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Make Money Using Credit Cards
Make money using credit cards as a new method of generating some cash. If you must pay bills and buy food anyway you might as well be paid back for it.
Buying items with them can provide other benefits that you may not have known. If you think of them as a tool to further your financial goals instead of a way to get out of a jam, you can profit from using them.
If you are tired of feeling like you are being taken advantage of by the banks, you can turn it around and make money using credit cards instead.
This plan is not a way to obtain credit. This article assumes that you already have them and can use them in a financially mature manner. I will begin to outline what I do when I execute this plan.
Note: This article describes the plan I use. You should consult an accountant or financial professional before you implement a scenario like this.
Make Money Using Credit Cards
This plan assumes several things. It is mainly for people who adhere to the list presented below. This plan is not a method to get out of debt or to eliminate a poor credit history. It is possible to make money using credit cards and not worry about minimum payments and interest charges. The list below describes what is needed to start.
- Do You Already Have Credit Cards?
You must already have a card in good standing with a very low balance. One that you can pay off on the next bill or one with a zero balance. Some people don't use them as an emergency fund. They use them wisely for purchases that they can handle, so for them, this will not be a problem.
I get a card that has no annual fee. In my opinion, although I try to get a low-interest card, for me, it is more important to find one that has a high reimbursement percentage. The reason the interest rate is less important is that I know that I am going to pay off the bill each month, so I will never incur the interest charges.
- Cash Back Credit Card
For this plan to work, you will need to have a credit card that pays you back with either cash that you can apply to your balance or a check that the bank will mail to you. I choose the option to get paid back and apply it toward my balance, I feel I get it faster, and I don't need to worry about the check getting lost or having to take it to the bank. Cards can offer 1%, 1.5%, and 2% cash back. Some of them offer 5% cash back on rotating categories up to a predetermined limit. I use my highest paying card for this plan depending upon what I am buying.
- Not a License to Spend
This plan assumes that you are going to buy the same things that you normally would, except you will use a card as the form of payment. Because you will be paid back doesn't mean you should go out and frivolously spend.
- Pay Off The Bill Each Month
For this to work, you must pay off your bill in its entirety every month. If not, the interest charges will cancel out your profit. The whole point is to be in control of what you are doing. Thinking of it like an investment that makes money on funds that you would have otherwise paid out to put cash in someone else's pocket.
- Borrow Money For Free
I found that a side benefit is that I don't need to be as worried about making sure I have a high balance in my bank account. I don't need to carry as high of a balance since I get a bill monthly I only need to have the funds in there when the bill is due. Because finances can be tight, I have the whole month to build up my account to pay off that one bill. And at least with my card, I can choose the billing date to one that is more favorable for the date I get paid. So they are paying me to borrow their money. I need to say again you must pay the bill off completely each month to avoid the fees and interest.
- Bills to Pay
Check to make sure the biller won't charge you an extra fee for paying with a charge card. My electric company does this, so I take care of these through the bank with online bill pay. I do pay for my cellphone, cable, car insurance, gas, food, and other things I buy in person in stores with a card. Check your bills to see which will work for you.
- Pitfalls
This plan will fail if you don't pay your bill in full every month, or you go crazy spending when you can't afford it. Even though you will get a percentage back, you still have to pay for what you buy.
So now you know that it is possible to make money using credit cards. They don't have to be something that you dread but something that you can use to turn a profit. You must pay these bills no matter what payment method you use, so you might as well get paid in return.
