A 3-Credit Card Cash Back Strategy Worth $500,000+

Рет қаралды 31,238

Күн бұрын

Best 2% Cash Back Credit Cards: bit.ly/3DeaqEM
In this video I update my credit card rewards strategy, including our current balance we've accumulated just from credit cards. I also walk through a simple 3-card strategy you can use to generate on average 3% or more in cash back.
We'll also look at how one can build wealth with credit card rewards or improve spending outcomes in retirement.
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Credit Cards Mentioned in this Video
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Citi Double Cash: bit.ly/3SDoOwe
Chase Freedom Unlimited: bit.ly/3f7nDHs
Amex Blue Cash Preferred: bit.ly/3gLDnk3
Wells Fargo Bilt Card: creditcards.wellsfargo.com/bi...
Chase Business Ink Premier: bit.ly/3gyY56r
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#cashback #creditcard #robberger
ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
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Пікірлер: 120

@mrwelch2004 Жыл бұрын

Here's my lineup: Citi double cash, capital one savor (3 percent on restaurants, entertainment and groceries, Amazon prime (5 percent on whole foods and all Amazon purchases) discover rotating 5 percent, Venmo (top tier category pays 3 percent)

@antisocialDude Жыл бұрын

Thanks for outstanding work, Rob. Your reasonable approach is a much needed voice of reason here on YT

@mere_cat Жыл бұрын

Rob is great! He even answers emails if you have questions! Thanks you! So glad I found this channel!

@rob9990 Жыл бұрын

I use a similar setup for rewards, but this is my setup: Fidelity Rewards - 2% on everything, and can deposit right into a Fidelity investing account - no annual fee Amex Blue Cash - 3% on groceries - no annual fee Sam's Mastercard - 5% on Gas, 3% Restaurants, 3% at Sam's Club - no annual Fee (Do need to be a Sam's club member)

@BryanColliver Жыл бұрын

i use the fidelity card 2% back in to my account every month

@gracechristianschoolcypres3189 Жыл бұрын

EXACTLY!!! Great stuff right here.

@JoeSouth67 Жыл бұрын

Good info.

@louiswelrod Жыл бұрын

Great video. The Fidelity Rewards Card offers 2% on everything and rewards can be automatically deposited into your Fidelity account. For dining (you can choose a category, but it stays until you change it) I use a BOA Mastercard which gives 3% back on up to $2400 per quarter. I use the Chase Amazon card for Amazon purchases and Whole Foods (5% back). Finally, I use a CapitalOne Visa with 1.5% back for non-Amazon online purchases as it has "virtual cards" that provide more protection online. All my rewards are deposited into grandkids' college accounts. Up to 18 years growth can add up to a lot.

@zoamball2022 Жыл бұрын

I all ready took this strategy. We think the same way, lol. I just did the other preferred blue without the fee. Great video, makes me feel like my choices that am making are the right ones.

@LK_EBM Жыл бұрын

I recently got approved for the Bilt credit card! They gave me a $22k credit limit! And I get to earn easy points by paying rent!

@MrsFeatherbottom Жыл бұрын

Great video, Rob! Here's another setup that might be even simpler and avoids any annual fees (which can be difficult break even on if someone's only spending $40K/year): the Wells Fargo Active Cash + Wells Fargo Autograph. Autograph gets 3% on restaurants, travel, gas, transit, streaming, and cell phone plans, while the Active Cash gets 2% on everything else. Just two cards with a single bank and no annual fee. Only cumbersome thing with the Autograph is I think you have to redeem your points to offset card purchases instead of as a direct statement credit.

@briandadude Жыл бұрын

Forgo the Fargo.

@bigislanddriver300 Жыл бұрын

I think you can also deposit cash into a Wells Fargo account but not other banks.

@LogosBKC Жыл бұрын

By your logic why not just do Chase Freedom Flex and Unlimited, and if you want a 3rd card get the Citi Custom Cash? No Annual Fees, better multipliers and all redeemable as cashback.

@mlj_the_shield Жыл бұрын

Just found the channel and emailed Rob my strategy. This is a fantastic personal finance channel not based on theories but real-world practicality.

