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, we aren’t one of them. We get all of the benefits of credit cards with none of the downsides.
We use our credit cards for a few reasons:
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!
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. We’ve got 4 credit cards and have different reasons for having each of them.
Our American Express Blue Cash Preferred Card gives us 6% cash back on groceries and 1% on everything else. That’s huge as we spend way too much money on groceries.
Our Barclaycard World Arrival Plus World Elite Card gives 2.2% cash back when used on travel. We did quite a bit of traveling this year, and they’re pretty loose with what they consider to be in the travel category. We use this for everything that doesn’t qualify for a high bonus, so almost all of our random purchases.
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 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. Recently, I’ve been using it less and less. When Chase Freedom isn’t offering 5% cash back on gas, we use this for the 3% cash back reward at gas stations.
Our Chase Sapphire Preferred Card gives us double points on travel. We rarely use it, there was a great signup bonus when we opened it in February. I’ll likely cancel it before the annual fee kicks in.
Our Virgin America Credit Card gives us triple points for Virgin flights and a free checked bag, along with a $150 credit for a companion pass each year.
We get a lot in rewards each year. I don’t think we spend a ton of money, but getting 5-6% cash back on major categories certainly helps!
How Much We Cashed Out This Year
The Barclaycard came with a great bonus of 40,000 points (worth $440), and we cashed out $950 this year! That’s awesome!!
We earned $419 with our American Express card. That’s all from earning 6% on groceries. It’s one of my favorite cards, and we’ll have it for a long time, despite the $75 annual fee (there was a $250 signup bonus when we got the card last year)
With our Bank of America card, we cashed out $83, but since we deposited this into a linked checking account, they added on a 10% bonus, for a total of $91.
Between our Chase Freedom and Chase Sapphire Preferred cards, we earned 56,622 points. It gets a little complicated, but these are worth at least 1 cent per point. You can transfer points to miles on an airline, and can be worth much more than just 1 cent per point, but at a minimum, we’ll call this $566 in rewards.
Finally, we earned 12,000 points from our Virgin America card ($10,000 points at signup). I used 7,500 for a flight which would have cost $200, and the rest I have as a credit (worth approximately $120). We also have a $150 credit for a companion pass that we will likely be using in the next few months.
In total, we earned
In total, we earned $2,496 from our credit cards this year! That’s pretty insane, and it didn’t cost of a thing. It just meant signing up for some credit cards (temporary hit to the credit, which I won’t be using soon anyway) and optimizing our credit card spending. We are ecstatic to have earned so much!
How much did you earn from your credit cards this year?