Most everyone knows that credit cards can lead to big financial trouble. Buying now with the promise to pay later is a slippery slope that ends in disaster for many. And even if you don’t misuse your credit card and ruin your credit rating, you can easily find yourself buying things you don’t need and can’t afford, and end up paying a lot more for items that you may not even still have by the time they are paid off.
Although credit cards pose a danger, with proper use, you can actually make money with your credit card. To do so, you have to have the right card and some serious self-discipline. And you probably also have to have good credit already.
Two Ways To Make Money With Credit Cards
In order for either of the following ways to actually make you money instead of costing you money, you have to charge on your card. And the way to make this work to your advantage is to charge things you’d normally pay by cash or cash equivalent (debit card, ACH transfer or check), such as your car insurance, utilities, food, gas, etc.
Many credit cards offer ‘reward’ points that can be converted to cash. For each dollar you charge, you earn points, which can be redeemed for merchandise, gift cards and/or cash. And some even let you use your accumulated points to pay against your monthly payment or balance due. Some cards may offer points that eventually expire so be sure to redeem them before they vanish. I usually redeem my points for discounted store or restaurant gift cards to give as gifts each year.
You may be able to ‘earn’ up to several hundred dollars from time to time by signing up for credit cards with a cash bonus incentive promo and charging a certain amount during the time frame specified in the offer. This is easy money but be sure to read all the fine print. While there are often many legitimate offers available, know the rules of any you’re considering before you sign on the dotted line. Be sure to pay your balance well ahead of the due date or you will be subject to interest and penalties. Also, it’s best to sign up for just one offer at a time to avoid confusion. If you do take advantage of more than one offer, keep careful track of dates and terms for each so you can maximize your cash incentives without confusion between offers.
A Word Of Warning!
Warning: Proceed with caution! Unless you pay your card balance in full each month, the amount you get as an incentive or cash back won’t come close to what you pay in interest or the harm you can do to your credit. And be smart and safe when applying! Do your research ahead of time. Type the site or card name followed by ‘scam’ into a search so you can benefit by the experience of others and avoid problems.
Lastly, be sure to know what your credit score is ahead of time. Credit Sesame offers a free credit score (no credit card required). Find out more here.
Crystal Marie lives by the philosophy that needing less rather than earning more is the key to happiness and financial serenity, which allowed her to “retire” from formal employment in health education at the age of 44. She can be found making the most of the second half on her blog, The Best 50 Years.