@ccrider8483 Жыл бұрын

Great video Rob, I guess I tend look at things in reverse because your video shows me how much the little nonessential purchases cost consumers over the long run. Credit cards do encourage us to buy things we probably would not take cash out of our pockets to purchase. One of the worst examples I can think of is the over-priced cup of coffee many have to have daily. Take that amount and calculate the amount generated if invested over 40 years. Yes, I do not drink coffee nor suffer any other addictions with the possible exception of being too frugal which I can live with. It seems many businesses are starting to charge extra for credit card transactions. I am sure the major cards raising their fees has had a lot to do with this and I suppose one could argue these extra charges nullify the advantage of paying by CC.

@OfficialChadsMoneyMinutes Жыл бұрын

I am a staunch advocate of spend optimization and this was a great breakdown for newbies to the world of points and miles. I literally hold every single card you mentioned in this video save the Citi Custom Cash. Keep putting the word out the savings and hedge against inflation are super valuabe!

@jtdockendorf Жыл бұрын

FYI - if you have an E Trade or Morgan Stanley account you can apply for a cobranded Blue Cash Preferred. Has a few more perks than standard BCP. I have both due to high grocery spend. Great Video!

@MarkUnique Жыл бұрын

For the Bilt card, the "cash redemption" option is 0.55% (not 1%), in the form of future rent payments (no cash-out to bank option). Plus it requires 5 monthly transactions, so if you already have credit cards doing better than 3% dining (e.g. US Bank Altitude Go, Citi Custom Cash), there will be some amount of lost cash back there. Just something to keep in mind when considering the card.

@vevenaneathna Жыл бұрын

100$/month is a lot of cash back.... meaning youre spending too much in my opinion (thats 5k/month on credit cards at 2% = 100$/mo). I know its assuming you have a small business, but most do not. really to get this kind of savings/cash back normally, you need to really play the game and sign up for about 3 cards per year, pocket the signup bonus' and build out the best possible 5% cash back setup. most people will not do this.... it takes a lot of time and tanks your credit score the first few years because ur average age of account and credit inquiries goes up. most people will find it much more easy to spend an extra 100$ per month since they have to meet the signup bonus spend requirements. imo, get 1-3 cc's, then once you can audit your monthly expenses for atleast 6 months, and see every single transaction you make, categorize it. then you can responsibly get more credit cards, select the most beneficial ones, and have the ability to track your life style creep over that period of time. if you dont have the self control to audit 6 months of your own finances, it is almost guaranteed you're of the impulsive majority and the game will play you. current setup is WF active cash, chase freedom, discover it, citi custom cash, abound cu plat., US bank cash+, chase freedom unlimited. (all no annual fee) 5% back on gas, grocery, restaurants, utilities, eBay, amazon, and gym/phone/internet/sporting goods ALL YEAR. 3% at pharmacy, 2% all else. I average about 2.5k per year, half from cash back, other half from signup bonus', and only spend about 2k/mo

@OroborusFMA Жыл бұрын

I combine bank signup bonuses with credit card cash rewards to feed a Fidelity account where I purchase dividend stocks. The goal is to create an additional income stream in retirement.

@larryb131 Жыл бұрын

I never thought about using these cash back cards as an investment vehicle to add the cash back to your portfolio. Very interesting concept. Your gonna spend that money anyway, and if your investing window is long enough, I can see where this could be big in the long run. Thanks Rob!

@hanwagu9967 Жыл бұрын

it's a ruse. you invariably will spend more buy chasing points and cash back, even when you try to convince yourself you are gonna spend that money anyway, that it negates the strategy. There is plenty of research into consumer behavior both in using credit cards and credit card rewards programs.

@nickdoyle-achievefinancial2464 Жыл бұрын

Sapphire reserve makes the freedom unlimited 2.25% on every purchase (if you redeem for travel or pay yourself back). Also makes restaurants 4.5% and freedom flex 7.5%. Even better you can redeem the ink ultimate rewards bonuses for 50% more. This is the primary setup I run.

@rob_berger Жыл бұрын

Yep, so long as you use it for travel through Chase.

@Omar-et7sb Жыл бұрын

Rob, I definitely would go with the M1 card. The rewards are a minimum of 2%, but sometimes more. But the BEST part is that the rewards go straight to my taxable 4-Fund Portfolio. Easy.

