This month marks the awesome proof of concept conclusion to an interesting idea I had--inspired by highly informative posts on r/cryptocurrency--to maximize rewards on credit card spending. As set forth in the table below, I've come up with a way to essentially get 7.2% back on every dollar spent through a four-step process.
| Monthly spending | Hodlnaut | Citi credit card | Coinbase Debit | XLM Staking | Total |
|---|---|---|---|---|---|
| Interest/cashback rate | 12.73% APY | 2% | 4% XLM | 5% in yXLM | 7.21% |
| Return on $1K spending | $10.61 | $20 | $40 in XLM | $2 in XLM | $72.61 |
Step 1: Hodlnaut: at the start of the month, I deposit money on Coinbase Pro, convert 1:1 to USDC, and deposit in my crypto savings account on Hodlnaut, which pays 12.73% APR or about 1% per month. It accrues interest there for the entire month.
Step 2: Citi Cashback credit card: during the month, I pay for everything on my Citi Cashback card, which gives 2% cash back. You name it--groceries, maintenance bill, restaurants, clothing, etc.
Step 3: Coinbase debit card: then, at the end of the month, I withdraw my USDC from Hodlnaut (which has 1x/month free withdrawals) to Coinbase (early in the morning, for low gas fees), convert back to USD, and use my Coinbase debit card to pay off my Citi credit card. The Citi Cashback card allows you to pay for it using a debit card (this is a key requirement for this method to work. That gives me 4% back in XLM.
Step 4: stake the earned XLM: I then transfer the XLM to Lobstr, where I convert it to yXLM for 5% staking interest.
Take $1,000 in monthly spending. This method results in $10.61 in savings on the $1K in USDC during the month, $20 back in 2% Citi credit card rewards, $40 in XLM, and then $2 in XLM staking rewards as 5% of the $40 earned in XLM. On balance, I'm thus getting $72.61 back for every $1K spent, which is absolutely bonker balls awesome to me. Actually slightly less from gas fees, although I transferred at 4-5am ET when gas is cheap. Also, XLM is currently only at like 28% of its ATH, so these rewards might be even higher. I am just so ecstatic about this method, and excited to try it for business expenses as we return full time to the office.
Anyways, I was excited to share the method. Hopefully it's useful!
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