How to Earn Free Travel by Paying Rent or Mortgage
Earning Points / / Feb 15, 2016
Put your rent or mortgage on your credit card:
For all intents and purposes, know that RadPad can support mortgages as well as rent payments. Hence, when I discuss paying rent you can safely assume this applies to you if you’re paying a mortgage.
This is where my recommendations need you to use a little more judgement about what’s right for you. Most people in New York City can empathise that rent here is pretty steep. For example purposes, let’s assume my rent is $2,000 a month. You can use a service such as RadPad.com to pay your rent with a credit card. Your landlord doesn’t need to sign up – if they’re not a member then RadPad will mail them a check bill payment, just like your bank would if you used their bill payment tool. Here’s the important difference: RadPad charges you a fee for this service. At the time of writing, the fee for Visa, Discover and American Express cards is 3.49%. Mastercard is 1.99%. This does not make sense unless you are attempting to hit your spend limit. Do not apply this strategy to simply earn points – you will lose money! However, if you are seriously about hitting spend limits quickly, this is a good way to do it pretty painlessly if you’re willing to shell out a few extra bucks for the convenience.
Back to my example of the assumption one pays $2,000 a month for rent. When you’re looking to hit a $5,000 spend requirement without any prepays or more elaborate strategies (to be outlined in future posts) you can easily “spend” $4,000 by putting your rent on your credit card for two months. I know for sure personal finance pros are wanting to gauge their eyes out reading this but if you do the math it can make sense. Assuming you’re not using a Mastercard, the fee paying your rent for two months is $139.60. One card that requires a $5,000 limit is the Chase Ink Plus card which also carries an annual fee of $95. Assuming over the course of three months you have other expenses that you can put on the card in addition to the $4,000 rent and $139.60 fee, you will have actually spent a total of $234.50 in fees to earn the bonus 60,000 points.
While this may seem excessive, the value of Chase Ultimate Rewards points is, at a VERY, VERY conservative minimum, 1.67 cents per point (when you redeem for travel on Southwest.) Noting that other points transfer partners will give you a higher value per point, using this conservative estimate we can add up the 60,000 points you got for opening the card together with the 5,000 points from the money you were required to spend on the card and that brings us to 65,000 points in the first three months. What are these worth? Keeping in mind this is an extremely low end estimate of value, let’s multiply the 65,000 points by the 1.67 cents each point is worth and we just earned travel worth $1,085.50 by spending $234.50 and making one change (paying rent on the card.) Congratulations on just generating a MINIMUM of $851 of free travel.