There’s only one card I keep that I’ve actually paid the annual fee for, and that’s the US Bank FlexPerks Card.
http://www.flexperks.com/credit/offer.do?redirect=refer&lang=en (Edit: Just realized I can get 5000 points if you signup through that link and input my FlexPoints number in the “Referring Friend’s FlexPoints #” field on the application. My FlexPoints number: 400005519816. Feel free to or not, makes no difference to the bonus you get. My first ‘referral’ bonus, woohoo!)
The signup bonus isn’t immediately that incredible – it’s 20,000 points, which is worth up to $400 in travel. FlexPerks has a unique points redemption system, where you can redeem points for travel bookings in increments of 10,000 points, starting at 20,000 points. Each point is worth up to 2 cents, as 20,000 points can be redeemed for any booking up to $400 in value, and 30,000 for $600 in value, etc.
So when you sign up, you get one $400 flight redemption. Not bad, but not the best, especially as it’s not always possible to get *exactly* a $400 redemption, and sometimes you might end up with say, a $300 redemption, which would use the same 20,000 points and reduce the value of each point to 1.5 cents, not 2 cents.
That said, this is still one of the most uniquely rewarding cards, as it offers 3 points per $1 spent on charitable donations.
And one such charitable donation is the microfinance site Kiva.org, where you can make small loans to impoverished individuals around the world to help them get on their feet and prosper.
Kiva.org is unique in that they allow you to donate using a credit card, and PayPal absorbs all credit card processing fees for them (since Kiva’s founder is part of the PayPal Mafia). What’s more, a loan you give on Kiva.org is almost always returned to you within a given timeframe. You pick a loan, and the microfinance organization on the ground receiving the money from you promises repayment within a certain # of months – as short as 6 months for some.
If you pick your loans carefully, you can get close to a 0% default rate, meaning you’ll receive all your money back.
At the same time, you’ll still be earning 3 points, worth 6 cents, on your US Bank FlexPerks card, for every dollar you loan.
So in short, you’re actually doing something great, giving a loan to someone in need on Kiva, while getting amazing benefits in return, being able to fly all around the world for free for the rest of your life.
In fact, your ROI doing this can be as high as 12% per year, if you really maxed out your points redemptions and picked your loans with excellent discretion and care.
That’s higher than you can reasonably expect from almost all investments you’d funnel your money into – and there’s literally zero risk, with a guaranteed 12% return on your investment. Kind of unheard of.
How does that work? Simple. Imagine you budget $10,000 to donate to Kiva. You set this money aside. You pick loans on Kiva that promise repayment within 6 months. So you donate all $10,000, and in return you get 30,000 points on your US FlexPerks card, worth up to $600 in flights. Then, 6 months in, you get all $10,000 returned to you from Kiva (minus any defaults, which are exceedingly rare if you pick your organizations on Kiva very carefully and choose those with no currency exchange loss and no history of any default over their entire time on Kiva). You then donate that $10,000 again, and earn another 30,000 points.
In total, you’ve earned 60,000 points in a year, worth $1200 in travel, on your $10,000 ‘investment’ – hence, a 12% annual ROI. You can rinse and repeat with that $10,000 every year, guaranteed to earn you up to $1200/year in travel with just about no risk (incredibly minimal risk of default on Kiva – less than 2% on all loans, and much lower if you pick carefully).
Given that you won’t always redeem for exactly the maximum value, and that you will likely eventually have *some* defaults on Kiva, we can make this a little more conservative and put the ROI earned at 10% per year, or $1000 for the $10,000 you’ve set aside.
This is also infinitely scalable (to the extent that Kiva has enough good loans for you to funnel money into) – if you have $20,000 in savings, that’s up to $2400/year you can earn. $50,000, $6000 in free flights. Woohoo!
Not bad for a $49 annual fee (waived the first year, even).
The annual fee is entirely subsidized, even, if you make just two flight redemptions per year, as you receive a $25 travel credit per each flight redemption, valid on in-flight purchases such as food and drink. So you can buy up to $25 in food and drink on every flight redemption you make – $50 on two redemptions, $75 on three (e.g. 3*20,000 redemptions with the 60,000 you earn in a year), canceling out in full the $49 annual fee you pay.
There’s also a way to make this *much* better, whereby you can effectively earn an extra 20,000 points for ~$25, and possibly even more. That’s currently a secret, so you’ll have to ping me personally if you want to learn more about that. I’ve gotten an extra 50,000 miles (or a free $1000) using this secret trick so far, so things have just been fine and dandy.
Hope you enjoy!