Introduction

Make sure you’ve gone through the Financial Independence page. This will build a solid foundation for your finances, which will then make using credit cards a lot easier.

⚠️ If you want to start earning awards and cash from your credit card spend, you should have NO credit card debt. If you have any credit card debt, pay it all off and then continue on this page. Having any credit card debt negates the benefits of using using credits for cash back and points.

Once you’ve completed the above steps above, continue on…

How to benefit from using credit cards

You can benefit from credit cards without having to change what you spend on a daily basis. The basic facts are when you spend money on something, you can receive points or cash back. This costs you nothing.

If you pay everything with either cash or a debit card, you’re leaving valuable points/cash on the table.

Some items to define

• Cash Back - you can usually receive cash in the form of a check or statement credit.
• Points - typically tied to a credit card issuer. Each bank usually calls it something unique. Ex: Amex Membership Rewards, Chase Ultimate Rewards, Citi ThankYou points, etc. Here’s some more info.
• Air Miles (or usually just referred to as “miles”) - typically tied to a specific airline and can only be used on that airline. Ex: American Airlines miles. Here’s some more info.
• Categories (or bonus category) - A merchant/store is given a “code” to define what they sell. Examples are grocery stores, restaurants, gas stations, etc. Credit cards usually give you more % back for certain categories.
• Signup Bonus (aka SUB) - This refers to when you signup for a new credit card, the card issuer will give you X amount of points (or cash) if you spend X amount of money in the next X amount of months. It’s usually a great deal.
• Player 1, Player 2: Player 1 is usually referred to yourself. Player 2 is usually referred to your spouse or partner. Having a Player 2 in your strategy can optimize your credit card points and signup bonuses.

Things to keep in mind when starting out

• You have to pick categories and places that work best for your situation. For example, what do you spend most of your money on. Dining, groceries, Amazon?
• When looking at card categories, make note of the spend caps. Look for things like “you’ll get 3% cash back up to $6000 per year, then 1%”. Factor that into your calculations.