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Are you a “deadbeat”?

EvanOkanagan

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Deadbeat is a slang term for a credit card user who pays off his or her balance in full and on time every month, thus avoiding the need to pay off interest that would have accrued on their accounts.

Disclaimer: This will not help you move you to the “Fastlane”. However, it could be one of many good habits to implement to set you on the right track financially (if you have the discipline).

———-

Should you cut up your credit cards? Freeze them? Or can you create the discipline and get PAID for having them?

I’ve literally made thousands of dollars over the past few years from VISA and MasterCard even after my annual fees. Last year alone I was paid $713.52 by Visa. I am considered a “deadbeat” in their eyes for sure.

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I’m constantly looking at ways to earn a higher yield on my investments, cut expenses, and get free stuff! Who else is utilizing this strategy?

I have a few different cards, and I strategically use them for certain purchases below.

Here’s my lineup and how I utilize it (I’m in Canada btw):

Scotiabank Visa Infinite Card ($99/yr):
-
4% cashback on gas, grocery
- 2% recurring bills & drug stores
- Lots of travel benefits ( Ex: when I went to Spain last year, I got free car insurance that otherwise would have been about $500 for the trip. Another trip to Europe my baggage was delayed and I had a $1,000 shopping spree that was reimbursed by Visa and my luggage came a day later).

Tangerine Money Back MasterCard (free):
- 2% back on restaurants, coffee shops & renovation supplies (Home Depot, Rona, etc)

TD First Class Visa (free w/ being a TD customer):
- 1.5% earn rate
- 4.5% earn rate anytime I book travel on Expedia (which is quite often)
**I use this on all categories outside of the categories I listed on the two above credit cards (as my earn rate is less than 1.5% on outside categories)

Scotiabank Business Visa Infinite Passport (for my Real Estate biz)
- I mainly use this as I need a biz card and I get free lounge visits at airports which the above CC’s don’t cover
- 1.5% earn rate on all biz expenses



Any other “deadbeat”s out there?
 

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ChrisV

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LightHouse

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Yes, been doing this since @Jill used to give talks on it. I don't use multiple cards though, mostly just SPG/bonvoy AMEX for both business and personal
 

YoungPadawan

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I've had good luck on with the 2% Citi double cash card for personal, and then the 2% Capital One Spark Business card for my biz. Nice extra money to play with.
 

G-Man

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I use a 2% fidelity for personal. For Amazon inventory I use 4 rewards cards, got the statement closing dates changed so I’ve got one card closing every week. I purchase inventory every week with that weeks card, so I have approx 45 days of float on every purchase.
2-3days to get inventory
10 days to get to amazon and work through all the FC transfers
20 days to sell through
10 days to next payment settle
= always paying credit card in full with Amazons money
 

amp0193

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Attempted this, did pretty well for a while, then when life got crazy, it got out of control.

Even when I knew I was just gaming the system, and trading dollars I was going to spend anyways for airline points... i found that it was a little too easy to just swipe the card for every little thing, knowing I could worry about paying it later.

Worked ok until I got into a spot that was tighter than I realized, and I couldn't pay the CC bill. Still playing catch up on that.

Over time, I think it's definitely cost me more than it's gained me.

No, I didn't have the discipline, and most don't. Which is why the cards exist.


When I've got everything paid down, I'll be switching to only debit cards and paying cash for everything.
 

minivanman

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My buddy owns a very large vending company. I forget what % he said, but he said since he changed his machines to take a credit card (several years ago), his profit went WAY up. That's like if I go shopping for shoes with cash, if I can get out of the store for $50 cash then I'm squeaking out of the store but if I was using a credit card..... well, the $50 pair is good but I really like this $120 pair so let's get it and I'll just pay the card off at the end of the month.

Now mind you, I can afford the $120 pair BUT if I would have been using cash I would have only spent $50.

I've never owned a credit card but my wife did and this is how I felt sometimes when we would go to the store. Or even on Amazon I feel this way. I have a rule, I can not order on Amazon for 48 hours after I choose the product. I can buy lots of crap on Amazon, I try to stay clear and this is why. Affording it isn't what it's about, buying more than what you would have with cash is what it's about.
 

