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7 Popular Credit Card Hacks That Don't Work

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Updated January 8, 2024

Rewards credit cards can be a valuable tool if you know how to use them wisely. After all, cards in this niche let you get something back for each dollar you spend, whether it's cash, flexible rewards points, or travel rewards points for flights or hotels. If you are able to pay your balance in full each month—and if you don't use the pursuit of rewards as an excuse to overspend—you can theoretically "get something for nothing" by using a credit card for purchases instead of debit card or cash.

Still, spend a few hours on Reddit or TikTok and you'll find a range of tips to help you gamify your card. For example, you may hear that making payments at certain times of the month can help you improve your credit score twice as fast, or that any number of complicated steps can help create more credit card rewards out of thin air.

While there are plenty of reputable and proven ways to maximize credit card rewards, many popular credit card hacks are nothing more than a waste of time. Here are seven hacks you should definitely avoid.

1. Using payment apps to send money to yourself (and others)

Digital payment apps offer a way to send money to friends or even to yourself. Many let you utilize more than just a bank account or your app balance to do so. For example, both PayPal and Venmo let you connect a credit card to your account for seamless money transfers. 

Paypal

Paypal Money Management App

Paypal Money Management App

Monthly fee
None for online-only payments
Swipe/tap/dip: 2.6% + $0.10
Key-in: 3.5% + $0.15
Online: 2.9% + $0.30

This often leads people to think that using a credit card to send money back and forth can help rack up rewards. It might appear that if you get a friend in on the game, you could easily send the same amount of cash back and forth between each other in perpetuity and earn cash back or travel rewards for each dollar moved.\ \ Unfortunately (but not surprisingly), using payment apps to send money with the purpose of earning rewards is not a winning strategy at all. That's because these apps and other comparable options charge fees for payments and transfers you make with a credit card.  PayPal charges 2.90% plus $0.30 for each money transfer made with a credit card using the U.S. dollar, and Venmo charges a flat 3% fee for credit card-fueled transfers.

While many rewards credit cards offer a great rate for purchases, you're probably earning 2% back at most with the best cash back credit cards. This means every $100 in money transfers you make would trigger a fee of around $3. In the meantime, you'd be earning $2 in rewards at most. 

2. Buying items to boost your rewards haul, then returning them right away

Another credit card "hack" to earn more rewards involves buying items and returning them after the fact. You might be tempted to do this on an ongoing basis in order to beef up your rewards balance, or you could consider it in order to meet the minimum spending threshold for a generous sign-up bonus.

Either way, you should know that buying and returning items is a really bad idea if you want to earn rewards. Credit card companies that offer cash back or other types of points for spending will simply deduct the rewards you were given when a return shows up on your account.

Not only that, but the fine print on many cards says that returns don't count toward welcome bonus requirements in the first place. As just one example, the terms and conditions on the American Express® Gold Card lists the following wording:

"Eligible purchases can be made by the Basic Card Member and any Additional Card Members on a Card Account. Eligible purchases are purchases for goods and services minus returns and other credits."

This means that making a big purchase to earn a welcome bonus with plans to return it could leave you wishing you hadn't. In this scenario, your welcome bonus could easily be removed from your account after you earn it. 

3. Purchasing prepaid cards or gift cards 

Speaking of fine print, you should know that some types of purchases aren't even supposed to count for the purpose of earning rewards. For example, credit card rewards enthusiasts often recommend buying prepaid cards or gift cards in order to earn more rewards over time. From there, the goal is using prepaid cards to pay for bills you typically cannot pay with a credit card, such as mortgage payments or rent payments.

Unfortunately, there are several things that can go wrong here, and the fine print on some cards even spells a few of them out. First off, many American Express credit cards list the following in their terms and conditions.

"Eligible purchases do not include: fees or interest charges; purchases of travelers checks; purchases or reloading of prepaid cards; purchases of gift cards; person-to-person payments; or purchases of other cash equivalents."

American Express is even well known for clawing back rewards points that were given for gift card purchases. You can read about these instances across many different threads on Reddit including this one and this one.

4. Buying gift cards and money orders to pay bills

Beyond the fact some purchases aren't supposed to earn rewards, there are often fees involved in the strategies recommended. For example, some people recommend buying prepaid Visa gift cards then using them to buy money orders you can use to pay a mortgage. However, buying a $500 Visa gift card online or in a store typically triggers a fee of around $6, so you may wind up paying $24 in fees to get enough gift cards for a $2,000 mortgage payment. After that, there are additional fees to use gift cards to buy a money order as well.

As just one example, Reddit user djshaggy recently said the following:

"I just went over to Albertson's and bought a $100 gowallet Visa gift card with AMEX PRG card. Since this card uses the last 4 digits of the card as the initial pin, I immediately turned around and turned it into a money order, which I can use to pay rent.

I'm surprised it was so easy. I know that the cost of the card ($5.95) and the money order charge ($0.65) will eat into point value (which is 2X for supermarkets), but I think I'm still coming out ahead. Obviously buying a higher denomination card will minimize this cost tradeoff.

Any advice, caveats, gotchas, goddamnits, or other limitations?"

