Don't Leave Money On The Table: My Credit Card Cashback Rewards Year To Date (Sep. 2018)

This week, I'm going to take a short break from all the Tesla posts and get back to some personal finance topics. My post on my first week of Tesla ownership will be next week, I promise!

I got an email from my Chase Freedom credit card a week ago showing me how much I've earned in cash back bonuses so far this year.

That's a pretty big chunk of change! It's higher than I would have guessed.

But this was only for one of my credit cards. I also have a Discover card that earns cash back and partway through the year, my wife switched to the Citi Double Cash card, which gives you 1% back on charges and 1% back on payments. My wife also has a Discover card as well, so we earn cash back there. Basically, every credit card we own gives us cash back.

We charge just about everything we purchase and pay off our balances in full each month (each week, actually). Because we never carry a balance, we are never charged interest. This means all the cash back we earn goes straight into our pocket. It's like getting free money.

I was curious to see how much free money we earned over all of our credit cards so far this year. Luckily, I track all my transactions on a phone app, so it was a simple matter to get this information.

Wow! $1,025.66! That's a lot of free money! (And there's still three more months in the year!)

This isn't phantom savings either. I don't take this money and go spend it all on hookers and blow frivolous items. Each month, as soon as the cash back is awarded, I immediately apply it to my credit card balance. That means it directly reduces the cost of my day-to-day monthly expenses.

The trick to maximizing cash back is to pay attention to the details of your cash back program. For example, both my Chase Freedom card and our Discover cards have a bonus category each quarter where you earn 5% cash back instead of the normal 1% or 2%.

For July, August, and September, the bonus category for Discover was restaurants. So anytime we went to a restaurant (even fast food), I made sure to use my Discover card. For October, November, and December, the bonus category changes to Amazon.com. So on October 1, I'm going to change my default credit card on Amazon to be my Discover card. I'll probably also do most of my holiday shopping on Amazon to earn more. (I'm an Amazon Prime member, so shipping doesn't cost me any extra.)

I keep a note in my wallet listing the bonus categories for each card, so I can make sure I use the right card in the right situation.

It's really nice when you can put big expenses on a cash back card. Back in August, I paid my $2,500 Tesla deposit with my Chase Freedom card. The $4,000 worth of electrical work I had done for installing the wall charger and new electrical panel? On the credit card.

Of course, the important part is being able to pay off your credit card bill in full each month. If you can't do that, you'll end up losing money. But if you are careful with budgeting and are able to consistently pay off your monthly bill, you can earn some serious coin for buying stuff you needed anyway. So take full advantage of your cash back cards and don't leave money on the table!