Episode 11: Cashback Credit Cards

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I talk about optimal options for earning cashback for those who don’t travel often or want to mix in cashback with their credit card setup.

 


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Thanks to generous patrons and fans of this podcast who help support my work. Have a great day.

Rough transcript:

You’re listening to the Hurdy Gurdy Travel Podcast. I’m your host, Justin Vacula, here to help you travel the world at next to no cost through credit card points, miles, benefits, and rewards. Make money, save money, and take advantage of great deals! Thanks for joining me for episode 11, Cashback Credit Cards, in which I’ll talk about strategies to maximize cashback. First, some updates.

It’s been a great start to 2020! On January 1st, after six months of no hard credit inquiries (US Bank and First National Bank of Omaha are sensitive to inquiries) I applied for three cards. I was approved for the MGM Mastercard which is amazing for my situation, but lackluster for many others and have conditional approval for the Barclay’s Jet Blue Business card which I would suggest for many who would fly Jet Blue – I just need to verify my identity following postal mail correspondence. I’m currently pending for a US Bank Flexperks card which can later allow me to get the wonderful Altitude Reserve card and will soon apply for another Bank of America business card when a payment posts to my existing card. Good friends, too, and podcast listeners have also had success with approvals in the new year. Let’s start strong and keep the ball rolling!

My previous episode with special guest Maserati Holly was really popular – welcome to new listeners including members of The Credit Society Facebook group and thanks again to loyal followers. Thanks also to Brian Jung of The Credit Society for letting me share the episode to the group. Stay tuned for more upcoming guests and a possible new podcast sponsor whose content I support as he does a wonderful job helping businesses establish and grow their credit options. As always, feel free to contact me with comments, questions, feedback, and let’s especially work together so you can get the right cards for you and approvals in 2020. Visit my website at hurdygurdytravelpodcast.com for past episodes, my credit card questionnaire, and contact form. Now, on with the show.

My main focus is on credit cards offering points you can redeem for travel including hotel rooms and flight tickets. Cards typically thought of as travel credit cards also offer great perks I’ve spoken about like lounge access, hotel status, travel credits, and much more. As I see it, most people will get more overall value getting travel credit cards and using points for travel rather than redeeming points for cashback or focusing on cards marketed as cashback cards, but what about those who do not want to travel, do not travel often, or are generally skeptical about points and miles? Good cashback options are available even cashing out points, but don’t make the mistake of getting cards with no or small signup bonuses or focus on cards with categories which won’t make much of a difference – listen to episode three for more on the value of signup bonuses.

Many cards like the PNC Bank Cash Rewards Visa are lackluster – these are to be avoided. This card offers a slim $100 cashback signup bonus after spending $1000 in 90 days and has categories which both won’t make much of a difference or are better covered by other cards – even the 4% back on gas station purchases won’t make much of a difference for most people, please avoid starting your credit card search with wanting a ‘gas card’ – instead look for overall value a card will bring! Even to grant a generous $50 a week spend on gas, we’ll only get a $96 total return in year one which is very weak when we can instead apply for multiple cards and get far more value from signup bonuses. Consider many options and opportunity costs – what is given up when you apply for one card especially since you usually can only get so many credit cards every few months.

Even the popular Chase Amazon and Amex Amazon cards are subpar for 99% of people. The Amex card gives 5% back on Amazon purchases and a $150 signup bonus, but the signup bonus is really weak compared to other cards and there are so many ways to save more than 5% on Amazon. Just this month, there’s an American Express offer to get 10% back on any Lowe’s purchases up to $1000 or a maximum $100 discount. You can go to Lowe’s and buy $1000 or less in Amazon gift cards. You can also use other cards’ categories like four times points on grocery spend also getting fuel rewards or grocery rewards – buy Amazon gift cards and get a good return. Just last month, I bought $800 worth of gift cards at a local store and got a tofurkey and vegan ham as a bonus – they retail around $10-15 each. I could have also used the points for $0.80 off per gallon of gas for 20 gallons – a savings of $16. You can take very little effort to save and make money! The Chase Amazon card is even more problematic because it takes up a Chase 5/24 slot (you can only get really valuable Chase cards in most situations if you have opened fewer than five cards which appear on your personal credit report) and Chase has been closing accounts for too many Chase cards opened in a short time – I advise one Chase card opened every three months to avoid this.

So, with examples of cards to avoid, here are some cards you can find good value in.

The Chase Ink Cash card grants a signup bonus of 50,000 points or $500 after you spend $3000 in 90 days. You also get a 0% intro APR for 12 months, never have to pay an annual fee, and get 5x points or 5% cashback on spending at office supply stores where you can even buy Amazon and many other gift cards for grocery stores, gas stations, and several merchants. Again, I find more value in using Chase Ultimate Rewards points for travel, but redeeming these for cashback can be a good option for you. You’ll especially want to get this card early because of Chase’s 5/24 rule I mentioned – it’s one of the few cards I’ll praise for its wonderful 5x office supply store category! If you don’t have a brick and mortar business, don’t sweat it, as you can apply with a social security number and even get an EIN for free even based on small business activities like hosting a YouTube channel which generates income, selling on Amazon, selling on Ebay, selling art, and so much more. Business cards are super valuable! Other Chase business cards including the Ink Unlimited and Ink Preferred have great signup bonuses and decent earning potential. Support my efforts by using my Chase Ink Unlimited referral on my website at hurdygurdytravelpodcast.com.

