Generally, people use a credit card to buy their needs and products in easy installments. Though the money seems little to repay multiple times, eventually the credit amount would become hefty and worry them a lot.
There goes the old saying “Don’t buy things you can’t afford with the money you don’t have. If not, you will lose both freedom and money”. But the following story of 29-year-old Keith Russo has a new saying “If we use credit cards responsibly, making a large purchase to earn tons of points is an easy win.” he wrote in Million Mile Secrets.
But in the case of Keith Russo, The reward points he earned surpassed the taxes and fee of a credit card.
Story of Keith Russo
Entering into the story, Keith Russo bought a Tesla Model 3 using a credit card for a total of $58,857 inclusive of fees and taxes.
While Tesla didn’t allow Russo to acquire the car through credit card because of their extortionate price and many vulnerabilities, they accepted the payment through the third-party service ‘Plastiq’ which charges 2.5 percent service fees.
To obtain high-cost products like Tesla, the person needs a secured credit card in a business line. That means, the person should possess a business card. Technically only business owners can get the card. Whether a person is a salesman, writer, shopkeeper, eBay merchant, he is eligible for a business card. Russo works on the eBay platform which made him get the card exceeding the limit of his credit around $37,000 to $23,000 to put the entire payment on the car.
Talking about the technique Russo put in to earn reward points. He told,
“The trick with my Tesla purchase is the card I used,[the] Chase Ink Business preferred, earned 3X points for the purchase.”
Ink Business Preferred cardholders get 3 times more reward points for each dollar spent which is mainly schemed to benefit small-scale business people. Then, the reward points could be used for traveling, phone, internet and cable bills, transportation, and advertising services.
The payment details
With the payment through Plastiq charged a 2.5 percent fee, which is about $1,470. Russo earned approximately 1,80,000 chase ultimate reward points which is equal to $1,800. This could more if he uses the points for traveling. For example, if Russo chooses the right hotel or flight which accepts the points, he could get the service of $5,000. Which is a straight bonus comparing the Plastiq fee.
However, luck doesn’t visit us regularly. Russo cautioned everyone that “Certain cards code Plastiq purchases as a cash advance, so you do not want to use such cards when paying through Plastiq”. Usually, the advance payments have the 5% percent fee approximately. If we do the right research and calculations and be aware of terms and conditions, these reward points would be an easy game.
Keith Russo and his wife Liz had saved money which cleared off their card payments and interest which they don’t need to bother anymore and now with the reward money, they earned they planned to spend a week in the Maldives or a round trip business class tickets to Australia.