This is a topic that I wanted to write about for a long time, I have teased a bit of this information out into the private community and sprinkled it in some of the daily emails, but now is time to break the whole thing down for you. This will be part of a new series I write about on the site here talking about mastering the money game. Now this will serve as part two and by far be the simplest things you can do now to start to build your own empire, as time goes on things will get more complex.

I want to share with you how you can leverage high interest savings accounts and reward credit cards to hedge inflation, build your credit history, get rewards and protection that checking accounts just can’t give you.

Most people in America, they live off their debt card, they think that debt is bad so they don’t have credit cards, they don’t want them because grandma said “money is the root of all evil”, so hold no debt. Debt itself isn’t bad, its the mismanagement of risk that leads to the trouble. Now, if my assumption is correct, you have heard of these credit cards that give bonus points, but maybe didn’t know how to best use them and savings accounts are boring so unless they have some weird Millennial spin to them, doubt that stuff is very common.

First you need to understand that getting the most out of these cards and accounts requires a completely different mindset than what most people have now. Look at the banks, not as your enemy but your friend, after all they are the guys who are looking to loan you money, but you gotta play the game and if you play it right and keep your score where they want it, pay your stuff on time and show them you good at the game, they will reward you.

Lets start at the very beginning here, what you are trying to limit tax liability and beat inflation which you can choose to believe that its the number they release every month or I think its safe to assume its a bit more than what they say it is. You can tell the actual effective inflation rate by going out in the streets and tracking what you are spending on groceries and life, that is ACTUAL inflation.

Here is the current inflation rate and last few years.

Full results click here

Now, lets start with the High Interest Savings accounts, those are simply a place for you or an entity you own to park some money and essentially wipe away inflation. The great news is that this semi “dead niche” is getting re-energized due to healthy competition which never existed before the internet, and now forcing up the APYs.

Here is a list of the top 15 for July 2019, check out those interest rates!

Full list and breakdown

Most of the above mentioned have great terms, low to no minimums and offer flexibility you would expect in a checking account but its savings and honestly outside of getting into an ETF or Bond, these are simple and easy to setup. Rate wise these accounts absolutely crap on your traditional banking institutions like Chase, Wells Fargo, Bank of America etc who all offer 0.01%-0.6% per year, usually have crappy terms and high minimums.

Now that we have that out of the way to hedge some of your capital against inflation, lets talk about a more fundamental change you can make to not only get FDIC insurance, fraud protection and earn reward points all at the same time and that is by using reward based credit cards.

That’s right, I am suggesting to those who have the means to pay off their credit cards each month to use those as your primary cards to purchase on and put your debt cards away. Debt cards usually offer low to no rewards, they only give you fraud protection and charge back capabilities on transactions from the last 30-60 days and they DONT build your credit score.

With a credit card you can charge back upwards of a full year on purchases, bad ideas and scams. Also you get the same FDIC insurance, and you get reward points. This is where I see many doing this kinda wrong, there are many points cards out, most of them suck. I will list out 3 of my favorites and give you resource to search a full list but telling you now if you got one for a measly 1%, forget it.

#1 Favorite Reward Credit Card- Amazon Chase Credit Card

This card you don’t get with a lower credit score, with a lower credit score 650 or lower (from what I could tell) Amazon actually puts you through Synchrony bank which has higher APR and NO points, keep that in mind. From what I can tell they just rolled this Chase partnership out this year, my score has been over 700 and I just got this card sent out to me in last 60 days.

Here are the perks…

#2 Favorite Reward Credit Card- Citibank Costco Credit Card

This card is also a bit newer from what I can tell because I was also just sent this card this year, not sure if that signals a new relationship with bank and Costco or not. This is another one that gives you well beyond 1% on the stuff that matters and offers 1% on all the rest

Here are the perks…

#3 Favorite Reward Credit Card- Discover it

This card have been running since maybe 2016 and loved it, no hassle overseas and always works. They have a new welcome offer now which I didn’t get.

Welcome Offer

Here are the perks…

Remember the idea is to essentially put away your debit card and use the credit card for everything, then pay it off at the end of the month. If you have full intention on paying your bills then this shouldn’t be an issue to operate this way and leverage the added protection and reward cash which will further offset your effective inflation rate and loss of value each year.

Sources:
http://www.in2013dollars.com/current-inflation-rate
https://www.bankrate.com/banking/savings/rates/
https://www.bankrate.com/credit-cards/cash-back