@aaront936 Жыл бұрын

I use the chase trifecta but I use the points for known travel expenses.

@mattchew4161 Жыл бұрын

Wells Fargo is simple. 3k in monthly bills = 60 bucks monthly. 720 a year in redemption give or take. Well worth it if used correctly

@terryadams1830 Жыл бұрын

Great video - Thanks Rob! Another card to consider is the Sam's Club card from Synchrony bank. It has no fee (other than Sam's Club membership) and gives you 5% back on gas (on first $6K per year) and 3% back on restaurants.

@terryadams1830 Жыл бұрын

All the cash back comes as an annual check, or it can be spent as credit at Sam's Club.

@vevenaneathna Жыл бұрын

about cu visa platnium just gives you a flat 5% back on all gas/gas station spending, all year round, and has extra rotating 5% categories every quarter. the cash back comes right off your bill at the end of the month, so you never see it and spend it on something else. only save it. it is one of the least well known card, 0$ annual fee, 15$ once in a lifetime creditunion fee. takes forever to get, basically like applying for a home loan. I got it in WA state, never even been in kentucy lol. rather not sit in line at walmart for hours and be able to use at any place with the cheapest gas. theres a website called gas...buddy... that can find you the best price.

@joevelasquez2757 Жыл бұрын

you got my attention

@OnCashFlow Жыл бұрын

I love cc churning for massive $$$ But there is a realistic limit per year for how many cards you can do per year. One of my "permanent" cards is the Walmart cash back card because it's 5% back for online orders at Walmart. I use Walmart+ for delivering all my groceries so it works out great for me.

@kevinmcnally3811 Жыл бұрын

My wife and I use 4 credit cards, but pay them off each and every month. Costco VISA (cash back from Costco and Citi Visa), Fidelity (cash back directly into our investment account), Amazon Prime (5% on Prime products), and Delta (miles and airline status).

@avstars Жыл бұрын

I would add a 5% rotating category card line Discover IT and chase freedom flex.

@mannymac82 Жыл бұрын

I agree that normal Amex cash out rate for points is terrible. But that is one of the reasons I am getting the Amex Charles Schwab Platinum card. That $0.011 cash out rate is very good.

@Bonez1999 Жыл бұрын

The wife & I use the Citi Custom Cash card x2 (one card each), and rotate the categories against the 5% back categories for the Discover It & Chase Freedom. This pretty much makes almost every category we spend money on 5% back. For example, this quarter: Discover It - 5% on Digital Wallet purchases (Android/Apple Pay) Chase Freedom - 5% on Paypal/WalMart purchases My Custom Cash - 5% on gas Her Custom Cash - 5% on groceries We try to use Apple/Android/Paypal this quarter whenever we go shopping for anything else... The Custom Cash cards are like a filler for the other cards and what they're 5% back aren't hitting.

@TheMuljo Жыл бұрын

Instead of the Unlimited, I'd go with the Freedom Flex since you get an additional 5% in rotating categories. IMO that's better than the 1.5% flat rate with the Unlimited which you wouldn't be using since you have a 2% card.

@poolking25 Жыл бұрын

only downside is a cap of $1500 per quarter with the freedoms

@poolking25 Жыл бұрын

freedoms unlimited would give you 3x dining and drugstores, 5x on travel for chase portal so these are great spending options for the specific categories only. Freedom flex is fine as well, I use that as well

@silver6054 Жыл бұрын

@@poolking25 If you aren't going to use the 1.5points (as he isn't doing transferring) the Unlimited has no advantage over the Flex, and the Flex 5x categories can be useful

@mooring10 Жыл бұрын

VISA cars:PenFed 5% for gas, bp 3% for groceries and restaurants, us bank 5% for utilities, and capital one 2% for all else. Pay all in full on auto pay. Challenge is to communicate which card for what to wife.

@joy2come119 Жыл бұрын

Do you have to have an account with Penfed credit union in order to be eligible?

@markmusto2527 Жыл бұрын

Sorry if I missed it,Rob, but how often do you recommend redeeming your points? Monthly? Yearly? Great stuff!

