Cash Back Rewards Cards ARE Worth My Effort

Doing cash back rewards credit cards is worth it to me because it would not be very frugal to leave all that money on the table. It just takes a little credit card management on my part to capture big cash back rewards payouts. And here’s that story.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

Cash back rewards cards put money in my pocket!

Cash back rewards cards put money in my pocket!


Some people think that there is not enough money in cash back rewards cards to go to all the trouble of managing them. Of course, I do not see it that way at all. Check this out.

A few months ago, we placed a $2692 order for 16 new windows. I made sure to charge that purchase on my Discover cash back rewards credit card, which at the time was running a special 5% cash back promotion on home improvement store purchases. By doing so, I got a $135 credit in cash back rewards dollars from Discover. And I leveraged those cash back dollars to get $168 in good-as-cash gift cards to use on goods and services I would buy anyway.

To score all that free money, all I had to do was (1) know that Discover was running that special promotion, (2) sign up for the promotion, and (3) make sure I carried that particular cash back rewards card in my wallet when I went to buy the windows.

Not too long before that, I paid for a $7500 roof replacement job with my Bank of America Preferred Rewards MasterCard. Not only did I get 1% cash back on my purchase, but I also got a 50% bonus on that cash back by taking the credit as a deposit into my Bank of America checking account. So I collected $112 just for knowing what I could get by using that cash back rewards credit card for that purchase.

It just takes a little credit card management on my part to capture big cash back rewards payouts. To me, it IS worth the effort. Here is more on that.

In the first place, cash back rewards card management is just another fun round of the Frugal Game that I love to play to save money without really giving up anything.

Second of all, it is not chump change I am getting here. My annual baseline living costs are around $15,000 and I figure about $8000 of that is credit card billable. At a conservative 2.5% average cash back on that $8000, that is 200 cash back rewards dollars. Factor in a modest 25% average redemption leverage and my found money goes up to $250 a year. But that is just from my baseline living expenses.

I also spend another discretionary $7000 to $10,000 a year on fun stuff. And ALL of that is credit card billable. So that adds another $300 to my yearly found money from putting in a little effort into the management of my cash back rewards credit cards. That means that in total I am adding $550 a year to my Discretionary Fund for just taking an hour or less (!!) every 3 months to (1) check a few credit card websites, (2) take note of which cash back rewards card is offering what promotion for the next 3 months, and (3) rotate a couple of credit cards in and out of my wallet accordingly. I’ve figured that I am getting over $100 an hour for my effort.

And no, I do not pay more in order to get those cash back rewards.

For example, I bought those 16 windows at a big box home improvement discount store. I timed the purchase to get a 15% special sale discount that saved me $475 over and above the store’s already discounted price. And I used a $25 store coupon to push down my cost even further. So the 5% cash back reward I got from Discover was on top of the $500 I would have saved without using the card.

And, yes, I did pay off that window purchase charge when the credit card statement came in. Which is what I do with all the purchases I charge on cash back rewards cards. It is all good.

The takeaway: Doing cash back rewards credit cards is worth it to me in principle because I never leave money on the table. That would not be very frugal!

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  1. I recently added Citi Double Rewards to my portfolio of cash back cards. 1% on all purchases and another 1% bonus when you pay. So 2% cash back on any and everything. All my utilities bill there and I put everything on it I can. The card is set to autodraft from my checking account to ensure I never pay interest or fees. So basically, free money.

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