The Chase Sapphire Preferred is also a solid option for cashback with its 60,000 point or $600 signup bonus – you’ll be well ahead even after the annual fee under $100. Use my referral link as well to grant me 15,000 points or $150 at no cost to you. If you have the Ink Preferred or the Sapphire Preferred, you also gain versatility in using points for travel if you decide – options are always nice! The Chase Freedom card is also nice with a 15,000 point or $150 signup bonus and quarterly 5x categories, but I wouldn’t suggest people with a great credit profile apply for this card as they can find better options inside and outside Chase. You’ll also, of course, not get great value if you fail to maximize the $1500 spending on the 5x categories. This card can be a good option, though, for people with credit scores around 700 and a year or more of established good credit history. A checking account, too, with Chase can improve approval chances.

I also wouldn’t recommend staying under 5/24 forever because you’ll constantly pass on so many great options – consider opportunity cost and the inevitability of running out of certain business cards which do not add to your 5/24 count. Cashback focused people can also downgrade or product change their Chase Sapphire Preferred in year two with the card since paying the annual fee may not make sense. The Freedom Unlimited, too, even with it’s attractive 1.5x back on all spend isn’t that great since I’ll advise other Chase cards first and most won’t spend an incredible amount – the spend, too, will be better spent on bonus categories and signup bonuses. You’ll be fine, also, with the Ink Unlimited which offers a bigger signup bonus.

American Express’ relatively new card, Blue Business Cash, can also be a solid option for cashback – 2% cashback on all spend up to $50,000 in a calendar year and then a $250 bonus for spending $5000 in six months and another $250 after spending $10,000 in twelve months for a total of $500 and 2% – a 7% return on all spend for the first $10,000 in spending. This card is really easy to manage with no annual fee, automatic cashback redemption as statement credits, and even has a 0% intro APR built in. You should be able to get this card with credit scores around 700, even a bit lower, as I witnessed a recent Amex approval with 690 scores. Amex business cards also do not take up 5/24 slots and once you have one Amex card, future applications are usually not hard inquiries.

American Express also offers a great option with its Charles Schwab Platinum card: 60,000 points for spending $5000 in three months and many other benefits including Saks off Fifth Avenue credits, Uber or Uber Eats credits, lounge access, and most importantly, for the cashback crowd, this card allows you to transfer American Express points or Membership Rewards to a Schwab account for a cashout of 1.25 cents per point. There’s a $550 annual fee on this card, but you’re still ahead $200 just from the signup bonus and will gain some value from the card’s benefits even if you don’t travel. Alone, this card isn’t very appealing, but when you have other American Express cards granting Membership Rewards, the cashout option is more powerful!

The Blue Business Plus, Business Gold Card, and Business Green cards can be good options for you among American Express’ business cards. For those over 5/24, consider the personal Gold Card, personal Platinum cards, and the personal Green card. I find cards like Cash Magnet and Blue Cash Preferred to be weak compared to the Membership Rewards and Schwab cashout options, but you can get these later in your credit journey if you absolutely won’t travel. Membership Rewards, like Chase Ultimate Rewards, are versatile, so it’s nice to have options to use points for hotel stays or flights. As always, reach out to chat with me about an American Express application strategy and use my referral link to grant me bonus points.

Finally, and there are of course more cards you can use to generate cashback, the Wells Fargo Business Platinum is a strong card. Its cashback version, not the travel version, gives $500 signup bonus after spending $5000 in three months and an additional 1.5% cashback on all spending. The travel version, too, can be a nice versatile option with a 50,000 point signup bonus, 1 point for every dollar spent, and an extra 1000 points for every month you spend $1000 making this a 2% cashback card when you cashout the travel points at 1 cent per point.

If some signup bonus spend goals seem high to you, listen to episode 10 with Maserati Holly who discusses many ways to creatively reach spending goals. You can also plan applications around upcoming larger expenses like auto insurance, car repairs, and tax payments so you’re not only getting 2% or so back on your spending.

Hopefully this was helpful for you to think about many ways to gain cashback! The credit card space, I must admit, can seem complicated – it’s important to know the rules so you can experience success and maximize your returns. I’m here to help you offering my expertise and experience so you won’t have to spend hours researching and likely making mistakes which will cost you even more time. The credit card game is well worth it, though, granting you hundreds or even thousands of dollars in value. This also doesn’t have to be all or nothing. Start small with just one card, see what’s comfortable for you, and don’t take on too much at a time. Let’s work together for a strong 2020!

Thanks for listening and stay tuned for more content!

Visit my website at HurdyGurdyTravelPodcast.com where you can read episode transcripts, complete a free credit card questionnaire to receive tailored recommendations, view helpful resources, listen to past episodes, and contact me.

Support my work through Patreon, Paypal, the Cash App, and referral links by visiting the donate tab on my website. Subscribe on YouTube; like on Facebook; follow on Twitter; and follow on Instagram searching for me – Justin Vacula – and Hurdy Gurdy Travel Podcast.

Visit my other podcast at stoicsolutionspodcast.com where you can find practical wisdom for everyday life inspired by the ancient philosophers of Greece and Rome.

Thanks to generous patrons and fans of this podcast who help support my work. Have a great day.

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