My FIRE Journey: Making Money by Spending Money

 

Not too long ago, I talked about the reasons why I quit using my debit card. Today, I want to talk about how I've already benefited from that decision. 

Last year, I got a Discover It Miles card. Like any card I pick these days, I picked it purely for the rewards points. This particular card offered points - or miles, in this case - at a certain percentage, depending on what you bought. The reward offered was that Discover would automatically double whatever miles you had accumulated at the end of a year. You could then either use those miles to book travel or convert the miles to cash. I chose the latter and recently had Discover deposit nearly $400 cash to my bank account. See, I used that card to pay bills, buy groceries, gas for my car, laundry detergent, and other things that are necessary for day-to-day living instead of using a debit card. I would then pay off the card each month with the money I was going to spend on those bills anyway, thus avoiding paying any interest. So, for simply paying my bills for a year, I made $400. 

After my year was up for the Discover It Miles card, I moved on to the next card with good rewards: my Fidelity Visa. This card is attached to my Fidelity investment accounts and offers 2% cashback on every purchase. Every quarter they will then deposit that 2% I've made into my investment accounts. Again, I'm using this card to pay my bills, and recently, I received the first quarterly reward in my Fidelity account. How much? Nearly $60. That equals $240 per year. 

I've also gotten enough points on a Choice Hotels credit card for five free hotel nights, enough airline miles on American Airlines for a one-way and two round-trip tickets, and enough airline miles with my Delta Amex for another one-way ticket. To describe how easy it was to get those five free hotel nights, I only had to spend $500 on the Choice Hotels card in three months. That's it. I simply bought my groceries and household goods for three months and got five free nights in a hotel. Easy peasy. I typically use two rewards credit cards at any given time, attaching one to all my automatic bill payments (electric, car insurance, phone bill, etc.) and the other to my household purchases (groceries, toilet paper, gas for the car, etc.).

Of course, you have to pay your credit card balance in full each month or you're going to incur interest fees and that kinda defeats the purpose - you have to be disciplined. In other words, only spend using your credit cards on what you would have spent using your debit card. I can't think of an easier way to earn cash, hotel rooms, airline flights, and a host of other things by just spending how you normally spend. 

I hope you're enjoying your week. I'm off this week for vacation and I'm thoroughly enjoying it. I'll start posting some vacation stuff starting this weekend. Until then, have a great rest of your week!