| Many people think that credit cards are simply a fast-track route to debt. Used sensibly, however, cards can actually make you money. A word of caution, though. The methods set out in this article do depend on you paying off the balance on your card/s every month, so you are not charged any interest. If you have an outstanding debt on your card/s that you cannot pay off completely, the best advice is to transfer it to a new card with a 0% introductory balance transfer rate, and aim to pay off the entire debt before the 0% offer period expires. The first, and simplest, method you can use for making money from credit cards is to get one with cashback. With these cards, for every dollar you spend, your card issuer will give you back some money, usually in a single payment made once a year. The amount paid back is calculated as a percentage of your total spending. Percentages vary, but typically range from 0.5% to 2%. Some card issuers pay higher rates for purchases in some categories or made through certain retailers. The Discover® Platinum Card, for example, offers up to 1% cashback normally, but 5% on purchases made from selected merchants in their Get More Program. The second method you can use for making money from your card is to use it for all your routine spending: food, clothes, gas, power bills, and so on (but avoid drawing cash on the card, as you will be charged interest on this). Meanwhile the money from your salary will still be in your bank account, where it will be earning you interest. When the due date comes round each month, simply pay off the entire balance outstanding, and pocket the interest. By using these two methods, you should be able to generate several hundred dollars a year, maybe more, from cashback and interest received. However, there is a third method you can use that will earn you even more money from credit cards. You will, though, need to be disciplined enough to avoid spending more than you can afford, and organized enough to make all required payments by the set dates. If you fail on either of these counts you will be charged interest, which will almost certainly wipe out any gains you make. To use this method, you will need to apply for a new credit card with an introductory interest-free rate for purchases (note that this is a different offer from 0% balance transfers). The Blue card from American Express®is a good example of this type of card: It offers a 0% rate on purchases for an introductory period of up to 15 months (the exact period depends on their judgment of your creditworthiness). You then make all your routine payments using this card during the introductory period. Simply make the minimum payment required every month and put the rest of the money you would otherwise have spent into a high-interest savings account. When the end of the 0% offer period is approaching, simply pay off the entire balance from the money in this account to avoid incurring any interest charges. Again, the interest you have made during this time is pure profit. By using these methods you can give your wages a very handy boost at the credit card companies' expense! So why not apply for a suitable credit card today? Follow the links in this article, or view any of the top credit card offers via the left-hand menu! Independent credit card comparison sites such as make this easier for you by listing all the best current card offers for you to choose from, and also have a range of articles offering unbiased advice and information. |
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