Did you know that your credit card bills could make you a millionaire? As unbelievable as it may sound, a US physicist seems to have made the improbable happen. Getting rewards and cashback for your credit card bill payment is no big deal because most of the times the reward amount is insignificant. However, US physicist Konstantin Anikeev managed to earn over to Rs 2.17 crore using a ‘unique idea.’
Konstantin started earning from his credit card in 2009 as a hobby and it soon turned into a “profession” for him. He eventually managed to earn millions from it.
The physicist used his credit card to buy a large number of gift cards. He would then encash them and use deposit the money into his bank account and pay the credit card bill. This payment earned him a reward from the credit card company.
The rewards from paying the credit card bills were his earnings. He repeated the process multiple times to earn more money.
For example, Konstantin earned a reward of $25 on the purchase of a $500 gift card. To encash the gift card, he had to pay a fee of $6, which left him with a profit of $19.
The physicist managed to earn $300,000 (Rs 2.17 crore) by repeating the trick over the years.
The case came to light when someone noticed Konstantin’s income rise exponentially and reported it to the US Tax department.
An investigation was carried out and the case was referred to the court.
Konstantin arrived with a tub full of gift cards and defended himself by saying that the rewards were not his income but discounts and cashback given to him by the credit card companies.
After the court heard both the parties, the judge ruled that the credit card rewards were like property and not taxable, however, if the gift card and rewards are converted back into cash, it becomes profit and shall be taxed.
The authorities are now working to collect taxes from Konstantin.