@richardcarlin1332 Жыл бұрын

Credit card for rent is cool. The only issue is my landlord won't allow credit cards. When I bought a car, I put $3000 on the card (the maximum amount) and got $30 cash back.

@rob_berger Жыл бұрын

I should have mentioned that the card works even if your landlord only accepts checks. From the Wells Fargo website: "Even if your property only accepts checks, you can still pay with your credit card through the Bilt app and we’ll send a check on your behalf."

@70qq Жыл бұрын

@richmurphy8144 Жыл бұрын

Nice video Rob, as always. Where did you get the 9% APY in the first calculator you showed here? Thanks!

@rob_berger Жыл бұрын

Just an estimate. An 80/20 portfolio has done better than that over the last 45 years. Of course, we don't know the future.

@GDUBLEY Жыл бұрын

Im invested in BofA cards. With their preferred rewards adding multipliers you can get 3.5% on all purchases. They also have a higher % category card to go alongside it. Granted you would need at least $100k invested with BofA/Merril to get the max benefit. But even at lesser tiers you can get at least 2.25%

@canyonoverlook9937 Жыл бұрын

I have 2 BOA cards. If you have 100,000 in Merril Lynch you can get 5.25 on the Cash reward card up to 2500.00 per quarter on travel. Or you can use the 3 percent for online, dining, gas. It's simple and cash back.

@rob_berger Жыл бұрын

I carry one of their cards, too, but as you noted, you need a lot of money at BofA/Merrill.

@canyonoverlook9937 Жыл бұрын

@@rob_berger Why not just move 100,000 over in kind from your Vanguard total stock market fund and let it sit there. That is what I am doing. you can get 1000.00 for each 250.000 you move over per account-ira, roth, brokerage because you are a current customer. You can get 400.00 if it is just 100,000 or 250.00 for non-current customers. You have to have a BOA checking for Preferred Rewards but you can 100.00 to open or more than that as a current customer for a certain deposit.

@canyonoverlook9937 Жыл бұрын

You can also get their 1.5 card for everything and then with the multiplier for 100,000 you would get 2.625 on everything with no annual fee or you could get the Premium Rewards card with a 95.00 annual fee but a 100.00 travel incidental credit. I don't know how much you travel. That has 2 percent dining and travel plus 1.5 on everything.

@myutoob2011 Жыл бұрын

Thanks for confirming my choices of Citi Double Cash and Amex Blue Preferred. Had them both for many years. Also have had a Discover card for 30+ years, 5% on rolling categories every 3 months. Lastly, for those that frequent Target, their Red Card gives you a 5% discount at checkout, no waiting for cash back. Also gets you free shipping.

@Tattooclownfish71 2 ай бұрын

Thanks I think 🤔 figured out how to pay my big bills with credit and I get the rewards from it again thank u not easy trying to save 40 grand I need 30 more 😂😂😂😂😂😱😱😱😱

@HB-yq8gy Жыл бұрын

Rob never mentioned Costco visa cash back. $60 annual with Costco gold 2 membership.

@aperson1181 Жыл бұрын

Rob the $30k that you mentioned at the end of the video, is this from the rewards accumulated over time, how long it took you?

@jomo4976 Жыл бұрын

Money is fungible - it makes no sense to separate out cash back from credit cards as a category separate from money saved (or earned) in other ways

@zekeboz5533 Жыл бұрын

Nice recap but I think the challenge is that it looks like these cards have a max limit on their cash back. For a family that limit is somewhat low, 6k on groceries... we spend that much in 4 or 5 months. Unless you start having separate cards (not added to the account) for each parental unit. I think a review on cards that have unlimited cash back would be better otherwise you will have to juggle cards in a single year. maybe wells forgo or BA .

@jtdockendorf Жыл бұрын

If you have an E trade or Morgan Stanley account you can get a second Blue Cash Preferred. I use this set up because I have high grocery spend as well.

@rob_berger Жыл бұрын

Most don't have a cap, but you are right, Amex Blue Cash does. The best grocery card beyond BCP will depend on where you shop for groceries.

@sharaf.6333 4 ай бұрын

How often do you cash out the credit card rewards to invest?

