I am delighted to say that I am a credit card bum! In fact, some of you may already be ineffective with credit cards, if so, kudos to you for your excellent work! Now for those of you who don’t know what a worthless credit card is, before you start thinking I’ve got a screw loose, you might want to read on!
When I say I’m a credit card bum, I don’t mean I avoid my credit card bills. By contrast, a credit card defaulter is the internal term used by credit card company executives and refers to all credit card users who pay their bill each month on time; By doing so, such clients do not pay interest and prevent the creditor from making any profit! That’s me! I love being a credit card bum!
The alternative to being a credit card bum is what credit card executives call a revolver. A revolver is a credit card user who constantly carries a balance and is charged regular monthly interest on their charges. Credit card companies love revolvers because, in essence, they increase the credit card company’s bottom line and make them a nice profit. Also, from an internal perspective, the best customers not only carry a balance, but also fall behind on their payments, leading to additional fees and a higher interest rate.
Okay, I’ve been a credit card slacker for a while, but last year I went even further and improved my slacking ways. Not only did I hold on to my hard-earned money by refusing to fill the credit card companies’ wallets, but I also happily filled my own wallet with their money, to the tune of $1,402. Yes, that’s right, they paid me $1,402 to use their cards; Read on to find out how!
Cash Back Credit Card
First, I applied online for a cash back credit card and was instantly approved. My new cash back credit card arrived at my house the following week, ready to use. This card offered me 0% APR for 12 months and no annual fee; With it, I made all my gas purchases, as well as grocery and pharmacy purchases, and got 5% cash back on gas purchases and 1% on all other purchases. I have a family of four and the gas purchases also included gas for my spouse’s car. My average monthly purchases and cash back earnings were as follows:
Monthly Gas Purchases $325 x .05 = $16.25
Monthly grocery bill $1,200 x 0.01 = $12.00
Monthly pharmacy purchases $160 x .01 = 1.60
Total Credit Card Cash Back Earnings $29.85 x 12 = $358.20
airline rewards credit card
I also applied for an airline rewards credit card and was again instantly approved online. Like the cash back credit card, my new airline rewards credit card arrived the following week, with a 0% introductory APR for 12 months and no annual fee. This credit card earns 1 frequent flyer mile for every $1 charged.
I charged many of my miscellaneous expenses, including major purchases and business expenses, to my new Airline Rewards credit card. As a result, qualifying spending averaged $2,250 per month or $27,000 per year, earning 27,000 frequent flyer miles, more than enough for a plane ticket to Hawaii – a $500 value!
0% introductory APR for 12 months
Now here is the kicker. Since both credit cards came with a 0% intro APR for 12 months, I paid only the minimum payments on each card and put the money from my purchases into a savings account that earned 2.5% (rates have gone up since then). Using averages for simplicity, I made 12 monthly deposits of $3,935 into a savings account earning 2.5% interest compounded monthly. At the end of the year, I earned $544 in interest!
My total credit card earnings for the year
So here are my total earnings from the cash back credit card, airline rewards card, and interest earned.
Cashback 12 x 29.85 = $358
Free plane ticket $500
Savings Account Interest $544
Total earned $1,402
Just to make sure I keep my habits dormant, now that the 0% introductory rate has expired, I’ve paid off my balance with money I put into my savings account over the year. To be a credit card bum you need persistence, determination and discipline. I did it so you can too!
