Credit Card Case Study – Discover It
Credit card hacking made easy!
So there is a little secret… Credit cards can actually be great! This goes against what we have talked about in regards to using credit. This is an advanced technique that should only be used when you have no other credit card debt AND you will be paying off your card in full each month.
Once my wife and I were able to pay off all of our credit card debt, I thought I would give this credit card hacking a shot. I had done some research and thought I would try a cash back card first. The first card that I decided to try was the Discover It card. The card will match 1% of everything you spend on it. It also has quarterly categories that will match 5% of your spending.. Sometimes the categories are great. One of the quarters was 5% on grocery stores. The catch is that you have to make sure that the store is listed as a grocery store or supermarket in the “Credit System”. For example, if you shop at Wal-Mart or a Super Target, they are not listed as grocery stores, so you won’t get the 5% match there even if you are buying groceries. I did my grocery shopping at Hy-Vee for that quarter to get the match. Some quarters I didn’t use the 5% at all. This quarter is gas stations, Uber and Lyft. I don’t use those categories, so I don’t get the benefit.
Now for the BIG benefit. After one calendar year, they will match 100% of the cash back that you earn! Finally! Earning some money back from those companies that I’ve paid so much interest too over the years.
Let’s take a look at our numbers below.
Money Spent on the Card - $33,683.98
Cash Back Earned $437.59
Cash Back Matched$437.59
Total Cash Back $875.18
Cash Back Percentage 2.6%
That’s not a bad return on money that I would be spending anyways. We used the card to pay anything that would allow us to use a card. Electric, phone, grocery, insurance, etc.. One of the big things that you need to be careful of is to not increase your spending just to get more cash back. There is no amount that is “required” to earn cash back, so only purchase items that you would get anyways.
I would say that this card was a resounding success for us! I will be getting that $875.18 check from Discover in a couple of weeks and will be salting it away in my Vanguard Investment account. Now I will keep this card, but I will only use it for the 5% categories. I will be using my next card in my case study, the Chase Sapphire Preferred. This is a travel card!
Keep Stackin!
