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9.30% cashback on everything!
Whether you’re looking to maximize point redemptions or cashback, I'm about to blow your mind with a strategy that I've been using to get 9x+ on all my ordinary spend. The best part about this strategy is that the only prerequisite is a single card.
Reminder
Before we get into it, a quick reminder that I see credit cards as a tool: a tool for earning points or cashback, a tool to give yourself 30+ days of interest-free loans (float) before payments are due, a tool to help you make the most of your hard-earned money. Credit cards are not a crutch. If you have a tendency to overspend or cannot afford to pay back your bill in full each month, I wouldn’t recommend continuing.
Ask a credit card enthusiast what they’re optimizing for, and you'll usually get one of two answers:
Cashback
Travel rewards
While I sit squarely in the travel rewards bucket, this strategy is presented as cashback but if you have an existing Chase Ultimate Rewards card, you can redeem 5% as travel rewards
The only card required
To get started, you only need one card, that card is the Chase Ink Business Cash® Credit Card. It’s important to note that there are multiple cards in the Chase Ink portfolio, yet this strategy only works with this card.
Ink Business Cash® Credit Card
Ink Business Cash comes with a 75,000 point signup bonus that is often marketed as “$750 cash back”. Note that if you have another Chase Ultimate Rewards card you can combine these points to be used for travel.
Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year.
Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year.
Earn 1% cash back on all other purchases, with no limit on how much you can earn.
No annual fee.
5x at office supply stores
The key here is 5x at office supply stores. For the uninitiated, that will sound odd… office supplies? Yes, office supplies. Stores like Staples and Office Depot offer pens, paper, printer ink, and gift cards. If you haven't guessed it, our focus is gift cards, specifically the unbranded gift cards from Visa or Mastercard that go on sale every few weeks. The cards are available in multiple denominations, but the $200 cards are the only ones I’ve consistently seen go on sale. Outside of a sales period, the cards have a $6.95 activation fee, but that fee is removed during sale periods. At which times you can purchase up to 8 cards ($1,600 of gift cards) per day. Since these sales typically last for one week at a time, you should be able to buy up to $11,200 of gift cards assuming there’s a Staples nearby. These cards can be used wherever Visa or Mastercard is accepted, we typically use them for groceries, gas, flights and other regular spend.
A business card?
Wait a second, don’t you need a business to open a business credit card? Yes, you need a business, but a business doesn’t have to be a publicly-traded mega corporation. You don’t even need any employees. A business can be an existing side hustle, a new venture that you’re planning, or a way to formalize something like selling clothing on Poshmark, driving for Lyft, or consulting outside of work hours. Perhaps you’re simply creating a blog, like this one.
Creating a business
First, you’ll need to hire an accountant, a lawyer, and a financial planner… just kidding. Most banks understand that you may just be getting started with your business and financial fundamentals like a credit card and checking account are the building blocks to help you kickoff. While you can apply to business credit cards as a sole proprietor, you may consider registering your new business with the IRS in order to get an EIN, an Employer Identification Number. Similar to a social security number for a company, the EIN is free to register, and assuming you’re registering as a single-member LLC or a sole proprietor, it does not have any impact on your tax filings. All that being said, I'm not a financial, legal, or tax advisor, and none of this should be taken as professional advice. I would advise you to continue due diligence on your own.
You've formed your business, so what's next?
Well, now that you have your business and have applied for the Chase Ink Business Cash® Credit Card, the next step is to open a high-yield savings account. This account will be linked to your new card as the source for automatic payments. I use a Wealthfront Cash account, which is marketed as a savings account but has the ability to be upgraded into a checking account. Once upgraded, you'll get proper account and routing numbers so you can easily link it to your Chase account for autopay. Wealthfront Cash accounts are currently earning 4.30% APY. With this referral link, you'll get a 0.5% APY boost for your first 90 days, and I'll also get a boost. It's a beautiful win-win!
What is this math, 5x + 4.30% = 9.3x?
That's right, you'll earn 5x Chase Ultimate Rewards or 5% back if you choose to redeem for cash when purchasing gift cards. In the meantime, your savings at Wealthfront are earning 4.30% APY.
Here's the kicker!
The Ink Business Cash® Credit Card, as well as some of the other Chase Business cards, come with 0% APR for the first year. This is a great benefit because it allows new business owners to get up and running without having to raise funding. For our purposes, it allows us to buy gift cards, spend them on whatever we need, and keep the balance that we would have paid on the card in our Wealthfront Cash account to earn 4.30% APY.
A balance on my credit card?
For many of us, myself included, we've grown up hearing that good financial hygiene includes paying off your debts as soon as they are due. While I generally agree with this for personal credit cards, many business credit cards do not report utilization balances to consumer credit bureaus (read more). So I feel comfortable keeping a balance and making the minimum payments for the first 11 months to ensure my card is not delinquent.
To get started:
Create a business
Apply for the Chase Ink Business Cash® Credit Card
Open a Wealthfront Cash account
Link Chase autopay to Wealthfront Cash
Subscribe to this newsletter, and I'll alert you during the next sale at Staples or other office supply stores for gift cards
Notes & tips
Naming your business shouldn't be complicated. If you're unsure, simply use your own name and make sure it matches a government-issued ID card (driver's license/passport) since some office supply stores will ask to verify your ID considering your purchasing up to $1,600 with a credit card.
When the sale goes live at Staples, show up early.
If you have existing cards from Chase, you may be able to move credit over to your new Ink Cash card.
Once you hit $6,000 in spend, I would suggest making a payment to ensure you receive the sign-up bonus that must be achieved in the first 90 days.
Nerdy math
Last but not least, a little nerdy math to tie it all together. While we earn 5x at office supply stores with the Ink Cash card, it’s important to note that our earnings for the first $6,000 in spend are actually quite higher. As of April 16, 2023 the card comes with a 75,000 signup bonus meaning each $1 for the first $6k yields 12.5% back. If spent at office supply stores, there is an additional 4x (4.0%), yielding 16.5% back!
Wealthfront Cash also comes with a referral bonus, earning 4.80% for the first 3 months which aligns in timing to the Ink Cash signup bonus period. So even with a $6,000 credit limit on your Ink Cash card you can earn:
First ~90 days:
Spend $6k on 5x category on day 1
Keep $6k in Wealthfront for ~90 days earning 4.80% (current rate + referral boost)
Earns 16.50% cashback on spend
Earn 4.80% in passive yield for ~¼ of a year
Blended rate of (16.50% + (¼ of 4.80%)) = 17.70%
Remainder of first year:
Beyond the first 90 days, you’ll earn 9.30% assuming rates stay the same.
Of course, take that math with a grain of salt since they represent a moment in time, but comment or reply if you have questions on getting started or suggestions on how to build upon this.
Talk soon,
Armand
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