lounges. These lounges have free food and drinks and a variety of other perks.

The last card I’ll mention is the IHG Premier Card. It does have an annual fee ($89/year waived in the first year). The two benefits here are a TSA Precheck credit ($100) and a free anniversary night for every year you have the card. As long as your hotel stay would have cost $89, you are breaking even on this card.

That wraps up the beginner section of credit cards. Next up we have a couple small hacks that could save you another 5–30% every time you have do any online shopping.

How to get Cash Back without (or in addition to) using a credit card:

Rakuten (formerly eBates):

I have been using Rakuten for a loooong time. Ever since I was in high school in my shoe reselling days. As long as you start your shopping through Rakuten you can easily make 2–15% cash back on places such as Nike, Express, and most every retailer.

The process is super simple. Go to Rakuten, search which every retailer you are about to make a purchase on. They’ll redirect you back to the website you were already on, and if you do end up making a purchase, you’ll get the cash back sent directly to you!

If you sign up with the above link and make a purchase within 90 days, you’ll get $30!

If you’re wanting to take things to the next level you can combine this step with the next step. In some cases you’ll get an extra 15–20% in cash back / savings on top off your total.

Buying Discounted Gift Cards

Have you ever got a gift card you didn’t think you would actually use? It happens to everyone and has resulted in an aftermarket. Now people who have an unwanted gift card can offload it to someone who will actually use it.

The best part is that you can get these gift cards at a great discount. While I was writing this, I went to my preferred marketplace, Raise.com and bought another one! I’m not sure what kind of monster doesn’t like Chipotle but I just bought their $25 gift card for $20. I eat at Chipotle weekly so it’s a win/win.

Even though I’ve bought $100s of worth in gift cards, it’s probably not something I’d recommend buying as a gift for someone. It’s only happened once, but I did receive an invalid card. When this happens they’ll refund you. If you do gift one, know that it’s a possibility.

With that warning in mind, feel free to check out Raise. You’ll get $5 off your first already discounted gift card!

You can also technically get 1% cash back from Rakuten for any purchases made on Raise. It doesn’t usually amount to much, but will add up over time.

This is another situation where you don’t want to buy something for the sake of getting a discount. If it’s something you were going to buy anyway, then buy it. My general process is if I’m going to purchase something online, I’ll check Raise.

Example to tie everything together:

This is a very tactical article that might be best illustrated with an example.

Les consider a recent situation I was in and break it down a little. I was buying some new clothes from Express. My goal was to pay as little as possible. After browsing their website the total was roughly $150. So… following my own advice. What’s next?

Step 1. Rakuten

I searched Raise.com, knowing that there would be gift cards available.

Cash Back Earned: 1%

Step 2. Raise

I searched Express and like expected that had some discounted gift cards. I’ve seen up to 17% off, but 8.6% is better than nothing. I also used my Freedom Unlimited credit card which gave an extra 1.5% in cash back.

Savings: 8.6%

Cash Back Earned: 1.5%

Step 3. Rakuten (again)

I headed back to Rakuten so I could get the cash back from the actual retailer I was ordering from. They’ll still give you cash back even if you use a gift card as your payment method. I’ve seen this range from 2–12%, but we’ll use the lower end for this example.

Cash Back Earned: 2%

Results:

Total Cart Amount: $150

Actually Paid: $130.57

With an extra 5–10 minutes of work I saved $20. Not bad.

With that, I have revealed all of my secrets to pay as little as possible when I need to buy something.

Feel free to stick around if you want to hear my thoughts on some advanced credit card tactics. We’ll be talking about:

• What order you should get certain cards to maximize rewards
• How you can hit high intro spend bonuses

Advanced Section

If you found the above interesting, the content below will teach you how to take it to the next level.

What order to maximize credit cards:

I’d recommend starting small, and applying for one of the Chase Cards mentioned above. They are genuinely the best cards out there right now, especially if you are just getting started. With no annual fee and 40% ROS it’s a no brainer. I’ll write out the below game plan as if I were someone with no credit cards now.

