April 14, 2009, 5:00 am

6 Easy Steps to Make money from Cash Reward Credit Cards or Point Rewards Credit Cards Part2

by: The Financial Blogger    Category: Credit Rating & Credit Bureau
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pile-credit-cardsThis is a guest post from a contributor of The Credit Toolbox. This is a blog about understanding, improving and keeping a good credit record. They write an interesting series about how to make money from cash reward credit cards. I am featuring the second part here while the first part and third part are already live on The Credit Toolbox.

2- Use your credit card for your day-to-day spending

Woah! You must be thinking that I am completely crazy. After getting on the back of Dave Ramsey, I am telling you to use your credit card on a daily basis? Maybe I am good for the nut house after all ;-). However, there is a reason why I think your cash reward credit cards should be used everyday; to get more points and cash in your pockets!!

Don’t get me wrong, I am not telling to spend more (there are people spending on their credit cards thinking it’s a great deal because of promotions…), I am telling you to use it. What is the difference? I personally think that you should use your cash reward credit card for every single purchase your make in a day. From your daily coffee to your grocery and gas in your car.

The idea behind paying everything with your credit card is that you would have paid for food, gas and other daily spending anyway. However, if you pay with cash or with your debit card, you don’t get any points or rewards back.

Where is the catch?

The catch is that you have to pay your credit card bill completely by the end of each month. You should never leave an unpaid balance on your credit card as you are paying an awful lot of interest charges on it. As you can see, this technique is not for people who have already a balance on their credit cards or have problem managing their credit cards. This is a technique for people who are in control of their personal finance.

Here’s a real example:

Let say that we only consider only a few spending for this example:

– $500 per month for grocery

– $250 per month for gas

– $100 per month for your phone and cell phone bills

– $150 per month for restaurants

This gives a total of spending of $1,000 per month that you already pay anyway,right?

Well if you use the Discover® More(SM) Card – Wildlife Collection cash reward credit card, you will get $312 at the end of the year (it gives 5% on spending such as gasoline and restaurant (and other spending categories) and 1% on everything else). As you can see, you can save money on your day to day spending. It’s like having a free rebate on what you are already buying anyway 😉

Over a year of spending, I was able to get $400 in cash reward and my wife got almost the same. In order to get this free money, we simply used our cash reward credit card on every single purchase we made and pay off our credit car bill at the end of the month. Money was accumulating in our bank account and we never withdraw from it to make sure we have enough money to pay off your cash reward credit card at the end of the month.

So you must not use the cash reward credit card to finance unexpected events or goods you can’t pay at the end of the month. Remember step #1; you choose your cash reward credit card based on its program not on a low interest rate option. Therefore, the cash reward credit card must be paid at the end of the month… all the time!

Here are a few examples of great cash reward and points credit cards:

Discover® More Card(SM) - American Flag

Discover® Card
More® Card – American Flag

American DreamCard™ Platinum MasterCard®


American DreamCard™ Platinum

Discover® Open Road(SM) Card

Discover® Card
Discover® Open Road® Card

Iberiabank Visa® Platinum Rewards Card

IberiaBank Visa®
Platinum rewards card

Here is the complete 6 Easy Steps to Make Money From Cash Reward Credit Cards of Point Rewards Credit Cards (links will be updated as article goes live).

1- Select a card with cash rewards or a good point system that suits your needs

2- Use your credit card for your day-to-day spending

3- Keep another credit card for emergency

4- Do not withdraw money from your bank account anymore

5- Pay it completely at the end of the month

6- Enjoy rewards from your credit card

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image source: flickr

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I follow all 6 steps to the tee. I use my credit card for all purchases and pay it off at the end of the month. Not only does it provide rewards but it’s like having 0% interest on a 30 day loan and I don’t have to worry about what my chequing account balance is everytime I pay for something.

So you are the one that stole my wallet and took my credit cards. That only looks like half of them though.

Is the DiscoverMore card available to Canadians?

by: The Financial Blogger | April 14th, 2009 (8:21 pm)

thx for the ride, I’m planning to buy my car with my credit card 😉 hahaha!

Finance Matters;
unfortunately, those credit cards are avaialble only in USA…. I’ll try to find something for us (I personally love the Mastercard Platinum from National Bank). If you want to learn more detail, drop me an email at thefinancialblogger at gmail dot com.


Go for it TFB, I upped the limit on the Yahoo! one. You should be able to get at least a Hot Wheel out of it.

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