One New Card and 5% Cash Back: My Q1 Round of Credit Card Application
I wasn’t planning on applying for credit cards during Q1 but this was too good of an offer! 5% on gas, groceries, and drugstores after your first $6,500 in annual spend. If you’ve been thinking about a cash back alternative for your Vanilla Reloads purchases, read on!
DISCLAIMER: Credit cards can be extremely dangerous for those that cannot control their spending and are not financially disciplined. If you cannot pay your credit card off in full at the end of every statement cycle, all the miles/points are NOT worth paying 15-25% interest. If you don’t have high enough credit score, your applications will be denied and it will lower your score even further. If you plan to take out a mortgage for a home or a loan for a car, recent inquires on your credit will impair your ability to get the best rate, or the loan. You don’t have to earn a lot, but you do need to spend less than you earn. Read more about it on Eden’s blog – Credit Score FAQ.
I’ve been racking up points via Vanilla Reloads and Bluebird from American Express (read blog posts from The Points Guy), using my regular 1x Rewards Cards. While this manufactured spending have been better than nothing, fee is still $3.95 for the 504 points I’m earning through this method (a 0.8% transaction fee). If I redeem these 504 points in the future for about 2 cents per point, its a lot of driving around to make a marginal profit of about $6 per Vanilla Reload card. That is, until American Express Blue Cash card. In hindsight, I should have applied for more credit cards because whenever you apply for a new credit card, the bank runs a credit check (also known as a hard inquiry) but oh well. Next quarter!
American Express Blue Cash (open this link after you’ve cleared your browse history) has no annual fee and no sign up bonus but 5% on gas, groceries, and drugstores after your first $6,500 in annual spend.
Why: We load $5,000 per month per person on our Amex Bluebird cards using Vanilla Reload cards from CVS, that’s $10,000 of spending each month, or $120,000 each year. If we use Blue Cash credit card for all our Vanilla Reloads, that’s $120,000 of “spending” which, at 5% rewards, would generate $6,000 of hypothetical statement credits. After the fees for each Vanilla Reloads card, its still $5,000 of net profit.
2014 is off to a great start! Cha ching!!!