I made $1,110 per hour, or $4,220 total for 2 cumulative hours of credit card points redemption. I want to share with you how and the nitty-gritty details in this article.
I am super excited to write this post because I couldn’t believe how much extra money I made from credit card points redemption when I sat down to tally the total last week.
Companies of all kinds offer of all types of credit card perks these days. Whatever you are into, traveling, shopping, eating, and even FREE CASH, chances are there is a credit card company willing and able to give you exactly that.
I mean who would turn down extra money? Especially when it is free! Most people use credit cards anyway. Most people also have ongoing bills to pay on a month to month basis anyway, so why not earn some extra cash in the process of doing what you do anyway?
AMEX American Airlines – 75,000 miles ($750 monetary value)
AMEX American Airlines – 75,000 miles ($750 monetary value)
My Citi Premiere Thank You 250 – $250
My Wife’s Citi Premiere Thank You – $250
My Chase Southwest Card – Free Ticket ($250 monetary value)
My Wife’s Chase Southwest Card – Free Ticket ($250 monetary value)
My AMEX Starwood Card – 10,000 points ($250 monetary value
My Wife’s AMEX Starwood Card – 10,000 points ($250 monetary value
My Chase Saphire Card – $500 Cash back
My Wife’s Chase Saphire – $500 Cash back
Miscellaneous – $220 (I’ll explain below)
GRAND TOTAL: $4,220
Cumulative Time Investment: 2 Hours (application, activation, modification of online bill pay records, award claim / credit card points transfers, deactivation)
Hourly Income: $1,110 (Wonder if I need to claim for income tax purposes?)
What we missed out on which I would do anything to claw back on:
100,000 Miles Chase British Airways Giveaway ($1,000 monetary value)
Note: These credit card points promotions may or may not be active as of this post. The estimated monetary values for the non monetary redemptions are ultra conservative. True cash value may be mush more than disclosed.
Working hard to establish good credit pays off. Having good credit and not needing it pays off even more. This is an important point because doing what I did would’ve hurt me had I needed an auto or mortgage loan at the time I was abusing these credit card points programs.
The liberty to royally abuse at will is yet another benefit of being debt free. Stated better, money saved is money earned, and though the dynamics between saving and earning are different, the bottom line impact is the same.
This is why I pursue these credit card points promotions. The personal finance beast in me brought about this craze. The numbers junkie in me is looking at pure ROI. How much can I benefit and what do I have to give up to get it? Sure, it’s not passive income, but it’s a darn good effective hourly wage.
Each time a credit card points promotion that intrigued me came up, I signed up for it, met the minimum spending requirement (typically you have to spend a total of X dollars within the first Y months of getting it). Each time I met the requirement, I signed up my wife for the same credit card. Not sure if our different last names helped the process of getting approved?
Each time we both met the criteria for a particular credit card points promotion, we moved on to the next one. We simply rotated from one to another one at a time, thereby avoiding the chance of rejection due to excessive credit limit or capacity outstanding. I know because I eventually got rejected from the biggest credit card points promotion program. I missed out on 100,000 miles from British Airways. Nooooooooo!
In my experience, there are three key things you have to keep in mind if you want to capitalize on similar promotional credit card points programs. I will go over each briefly.
Annual Fees – Some of the credit cards I signed up for had annual fees while others did not. For the most part I don’t believe in paying annual fees on credit cards. That said, the ones that had them were waived for the first year. Knowing that I’d meet the spending minimum in less than a year, I knew I wouldn’t be paying annual fees.
Credit card companies are fighting for the best customers. Because of this, they will try to keep your business when you get around to canceling your credit card (after you have met the minimum and redeemed your credit card points). When this happens, you need to be respectful but very firm. You need to close the account and move on to the next one.
There are some exceptions to this. Often times credit card companies will try to keep you buy extending you additional perks such as an $85 credit when you use your credit card for at least three more transactions. This happened to me. The $220 miscellaneous that you see above is a composition of two $85 credits with American Express and one $50 credit with Citi I believe.
Credit Score Impact – I mentioned above that this won’t work when you plan to borrow money or utilize your credit. When you open and close all sorts of credit cards on an ongoing basis, there will be a short term negative impact on your credit score resulting from the inquiries. However, this should normalize relatively quickly. This game is definitely not for everyone, especially when you are close to a big ticket purchase on credit.
To demonstrate the impact of a temporary hit on your credit, I was denied the grand daddy of all credit card points promotions, the 100,000 miles British Airways giveaway. I guess Chase figured out what I was up to and slammed the door on my face. Oh well…
Discipline and Organization– Finally, discipline and organization is important because as you pile on the promotions, things can get scattered and somewhat overwhelming. I always maintained a spreadsheet that detailed the credit card points program I was signed up for, as well as various milestones such as spend limit, date I met the limit, award request, award receipt, account closure etc.
Each time I updated the spreadsheet, I emailed myself a fresh copy and deleted the older one. In addition to a master spreadsheet, I religiously set calendar reminders online as well as on my phone to ensure critical milestones were met on time.
Sounds fun and dandy doesn’t it? Not if you own a business and take credit cards for customer payments. The business side of this equation is dark. As a small business owner who takes credit card payments, I get to see the other side of this game.
If you are wondering how credit card companies are able to fund such an expensive campaign, don’t wonder anymore because they are not. It is the business who swipes the customer’s credit card who is paying up da wazooo.
A business that swipes a high credit card perks card as form of customer payment also pays higher credit card fees for that transaction. Ever wonder why some stores don’t accept American Express or Discover? Those credit card companies have some of the most lavish credit card points programs out there, therefore resulting in higher fees for the merchant.
There are some new regulations around the corner that give retailers a choice when it comes to accepting credit cards by essentially allowing them to discriminate what credit card to accept. But think about this for a moment. Would a retailer really exercise the right to discriminate at the expense of a lost sale? Likely not, I know I won’t. Gotta love how the double edged sword works here.
But as a consumer, fret not, there are a ton more credit card points programs on my target list and I am inching closer to each and every one of them.
Note: I am not advocating you do this for yourself, nor am I disseminating any advice. This article is a recollection of my personal experience with credit card points redemption programs. Each one of us decides what’s best for us.
Readers: Have you royally abused credit card points programs like I do? What are your thoughts on this method to make extra money?
Here are my additional thoughts on earning credit card points for doing what you already do anyway.
Here is a Business Idea: If you are developer who can come up with an application where a user inputs all their personal information once and have the application interface with various vendor bill pay systems, then there might be an opportunity here for you. There are many individuals like me who like to take advantage of credit card promotions. How about enabling them to change their credit card payment information to all the vendors they pay online much easier than having to go into each account manually and making the change? I’d happily pay $25 for this application. Something to think about? I’d be happy to discuss further if you are interested…Previous: How to Accept Donations Online Using the PayPal Donate Button