@jtdockendorf Жыл бұрын

Is anyone using a Fidelity Rewards straight into a Fidelity Go account? I was curious how streamlined the process is/could be, or if you had to manually do the investing yourself.

@NotTheRealJoker Жыл бұрын

I use a similar strategy with Charles Schwab. I use the Schwab Investor Card by AMEX which automatically deposits my 1.5% cash back into my Schwab Intelligent Portfolio. The process is streamlined and the algorithm buys ETFs automatically.

@jtdockendorf Жыл бұрын

@@NotTheRealJoker Thank you for the info. I have a Schwab Account, just not an Intelligent Portfolio at the moment.

@rapfreak7797 Жыл бұрын

I wonder how long it will be before the government starts considering credit card rewards as ordinary income.

@zekeboz5533 Жыл бұрын

Shhhh…. 🤫

@aaront936 Жыл бұрын

They do consider referral bonuses as income.

@sullivan1ist Жыл бұрын

Would you throw any capital one savor cards in there?

@frankekpu1270 Жыл бұрын

How do i create an account on Cashback

@hulenbryant5637 Жыл бұрын

Not sure if it’s every card, but Bank of America has a 3% on gas charges.

@taco5467 Жыл бұрын

Quick question how do you get the apy to 9 percent ? In the beginning of the video

@taco5467 Жыл бұрын

How do you get 9 apy ?

@trapcracker Жыл бұрын

Rob, why Citi Double Cash over the Fidelity Visa? It is 2% cash back immediately and it automatically goes into your brokerage to invest. It seems that’s the goal with this video. Thanks!

@rob_berger Жыл бұрын

They are both great. Citi Double is paying a signup bonus. Not sure about Fidelity. Also, Fidelity is ideal if you have a Fidelity account. But you don't need it to invest your rewards. I just do a transfer once a month.

@mmactc Жыл бұрын

@Rob Berger Rob what about the Fidelity 2% back credit card if you open an account with them you could easily invest with their excellent investment products?

@markjoseph2801 Жыл бұрын

I thought the same. But the Fid card has a minimum before they will transfer the money to your account. It's a game. Check again to see if it changed. You have to hand it to the Chase card with Amazon. If you earn $10 they immediately credit. Good luck

@mmactc Жыл бұрын

Perhaps you’re right about that. But I believe if you put it into say a Fidelity cash management account or a brokerage account it goes in immediately which would allow you to invest in ETF or stocks this would be doing what Rob suggested. Naturally you’d have to invest with Fidelity but I think it could simplify things as long as you are ok with Fidelity.

@rob_berger Жыл бұрын

Yes, it's a great option.

@thoryan3057 Жыл бұрын

I currently have just one card that gives me 1.5% on everything. If I applied for a second card in the near future, would Citi Double Cash be better or would Citi Custom Cash be better? Citi Custom Cash pays 5% on up to $500 in your top spending category and 1% on everything else. My top spending category is usually groceries, which is over half of my credit card usage but usually less than $500/month. I want to get the Citi Double Cash *eventually* in my lifetime but want to spread out when I get each new card. I feel like the 5% on up to $500/month on groceries would payoff more than an extra 0.5% on an everything card.

@rapfreak7797 Жыл бұрын

I have the custom cash card just for groceries, it’s a great card.

@juanserrano3297 Жыл бұрын

Put the money in an M1 finance account.

@InBrz 15 күн бұрын

THE PROBLEM with the AMEX card is that they DO NOT INCLUDE food club stores like Walmart, Sam's, Costco etc in their 5% discount 1% with BILT isn't even worth my time, it's a joke

@wdeemarwdeemar8739 Жыл бұрын

I will take 800 per year… happily.

@larryTX415 Жыл бұрын

Dave Ramsey has left the chat.

@gregarnet Жыл бұрын

9% yield is super difficult to get. Maybe 5% average.

@-mr3puttz-310 Жыл бұрын

Walmart has a 5% back for Walmart buys

@rob_berger Жыл бұрын

A good card for Walmart shoppers. Target, the warehouse clubs and Amazon each have similar cards.

@JoeSouth67 Жыл бұрын

Dave Ramsey had his 15 minutes. He is a rude know it all. He doesnt listen.

