Credit cards have earned a negative reputation towards many people. It was said to be the source of financial troubles and a lot of responsible people chose to ignore the idea of having one. Even though these statements are true, credit cards still have their advantages and who would know that one of those is making some money. See the below ways of how you can make money with a credit card.
1. Credit card arbitrage
This type of money management should be well thought of. This is where zero-interest credit cards are being taken advantage of to use for profitable investments. Here are the procedures:
- Research on all credit cards – Make yourself the world’s expert when it comes to all kinds of credit cards from different banks. Some says that doing a credit card arbitrage is like playing with fire so you need to be ready for it.
- Check your credit score – Get your credit score free once a year.
- Find banks that offer 0% APR
- Apply for all cards at once – If you apply for a whole bunch of cards at the same time, your credit score will all be based on your original.
- Deposit the cash advance to high interest savings account
- Enroll to automatic credit card minimum payments to be debited from your bank account. If you don’t want that, then just make minimum payments manually.
- Pay off the 0% credit cards in full before they expire
- The money you’ll get here is the interest that you’ve earned.
2. Open up a small store
It could be a small store or an online store. Use your credit card on purchasing items that you want to sell and pay in full every month. If you have a cash back credit card, you’ll be getting money once you have enough points. Another good thing here is that you can gain profit because of the business you started.
3. Balance transfer
If you found a credit card company which offers 0% charge on balance transfers, then apply for one. After you get the card, transfer the balances to a high interest savings account. Pocket the interest and make sure that you are paying for the bill in full. Keep going and you’ll see how your savings would grow after a couple of months.
4. Riding on
This one could be very risky as it looks like you are lending money to some people. Some only offers this to their close friends and relatives to make sure that they will get paid. The procedure is, if you are a credit card holder you can use it to purchase an item for a friend who doesn’t have a credit card and can’t afford to pay in lump sum.
Since credit card companies offer 0% interest for installment plans, you can avail to have this set up on your bill. You will then charge your friend for the item in installment basis and it is up to you how much interest will you charge to your friend.
5. Cash back rewards
Are you aware that you can some get cash back with some credit cards? Yes, you definitely can and this is how you can get make money using your credit card. Follow these steps to make it possible:
- Make a research on credit cards. Know which credit cards offer cash rewards. Try to find a card that gives out 1% cash back or more and apply for that card.
- When you have the card, use it for every purchase that you normally make. Treat it as cash where you would buy all the things you need through it. Do not buy things that you normally don’t make like items that you can’t afford.
- The next step is paying your credit card bills in full. Do not leave any balances. With this, you will be paying all your valuable expenses in one time
- Keep your bills and payment receipts for your own records.
- Once you accumulate enough points for the credit card, request for a check. The cash back that you will receive is a rebate of all the purchases that you make.
- Pocket the cash back and keep on doing this practice. You can also apply for additional credit card and search for cards which will give out higher rewards and cash back percentage.