Overpay Your Utilities Before You Cancel Service

Overpay Your Utilities Before You Cancel ServiceI’m always looking for easy ways to save money or make money.  Basically anything that will put more money in my pocket without much work is something I like.  I get a lot of my ideas from browsing deal forums like Slickdeals or travel forums like Flyertalk but occasionally I’ll come up with a good idea on my own and share it here.

One of my favorite cards is the Chase Ink Bold Business card that I signed up for a few months ago.  I like this card because it gave me a 50,000 point sign-up bonus, has no foreign transaction fee and it gets me 5x points back on office supplies and utilities like phone, internet and tv services.  The Chase Ultimate Rewards points are very valuable too since you can transfer your points 1:1 to airlines like Southwest and United and hotel chains like Hyatt.  Or you can redeem your points for 20% off travel, so for example a $625 flight on any airline would only require 50,000 points.

Racking up the Points

The only problem is that I don’t spend much on my utilities every month so I don’t get the 5x back on much money.  I pay about $70/month for Directv and $40/month for high speed internet.  I’m still on my mom’s family plan so even my smart phone only costs $50/month(although my mom pays the bill).

When we moved a couple months ago, I decided to switch from ATT Uverse to Time Warner since the former only offered internet in my new area.  Before I canceled my U-Verse though, I did an experiment to see if I could overpay my bill and still get 5x the rewards points.  On my last statement, I overpaid by $300(that was as much as they would let me) and waited.  The payment worked and about 2 months later, I received a check in the mail for just under $300.

So I essentially got 5x back on $300 2 months after I cancelled my service.  I had to call AT&T once to make sure everything was going to get refunded but I guess they’re just really slow to process refund payments.  On my $300 purchase, I got 1,500 Chase UR points back.  Assuming a conservative 1.5 cents to 1 point ratio, these points are worth about $22.50.  Not bad for a few minutes of my time.

Readers, what do you think about my strategy to overpay utilities and get 5x cash back?  Is it worth it for $22.50?  

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-Harry @ PF Pro

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Hi, I'm Harry, the owner and head writer for Your PF Pro. I started this site back in 2011 in order to create a place where young professionals could come and get all of their financial questions answered. On the site, you'll find articles on everything from asset allocation for retirement to saving money at Chipotle! So enjoy..

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  1. Hotandhumid says

    Not a chance. I would never give a utility more money than I owed, getting it back isn’t always so easy.

    Then you have the cost. While I’m not going to dazzle you with numbers (it’s way too early in my day!) but there is a cost to spending that money for 2 months, as you did not have use of it. Is $22.50 worth it? That’s only a choice you can make but it’s not for me.

    • says

      I don’t understand, there is no risk to losing your money. It just might take longer than expected to get your money back.

      Obviously there’s an opportunity cost to not having that $300 in your bank account. But let’s not kid ourselves that OC is very low in today’s interest rate market. I’d rather get a 45% return on my money than a 1% in my Ally checking account.

      Or compounded every 2 months and you have a 54% return. $322.5=$300(1+x)^(2/12). Solve for x.

      I just had my latte so not too early for me to do math haha

    • says

      I had a pretty good experience with AT&T. They always lowered my bill when I called in to complain and I currently pay about 30-40% more with direct TV and time Warner.

      I guess I don’t mind waiting, I made one call after the payment and they told me it would be 4-6 weeks before I got my refund so I set a reminder in my calendar and ended up getting the check a few days before my calendar reminder. If you need $300 you probably shouldn’t be using credit cards at all.

  2. says

    I would do a lot of things but overpaying a corporate entity is something I’m not likely to do to get free points on a card, unless I was just really behind on a spend threshold for a card. I have one student loan with low interest that I pay the minimum each month but the loan actually takes credit card for payment (everything except VISA…Texas colleges and loans hate Visa). I’d rather overpay on my student loan to get the points than pay extra on a utility that might give me the run around.
    Tara @ Streets Ahead Living recently posted…Why I don’t do monthly budgetsMy Profile

  3. says

    I’ve always had more difficulty getting money back I overpaid. It usually can take up to 6 weeks. I remember I overpaid a credit card by mistake and it took 3 months for them to refund the overpayment.

    • says

      Yea it’s always easier getting your money in than getting it out. Just try online sports betting haha But if you’re not in a rush to get the money back, set a calendar reminder and follow up after the 6 weeks or whatever they tell you.

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