Quick Tip: The Easiest Money You’ll Ever Make

Yesterday the Honeybee and I got another dividend rewards check from our credit card company — this time for $300.00. I love it when those checks come in, as we use the money to treat ourselves to a nice dinner, night on the town, or other fun activity.

Over the past seven years we have earned more than $2000 in cash dividends for nothing more than using our credit card.

We get the dividend checks because we have a credit card that pays us a one percent dividend on all of our purchases. We try to use that dividend credit card — along with a second rewards credit card that accrues hotel points — for every purchase we can, from large purchases like new furniture to smaller stuff like our groceries and gasoline.

Of course, these credit card rewards programs only make sense if you’re the type who absolutely refuses to carry a balance from month to month — otherwise you end up worse off financially. Needless to say, we only use the card if we know we can pay it off in full before the grace period expires.

As for those of you who lack such fiscal discipline, please … do yourself a favor and stay away from credit cards — regardless of whether they offer dividends and other rewards or not. You’ll be much better served financially by learning to control your urge for instant gratification and eliminating any revolving debt you’ve run up on your existing credit cards.

After all, with few exceptions, I hate paying interest to anybody. You should too.

Photo Credit: borman818

(This is an updated version of an article that was originally posted on November 8, 2009)


  1. 1


    I have the same strategy as you when it comes to credit card rewards. I know that some people are big proponents of airline credit cards but my personal favorite has always been the cash back credit card. I use 2 different cards that each get a minimum of 1% and up to 3% cash back depending upon the purchase.

    • 2


      I’m with you, Joel. Frankly, I think cash is the only way to go, and it is also the only sure way to get reliable feedback regarding exactly just how much rewards I am actually getting. For example, with airline miles it is tough to correlate my rewards on a dollar-spent to dollar-earned ratio. That is not the case with cash back.

  2. 3

    TDH says

    The best card I have found for this is the American Express Blue Cash card. I charge everything that can be charged on this. Stops at small stores, coffee, anything that takes credit I use it and do not carry a balance. Also, I have any bill that can be chared to a credit card (cable, netflix, car insurance etc) added to this card I have reaped more than 2500 dollars in rewards over the past three years. Free money!!! There is no way a miles card can match the cash card.

    I back that up with Discover Cash back then a hotel reward visa because not every retailer takes Amex.

    • 4


      I agree, TDH. It is free money. And it is so darn easy. The only caveat is that you need to pay off your balances in full each month, otherwise you really are playing into the credit card company’s hands and are most likely losing money.

  3. 5


    That’s awesome! Not only are you collecting rewards, but your purchases are also more secure than they would be it purchased with a debit card (especially the big ticket items). I’m not a fan of debt, but I am a fan of wise credit card usage.

  4. 7


    Len, I just got the October 529 statement. This account is funded strictly with the cash rebate directly put from the credit card (a Fidelity deal). $6815. Yes, it was higher before the crash, so my other posts may reference as high at $8500 balance.
    This is just one of the rebate account I’ve had over the years. Too many to count. A lot of perks.
    I’ll take free money any day.

    • 8


      That is absolutely fantastic, Joe! I’d be curious to know how many years is too many to count – however many it is, it’s a great perk! That is not chump change by any means. :-)

  5. 12


    I used to collect airline miles but now I strictly collect cash! I found the airline miles hard to use…you have to be a travel hack to make it work. Besides, I hate paying an annual fee for a card I never use anymore but feel I must keep so I don’t lose those hard-earned miles.

    In 2014 I’ll use some miles and transfer the rest to my retired father. I figure I can use the cash back from my Costco AMEX card for “discount” vacations instead. Like you, I use it everywhere and get 3% for gas, 2% for restaurants and 1% on everything else. In the last two years I’ve snagged around $1,000 from that card alone but I did make one huge purchase that usually comes up once in 10 yrs or so.

    Loved the post!

    • 13

      Len Penzo says

      Thanks, Ree. Cards that offer airline miles are the least attractive to me too. I prefer cash too, but I love my Marriott rewards card — that card has paid me some very big dividends over the past few years!

  6. 14


    Hey Len – I noticed that you mentioned you’ve earned just over $2k in seven years. Based on my math, it sounds like you’re hitting the ridiculous cap that citi puts on their dividend accounts.

    We ended up putting our citi dividend cards away after they refused to raise the $300 annual dividend limit when I called them. We are now happily using another card that gives us unlimited cash back and only use the dividend card at costco.

    • 15

      Len Penzo says

      You nailed it, Tom. Instead of moving, we put any additional charges on my other credit card, which gives me Marriott rewards points. We actually use the Marriott rewards card more than the cash dividend card now — so much so that I’ve used that card to help fund two Maui vacations in the last three years. So it’s all good!

      • 16


        Huh, this is a good tip. We have a United card, but we never really use it. Not even sure it’s in my card. But I think I’d rather use the Hilton card that my husband has.

  7. 17

    JP says

    I think cash rewards are the way to go. I believe the rewards points are just a way to hide a lower rewards percentage.

    I recently switched from a Chase Freedom card that offered (1% on everything, and 3% on a few monthly selections) to a Capital One Quicksilver card that gives 1.5% cash back on everything.

    Take care,


    • 18

      Len Penzo says

      JP, I prefer the cash rewards too, but I’ve got a $300 annual limit.

      Thanks for the tip on the Chase Freedom card! I may have to look into that. My only reluctance to change is that I have been a long-time customer with Citi and I’ve built up a long history and a lot of goodwill with them that I’d hate to lose.

  8. 19

    Fencedin says

    The Costco AMEX card is great coupled with an executive membership. Granted that the membership costs more than a basic one, but the perks are good– for example, cheap check printing (I got 400 checks for one-fifth the cost from my bank), etc., and Costco also pays you 2% back on your expenditures at your anniversary date.

    Discover is also a good card, if you can make use of the 5% specials sprinkled throughout the year.

  9. 21

    Paul N says

    Cash back cards are the best. Particularly if you have work expenses that you get reimbursed for at the end of every month. Shop around for the best card, I recommended the MBNA cash back card to my friend some years back. He kept sending me e-mails every 2 months when he received a check for another $100.00. Sort of saying thanks but at the same time riding me because he got more back then I did. It was all good though :)

    You just need discipline to pay down your full balance religiously every month or your benefit is for nothing.

  10. 22


    I think we all have to choose our credit cards after knowing which will best suit with our financial situation and lifestyle. Credit can easily go from good to bad due to poor our budgeting or simply by an overlap between our jobs. Rewards credit cards are a good alternative to standard credit cards because with every purchase we we’ll earn points or miles that we can redeem for exciting stuff. I prefer The Chase Freedom Credit Card. It makes my choice easy by not making me choose just one – I really can have everything with this card. Higher than average cash back rewards. The Chase Freedom Card accepted at more places than Discover and American Express. It also depends on the choice because I prefer the simple way to save interest is pay off my balance every month. If you are not interested in paying off each month then choose a card with low ARP. Those who have problems with compulsive spending, prepaid credit cards can be a great option for them. Yes it’s true that prepaid won’t help your credit score and some hidden fees attached with it. Prepaid card can be a great tool to help you responsibly manage your finances and safely make online payments. Yes about travel cards once I discuss with one of my friend who most of time traveled for his official work. He said the real travel card is the 28 Degrees Mastercard (previously known as the Wizard Clear Advantage Mastercard). It charges no fees, no currency conversions fees or withdrawal fees at all.

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