Most credit cards offer some sort of cash back program, usually 1-2% on all purchases, but sometimes up to 5% for spending in certain categories.

This is the bank’s attempt to get you to pull out their card when you make a purchase — instead of all the others in your wallet.

That means if you spend an average of $1150 a month on charge-able purchases like food, gas, entertainment, and apparel (the national household average according to one report), you should be earning at least $138 a year in cash back rewards.

It’s obviously not a lifestyle-changer, but then again, it’s free money.

Still, You Can Do MUCH Better

Now if you divided that $13,800 in average annual spending among a few cards with attractive sign-up bonuses, you could earn the equivalent of $1000-2000 in rewards.

A heckuva lot better than $138!

For years, I had just one or 2 cards in my wallet, and would sit back and happily earn my 1-2% cash back. Knowing what I know now, it pains me to think of all the money I left on the table!

What do I mean? The magic really happens when you take advantage of certain sign-up bonuses for new cards — earning the equivalent of 20%, 30%, 40% cash back or more in travel value or statement credit.

Here’s just a really simple example:

The Chase Freedom card is currently offering $150 as a sign up bonus when you spend $500 in the first 3 months. That’s 30% cash back, or probably 30x better than what you’re earning on your spending right now.

And if your household is anything like ours, it won’t be much trouble to spend $500 on your card in 3 months. Plus there’s no annual fee!

To learn more, please visit:

https://www.sidehustlenation.com/credit-card-rewards/#how-credit-card-rewards-work

Before you dive in, there are a few “rules” to keep in mind in this game.

The 3-Month Cooling Off Period

First, you don’t want to apply for credit cards in quick succession. Instead, I recommend waiting at least 3 months in between applications.

Each application is a note on your credit score. If you’re seen to be applying for too much credit in too short a window, it can raise a red flag — hurting your credit score and making it harder for your application to get approved.

Now, I’m not saying I’ve never broken this rule … but think of it as a general guideline or best practice.

The 5/24 Rule

The 5/24 rule is specific to rewards credit cards issued by Chase. It dictates you can’t open more than 5 accounts with Chase in a 24 month period.

The reason this one comes up is because Chase is one of the largest card issuers and has some of the most attractive cards.

Double Dipping

If you’ve been going after credit card rewards for awhile, you might want to apply for the same card you did in the past.

In most cases the banks are OK with this to try and win back your business, but each financial institution has different rules on whether or not you’re eligible for the sign-up bonus again, whether your current card needs to be cancelled, and how long it’s been since your last bonus.

(Probably not an issue if you’re just starting out, so I wouldn’t stress too much about it.)

To learn more about my recommended cards and for the CardRatings links to check them out, please visit:

https://www.sidehustlenation.com/credit-card-rewards/#how-to-pick-cards

What Qualifies as a Business?

This probably doesn’t come as a shock, but to apply (and get approved) for a business credit card, you DO need a business.

Now if you’re side hustling, you’re probably already in business — even if it doesn’t feel like it.

If you ever do freelance work, sell stuff on Ebay, run a blog, or do tutoring, all of those could count as a business.

Do I Need to Register My Business?

By default, you’re already set up as a sole-proprietor. You don’t need to create an LLC or incorporate to apply for business credit cards.

Your business also doesn’t need to be profitable or even to have any revenue at all. Most startups have some expenses early on, and for better or worse, banks are often happy to lend you those startup costs.

(Of course, don’t spend money you don’t have.)

If you are “pre-revenue”, that’s OK. Just fill out the application as accurately and truthfully as possible!

Do I Need an EIN?

An EIN, or Employer Identification Number, is also not required to apply for business credit cards.

(Though it’s free to get one at IRS.gov, and you may need one to open a business bank account.)

Most applications will ask for your social security number anyway.

To learn more about my recommended cards and for the CardRatings links to check them out, please visit:

https://www.sidehustlenation.com/credit-card-rewards/#business-cards

Applying for credit cards can impact your credit score, but probably not in the way you’re thinking.

There are a few main factors to consider, and I’ll address those below. However, the biggest thing is to be a responsible borrower: don’t spend money you don’t have, don’t max out your cards, and don’t pay late.

Inquiries

Each time you apply for a new credit card, that counts as a “credit inquiry” on your credit report.

Generally speaking, inquiries are OK, and each one will only ding your score perhaps 3 points. But too many inquiries in too short a time is a red flag to the banks and to your credit score.

Banks are risk-averse and to them, it’s like, “Whoa, why is this person suddenly in need of so much new credit?”

That’s why I recommend only applying for 1 card every 3 months.

Open Lines / Credit History

The longer you have an open credit account in good standing, the better.

That’s why keeping a card forever, especially one with no annual fee, can help your credit age.

Credit Utilization

Credit utilization is the amount you have charged divided by the amount you could charge. Basically, how much of your available credit line are you using?

This is where having multiple cards can actually help you.

Banks and credit monitoring services want to see low credit utilization — below 30% is a general guideline.

That means if you have $10,000 in available credit, but keep less than $3000 charged, you’ll be in good shape here. It’s a signal that you’re a responsible borrower — you have all this money available to you, but you only use a small portion.

I created a spreadsheet in Google Docs to help me keep track of the various credit cards I have, their benefits, and the annual fees.

You can save a copy for yourself here. (Just be sure to hit File > Make a Copy, before you add any of your own info.):

https://docs.google.com/spreadsheets/d/159JhrMRq3nP0uML5lAIbgK7nx1VVtFVpevhDgrYaYC8/edit?usp=sharing

If you plan ahead a little bit, it’s usually not hard at all to meet your minimum spending requirements.

Especially for the cash back cards we looked at — our family can easily find $500 worth of groceries, utilities, insurance, or other expenses.

Here are some of the common things we buy to meet the minimum spend:

• Transfer over all recurring monthly payments — Internet, TV, cell phones, Netflix, life insurance, utilities.

• Make the card your “daily driver” for every day expenses like gas and groceries.

• Plan big purchases around new credit card sign-ups. That could be stuff like furniture or flights.

• Group or family purchases. When you’re out to dinner with friends, offer to pick up the tab and have everyone give you cash.

• Car repairs.

• Medical expenses. With two young kids in the house (and an injury prone dad!), we sadly have had quite a few doctor bills lately!

• Charity donations. Win win!

For business cards, here’s how I typically meet my minimums:

• Recurring expenses like hosting and software

• Contractor payments

• Pre-paying for software or licenses

• Conference registrations (and flights to those conferences)

• Equipment like webcams, monitors, or a new laptop

• Inventory purchases. My experiments with the Amazon FBA business were great for meeting minimum spend requirements!

The bottom line is to be intentional about using the new card and don’t sign up for something if you can’t see how you’ll reach the minimum spend required for the bonus.