Today:

1. Apply for Chase Freedom Unlimited
2. Bonus — Apply for the Amazon Prime Rewards Visa

If you shop a lot on Amazon I’d also recommend applying for the Amazon Prime Rewards Visa. They’ll give you $100 in Amazon Credit as soon as you are approved. It’s mainly meant for Amazon Prime members, but it can still be useful if you aren’t a member. In addition to the one time bonus, you’ll get 5% cash back on all Amazon and Whole Foods purchases. It’s also a no annual fee card. This was my very first credit card and they approved me with no credit history and very little income (I applied as a freshman in college).

The reason I recommend applying for 2 cards at the beginning is to make your credit score less variable in the long run when you apply for new cards. A common question (see FAQ) is how does having so many credit cards affect your credit score? Assuming you make your payments on time, it won’t negatively affect your score. I have 6 credits cards and am in the upper bracket of credit scores.

However, one of the factors that goes into the calculation of your credit score is your length of credit history. So technically every time you get a new credit card, your average length of credit goes down. By anchoring a couple towards the beginning you’ll have less of a variation when you apply for new cards in the future. It won’t cause too much variation, again payment history is the most important factor, but it’s why I’m recommending multiple at the beginning.

3–6 Months from Now:

If you’ve followed the above suggestions you’re now at least $300 better off! Let’s keep going.

1. Apply for the Chase Freedom Flex
2. Bonus — Apply for the Apple Card

My reasoning for the Apple Card is pretty similar to last rounds reasoning. The more cards you have at the beginning the better your credit score will be in the long term. If you already pay for anything Apple related (Apple Music / Cloud Storage) you might as well get 3% cash back for it. It also is a pretty cool looking card. There’s an argument to be made here to wait until they have a Intro Bonus before applying. That’s definitely a possibility. I think the highest intro bonus Apple has ever given was $50, but feel free to adjust if you want to wait for an intro bonus.

6–12 Months from Now:

Only counting intro bonus rewards you’ll now be up roughly $500.

Start getting into cards with Annual Fees

Chase Sapphire Preferred (recommended due to 5/24)

From here on out keep an eye out for any juicy intro bonuses. Different credit card companies are always running promotions to try to steal market share from each other. Continue to limit yourself to 1 new card at maximum every 3 months.

How to hit high spend amounts to get intro bonuses:

This sounds counterintuitive, didn’t we agree that we shouldn’t be spending more just to get a bonus? Yes. However you can use your credit card to pay for things you wouldn’t normally think of.

Do you have a mortgage? Pay rent anywhere? Maybe have a student loan?

You can actually pay these with a credit card. There’s a service called Plastiq that will process your card and mail a check to your bank or landlord. Plastiq charges a fee for this service so this is really only good for hitting high spending amounts. For example if a card offers you a $500 bonus if you hit $3000 in spend in 90 days, you might think there’s no way to get that bonus. But what if you put your rent for the 3 months on Plastiq, pay the $150 in fees and walk out up $350. It’s free money so why not, but it does take a little effort.

FAQ:

Is this legal?

Yep! Credit card providers are choosing to give bonuses to get people to sign up for their card. Their hope is that you will exclusively use their cards after signing on. But we are smart and like to collect all the money so mix and match to best fit your needs.

Will this negatively affect my credit score?

Again, not if you’re smart. Space out applying for credit cards, and then you’ll be fine. In the short term, having another credit check on your account can decrease your credit score. In the long term opening multiple credit accounts while you’re young will give you a more resilient credit score. One aspect of your credit score is your length of credit history, so every time you add a new credit account this average time will go down. But for example, if you have 7 accounts that are 5 years old and apply for a new credit account, your average age will be 5+5+5+5+5+5+5+ 0 / 8 your average age of credit is still 4.375 years. Whereas if you have 2 accounts that are 5 years old, 5+5+0 / 3. Your average age of credit goes down to 3.3 years. This all assumes that you use the credit cards responsibly.

How do I manage all of this?

I keep 4 credit cards in my wallet. I keep a rough idea on what card to use at which category. To be honest I probably use 1 card (Chase Freedom Unlimited) for 80% of my purchases.

At the end of the day, if you can spend 10 hours doing something that will make you $1000 vs trying to optimize credit bonuses, go with the making $1000. This is really not the most effective way to make money, but rather a fun tactic!