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Here's a brief list of where I use credit cards (which I always pay off monthly):

- Car payments (they let me use credit cards with no fee, >$9 / month rewards)

- utilities ($1 fee, with >$1 rewards)

- Food (>$20 / month rewards)

- Gas (>$5 / month)

There are more, but that's what $40 / month. If you then use a churning method to get more points, like opening a new card where you spend $4000 in three months get $500 back, then it's even better. It depends how much you normally spend, but for me - I don't need to change spending habits. Just only use that single card.

Last year I made $2500 from credit cards with my standard spending. I took out three new cards, paid for my wedding, then paid them off. Haven't used them much since and I didn't need to spend any more than I normally would have.




>There are more, but that's what $40 / month.

Help me understand, US$ 40 in rewards agains a monthly spending of?


Assuming a good cash-back rate of 2%, $2000 spent on the credit card for $40 back.

The point being he's spending the $2000 anyway, so he'd rather get $40 back from his credit card company rather than $0 back if he used cash or debit.


But cash-back is not the same as reward points.

Cash-back is "money", reward points (more or less) is "discount on given good".


Many cards let you cash out rewards points now. With Chase, for example, you can get a check in the mail, use points to pay off your CC balance directly, or use points on amazon (at full value).


Using Chase Ultimate Rewards points at Amazon is only worth 0.8 cents per point, not 1 cent per point like the others.


Then you have to pay income tax on the churn.


Income tax is only assessed on deposit accounts that offer sign-up bonuses. Credit cards aren't deposit accounts.


I stand corrected!




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