I use credit cards to earn reward points for almost all my spending. Therefore, I generate a small passive income while spending money for my needs. But, don’t think that I am spending too much money in order to collect more points, actually I collect points while doing our regular shopping like groceries, gas, and when I paying my bills. Of course, I pay off the balance by the end of the month in order to avoid the interest charges.
I have multiple credit cards, and maximize the points by using different cards at different situations. For example, I use MBNA Smart Cash Mastercard groceries and gas, President’s Choice (PC) Mastercard to pay for bills, and whenever I receive any promotional offer I use RBC rewards card to collect RBC reward points.
Last month, I received pre-approved Scotiabank American Express gold rewards card that offers even high rewards points – 4 points for every $1 spend on groceries, gas, restaurant and entertainment.
RBC rewards points
Recently, I was able to pay $75 using RBC rewards points, and it was an absolutely free-passive income. 
No annual fee RBC rewards card offers 1 point for every $2 you spend and each point worth 0.00581 cents. Therefore, you could earn 0.29 cents for every $100 you spend. It is not worth when you compare with the other rewards cards such as MBNA Smart Cash (earn $2 for every $100) or Amex gold ($4 worth travel points for $100) or PC Mastercard ($1 for every $100), but it is worth to use when you have promotion reward offers.
PC Mastercard points
Using PC mastercard, I can buy $60 worth of groceries using available PC points in any Loblaws stores (No frills, Independence store, etc). 
Air Miles card
In addition, I use Air Miles card along with the credit cards to earn more reward points in some stores. For example, Metro and Shell gas station you can earn 1 Air Mile points for every $20 you spend. Also, you can earn extra Air Mile points when you fill out an online survey and also you can get bonus points when you do cash redeem towards purchases at the stores or gas stations. 
Earn more than $750 per year
Hopefully, I can earn more than $750 worth of points per year using reward credit cards and Air Miles card when I use them for my regular shopping. So, I can go for a free vacation every few years using those reward points :D.
I completely agree with you that credit cards can be put to great use. As I’m sure you do, I disagree with the authors out there that say you should go back to cash or at least a debit card in order to reduce the tendency to overspend. Overspending is definitely a problem for some people, but that is through no intrinsic fault of the credit cards…just because you have a $10k credit limit on a card doesn’t mean you need to spend all of it!
Therefore, like you, I buy anything and everything with a credit card. It gets paid off in full (automatically) each month so I’m effectively using it as a free 30-day loan. Plus, I get the benefits of fraud protection, some insurance, and awards.
However, I only get cards that pay their rewards directly in dollars. (My current cards are US Bank Cash+ card, which is 5% on restaurants, 3% groceries, and 1% everything else; and the PenFed Rewards card, which is 5% monthly cash back only on gas. I miss the days of 2% monthly cash back from Schwab!)
Awhile back PenFed tried to switch me over to their points card. It was initially equivalent in that the direct cash back and points, which were then eventually redeemed for cash, were equal. I decided to stay with the cash back version of the card (despite very nice bonus points for switching) because I was worried that the points could be easily devalued in the future.
And, that’s exactly what happened. I think it used to be $50 was 5000 points while the new terms state that $50 is now 6100 points. While you can easily make the points worth less, you can’t do that with cash.
That’s why I love rewards credit cards but dislike and try to avoid those that pay only in points. Still, I’m sure I’m missing some great deals out there!
Source for the devaluation: http://www.fatwallet.com/forums/finance/1292477/?start=0
Thank you Scott,
If we have great spending control, then it wouldn’t be a problem in using credit cards and pay them off in full by end of month. As you said, it is free 30-day loan.
Also, it is really good to have rewards directly in dollars; it is OK for us to have rewards in travel points because we travel a lot, so we can easily pay the traveling cost using the points.
Best regards,
You’re right. Travel cards are tough to beat. If I traveled more I’d have to get one of those too!
Income is income. I too have a cash back rewards card and use the cash back to pay part of my statement balance. another source of passive income is always great. It’s not like I am buying something just for the cash back. These are for regular purchases like gas & groceries. I’m going to buy the stuff anyway, might as well get a little back.
Thank you DivHut for stopping by!
As you said, if we use the rewards cards for our regular purchase, we can get something back.
Cheers,
If you do not have a credit card youerslf you can use a parents or a friendsI use my moms credit card to pay for WoW (technically they pay for WoW for me too)My Brothers friends uses my brothers credit card to pay for WoWBut if you dont want to mooch off of your friends or family you can buy game cards which they have at most;Best Buys, Game Stops and Walmarts but buying with a credit card is easier and you can buy 6 months at once for cheaper which i do it goes from 15$ s a month to 12$ s a month. What you do is pay 72$ every 6 months.
Good article, reward points look so low when you collect, but it will add more value for long term.
Thank you Fazil, Glad that like it.
Nice post…Our family uses Chase Rewards for our points program. It is 1pt for every dollar you spend but they also rotate bonus categories (ex. restaurants, gas, groceries, etc.) every 3 months where you get up to 5pts for every dollar you spend up to a set maximum.
We use credit for everything but pay our bill in full each month (no exceptions). Every year, we usually cash out our points for cash or gift cards. We’ve been able to use our points to fund most of our Christmas shopping every year!!
Thank you for visiting my site!
5 points for $1 is a good deal. Earning reward points is a good way to save some money while spending.