Keith and Liz Rosso walked into Tesla to buy a new Tesla Model 3 and left with not only their luxurious car but also $5,000 in their pocket thanks to their credit card. On top of that, the Rossos scored 180,000 travel rewards points which is equal to $1,800 in cash back or $2,250 in airfare, hotels or car rentals all due to purchasing the Tesla through the app Plastiq.
Using a credit card may come with interest and fees, but in cases like the Rossos, the those expenses could be outweighed by the rewards. “If you use credit cards responsibly, making a large purchase to earn tons of points is an easy win,” Rosso writes in Million Mile Secrets. That is exactly what he and his wife Liz did to purchase the Tesla Model 3 for a total of $58,857.
It’s reported that, “Rosso put the charge on his Chase Ink Business Preferred Card… [and] he can get even more value through Chase’s travel partners. Rosso estimates he’ll get at least $5,000 worth of travel from the points he racked up buying his Tesla.”
While Tesla wouldn’t allow the Rossos to make the purchase directly with his credit card, they did accept the payment through Plastiq, a third-party service that charges a 2.5 percent fee.
“The trick with my Tesla purchase is the card I used, [the] Chase Ink Business Preferred, earned 3X points for the purchase,” Rosso tells CNBC Make It. With this particular credit card, cardholders receive three points on every dollar spent in a variety of categories, including travel, shipping and advertising as well as internet, phone and cable services. The categories often benefit small-business owners.
Rosso said there are two options he can use the points on. The first is “he could use 160,000 points to buy a round-trip business-class award flight on United, which would cost nearly $7,400.” The second option is he “can transfer these points to Hyatt at 1:1 ratio to book free nights at top-rated hotels like the Park Hyatt Maldives. A free night at this hotel costs 25,000 Hyatt points. So, 180,000 points is more than enough for 7 free nights! Paying cash for a sample 7-night stay I looked at in October 2018 would cost more than $6,100!”
Making the purchase through Plastiq resulted in an extra $1,470 due to the 2.5 percent fee the app charges, but the purchase earned him nearly 180,000 rewards points which is a minimum of $1,800 in value. Although, the value could possibly be worth more when redeemed for travel. If the Rossos apply the points to the right hotel or airline, the points could be worth as much as $5,000.
While this plan worked great for the Rosso family, not everyone should jump on the idea. Rosso cautions it could be a “dangerous financial move” and not everyone can pay their car off in full. If you do not have the cash on hand and decide to put the purchase on a credit card, it could lead to dangerous financial issues. “My wife and I had money set aside for the Tesla purchase. And as soon as the Plastiq charge hit my credit card statement, I paid it off in full,” says Keith Rosso.