Rewards Stacking: How I Build Wealth with Credit Card Rewards

Several years ago, I stumbled upon a quote from Dave Ramsey about credit card rewards. I’ll never forget those 11 words. :

“No one ever says they got rich off of credit card points.”

As I read his words, I knew immediately that he was wrong. One could build wealth through credit card rewards. In this sense, credit card rewards aren’t special. Saving and investing small amounts of money from any source over time will turn into piles of cash. We just need to allow compounding to work its magic.

It was then that the idea of Rewards Stacking was born. Over the past four years, we’ve saved and invested all our credit card rewards. Our balance now stands at $37,834.55.

While that doesn’t make us rich (yet), it’s an impressive sum, particularly when you consider that it required no sacrifice on our part. It wasn’t about cutting back or working harder—just saving and investing the free money credit card issuers send us every month.

In this video, I’ll share exactly how we did it and, more importantly, how you can do it, too.

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#creditcardrewards #creditcards #robberger

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

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[tylerlester]

“I know, he doesn’t like math.” Got me to hit the like button in 40 seconds, Rob 😂

[SpookyEng]

What I do; Fidelity 2% on everything, directly into brokerage every month. Added$1, 700 last year. Not big money but adds up over time.

[dutchcrunch]

Don’t forget…this is tax free money which makes it even more valuable. Invest it in a Roth ETF like VTI and let it grow tax free too!

[MrFoof]

Yep, I’ve been doing this for about 8 years now, where all credit card cash back rewards are functionally put into a 3-fund portfolio. If I can’t put them there directly, I’ll just get the statement credit or purchase credit and manually match it once a month. It adds up quick!

[johnlittle]

I agree people underestimate this and don't understand it. I choose to seek points and miles and each year usually save $4k-$6k net of annual fees on flight and hotel savings. A lot of this comes from new sign ups that I'm willing to do because the spend is so easy to hit. This allows my family of three to get a lot of highly discounted vacations and extra trips with friends that we would not otherwise do if we had to pay cash. So some is a true savings and some is additional flexibility when trips come up.

[Plumeria]

Don't knock Dave. He targets a very specific audience who, for the most part, should not go near a credit card for obvious reasons. For the rest of us, who have graduated from Dave, or never needed him in the first place, congratulations! Dave helps a lot of people to be able to come up for air.

[angieharris]

"Do you carry Android? I guess some people do"....lol shaking my head. Not everyone is Team-Apple, just sayin'...

[williamkerr]

Would love to hear you talk about cash back vs. points and the idea of churning.

[markmiller]

100% onboard with have been doing this for many years.

[evangravitz]

If I followed Dave Ramsey's advice, I would have A LOT LESS money.

[stephtraveler]

Great content. I must be doing something right if I did the same exercise you did. Good on ya Rob. Now find an SEC team to follow...
Amex 6% cash rewards on groceries.
Amazon card 5% cash on Amazon purchases.
Gas card 3% cash on gas.
Visa 2.5% cash on everything else.
Each card is a different color. Blue for Groceries, Red for gas, etc. Easy rules for the spouse to follow.

[michaelparks]

For years my wife and I used United cards to get frequent flyer miles. We've had free first-class flights all over the US, Mexico and Australia, and combined with hotel and time-share offers we've enjoyed great vacations for $200 ~ $500 per week at really nice resorts and hotels. But since Covid we've stopped flying and have built up a huge number of miles, so the time has come to switch cards to something that offers cash-back. Thanks for the overview of the different card offers, we'll probably switch to a card that offers 2% ~ 3% on everything.

[kenm]

I don't chase cards and have used the same 2 cards for many years, USAA (1.5% I think) and Citi Costco (multiple %'s). We end up earning enough to pay the household reoccurring electric, internet, subsription TV, cell phone, and garbage for 3-4 months. Haven't paid interest on a card in more than 15years.

[christineoneill]

Totally agree with you Rob. Have specific cards for specific areas giving me the highest return (ie food 5% card). On the 1st of month go into each CC on line and prepay all in full for the month. Now also looking at the Robin Gold card.

[Kimmer]

I'm sticking with our Costco Visa card at no annual cost and great cash back rewards. We also have Marriott and Delta cards, but they may not be worth it unless you travel a lot.

[richardcarlin]

I've gotten back over $1000 through many years, but applied to paying the card. This frees up money for other items including investing.

[mashort]

More and more businesses are fighting back against fees by charging the customer up to 3% interest on credit card transactions. My wife and I have started carrying substantial cash again to avoid these fees. I’m interested in how this is going to play out — are cardholders just gonna use their cards anyway and negate the rewards or are they gonna respond by going back to cash? And if they do, how will credit card companies respond? Bigger rewards? Lower merchant fees? It’s all going down as we speak.

[janethunt]

Way to go Rob!!!! We once got enough bonus miles that covered our RT tix to London with a free for a year airline credit card. And I love your math. You can definitely come out ahead on the credit card games.

[blahblah]

One thing to be mindful of is that if you get new credit cards, it can temporarily lower your credit rating until they age. So maybe wait to get 10 store cards to get everything at 5% until after getting that mortgage or car loan. 😉

[mooring]

I use 3 primary no fee CCs, usage is based on cash back points, 5X gas, 3X eating out and grocery, 3X utilities, and 2X on everything else. Last year, more than 2, 500 cash back. But, I didn’t invest it, I spent it! Overall, I still have over 20nCCs in 50 years. Never close them because it would ding my perfect credit score. Just need to remember to charge at least 1 small item per card per year so they don’t cancel you.