Tuesday, May 30, 2023

I’m a Credit Card Deadbeat: You Can Be One Too!

I am happy to say that I am a credit card deadbeat! In fact, some of you may already be credit card deadbeats, if so, I commend you on your excellent work! Now, for those of you who don’t know what a credit card deadbeat is, before you start thinking that I have a screw loose, you may want to keep reading!

When I say I’m a credit card deadbeat, I don’t mean I avoid my credit card bills. In contrast, credit card deadbeat is an insider term used by credit card company executives and refers to all credit card users who pay their bills promptly each month; In doing so, such customers do not pay any interest and prevent the creditor from making any profit! That’s me! I love being a credit card deadbeat!

The alternative to being a credit card deadbeat is what credit card executives call a revolver. A revolver is a credit card user who constantly carries a balance and is charged regular, monthly interest on their charges. Credit card companies love revolvers because they, in essence, increase the bottom line for the credit card company and make them a nice profit. Furthermore, from an insider’s perspective, the best customers not only carry a balance but are late on their payments, triggering additional fees and higher interest rates.

OK, so I’ve been a credit card deadbeat for a while, but last year I went even further in improving my deadbeat ways. Not only did I hang onto my hard-earned cash by refusing to line the credit card companies’ wallets, but I happily filled my own wallet with $1,402 worth of money. Yes, that’s right, they charged me $1,402 for using their card; Keep reading to find out how!

cash back credit card

First, I applied for the cash back credit card online and got instant approval. My new cash back credit card arrived at my home the following week, ready for me to use. This card offered me 0% APR for 12 months and no annual fee; With it, I make all my gas purchases, as well as grocery and drugstore purchases, and earn 5% cash back on gas purchases and 1% back on all other purchases. I have a family of four and my gas purchase includes gas for my husband’s car. My average monthly purchases and cash back earnings were as follows:

Monthly gas purchase $325 x .05 = $16.25

Monthly grocery bill $1,200 x .01 = $12.00

Monthly drugstore purchases $160 x .01 = 1.60

Total cash back earnings from credit card $29.85 x 12 = $358.20

airline rewards credit card

I also applied for an airline rewards credit card and again got approved instantly online. Like cash back credit cards, my new airline rewards credit card arrived next week, came with a 0% introductory APR for 12 months and no annual fee. This credit card earns 1 frequent flyer mile for every $1 charged.

I’ve charged many of my miscellaneous expenses, including major purchases and business expenses, onto my new Airline Rewards Credit Card. As a result, eligible spending averaged $2,250 monthly or $27,000 per year, earning 27,000 frequent flyer miles, more than enough for an airline ticket to Hawaii: $500 worth!

0% Introductory APR for 12 months

Now here’s the kicker. Since both credit cards came with 0% introductory APR for 12 months, I paid only the minimum payment on each card and put the money for my purchases into a savings account earning 2.5% (rates have gone up). Using the average for simplicity, I made 12 monthly deposits of $3,935 in a savings account and earned 2.5% compounded monthly. By the end of the year, I earned $544 in interest!

my total credit card income for the year

So here is my total earning from cash back credit card, airline rewards card and interest earned.

Cash Back 12 x 29.85 = $358

Free Airline Ticket $500

savings account interest $544

Net Earnings $1,402

Just to make sure I keep up my deadbeat ways, now that the 0% introductory rate is gone, I pay off my balance with money I’ve accumulated in my savings account over the course of the year. It takes persistence, determination, and discipline to become a credit card deadbeat. I did, and you can too!

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