Today I’m taking a break from writing about credit card reward programs and new credit regulations and such, and instead meandering into the realm of the “thought experiment”. Indulge me.
So here’s my grand vision on how to slay the evil OPEC monster, get free gas in the process, and maybe even get paid (a microscopic amount) for pumping it, all using your plastic Excalibur Chase Freedom credit card. Since gas purchases earn 5% cashback in Q1 and Q3 of 2012, we’ll use those quarters for our example, though in theory it could work even at the 1% cashback rate.
Major Disclaimer 1: the plan below is economically irrational unless you value your hourly rate at something south of $2.
Major disclaimer 2: I don’t recommend you actually try this, as you might really upset the economic machinery of the world.
This all hinges on the little-known fact that if you link your Chase Freedom credit card to your Chase Checking account, 2 interesting things happen (kind of like crossing the streams in Ghostbusters).
- You’ll earn an additional 10% increase in your baseline cash back earnings. For the 5% reward categories, the baseline is actually 1% (with the bonus being an additional 4%), thus you would earn 5.1% 4% + (1% *1/1).
- And, most critical to our juvenile plot, you’ll earn an additional 10 points on every Chase Freedom credit card purchase.
Let’s assume you want $5 worth of free gas….Here’s the play-by-play:
- Go to the pump of your nearest gas station.
- Swipe your Chase Freedom card.
- Pump 10 cents worth of gas, then hang up the pump.
- Repeat 49 more times.
Assuming all goes as planned (and the guy waiting behind you doesn’t attack you), when your credit card statement arrives you should see the following:
- A charge of $5 for gas
- Earnings of 25 points (worth $0.25 in cash back)-assuming you executed this during Q1 or Q3 of 2012, when you get the 5% cashback rewards on gas purchases.
- Most importantly, an additional 500 points earned due to the linkage of your Freedom card to your Chase checking account.
Thus, on a $5 transaction you would have earned $5.25 (with Chase Freedom points valued at $0.01 each). So you just got paid $0.25 for pumping gas. If you performed the same technique when you were only getting 1% cash back on gas, then you’d expect to get the free gas plus a nice, shiny nickel.
Of course, even the less astute amongst us will quickly and rightly point out that you’d spend the better part of an afternoon on such a shenanigan, putting you well below minimum wage. But hey, consider this a “thought experiment”.
Say Hello To My Little Friend
So, if you’re that hungry to save money on gas (and who isn’t?), and you aren’t in the mood to wrap your car in a full-body advertisement for $200 a month (yes, I’ve thought about it), then check out the PenFed Visa Platinum Cashback Card. It provides you with a whopping 5% cash back on gas, 365 days a year. It’s in my wallet-shouldn’t that be enough for you??;) Peace. Marc.