Cheap Points Alert: Leveraging Rakuten for Travel Rewards

At RewardSmart, we're always on the lookout for innovative ways to boost your credit card rewards. One strategy that often flies under the radar is leveraging cashback portals like Rakuten to indirectly purchase valuable points and miles at a significant discount. These opportunities arise when Rakuten offers substantial cashback rebates on specific purchases.

The key is to identify promotions offering near-total rebates on products or services. While the upfront cost might seem high, the massive cashback essentially allows you to 'buy' the points you earn on your credit card for that purchase at a fraction of their usual cost.

How This Works in Practice

Let's say Rakuten is offering 90% cashback on a subscription service. If you purchase the service for $100 and pay with a credit card that earns, say, 2x points per dollar, you'll earn 200 points. After receiving $90 back from Rakuten, you've effectively 'paid' only $10 for those 200 points. This translates to paying just 5 cents per point! Depending on the credit card and redemption, this can be a stellar deal.

Which Credit Cards to Use?

The best credit cards for this strategy are those that earn transferable points, like those offered by American Express Membership Rewards, Chase Ultimate Rewards, or Bilt Rewards. These points offer the most flexibility and potential for high-value redemptions, particularly for travel. Consider using a card that also offers a bonus on online purchases to amplify your earnings.

Specifically:

  • American Express: Cards like the American Express Gold or Platinum are excellent choices due to their high earning rates on everyday spending categories and valuable transfer partners.
  • Chase: The Chase Sapphire Preferred or Reserve cards offer strong earning potential and access to a robust travel portal.
  • Bilt: The Bilt Mastercard is unique as it lets you earn points on rent payments without transaction fees, making it a valuable addition to any rewards strategy.

Important Considerations

  • Read the Fine Print: Always carefully review the terms and conditions of both the Rakuten promotion and your credit card's rewards program. Look for exclusions or limitations that could impact your cashback or point earnings.
  • Consider the Opportunity Cost: Evaluate whether the time and effort involved in pursuing these deals are worth the potential rewards. Sometimes, focusing on organic spending and maximizing category bonuses on your existing cards may be more efficient.
  • Track Your Spending: Keep a close eye on your credit card statements and Rakuten account to ensure you receive the correct cashback and points.

RewardSmart's Recommendation

Keep an eye on Rakuten and other cashback portals for these high-rebate opportunities. When they arise, evaluate the potential value of the points you'll earn and compare it to the cost. If the math checks out, it can be a fantastic way to supercharge your travel rewards and unlock experiences you might not otherwise afford. Always be sure to pay your credit card bill in full and on time to avoid interest charges and maximize the value of your rewards.