The Hack: Get a new credit card every 6 months to pay your semiannual car-insurance premiums.
Do this around December and June of every year (you'll see why in a second). Make sure this credit card has a significant introductory cash-back amount after hitting a low spending threshold.
For example, the latest addition to my credit-card arsenal is the Citi Custom Cash Mastercard. I get $200 cash back when I spend $750 within the first 90 days of opening the account. My 6-month car insurance premiums (which are due around January 1 and July 1) run about $500, so BANG, I’m already two-thirds of the way home on something I have to buy anyway. The cash back effectively a becomes a $200-OFF coupon on my car insurance.
Sure, there’s a minor hit to my credit report every 6 months when I do this. But these dings are the kind that rebound quickly: inquiries and age-of-open accounts. They’re quickly offset by factors like my total credit-utilization percentage going down (because I have more available credit than I had before—credit bureaus love it when available credit in not being used).
If every year, I can save $400 on my car insurance in exchange for two minor hits to my credit report that quickly rebound and then turn into positives, that's a no-brainer, right?
Drop me a line at vikram@ghostmile.com and tell me what you think or other hacks you know of.
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