We Cashed Out Our Credit Card Rewards for $1,400!

Each year around this time, I cash out our credit card rewards. I don’t know why I do it only once a year, but it makes keeping track easy and gives us a nice end-of-year bonus.

While plenty of people have credit card debt, and the average credit card debt per household is over $7,000, and the number is over $15,000 when looking only at households with credit card debt. But we aren’t one of them.

We use our credit cards for a few reasons:

Convenience

Carrying around cash and having change in your pockets is straight up annoying. What am I supposed to do with dimes, nickels, and even worse, pennies?

By using credit cards, I get to keep a lighter wallet (soon to be much thinner!) with only a few bills in it at a time. I just take out the card that will give me the best rewards at the specific location, and swipe. Voila!

Rewards

The other main reason we use credit cards for almost all of our transactions is the rewards. This is how we take advantage of big banks and make sure we milk them for everything we can. We can spend on rewards on anything, from vacations to basic bills like paying our electricity suppliers. We’ve got 4 credit cards and have different reasons for having each of them.

Our Bank of America Cash Rewards Card gives us 3% cash back on gas, 2% cash back on groceries, and 1% cash back on everything else.

Our American Express Blue Cash Preferred card gives us 6% cash back on groceries and 1% on everything else.

Our Chase Freedom card gives us 5% cash back on bonus rotating categories each quarter (see the 2014 calendar here), and 1% cash back on everything else.

Our Southwest Airlines Rapid Rewards Plus card gives us double points for Southwest flights and points for all other purchases.

We get a lot in rewards each year. I don’t think we spend a lot, but getting 5-6% cashback on major categories certainly helps!

How Much We Cashed Out This Year

With our Bank of America card, we cashed out $280, but since we deposited this into a linked checking account, they added on a 10% bonus, $28, for a total of $308. Since this is the only card that gives us a 10% bonus when we cash out, we use it for all purchases that don’t quality for a higher payout. When Chase Freedom isn’t offering 5% cash back on gas, we use this for the 3% cash back reward there.

Our American Express card rewarded us with $325 this year (we signed up for this one in August), most of it coming from the $250 initial sign up bonus and the rest from the 6% cash back on groceries, which is great for us as it’s our single biggest expense after our rent. This card has a $75 annual membership fee, which is covered for the first 3 years by the signup bonus.

We cashed out $90 from our Chase Freedom card, most of the rewards there coming from gas stations during the 6 months that gas stations got 5% cash back.

Finally, we earned $820 in rewards from our Southwest card. $400 came from flights we booked with the initial bonus, and another $420 came from selling the leftover credit to a family member at a discount to them. I don’t fly Southwest often so I will be closing this account to avoid the $69 annual fee.

In total, we earned $1,543 from our credit cards this year. Subtract the annual fees, and we earned a total of $1,399 in rewards. That’s pretty great, as it didn’t cost us a dime!

How much did you earn from your credit cards this year?

4 Responses to We Cashed Out Our Credit Card Rewards for $1,400!

  1. Catherine says:

    That’s amazing! I hope to do this sort of thing someday. Enjoy your bonus!

  2. FI Pilgrim says:

    That’s huge! Great job managing that, and I like your idea of cashing out on them once per year so that you can keep better track. Seems like you’d put that money to better use that way.

  3. That’s great! I’m going to be looking into credit card churning this year to buy a couple of tickets to London. In the last year, we’ve cashed out about $600-$700 in cash back at Discover.

  4. Alicia says:

    Nice haul! Sadly I am at the point where I am paying the credit card company, and not the other way around. That being said, I have about $450 in one reward points program, and another $250 in another. Saving up for a holiday.

Get Income and Money Saving Tips To Your Inbox

Get Income and Money Saving Tips To Your Inbox

Want more tips on how to make more money each month? Sign up to receive the great tips and tricks to boost your income and save more!

You have Successfully Subscribed!