At my previous job, my boss or coworker (not sure what he was) asked me what my hobbies were. He was confused when I told him I am into cash back and gift card collecting.
If your not sure what that is I'll explain, and explain a little history.
When I was getting out of debt using strictly credit cards I noticed I began to get cash back every month. Because I was paying off my credit card statements in full I would get around 20 bucks a month. Back then 20 bucks helped alot. This in turn would be credited back to my account giving me an extra debt payment that to me was free. I wondered what other secrets are out there so I studied up on maximizing my credit cards through travel blogs. I didn't travel at the time but all the information they had to travel for free I could use to pay off debt. I learned about cash back categories different cards to use and eventually applied for alot of credit card. Today due to unforseen circumstances (and by choice) I'm in healthy debt. I control it so well my neighbors wonder how. My debt practically pays itself off.
Now unfortunately it would take me pages and pages to explain everything but let me give you a few pointers.
-Credit cards typically give cash back up to 5%
-Gift card resale sites sell gift card at up to 55% plus off. (Adding a credit card gives you cash back plus the discount)
-theres also Cashback websites such a Raketen. Your credit cards may have deals through their website such as capital one. These work the same as Raketen where you make a purchase and your card is reimbursed. On Bank of America Chase and Wells Fargo cards they have deals you can add that will pay you a percentage back on your purchases. For example last week I made a purchase at McDonald's and received 20 percent of my money back through a deal.
I mean it's honestly great yet you Begin to realize there is strategies to improve your game.
For example I just made a purchase on my Amazon account. I had three options. First of all I could have used points from a credit card. I could also use points from my Amazon card too. These both would have cost me more than if I would simply use my Amazon card. Why? The one card, a chase card would have charged me a 20% fee to use it. I mean it may seem free because your using your points but your still losing a fifth of your money!
Amazom points are slightly different. They are worth dollar for dollar but here's the issue. I call it compounding cash back. You've heard of compound interest right? This is the same thing through purchasing! Your cash back can make additional cash back! For example. I have a hundred dollars worth of Amazon points. The total value of those points is a hundred dollars. It cannot purchase more than a hundred dollars. But if I direct that money through a different avenue say cash it out and pay off my hundred dollars I just put on the Amazon card now it's worth 105 dollars! I just made 5% on free money! Take that 5 dollars do it again and I have 25 cents do it one more time and I have an additional Penny making my compound cash back 105.26
Doing this over and over again really does add up.
Other cards that I strategize on is my Citi double cash card. This too has several ways it will try and lure you to cash in your points. Just recently I had almost 500 dollars worth of points. This card rewards cash back two ways. Buying and paying. Had I simply asked for a statement credit I would be missing out on 5 extra compound dollars. Always cash out then pay towards the balance.
What about gift cards you ask. I can get a gift card and use that at my favorite restaurant or store. Well unless your card doesn't offer cash back I would advise against it. Gift cards normally are the exact same dollar for dollar. You might as well cash out and pay a credit card you used at that store or restaurant. There are credit cards that do not offer cash back or don't make sense to make more in cash back. In those cases get what you can get.
One last thing I want to mention is to check gift card resale sights. I'm mentioning this again because you may be tempted to cash out your cash back for gift cards. You might find those same gift cards at up to 50 % off. Most of my favorite restaurants are 20 percent off. Even airfare is 10-20%
Moral of this post. Always cash out then direct your cash back to it's proper place. For the most part don't use your points for anything else.
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