EvanOkanagan

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Yeah, if everyone worked the system there wouldn't be any rewards cards out there!

I'm a fairly organized guy, so I always get these paid off before any interest accrues (which is key to doing it). Also, on all my cards I have the minimum limits (5k usually) so it can't get too out of control.

If what you're spending it on is what you'd buy anyways, then you're essentially getting an annual return (1.5-4% in my case). Plus some pretty great perks to boot.
 

theag

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Maybe I should do some research on this. I put around 30-50k/month on my Amex Platinum. Unfortunately my main suppliers don't take credit cards or it could be much more...

Its paid off in full automatically every month. We don't really have a lot of revolving credit cards here.

I do it just to collect the membership rewards points, because direct debit on this stuff would be easier, and have around 1 million points now. I think the best return on them is flight upgrades, but I don't really have a need to fly right now, so they are just collecting dust in my account...
 
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Kak

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I have Chase ultimate rewards cards for each company. Some suppliers allow for credit card payment, most will charge fees and make it pointless.

I transfer them all to my personal card, I get 1.5x the value on my points when I book hotels. So it amounts to about 2 weeks of 5 star travel for me and my wife per year.

I don't make it complicated, I just use my one card for everything personal and the business card associated with the transaction.

Among other things, I get a $300 travel credit per year. That just automatically reimburses me for anything in the travel category.

Memberships to Priority Pass Select and United Club.

I am also emerald whatever at national where I can choose any car if I book an overpriced midsize.
 
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becks22

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@StompingAcorns since you were thinking about switching cards.
 

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MJ DeMarco

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Been a deadbeat for a few decades...

Most of my Amazon purchases are FREE because I've connected Amazon to my Chase Sapphire reward points...

My Citibank cards are tied into Costco, so I get 4X rebates on all gas, 2X points on dining out and Costco purchases.

I rarely pay "cash" for anything and use my cards for all transactions whenever possible. In fact, the cash that is sitting in my wallet has probably been sitting there collecting dust for nearly a year.

Of course this doesn't work if you let the balance revolve and accrue interest. Miss a month or two and all the benefits go out the window in the form of interest.
 

Veloman

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I am. I never understood why people have such a hard time with cc debt. I guess it goes along with living paycheck to paycheck which I also can't imagine.

Like Gary v says, 'eat shit' until you get on top of things.
 

The-J

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I am. I never understood why people have such a hard time with cc debt. I guess it goes along with living paycheck to paycheck which I also can't imagine.

It's pretty easy to end up in credit card debt. One bad month could leave you in 20% APR purgatory for quite some time. And that's assuming you're responsible.

People who take credit cards for granted and don't put any effort in curtailing their spending end up in a downward debt spiral, even when things are going well.

Credit cards are designed to take advantage of the basest elements of consumer psychology. When you pay for things with a credit card, the effect of the purchase is quite literally less real. Not only that, but people are terrible at mental accounting, so they think they can afford something when they can't. People who use credit cards responsibly don't buy very many things outside of their normal purchases, and they make enough money to cover their normal purchases anyway.

If you don't (1) live within your means (the amounts barely matter), AND (2) keep your purchase behavior relatively consistent, you're more likely than not to end up with credit card debt.
 

Fassina

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Just sign up for automatic debit, your bank will just pay it off automatically for you.

That's what I do, no need to waste time going to the bank to pay a credit card bill..
 

ecommercewolf

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Haven't paid for a flight in the past few years with points I've received through buying Amazon inventory on various cards.

If you're responsible it's really not that hard to pay them on time.
 

SkyLake

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I see this as a tactic for Slowlaners, not Fastlaners.

As a Fastlaner, I'm thinking about how to make an extra million this year. Not how to cashback $700 from a credit card. I would never waste my limited amount of time and energy for something like that, when I could use it for something bigger and better.

Of course.. if you are a beginner and live month to month, it may help you in the short term.
 

EvanOkanagan

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I see this as a tactic for Slowlaners, not Fastlaners.

As a Fastlaner, I'm thinking about how to make an extra million this year. Not how to cashback $700 from a credit card. I would never waste my limited amount of time and energy for something like that, when I could use it for something bigger and better.

