How to Scam Credit Card Companies

Ok, so maybe “scam” isn’t the right word.  More like “gaming” them.  What we’re doing is perfectly legal, but they’ll hate you for it.

You know how a lot of credit cards have sign-up bonuses?  Things like gift cards or cash back to entice you along with their 0% introductory APR.  Usually these are store cards that will offer a gift card to their particular business. Sometimes banks do it too, and they offer cash.  In fact you can get up to $100 from various card issuers completely for free when you sign up for a new card.  Now that doesn’t mean you don’t have to do some work here too.  Usually they contain stipulations such as “make a purchase within 1 month of receiving your card” or “spend $500 in your first three months.”  These are designed to get you to actually use the card in the hopes that you will be hooked on a large credit line and low rates.  Then in a year they crank up the interest rate to 22% and suddenly your savings have run dry.  And of course the better rewards usually have a bigger catch.

So how do you get the reward without paying out the nose? Simply meet the minimum standards for the reward, pay off your balance, and never touch the card again. Put it in an envelope, cut it up, or even freeze it in a block of ice so that you only have it for emergencies.  But don’t cancel the card.  If you keep the card active with no standing balance, your credit score actually goes up!  This is because your score is partially based on your debt-to-credit ratio, so if you have a lot of credit and carry no debt, your score starts to look pretty good.  Just read the fine print and make sure there are no annual fees.  Those cards are a bad deal anyway.

This will backfire if you apply for 6 cards at once. You probably can’t handle the necessary spending and card companies will get wise to you.  Instead wait 3-6 months in between each one.  That’s generally how long it takes to actually earn the reward anyway.  The real trick here is willpower.  Say you have a card that gives you $100 after you spend $500 in three months.  The easiest way to rack this up without overspending is to put your fixed monthly costs on the card for 1-2 months, but pay them off immediately rather than keeping a balance.  I’m talking about things like utility bills and groceries.  Things you already have money set aside for and can afford to pay off.  Generally you just have to make $500 worth of purchases, you don’t have to keep that balance on there the whole time.  Read the fine print on that one as well.

If you do this right and are responsible about your spending, it’s entirely possible to get upwards of $300-500 in gift cards, cash back, or bonus miles over the course of the year just by playing the credit game.  Just keep your spending in check and lock away the cards with bad rates and fees, and you’ll be in the clear.  If you get more than 6 cards this way, feel free to cancel some once you pay down the balances. Otherwise sit back and reap some rewards.


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