There has been a lot of news in the press lately about card stacking and how it is associated with cash back rewards. In fact, last year alone the Chase Sapphire Rewards Card was offering 100,000 miles to those who signed up.
All the person had to do was sign up or apply to be a Chase Sapphire Cardmember. Once the application was approved, the person got about 100,000 miles. According to inside sources, now the miles are down to about 50,000, but it is still a lot.
The Rewards for Doing Something Like This
There are many benefits to doing something like this. It has become sort of competition among credit card companies. The idea is to entice as many cardholders to their credit cards by offering these kinds of benefits. The one incentive that has not merited a lot of attention until now has been card stacking.
Credit Card Stacking and Credit Cards
The idea is not to take one card and maximize your cash back rewards from it. The goal is to use two or three and maximize those rewards. One study concluded that you can get back as little as $5,000 back over a 3-year period. All you need is to use the right cards to make the right kind of purchases.
This is where some of you get mixed up. It is not just about choosing the right cards from a list of cards. It is about choosing the right cards from your list of cards and making a purchase that counts. Not all purchases are going to be giving you money back. Many consumers assume that any purchase is going to give them cash back, which is why they look for the link “how to apply”. You have to read over everything first. Only 2-3 cards from your list of cards are going to give you what you need. Only two or three purchases out of 100 are going to give you the cash back.
How to Maximize Those Incentives Safely
This is the other thing that concerns many people. They want to know how to earn the cash back without creating a negative impact on their credit score or credit report. There are a few easy ways to do it.
- Choose A Good Flat-Rate Card
This is the first step in the process. This is the card that will earn you the same money back, regardless of what you purchase. You can use your credit report to keep track of the items you buy. The Capital One Venture and The Capital One Silver cards are two good ones to use.
Take note of one or two places you spend most of your money on. Some of you may buy from Walmart and eBay most of the time, like me. Some of you may go to Amazon. Some of you may choose other places. The point is, pick two places and maximize your goals there. One way to do this is to broaden your scope of buying in the two places you go to the most. This way you get more bang for your buck.
- A Card That Beats A Flat Rate
Here is an example. Scott spends most of his time shopping in Walmart and eBay. Find a way to co-brand the two cards these two places offer. Walmart offers a cash back percentage when you use a specific card and so does eBay.
- What Do You Do With the Rest of the Cards?
The idea is not to close out all of them because that will hurt your credit too much. Find a way to turn some of them into no-annual-fee cards and keep them for an emergency. Close the others ones you are not using. You will save money and your credit will not take much of a hit.