Is there a clever way to use credit cards in real estate?

[John Hyatt]

Recently I have been fascinated with travel hacking, learning about ways to manufacture spending to earn points. It hit me that as a real estate investor we spend hundreds of thousands if not millions paying for contractors, supplies, and properties. The dilemma I am having and I am sure may investors would have is to find a contractor that accepts credit card. If you used a citi double cash back card and spent $1,000,000 in rehab costs you could get $20,000 back (that could be an entire remodel for free, just by changing how you pay). At the very least you could get all your family vacations paid. If a contractor accepts PayPal you could use credit card to pay them through there, I would just be afraid that it might look as though you are making a cash advance on credit card. Best case would be for them to just accept credit cards. I know there has to be a way to do it, just not sure how and it's been bugging me for days now. Does anyone have any clever ideas? On a side note, if there are no contractors that accept credit cards. A contractor might be able to get more business and possibly charge a little more just by offering the ability to pay with credit cards.

[Justin R.]

John Hyatt Taking a step back, what you're suggesting is that the contractor eat the 2.5% tax they pay on those credit card transactions so that you can get 1-2% in rewards.

At the end of the day, this behavior destroys value - it makes the collective lives of the contractor and client WORSE than if they paid in cash. Value is siphoned out of the ecosystem by the credit card processing companies.

I don't mean to be harsh, but if I take a holistic view of the system and all parties involved, I would argue the client is either being selfish for pursuing points at the expense of the contractor or fellow clients. We should be adding real value in what we do, not destroying it, IMHO.

[Small business owner, so I'm passionate about the system-level impact of credit card use - not personal]