The Day of Reconciliation

I discovered rewards credit cards almost two years ago. In case you haven’t heard of them, they’re these nifty little pieces of plastic, where if you use them to spend money, they’ll give some of the money that you’ve spent back to you.

Usually this money is on the order of 1-2%, but there are some cards that offer 3% back in some categories, and I’ve seen cards that go up as far as 5% in rotating categories, or even higher if you have exceptional credit scores.

I fell into the trap of wanting to maximize how much money I was getting back in rewards. I subscribed to a travel card, a gas card, an Amazon card, and several others. However, because I like to reconcile my accounts with my family’s budget, keeping track of over a half-dozen accounts was requiring a lot of time every week. More time than I was okay with.

Reconciling Credit Cards

Enough was enough. I went online and did a bit of research and found a card that would be all around solid. I found it in the form of the Citi Double Cash Card, which really has quite nice features you should check out on their website. Once I found this card, I simply put all my other cards in a ziplock and hid them in a drawer. I changed all my online accounts to bill my new card, and called it a day.

Well, all cards except for one. There exist some credit unions in the USA that give you 5% APR (which is actually 4.889% APY) if you make at least 12 transactions per month on their debit card. It essentially works out as a rewards card, but it gives you FAR greater rewards than any other credit cards if you know how to game it correctly.

Still Earning 5% On My Checking Account

Credit Card purchases incur transaction fees. These might vary a little bit, but they’re the reason why sites like Paypal charge you extra to use your credit card. Paypal’s credit card transaction fees are $0.30 + 2.9%.

Credit Unions that give you high APR on checking accounts if you use your debit card as a credit card are giving you the transaction fees back…mostly. They hope that they can earn some more revenue if they incentivize you to get them more transaction fees. So if you make 30 transactions per month, totalling $600, the transaction fees are (30 * $0.30 + 2.9% * $600 = $26.40). In an account with $5000 with 5% APR, you wind up getting around $20 of those transaction fees as dividends each month.

The nice thing about it though, is that you get the $20 even if you don’t generate $20 in transaction fees. The only requirement (at least at my credit union) is an ACH transfer each month and 12 credit card payments.

The common solution that I’ve seen is to buy a bunch of $.99 Amazon cards, but once again, this ends up being a lot of work and that’s what I’m trying to move away from. Instead, I’m setting up 12 recurring purchases of Bitcoin per month. The smallest purchase I can make is $1.15, which gets me $1 in bitcoin, and $0.15 goes towards transaction fees, but I figure this is a fine way to pay $1.80 in fees and get $12 in digital currency, and $(20-12) in interest each month.

The best part is there’s a crepes and pasta place down the road where I can use this $12 to literally buy a free lunch in Bitcoin.