How I Tried to Get the New iPad for Free and What I Learned
Each time Apple released a new iPad , I wrote about its pros and cons, where to buy it and what apps to get for it, and all the while I tried to resist the urge to buy one for myself. When the first iPad came out, I told myself it was better to wait until they fixed the obvious flaws with the next model. Sure enough, the second generation iPad addressed almost all of my complaints, so naturally my concerns shifted to price: How could I justify spending $499 on a product that isn't absolutely essential? I couldn't, so I didn't buy it.
|Trying to saving money on items such as iPads can be more trouble -- and expense -- than it's worth.|
But about six months ago, I came up with a plan. I decided to save up all my credit card rewards points and put them toward the cost of buying the new iPad when it came out.
I have two credit cards -- a Chase(JPM) Sapphire and a Chase Freedom -- both of which allow customers to redeem rewards points for cash. So I figured if I cashed out the points after a few months, I'd have enough to at least bring down the cost of the iPad to $200 - or about the price of a Kindle Fire . Who knows, maybe I'd even get it cheaper than that.
Unfortunately, when you do the math, this is easier said than done. With the cards, you get $1 back for every 100 rewards points you earn. So to cover the cost of a $499 iPad, I would need to earn roughly 50,000 rewards points. For both of these Chase cards, the baseline rewards rate is one point earned for every dollar spent. So theoretically, I'd have to spend $50,000 to make an extra $500 in cash-back rewards. Gulp.
Of course, it ends up being significantly less than that. The Sapphire offers two points per $1 spent on travel, the Freedom offers five points per $1 spent on special categories each quarter and both push out other rewards promotions throughout the year. Indeed, when I started this grand scheme, the 5% cash-back category on the Freedom was food and dining, which helped me earn points quickly since I eat constantly. Then the category changed to gas and this New York subway commuter was out of luck.
All of this led me to my first lesson in savings: You are more likely to charge frivolously if you are focusing on the rewards points.