Some people don’t like credit cards. People like Dave Ramsey believe you should never use a credit card. Well guess what? The only reason he says that is because he thinks people are idiots.

Credit cards are not inherently bad; they just can be bad for people who misuse them. In reality, credit cards can be very good and can earn you a lot of money if they are used properly. The trick is to find the cards that give you the most rewards (aka free money), and then pay them off every month so you are never charged any interest or fees.

free money

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Some people argue that the miniscule rewards aren’t worth the potential losses, but I’m here to show you that the rewards aren’t miniscule at all. And I can address the “potential losses” in another post one day, but it can be summed up very simply: as long as you spend within your means and pay off your bill in full every month, the potential for loss is zero.

Below you’ll find the rewards I’ve personally received from credit cards and rewards programs over the last year. Maybe some people are rich enough that $881.85 is just a miniscule reward, but to me that’s an incredible amount of free money!

American Express Blue Cash – $214.38

I have the American Express Blue Cash card, and after a year of getting anywhere from 0.5% to 5.0% cash back on purchases, I racked up $214.38 in rewards. I can either buy stuff out of their online store, or just use the money as a statement credit for anything I buy with my Amex. I don’t really use this card anymore because you have to spend $6,500 on it before you get 5% cash back on Gas, Groceries, and Pharmacy, and it will take me so long to get to that point, it won’t be worth it for this year. This card is great for big spenders, but unfortunately, I’m not one of them.

Citi Thank You Points – $177.47

I got the Citi Forward card last year, primarily because they give 5x points (equivalent to 5% cash back) on restaurant and entertainment purchases. Unfortunately I eat out quite a bit, so this card actually helps me rack up substantial points. I also get a 5x bonus when I go to movies. It works for other entertainment like concerts, but I don’t think I’ve been to a concert in the past year. I got a ton of points as a sign up bonus, and then have been racking up points on this card for about six months now to get a hefty balance.

Marriott Rewards – Up to $130.00

I did a little bit of traveling this winter for work, and stayed two nights in a Marriott hotel. They had a promotion where if you stay two nights, you get one night free. My work paid for the hotel, so I didn’t pay a dime out of pocket, and now I get a free night in a category 1-4 hotel, which is worth anywhere from about $60 to $130, depending on how nice the hotel is. I’ll have to plan some kind of weekend vacation and put this thing to good use, as it expires at the end of September.

Chase Sapphire and Checking Account – $225.00

Chase was running a few promotions last year where they were handing out money for signing up for their services. I got a Chase Sapphire card, which was worth 10,000 points (or a $100 statement credit). Then they offered me $125 to sign up for a checking account. I did both, got my rewards, and pretty much haven’t used either product much since. I had to keep the checking account open for six months in order to keep the reward, and I closed it after about six months and one day. I still have the credit card, but I never use it. Thanks for the free money Chase!

Sallie Mae – $135.00

I honestly have no idea how my student loans got loaded with these promotions, but I had promotions on two of my loans where I receive credits after making on time payments for a certain number of months. After making on time payments for 24 months, I got a 1.5% credit on $9,000 worth of loans, which comes to $135. I actually owe much less than that on the loans, but the benefit is calculated on the original amount of the loans. Some of you might be wondering why I don’t pay the loans off entirely, and my answer is 2.47%. That’s the interest rate I pay on those suckers; you can’t find a cheaper loan anywhere! I’m looking forward to five months from now where I have a 3.3% credit due for making 33 on time payments in a row on a different loan. That’s gonna be another $79.93. woot!

Total Free Money – $881.85

It still boggles my mind that I can get close to $900 of free money for just using the right credit card and signing up for a few loyalty programs. There are lots of different credit cards that offer great rewards, so if you want to get in on some of this delicious free money action, you can either check out some of the cards I have or do a quick Google search and find some for yourself. Just make sure to pay off your bills in full every month, and you’re golden!

Rewards for Next Year

I will keep using my Citi Forward for 5% back on restaurants and entertainment. I use my Citi Thank You Premier to buy plane tickets because it gives me 1 point per mile of the trip. I’m going to get approximately 4,490 points, or $45 back, for a flight to Costa Rica that only cost me $431. That’s over 10% cash back! I also have my PenFed Gas Card so I’ll get 5% back on all my gas purchases. I should also get enough points with my Southwest Rapid Rewards to get a free flight in 2012. I love to travel, so… Booyah!

Finally, I’m hoping to get the Chase British Airways Card and get 100,000 free miles, which has a sign-up bonus that is good enough for two round trip flights to Europe! Unfortunately, I applied for that one right after I applied for the PenFed card, so my application wasn’t immediately accepted. It is being reviewed and I might miss out on this incredible opportunity. Aw shucks.

Do you use rewards and loyalty programs to your advantage, or do you believe in paying cash only?