Lately, I’ve noticed a growing trend among financial bloggers: maximizing rewards credit cards for serious gains. The game involves signing up for high-reward cards, collecting lucrative bonuses, strategically using the best ones, and canceling the rest.
My Journey with Rewards Cards
I’ve been familiar with cash-back cards for a while. Between 1999 and 2006, I used an REI Visa that earned me 1% back on all purchases, totaling a few hundred dollars annually. In 2006, I upgraded to a Travelocity American Express that offered 2% back on most purchases and a hefty 10% back on travel—perfect for my family’s one-to-two trips a year.
Around the same time, I took advantage of 0% APR checks sent by Chase for my business card. By borrowing up to the $50,000 limit and using it to pay off a higher-interest construction loan, I saved thousands in interest that year. While such offers still exist, they often include sneaky fees like 3% upfront, making them less appealing.
Today, however, the game has shifted. Credit card companies are upping the ante, offering massive sign-up bonuses—some as high as $400 or $500—with no annual fees or hidden downsides.
Why It Pays to Play
In the early days, people signed up for credit cards for trivial perks like t-shirts or clock radios. Banks made huge profits by charging exorbitant interest rates and fees to these unwitting customers. But as competition among card issuers heated up, they started offering a larger share of the profits back to consumers.
Nowadays, signing up for a credit card with less than a $100 bonus feels like leaving money on the table. Some savvy users keep a collection of cards, meticulously tracking rewards and exploiting every opportunity for “manufactured spending.”
While I’m not interested in juggling 14 active cards like some of my friends, I decided to test the waters with one high-reward card: the Chase Ink Business card.
My Experiment: Chase Ink Business Card
This card promised a $400 sign-up bonus, so I applied online using the code provided in the mail. The process was mostly smooth, aside from a glitch with the tax ID field that annoyed me. Once approved, I received the card within a week and called to activate it.
The activation process included a chat with a “business specialist” who attempted to upsell me on other cards. While her effort was admirable, I declined politely, focusing on the $400 bonus. After setting up automatic payments (always opt for “full balance” to avoid interest), I eagerly awaited my rewards.
The Payoff
After making my first purchase, the promised 40,000 bonus points appeared in my account within weeks. By mid-February, I redeemed the points for $403, which arrived as a check shortly thereafter. The entire process—from application to deposit—took about a month.
Should You Try This?
Gaming the credit card system can be profitable if done right, but it’s not for everyone. Here are a few tips and caveats:
- Credit Score Impact: Applying for multiple cards may cause a temporary dip in your credit score. Ensure you cancel unused cards and keep your oldest account active to maintain a strong score over time.
- Avoid Interest Charges: Never carry a balance or pay interest on credit cards. If you can’t pay in full each month, this strategy isn’t for you.
- Opt Out of Marketing: New cards often result in a barrage of junk mail. Take a moment to opt out of marketing offers to minimize this annoyance.
Ethical Considerations
Some might question the ethics of gaming the system, but I see it as reclaiming profits from massive banks. Every dollar I earn reduces their ability to trap others in a cycle of high-interest debt.
Final Thoughts
For me, this experiment was worth it. My $400 windfall covered a chunk of an upcoming snowboarding trip. But as Mrs. Money Mustache wisely put it, “Just let me know how much money we made when the cards are deactivated.”
If you’re curious about exploring high-reward credit cards yourself, I’ve compiled a list of referral links on the Credit Cards page of this blog. Proceed cautiously—avoid annual fees, dodge balance transfer traps, and, above all, never pay interest.
Happy gaming, and may the rewards be ever in your favor!