@randolphh8005 Жыл бұрын

Credit cards are only good for people that are VERY disciplined, detail oriented, and financially solvent. And be honest with yourself! Otherwise you will pay fees, and spend too much. After all that is how the CC companies make money. One late payment costs big bucks! Lots of purchases easily put you over budget without realizing it. The interest rates are astounding! We now use them correctly, (although still have to worry about overspending)but not so when we were young. I have elderly parents that still carry balances! The psychology of the free stuff is created to suck people in, and confirmation bias allows us to remember the “freebies” and “forget” the fees or the late payment, or “I will pay it off next month”

@InBrz 15 күн бұрын

EXACTLY, WHO wants to spend all their spare time dealing with that bullshit ? NOT ME, 3-5 % is NOTHING, MY TIME IS WORTH MORE !

@unclemiketrader Жыл бұрын

With american exprees card are groceries at r walmart considered a supermarket for the 6% reward?

@EwaRuiz Жыл бұрын

No, but you should look into the new U.S bank Shoppers Card for Walmart 🔥

@InBrz 15 күн бұрын

Capital One for Walmart

@dylanyoung7315 Жыл бұрын

Oh 😊

@okrajoe Жыл бұрын

Aha, over 45 years!

@rob_berger Жыл бұрын

Your mileage may vary.

@howardfriedman7077 Жыл бұрын

Gee, didn't Dave Ramsey say all credit cards are bad???

@robertw477 Жыл бұрын

I actually know a better one that pays 3% cash back on everything and 5% on groceries and fitness. Unlimited BTW.

@unclemiketrader Жыл бұрын

What is that one?

@adamduvick Жыл бұрын

You should tell us what this card is unless you’re trying to just make everyone jealous of your perks.

@claricehirata3303 Жыл бұрын

Is there an annual fee?

@thehylander266 Жыл бұрын

Capital One savior one has 3% cash back and no annual fees.

@briandadude Жыл бұрын

Annual Fee $95

@thehylander266 Жыл бұрын

@@briandadude Hmm. Weird. Mine doesn’t charge one yearly. Maybe it’s something new they added to the newer ones. Oh well. I get over $150-$300 per month back so still well worth it to me.

@jesslai8363 Жыл бұрын

@@briandadude that’s the savor. Savor one is the free one

@briandadude Жыл бұрын

You’re right. Savor one only gets 3% on certain categories

@taserpulse Жыл бұрын

Looks like you tried very hard not to say "financial planning" again this time.

@scott1441 Жыл бұрын

You don’t mention the fact that using a credit card at a restaurant and a gas station, for example, cost more (added surcharges) than when paying in cash. I will only use a credit card if there is no other alternative. Credit cards users will run up more debt because there is no initial feeling of a monetary loss when using a plastic card compared to cash paying individuals .

@adamduvick Жыл бұрын

These added surcharges for credit cards is definitely something to be considered, but not every gas station or restaurant has those (especially in my area). As for your second point, they is likely true for immature spenders. But once you learn to pay off the cards regularly & in full, it becomes a non-issue. And even if I wasn’t using a credit card, I would still be using a debit card instead of cash 99% of the time. It’s much more convenient.

@aaront936 Жыл бұрын

Your body can not differentiate between your debit card and your credit card.

@hanwagu9967 Жыл бұрын

@@adamduvick those who market a fee, are just trying to get you to buy from them. In reality, all businesses account for the transaction fee in one way or another then pass on the costs to the customer. Hogwash about immature spenders. The psychology in using credit cards is well researched, as is the whole reward incentive system based on gambling. By the simple fact you say once you learn to pay off credit cards in full is actually the wrong perspective. It is about spending not about paying the card in full. Credit cards are designed to get you to spend more.

@mariusfacktor3597 Жыл бұрын

It's a shame that credit cards made it so that merchants need to charge ~3% more for everything. People who get credit card rewards don't mind but people who don't qualify for credit cards are made to pay more. It's messed up.

@stevedice5963 Жыл бұрын

The Charles Schwab amex trifecta is the best way to cash out amex points. You get a higher rate cashing out to the brokerage account than just using points to pay off your credit balance