Of course.. if you are a beginner and live month to month, it may help you in the short term.

Lol, you're right, most of the people posting in here must be living month-to-month and on the Slowlane path.. :rofl:

How many millions have you made this year, "Fastlaner"?
 

spreng

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I compulsively pay off my credit cards about every 10 days. I can't stand owing anybody money. I think i've milked just about every sign up bonus there is too lol.
 

Consolation

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I see this as a tactic for Slowlaners, not Fastlaners.

As a Fastlaner, I'm thinking about how to make an extra million this year. Not how to cashback $700 from a credit card. I would never waste my limited amount of time and energy for something like that, when I could use it for something bigger and better.

Of course.. if you are a beginner and live month to month, it may help you in the short term.
Check Unscripted Chapter 42.
 

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SkyLake

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Lol, you're right, most of the people posting in here must be living month-to-month and on the Slowlane path.. :rofl:

How many millions have you made this year, "Fastlaner"?

I said my opinion on the matter.

No need to get defensive when you could've just disagreed and then made a better case for your argument.
 

EvanOkanagan

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I said my opinion on the matter.

No need to get defensive when you could've just disagreed and then made a better case for your argument.

I wasn't being defensive, I was being sarcastic.

I do agree with you that focusing on making more money is the #1 priority for creating wealth.

This strategy, however, is about gaming the system to essentially "earn a return" back from money that will be spent regardless. I earn anywhere from 1.5-4% on all of my purchases that would have otherwise earned me 0%. The "time and energy" it takes me is literally a split second to decide which card works best for that purchase.

Furthermore though, I believe in the bigger picture this is also about creating a habit to constantly look at how you can maximize returns in every aspect of your finances.
 

BradD

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In my last business (textbooks), used to buy all inventory from Amazon on a CC, then use a points broker to re-sell the points. These buyers will typically take over your account to buy flights for their clients on your account. I believe I was getting ~1.5 cents/pt usd (being Cdn the USD was key..). At the peak I was selling points worth $25-30k/yr, something to think about if you’re buying a lot of inventory on cards (obviously research the tax consequences).
 

SteveO

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I wish they would stop doing the cashback/rewards programs. It just makes doing business more costly for the vendors. There is definitely a trend in my local area to charge more for credit card transactions. Checks are coming back.

I used my chase rewards to book a flight recently. A few days later, I wanted to make a change in the time both coming and going. They wanted to charge me $150 per ticket or $300 total. I was still 7 weeks away from my flight date.

We certainly are deadbeats. I just don't care for the scam. It is like the windshield repair companies. No deductible…. Free pack of steaks...
 

SkyLake

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I wasn't being defensive, I was being sarcastic.

I do agree with you that focusing on making more money is the #1 priority for creating wealth.

This strategy, however, is about gaming the system to essentially "earn a return" back from money that will be spent regardless. I earn anywhere from 1.5-4% on all of my purchases that would have otherwise earned me 0%. The "time and energy" it takes me is literally a split second to decide which card works best for that purchase.

Furthermore though, I believe in the bigger picture this is also about creating a habit to constantly look at how you can maximize returns in every aspect of your finances.

To each their own. Personally, I associate rewards system and things like this with being stuck in a job I hate, so the only way to make more money is gaming the system with reward systems, cash-backs, coupons, etc. Also, these companies usually are not very happy giving out money.. they always take extra time and effort from you.

Why not game the system in a way that can actually change your life? Game the system by providing value to the marketplace yourself, instead of providing value to an employer.

I respect your choice though. If all it takes you is a split second, then might as well. Extra cash never hurt anyone.
 
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EvanOkanagan

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Why not game the system in a way that can actually change your life? Game the system by providing value to the marketplace yourself, instead of providing value to an employer.

What would you suggest?
 

EvanOkanagan

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Also, these companies usually are not very happy giving out money.. they always take extra time and effort from you.

Are you actively using this strategy and this is from experience or just from what you've heard?

-My Scotiabank cash back is auto deposited into my checking account without me lifting a finger (annually).
-My rewards with TD for Expedia are uploaded on the TD Expedia site and available whenever I want them.
-My cash back with Tangerine is auto deposited (monthly) into my checking account.
 

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