The first response to this post explained exactly why this credit card hack doesn't work. Reddit user JooP84 said: 

"Your $2 back cost you $5.95 for the card and $0.65 for the money order. Sorry to break it to you, but you just lost money. Next time get a 5x card and buy $200 gift cards and you're good to go."

Fees aside, there are many threads on Reddit where users have followed this advice but can't seem to find a place that lets them convert their gift cards to a money order. For example, Reddit user Be_Better_Human_Bot recently said the following:

"Can't buy a money order with gift cards? I thought gift cards were considered debit? But I just tried to buy a MoneyGram money order and it wouldn't go through on the gift card. Is this true at ALL Walmarts?"

5."Balance surfing" while pursuing rewards

Many cash back credit cards offer rewards for spending and 0% APR on purchases and balance transfers for a limited time, such as the card_name and Chase Freedom Flex℠ Card. Both offer cash back and intro_apr_rate,intro_apr_duration and balance_transfer_intro_apr,balance_transfer_intro_duration (followed by a reg_apr,reg_apr_type).

This combination of perks can sometimes tempt people into pursuing credit card rewards and consolidating debt at the same time, even though the fees involved in doing so ensure they'll never get ahead.

One such strategy called "balance surfing" takes place when you continually move credit card debt to new 0% APR credit cards in order to avoid paying interest. Doing this repeatedly without paying more than the minimum creates a cycle where the balance is simply "surfed" from one card to the next.

Unfortunately, balance transfers never earn rewards. Not only that, but transferring a balance to a balance transfer credit card triggers a transfer fee (usually 3% or 5% of the amount transferred).

Beyond that, using the card to make more purchases with the goal of earning rewards can easily lead to the amount of debt on the card ballooning over time. Eventually, the user winds up paying an even bigger balance transfer fee to transfer that debt over to another 0% APR credit card.

6. Earning a credit card sign-up bonus then canceling the card right away

You may have also heard that earning a credit card welcome bonus then canceling the card right away can help you get ahead. After all, canceling early enough may get you out of paying an annual fee to renew the card, or even the first year's fee.

Unfortunately, this strategy commonly backfires due to the credit card terms and conditions that are laid out ahead of time. As a case in point, fine print listed with the Platinum Card® from American Express spells out the following:

"If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with this offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain an offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit, we may freeze, or we may take away the Membership Rewards points from your account. We may also cancel this Card account and other Card accounts you may have with us."

There are many threads on Reddit about American Express in particular taking back welcome bonuses after cardholders canceled their accounts too early. While other card issuers may not be as heavy-handed when it comes to this specific hack, canceling other cards too early can still come back to haunt you. A card issuer that sees you earned the bonus on multiple cards then canceled may be reluctant to approve you for more rewards credit cards in the future.

7. Using the 15/3 credit card hack to improve your credit score

A range of TikTok influencers still talk about the so-called 15/3 credit card hack. Generally speaking, this trick suggests that you make two payments on your card during a billing cycle—15 days before your payment is due and another payment three days before. 

According to those who promote this strategy, making these two partial payments can help keep credit card interest at bay while showing credit card issuers how responsible you are. Some influencers have even been known to say this hack can boost your credit score faster than you would if you only made one on-time payment per month.

However, credit-builder loan company Self easily debunks this hack on the company website:

"The hack assumes that you can impress the credit bureaus by making more than one on-time payment a month, increasing the amount of on-time payments banks report to the credit bureaus. However, banks only report one on-time payment a month, regardless of whether you break it into 2 or 20 payments. So making multiple installments won’t help your payment history."

TIME Stamp: The best ‘hack’ is responsible use of credit

Keep one simple rule in mind any time you hear someone promoting a credit card hack or trick: If something sounds too good to be true, it probably is.

It would be great if we could earn more rewards through easy moves like sending ourselves money through Venmo or transferring debts between one card and another, but there are hidden fees and rules that prevent these hacks from being profitable or even useful.

At the end of the day, the best way to get ahead with a credit card is boring and predictable. Use a credit card to earn points or cash back on your spending, then pay your bill in full and on time with no exceptions.

Frequently asked questions (FAQ)

What is the 15/3 credit card hack?

The 15/3 credit card hack recommends that  you pay your credit card bill twice per month—15 days before your bill is due and another three days before. This hack is supposed to show credit card issuers how responsible you are. In reality, it doesn't do much since card issuers only report one on-time payment to the credit bureaus each billing cycle. 

How can I get extra money from my credit card?

You can get extra money with a credit card by using a cash back credit card for all your regular purchases and bills. Over time, you'll earn rewards that can be redeemed for cash back, statement credits, gift cards, and other options.

What is credit card flipping?

Credit card flipping is the process of opening and closing credit cards over and over in order to earn credit card sign-up bonuses. However, many card issuers have instituted rules in the last few years to prevent this practice. For example, Chase has what it calls the 5/24 rule that says you can only have up to five new credit cards in the last 24 months. Not only that, many of their popular cards (including Chase Sapphire cards) only allow customers to earn a sign-up bonus every 48 months.

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