Beginners Guide: Making Money Using Your Credit Cards

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Making money using your credit cards, what a concept. I’ve been making money off my credit cards for years. Learn how to get started today and improve your life financially. Making Money Using Your Credit Cards PhotoLearn how to take advantage of credit cards, instead of letting your credit cards take advantage of you.

It’s true, I’ve been making around a $1,000 -$1,500 dollars/year since 2005 by using my credit cards for everyday purchases. As a matter of fact, I try to purchase everything I can using my credit card.

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Have You Sworn Off Credit Cards – Think Again


Many people have gotten themselves into financial trouble using credit cards. They eventually swear off their credit cards and actually end up making their financial situation worse.

They opt to use Debit Cards to control their spending habits and cut up those nasty credit cards thinking they are doing themselves good.

However this is absolutely the wrong thing to do for 2 reasons.

  1. You are not doing anything proactive to build up your credit scores.
  2. You are losing out on a ton of great benefits from having a Rewards Credit Card.

How’s an extra $1,000/year sound?

Many of us, myself included, get our first credit card and we don’t understand how detrimental compounding interest can be when we carry a balance on the card.

Making Money Using Your Credit Cards Photo

We think that paying the minimum amount or putting an extra 50 dollars to the monthly  payment is good enough.

But that is the WORST thing that you can do with a Credit Card.

This is how Credit Card Nightmares begin.

THE ONLY WAY TO USE A CREDIT CARD IS TO…

  • Pay your credit card balance off completely every month.
  • Use your credit card just like you would use a debit card or hard cash.

In other words, if you don’t have the cash for a purchase, don’t make the purchase, PERIOD.

There are NO EXCEPTIONS to this rule. If you can’t accept this rule into your life, then you won’t build up your credit scores or make money off of your credit cards.

Seniors, here’s a great post I just read on how to make extra money as a senior, check it out.

Credit Cards Build Your Credit Scores


In order to build good credit, you need at least a couple of active lines of credit. Meaning some form of credit that you are using on a daily/monthly basis and paying your payments on time. This can be in the form of Credit Cards, Car Loans, or Mortgages.

You also want to build new, good credit.

If you eliminate your credit cards and have no other lines of credit, you eliminate your open lines of credit history and your credit scores will go down.

But if you have a couple of credit cards, and you pay them off each month, you’re scores will go…

UP, UP, UP!

In today’s world, having good credit is the key to getting lower interest rates for loans, lower insurance costs, or even simply being looked at by a lender when you decide to purchase a car or a home.

NO CREDIT = NO CAR, NO HOME, NO FINANCIAL FREEDOM

Making Money Using Your Credit Cards Photo

So by having a couple of credit cards and using them just as you would a debit card or cash, you’ll find yourself building solid credit in no time.

“Just don’t forget to pay the balance off on your credit cards every month.”

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How to Start Making Money Using Your Credit Cards


If you don’t have good credit, you will need to suck it up for a while and get a credit card that doesn’t offer any type of rewards program.

If your credit is really bad, you will need to apply for a secured credit card. A secured credit card works to repair your credit by establishing a new credit history.

Many local banks provide a secured credit card if you have an account with them. As you use your new credit card and pay it off each month, they will report your credit history to the three major consumer credit reporting agency (Experian, Equifax, and Transunion in the US). Making Money Using Your Credit Cards Photo

As you begin to re-establish your credit, your scores will improve and you will eventually be able to get a credit card that rewards you for making purchases.

If you already have good credit, this will be an easy process to start making money right away.

All you need to do is apply for a Rewards Credit Card.

Benefits of Reward Credit Cards


Most all of the reward credit cards offer similar programs. They typically offer a percent or two on every purchase in the form of cash, travel points, or popular brand name purchases using gift cards. It depends on the type of purchase as to whether you get 1 or 2% cash back.

You can redeem your cash at any point in time. One great way that I’ve seen a lot of folks use rewards credit cards is to let the cash accumulate until the end of the year, close to Christmas time. Then you can save up your cash to buy your Christmas presents or give yourself a fat year end bonus, your choice.

 

Or, you can accept your cash back in the form of gift cards. This allows you a greater purchasing power by giving you more than your original cash. Sometime you get up to 1 1/2 to 2 times the amount of cash back. And many credit card companies offer gift cards to hundreds of retail shops.

For example: This last year at Christmas time, I had the option to take my cash back in the form of cash at $1,000 dollars or $1,500 dollars in gift cards.

If you’re a fan of traveling, many credit card reward programs offer you cash back in the form of travel points that you can then apply to air fare or lodging.

Final Recommendations


There are many credit cards that offer reward programs. I wouldn’t be concerned with the terms of interest rates on purchases or on cash advances.

Why?

Because you never should take a cash advance from a credit card.

Also, you’re never going to carry a balance on the credit card, so who cares about the interest rate.

“If you follow this advice, the credit card companies will never make a dime off of you. But you will make several thousands of dollars off of them throughout the years to come.”

Lastly, if you are a traveler or purchase things outside of your home country, get a credit card that has ZERO foreign financial charges.

There are several cards out there that offer no foreign financial charges, but in my experience and based Making Money Using Your Credit Cards Photoon my current research, Capital One, continues to be the dominant leader in this category.

I did use Chase Sapphire Rewards Card last year, but after one year with them, they have an annual fee of $100 dollars.

I personally use Capital One World Card, they offer great customer service, card protection, zero foreign financial fees, and a great rewards program without any annual fees.

Use this information to make yourself a wealthier person.

And if you have any Credit Cards that you would like to recommend or would like to add anything to the discussion, please leave a comment below and I’ll get back to you right away.

Making money using your credit cards is an awesome concept. Take advantage of it and make your life better.

Cheers,
Todd

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photo credit: TrinityCreditServices via photopin cc
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photo credit: Sean MacEntee via photopin cc


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