Best Reward / Cash Back Credit Cards

Best Reward / Cash Back Credit Cards


I can offer an example, even though this is off topic here. So I shall be brief:

I live nearby to a state border. I have a PO Box in that other state. I also carry ID from both states - all legal, with full disclosure to the out-of-state state of my actual, physical, address.

They came after me anyway in hope I owed them tax.

This is 2018. There are aspects related to businesses I do not understand. I probably never did. Talking about relationships to government at all levels, federal, state, local; taxes, permits, regulations . . . it goes on.

In my view: potential can of worms. And most importantly, I have no business!!


If you’re intending to and making profit from credit cards, someone does probably technically have a business by IRS definition. Of course you’d be correct that they won’t notice or “make” them report it as such. And I’m not suggesting to treat it as such either. It makes most sense to just ignore it. Income tax is owed on credit card profits if you only manufacture spend. If you mix in regular consumable purchases, you could apply those rebates vs the purchase price and there is no profit. If you’re buying things you’ll later sell for a profit (such as merchandise or precious metals), you are supposed to reduce the cost basis by the value of the rebate.

IMO someone also can’t reasonably argue it’s just a hobby. IRS is clear, yes someone can make unexpected income from a hobby (hobby profits still must be reported on tax return as taxes are owed, losses just can’t be deducted and no SE taxes paid). But its a business if there is an intent to profit. With rewards arbitrage you are intending to profit from each and every transaction. You know in advance of the transaction that it will be profitable.


Still haven’t heard back from Chase. Had their Freedom card for years and this is the way they treat me…



We country folks have a different scenario concerning our living & working locations. We live & operate our business @ physical address & get our mail @PO Box (different city). This sometimes causes confusion when I apply for membership at a bank or credit union. If they do not ask for a different mailing address on the application, they will sometimes mail literature to the physical address & the membership gets returned to sender.

But you are making a sizable profit from your credit card venture. (from what I read) But I would not consider it a business & just hope that IRS doesn’t get involved.


Thanks, pattyb53. I think everything will work out just fine.:grin:


If not instant, it is usually 7-10 days.


As mentioned above, if there’s intent to make a profit, it’s a business. It doesn’t matter if you think you don’t have a business, it’ll be up to the third party to decide if they ever find out what you’re up to. Especially in this digital age. :wink:


No worries, mate! It’s all good.:rofl:

This thread goes to rewards/cash back credit cards. I realize such cards are central to the success of genuine MSers. I want to express my respect and admiration for such persons, the MS community generally. You folks are innovative, creative, and just frankly pretty darn cool! :grinning:

Because I do not engage in the forms of MS practiced with expertise by the aforementioned community, I’m unable to comment with any authority regarding taxability of profits so earned. My gut feel, however, tells me your vulnerability is nil.

As for myself, engaging as I do in a sort of second tier version of MS, perhaps second class would be a more apt description, I have even less vulnerability than the professionals. And certainly none of us is engaged in a business. Nothing could be more self evident.


dont know where you get your info… CC rewards are NOT taxable according to IRS. Cash and points are NOT taxable. Been in this MS biz for 5 years…never a w2 for these rearwards. But new bank acct bonuses are taxable.


I think you are misunderstanding @Bend3r. I’ll rephrase what he said but it my words where I think he’s right. He can correct me if I’m interpreting his view incorrectly. We’re not saying CC rewards are taxable, generally speaking. We’re saying that manufactured spending could be considered business activity by the IRS if they were interested in pursuing MSers. And if MS were classified as a business, since the CC rewards ARE the profit, rewards could therefore be considered taxable. As far as I know, the IRS hasn’t pursued anyone for this who has written about their experience or fought it , so there is no publicly accessible documentation from the IRS or tax court interpretation to back up our belief. That doesn’t mean that we’re wrong, though. It just means it hasn’t happened… yet. There are lots of things that are in the gray area with respect to taxes. This is one of them. Thankfully, the IRS is so behind on bigger things worth way more money that I don’t predict they’ll have the manpower or technology to go after even the biggest MSers for a decade. By then, who knows what MS will look like.


LAST UPDATE: I was wrong about what could cause an issue. Chase didn’t want my County Business License, they wanted my Articles of Incorporation, Certificate of Formation, IRS EIN Letter, or Fictitious Name Statement. Since I don’t have any of those (they aren’t needed in my state for sole proprietors with the owner’s name in the business name), I got another letter. Thankfully, they don’t staff their phones with idiots. I called the number, confirmed my info, gave my reference number, got put on hold, the CSR spent 2 minutes reviewing what I faxed in 11 days ago, and came back on the line to say I was approved for a $9,000 credit line. Now just to meet the minimum spend. Shouldn’t be an issue, but I always get paranoid about it for the first month. Hope you get your referral points @Bend3r.


I hadn’t added info because already looked figured out. But when I got the business address verification letter for sole proprietor, all I took in was a utility bill. They didn’t require anything else from me. I took it in rather than mail and they verified it over the phone at the Chase bank. No idea if mailing would have been easier. Good you got it all sorted.


Lets not go down this rabbit hole, ok?


Ok understood. Thanks for the explanation!!


Finally, seemed they approved since I"m seeing a new card in my account but never got any notification.


DCU offering totally free balance transfers, up to your credit limit, between now and July:

Decent BT deal at DCU


This is just 6 months at 0%, one of the shortest deals around. You might post it in the balance transfer thread:

[Best Balance Transfer Credit Cards]


Agreed. Done. Thank you, Argyll. I was unaware of the BT thread else I would have posted the offer there in the first place.


Freedom paid me my 5% on my first purchases with the funds credited Jan. 1, 2019, quicker than promised) which were primarily charitable donations made to the Foundation for Metabolic Cancer Research through the Paypal site (so the charity did not have to pay fees for using credit cards).

Their failure to use account numbers on checking accounts that are of the usual length, complicated setting up ACT transfers, but it can be made to work for some firms, with Freedom knowing what to do with the funds received (at least for two banks) designed for checking (from when payments to the VISA card can be made).

A wire transfer also got to them. A phone representative was not helpful, merely telling me questions about wires could only be answered by the sending firm only (I had some confidence in the ability of some banks to process wires transfers to them, but wanted to know what would happen when Freedom received the funds, and how long it would take them to get the funds into the right account, especially since the funds would come in with only your member number attached).

Experimentally, wire instructions submitted about 2PM on Dec. 31 got funds into my checking account that day, and could be transferred to pay off part of my credit card debt, so I could use the card later on Dec. 31 to make a large donation in time to create a tax deduction for 2018, and hopefully get the 1% Paypal giving Fund bonus.

They seem to have no way to initiate ACT transfers, but a couple of banks could make them if given the account number (which is your member number) for your checking account. As discussed in the thread on brokerage bonuses, Merrill lacked the ability to handle their non-standard checking account numbering system on their online sites, although BOA at least accepted the instructions (not tested to see if it works however), since BOA charges for transfer out over $1,000, and appears not set up to handle customers without cell phones, or unwilling to disclose their numbers.


Amex Blue Cash Everyday card has $150 back on $1K spending in the first 3 months. It is 3% back on groceries with no annual fee. If you spend $6K at the grocery store the first year that works out to 5.5% cash back.

Slickdeals offers an additional $125 bonus if you apply from their site, meaning $275 total.

With a combined $275 bonus, If you spend $6K at the grocery store the first year that works out to 7.5% cash back.

This card also has Introductory 0% APR for 15 Months on purchases.