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Credit Card Cashback Arbitrage
Using business credit cards with high cashback rates for large business expenses
Why It Works
Credit card rewards are considered rebates by IRS, not taxable income, providing tax-free cash flow
Prerequisites
Business with significant recurring expensesAbility to pay off cards monthlyUnderstanding of cashback limits
How to Execute
1
Research business cards with highest cashback rates for your spend categories
2
Ensure you can pay full balance monthly to avoid interest
3
Track cashback earnings as rebates (non-taxable)
4
Consider paying taxes with credit card if cashback exceeds processing fees
When It Fails
When carrying balances (interest exceeds cashback), when personal credit is damaged, when cashback limits are too low for spend volume
Real Example
“Business owner putting $2M annual ad spend on 2% cashback card, earning $40K tax-free annually”