As many of you know, I am a huge fan of getting things for free. Especially valuable things that would otherwise be very expensive. Since October 2013 I’ve purchased the following and spent a grand total of about $50 in taxes:
- 2 trips to Grand Cayman;
- 4 trips to Puerto Rico;
- 2 trips to El Paso;
- 2 trips to Denver;
- 8 nights in 4-star hotels, and more.
I do this by leveraging credit card signup bonuses and other offers that can be done for no (or very little) money. Combine those bonuses with some other handy (and completely legal) tricks and you’ll earn points faster than you can use them and not spend extra money – maybe a few bucks here and there – doing it. The redemptions above amounted to about $7,000 in value and constitute a fraction of my overall earnings so far.
What I’m sharing today is basically a fusion of a Free Stuff 101 course plus a current offer you can take advantage of that will cost you $0 and get you $900 in free travel or $400 in cash.
In the interest of full disclosure, this post was prompted by Chase offering me money for referrals using the link below. But I have also benefited immensely from these cards and have no reservation about personally endorsing it to my friends and family (and already have to many of you even when I was not being compensated.)
The gist of today’s offer is simple. You sign up for a Chase Sapphire Preferred credit card, which is free. You spend at least $3,000 over the first 3 months of card membership. (If you can’t spend $3,000 in 3 months, I can show you a way to get around this.) Chase then gives you 40,000 in Ultimate Rewards Points (worth $800). You can also earn an additional 5,000 points (worth $100) by adding an “authorized user” (could be anyone) and using that secondary card at least once (also free.)
Why are Ultimate Rewards points valuable? Because Chase has partnerships with Southwest, United, Virgin, Hyatt, Marriott, InterContinental, Ritz-Carlton, and several other partners to transfer these points into whichever loyalty program you want at a 1:1 ratio with no fees. Chase will also let you convert these points into straight-up cash at $0.01/point. But since all the loyalty programs’ points have higher valuations than $0.01/point (Hyatt and United points are worth about $0.02/point and Southwest is worth about $0.018/point), you get the biggest return if you don’t cash them out but use them. (United, for example, will fly you to the Caribbean and back for 35,000 points.)
What’s the cost? Nothing. Seriously. Chase normally charges $95/year for this card but right now they’re waiving that fee for the first 12 months. Nothing stops you from canceling in 2-3 months after you get your points or enjoying the card for 11 months, or downgrading it to the regular Chase Sapphire which has no annual fees ever. That said, I personally plan on keeping the Preferred indefinitely since I get way more than $95/year in benefit from it.
What are the other perks of this card? There are many great things about it, which are the reasons I’m willing to pay $95/year for it. (That said, if you call at 11 months to cancel, they’ll usually waive the fee for you another year.) Here are some of the coolest features:
- The card is partially made of metal, which is kind of awesome.
- It includes a free concierge service who will book things for you, do any research you ask of them, etc. I use these guys all the time for a huge variety of things.
- Extended warranty protection that doubles the manufacturer’s warranty on everything you buy. If it breaks out of warranty, Chase will pay to have it fixed or give your money back.
- Purchase protection. If you buy something and lose/break it within 90 days, Chase will replace it or give your money back.
- 2x points on all forms of travel and dining – this is basically like getting 4% back every time you eat or travel and having that applied to whatever travel you want.
- No foreign transaction fees if you use the card overseas.
How is this possible? Who wins and who loses? Chase is paying out a ton of money in free points/cash in hopes that you will use this card on an ongoing basis OR that you will be irresponsible with credit and end up paying them a bunch of interest fees. MANY people don’t know how to use credit responsibly and the latter (and most profitable result) ends up being the case. So if you don’t pay off your credit cards every month and end up carrying a balance, YOU lose. However, if you are responsible and pay your credit card bills off in full, Chase still makes money off of the places you shop. When you use your card, the store pays a 2-3% fee to Visa, a fraction of which goes to Chase. Again, Chase’s hope in this case is that you end up using the card long-term and that they can rack up merchant fees from the places you shop. If you are profitable as a customer and ask that they waive the $95/year annual fee after your first year, they will often do it because they are just happy to have you using the card. In this scenario, there is no clear “loser” other than the other potential banks whose credit cards you would otherwise be using.
By the way, I’ll say this here since many people don’t know: If you are using debit cards or cash for your major purchases, you are leaving SIGNIFICANT money on the table and also missing out on valuable options such as the ability to file chargebacks and use some of the aforementioned benefits that come with credit cards like this one. Even things that don’t accept credit cards (e.g. your rent/mortgage/auto payments, property taxes, etc.) can be charged to a credit card using certain (totally legal) tricks. It adds up FAST.
Qualifications: You must have reasonable credit to qualify for this card. Whether you get the card or not, it’s still a hard pull on your credit. Not a big deal if you aren’t buying a house in the next 18 months but just something to be aware of. If you haven’t had any bankruptcy, have at least some credit history (e.g. other cards or student loans) and have always paid your bills on time, you should be okay.
I’ve disabled comments on this post but if you have questions please ask on my original Facebook post about this.
To apply use this link: https://applynow.chase.com/FlexAppWeb/renderApp.do?PID=CFFD2&SPID=F9BR&CELL=VB1&MSC=1511675322 (Expires August 31, 2014.)