Make Money!
I frequently say that I don’t spend money unless I’m making money. This is done by using my credit cards to earn points when I spend money in my everyday life. The money can then be used for travel, dining, gift cards, or, as I prefer, cash back. So, this money goes back into my account, and the beauty is that I didn’t change anything about my spending habits to earn it.
Make Money Through Cash Back
Cash back cards are such a valuable tool. You frequently see credit cards offering cash back rewards with them. Many times it is 1% back. You may be thinking “how can credit card companies afford this without losing money?” The answer is simple, they charge vendors a fee to allow them to accept credit cards. So, when you see a fee to use your credit card, just know the business is passing this fee on to you. Just another way banks make money off of you!
REMEMBER: This strategy only works if you can control your spending
Make Money Efficiently
Where to Start
The key to starting this strategy is getting a card that will work for the majority of your purchases. When I first started, there was a card that offered 5% on certain categories that rotated quarterly and 1% other than that. This was great for me for a couple of reasons. First, the 1% cash back was good for every day purchases. Second, the 5% helped even more during the right quarters. Lastly, and probably most overlooked in the beginning is the fact it was a Visa. And, Visa and Mastercard are the most commonly accepted cards. If your first cash back card was an American Express or Discover, you would be limiting yourself because they aren’t accepted everywhere.
Be Strategic
After my first cash back card, I found another one that gave 6% cash back for groceries along with other percentage perks. This was perfect! Because, it was always this percentage instead of a quarterly rotation. This led to a revelation about creating an arsenal of cards. I now have six credit cards that serve a different purpose. One gives 3% back on gas, another 5% back on military bases, and most recently 3% on restaurants. So, that one really helps in the current times.
Other Perks
There are many other perks to consider. Some cards have add on perks that include waiving of membership fees, airline fees, or subscription fees. Additionally, you should also consider foreign transaction fees if you plan on using them abroad. But, the most important piece of any credit card is the fraud prevention and customer service. So, if someone steals your debit card information and spends your cash, you’re out of luck. Credit card companies are great for helping eliminate fraud and get your money back to you ASAP.
Annual Fees?!
One thing I did not mention in the previous section in regards to some of these cards with amazing perks is the annual fee. My first card did not have an annual fee, and that is great. However, an annual fee should not be a game over situation. The 6% cash back at grocery stores card had a $95 annual fee. Yes, there was another similar card with 3% cash back at grocery stores. I did a cost analysis and found that the additional 3% added up to more than $95, well worth it. Plus there were other perks to sweeten the pot. So, all that being said, when looking at cards with annual fees, make sure it is more beneficial to your unique situation.
Choose Your Weapon
In my last post, I talked about building credit and how I would call to increase my credit limit every 6 months. I also talked about this in this YouTube video. Below are the main pieces of my arsenal. I use my American Express at grocery stores, my Flex for the rotating 5%, and the Unlimited for the 1.5% of all other purchases.
- $95 Annual Fee
- 6% Cash Back on Groceries
- 6% Cash Back on Streaming
- 3% Cash Back on Transit
- 3% Cash Back on Gas Stations
- 1% Other Purchases
- No Annual Fee
- 5% Cash Back on Groceries
- 3% Cash Back at Drugstores
- 3% Cash Back on Travel
- 3% Cash Back on Restaurants
- 1.5% Other Purchases
- No Annual Fee
- 5% Quarterly Bonus on Categories
- 5% Cash Back on Groceries
- 3% Cash Back at Drugstores
- 3% Cash Back on Travel
- 3% Cash Back on Restaurants
- 1% Other Purchases
Disclaimer
Once again, I am not a financial advisor. These tips are some things I have validated with my own personal experiences. If you feel you need more personal advice, please consult a professional financial advisor.
