Every Sunday morning, Danny Guo spends time on his favorite pastime: Updating a decade-old spreadsheet detailing his personal finances, credit card spending, and rewards.
In it, the 31-year-old tracks not only how much he spends and what, but how much cash back or reward points he receives for each purchase. He also plans which card to use in the coming week for each purchase he and his wife make.
It may seem like a lot of work to the average credit card holder, but it pays well. Guo is a seasoned veteran of vibration, the practice of opening credit cards to get welcome bonuses and other rewards. While the average American has one to six credit cards, Guo has opened 80 in the past decade, according to credit card documents reviewed by luck. He does not handle everything at once; 50 was closed, and he only used one some of the remaining 30 per month for various expenses. (Although opening too many credit cards in a short period of time can damage a credit score, Guo maintains hers by making regular payments on time and keeping her credit utilization rate low.)
Between sign-up bonuses, cash-back rewards, travel credits, and other rewards, Guo, a senior engineering manager at Credit Karma, estimates that his hobby earned him $32,000 in the last decade.
“It’s better to save an extra dollar in spending than to earn an extra dollar in income, because your income is taxed,” Guo said. luck. Credit card rewards usually aren’t. “I made $32,000 in rewards, but that equates to a $40,000 or $50,000 job bonus.”
Maximize hidden rewards
Guo got her first credit card in college, creating a spreadsheet to track her spending soon after. Doing so prompts him to begin maximizing the cards he uses for each expense. Some cards, for example, offer better rewards for groceries or gas; others give cardholders more miles or points for travel.
The software engineer always enjoys tracking and optimizing different aspects of his life, including his exercises, the time he spends on certain websites, and, of course, his personal finances.
His passion includes finding “hidden” rewards that many cardholders may not even realize exist. For example, one of his cards offers a free two-year extended warranty in tech equipment like laptops. Another sign up bonus on the card is a voucher for a free two-day stay at any hotel, which Guo used for a room in Paris with a view of the Eiffel Tower, which he couldn’t afford. According to his spreadsheet, he received sign-up bonuses ranging from $25 to $1,400 (mostly from $100 to $500).
His biggest coup: When he planned a two-week trip to Europe with his parents and sister a few years ago, he suggested they open certain credit cards a year in advance; during their trip, they generally earn enough points to pay for all their flights and hotels.
Sites like Reddit taught him the tricks of the trade; he supplemented the information on the forums with his own research on bank and card issuer websites. He puts every expense he can on a card, including his rent when his landlord allows it, to get the most rewards he can.
“It’s a fun thing for me to do on a Sunday morning, thinking about what credit card to get next,” he said. “I enjoy saving money, and when I think about what that savings can do if I invest it in a long horizon; that $32,000 will be an even larger amount of money in retirement. That’s very encouraging.”
A dangerous game
While optimizing your rewards with credit cards is fun, swinging isn’t without its own risks. Perhaps the most important thing to avoid, says Rich Franks, head of Credit Karma’s Lightbox: Overspending.
“If you’re paying a late fee, or if you’re changing a balance, that’s going to offset the benefits more,” Franks said. “If you miss…your credit will be affected as well. And that can cost many, many thousands of dollars” over the course of your life.
Guo, who learned about credit cards and how to use them responsibly from his parents, avoids overspending by treating his credit cards as debit cards to earn the most reward points; he never carried a balance or owed interest payments. He also has the time, passion, and organization (he keeps physical credit cards in a trading card binder) to handle multiple cards—and earns a tech salary out of college, which doesn’t hurt.
“I was very privileged to learn from my parents,” Guo said, noting that he was added as an authorized user to one of their cards, which helped him get his own college card. “It’s hard to break into the world of credit, so I’m very fortunate to have gotten a step up in that regard.”
Churning can also have a negative impact on a cardholder’s credit if they’re not careful, Franks said. Every application requires a hard credit pull, which can lower a credit score. Issuers may look negatively at someone who applies for too many cards in a short period of time; Opening a bunch of accounts in quick succession can indicate a person with risky financial behavior. This may affect not only future credit card applications, but also applications for other credit products, such as mortgages or car loans.
But despite opening (and closing) several cards, Guo’s credit remains in the “Excellent” category, according to financial documents. He opened the cards every few months over the course of a decade, giving his score time to recover from credit pulls. “I know my credit score would be higher if I didn’t apply for cards so often,” he said, explaining that if he had something big coming up, like a purchase house, he will stop applying for cards before then. happened to get his mark as much as possible.
And then there is the security aspect. Having different cards with multiple companies can put you at greater risk of fraud. “Look at the accounts to make sure you don’t get skimmed, make sure you don’t have statements going to an old address when you move,” Franks said. “There’s a lot of risk of things going bad. You can lose the plastic.”
‘It doesn’t have to be a lot of work’
Financial institutions have too began to control the shaking, denying more applicants and offers less generous rewards in some cases. there unwritten rules of applying for credit cards.
“I get turned down all the time now,” Guo said. “The golden age of getting credit card sign-up bonuses is over.”
Now, his focus is on maximizing his average rate of return or the points he receives for each purchase. He spends about 20 minutes updating his spreadsheet each week and checking which card offers the most return in rotating categories. That’s the easiest way most people can get into the credit card rewards game, he says: Most don’t need 80 cards, but it’s smart to choose a card that offers the best cash back or rewards. score the most constant cost to the holder.
“It’s not for everyone, but if you use it wisely, it’s not a lot of work to meaningfully generate a decent amount of credit card rewards,” he says. “If you can use credit responsibly and are in a fortunate position to do so, things like credit cards can be very helpful tools.”