Ariana has done us all a great service by publishing her weekly hobby results. I started recording my earnings the first of this year and have been intrigued by the results. It is the mix of techniques that caught my attention and how the cumulative efforts of multiple approaches have increased my earnings.
When I first started in the points and miles game, I was just a part-time player who applied for a card infrequently, and it was always a travel rewards credit card. In 2005 or so, I read a thread in a forum called FatWallet started by SisSucksStaples or some variation of those three words that led me to 0% balance transfer offers.
Balance transfers for income
The play was to apply for credit cards that offered 0% interest for a year or two, with no balance transfer fee. We would take the offer by balance transfer check to our savings account, which at that time was paying between 5% and 7% interest.
We would make the required minimum card payment and let the money earn interest in our savings account. When the 0% interest rate expired, we’d pay off the remaining balance. This play is not viable now, as the banks charge balance transfer fees (typically 3%) and saving rates just don’t pay enough interest.
My wife and I applied for 34 credit cards in one day, were approved for 17 and generated $250,000 of interest-free cash that we deposited in our interest-bearing savings accounts. With $250,000 x 6% = $15,000 per year in interest income for a year.
Yes it was a little bit less, as we were constantly paying down with the minimum payments. So the balance from your bank account was not at $250,000 all year. When the 0% ended we paid off the credit cards and closed our bank account.
Lessons learned
When I finished that project, I had a clearer understanding of how a new credit card application (inquiry) affected your credit score. The activity confirmed that it has very little and for a short time frame only.
The point of my story is that there is often more than one way to make miles and money if you keep your eyes open, network with like-minded people and spread your action around. Every week you see that Ariana earns not only frequent flyer miles, but cash back as well. And I can assure you, she is not just doing manufactured spending for cash.
The game is constantly changing. Banks now limit the number of credit cards you can get in a given time frame. But new bank account bonuses are now in vogue, offering at times simple easy cash for those with their eyes open. Many of these bonuses require a small deposit to the new account with limited activity and in some cases no direct deposit required.
Many of us have taken manufactured spending to almost a science earning the most they can on bonus category offers. My wife and I each applied for a American Express Gold card this spring, which offers 4 Membership Rewards points per $1 on grocery spending.
We have each maxed out our $25,000 per year in that category and have added to the take by transferring our Membership Rewards points to our Schwab brokerage accounts. We each hold a Schwab Platinum card, which allows us to transfer our Membership rewards points to our Schwab accounts at 1.25 cents each (Net 5% on $25K or $1250 each minus card and MO fees).
Cash back cards
My last post covered simple cashback apps that require little to no maintenance. Cashback credit cards are becoming more and more popular, especially for us long-time players that are reaching our limits of new credit cards available.
For the record, my wife and I received ten new credit card sign-up bonuses in the first six months of the year. We are currently awaiting the payoff on four other unpaid applications.
So my mix-in income is about 50% frequent flyer miles and hotel points at wholesale values of 1 cent per mile and 0.4 – 1.5 cents for hotel points. I value bank reward points at between 1 cent per point and 1.5 cents each.
We have plenty of frequent flyer miles and hotel points but there is always room for more cash. Half of our earnings we take or earn in cashback. Example: We could get a higher rate of return by turning our Membership Rewards points into miles and use them for premium cabin experiences. But we have plenty of miles already, hence the decision to deposit into our Schwab account.
Mix it up to maximize
To summarize, here’s how I’m currently earning rewards:
- Credit card sign-up bonuses for both miles and cashback
- New Bank Account sign-up bonuses
- Manufactured spending
- Short-term bonus offers on credit cards (Amex Offers, etc)
- CashBack apps
- Credit card referral bonuses (get your friends in the game)
- Don’t be afraid to ask for a retention bonus on an expiring CC.
- I got $50 for test-driving a new car
- Traditional shopping portal bonuses
Don’t pigeon hole yourself by putting all your efforts into one technique. Look around. Try several options and find the ones you like and pay you well for your time. We are making about $2,000 per month in value across multiple options. How are you doing at diversifying your efforts?
Wow, my jaw dropped ! Amazing results.
I have a question regarding all your Credit cards applications this year. How long will you wait to apply for a new credit card? The last application I did with Chase in May was really hard to get it approved after I had 3 more applications in the previous months. I am waiting for the right moment to apply again with Chase but I don’t want to be denied. I am impress on how many applications you have in short of period of time.
Thanks for this post.
For years I applied in batches with the App o Rama philosophy. My credit file is so deep that they either like me, or refuse based on too many inquiries Because I’m way over 5/24 with Chase and BofA is out for awhile, I apply when I find something new. Amex Gold, Hilton Aspire, Terpscard, Penfed and Navy Federal.. For me it’s more hunting for a NEW product, targeted offers and anything I can get.from searching the internett. I spend time looking for new products. And we each apply separately
The AOR’s is becoming less useful as creditors and credit bureaus upgrade their reporting systems to be real time. Does this technique work for you this year?
Haven’t been using it as I can’t find more than one card to apply for at a time and as a poster said, the information between agencies moves very quickly now
I’m with you – look around. I did, but gave up most everything but MS due to hassle-factor. I try to target $50K/yr in cashback and along the way might get a million miles/points. Sadly, the Golden Age of MS is behind us and it’s relative crumbs now.
Wow $50k. Congratulations.
Rick, I expect you had the Amex Gold Card before. Did you receive the signup bonus this time?
Yes I got the bonus again. I think there was a name or product change
Good to know. I’ll give it a try soon.
What a team you and Ariana are!! Thanks for a fun read!
Hey Rick! So nice to hear your words of wisdom. It’s been too long. Cori from Canada( Sheraton Miami airport…met you and your lovely wife years ago)
You have done well to get 10 new credit card bonuses in 6 months.
We have gotten only 5 approvals YTD. With all the new rules we are left with Amex product change bonuses and lesser known banks.
I’ve never aggressively pursued the cash back but I need to start. I used to do 2 or 3 bank bonuses each year at Doctor of Credits recommendations but then I got lazy. Seemed like a hassle but for the time spent I can’t make that return anywhere else.
Thanks for the write up. You’ve motivated me to modify my strategy.
BB&T has a simple one now. $300 for new checking acct. use bill pay three times. $1500 deposit to eliminate fees
As usual Rick, your words inspire me to do something a little different. Nice post.
Good!