You can use your credit card on a daily basis to make some extra money. You won’t get rich but you’ll get every possible penny you can out of every purchase to put extra cash in your pocket.
If you follow these tips, you’ll stop paying high interest to the credit card companies and you’ll instead be making money by using your credit card for every purchase. This takes some responsibility and also requires you to stay out of credit card debt.
Get a good credit card.
First, if you don’t already have a card with a decent rewards or cash back program you’ll want to get one. Avoid cards with annual fees and instead look for cash back or rewards credit cards that offer at least a full 1% cash back on all purchases. Avoid cards that require you to reach a certain annual spending limit to get the full percentage back.
Consider a card that in addition to a full 1% back also offers bonus percentages back on certain spending categories. For example you might find a card that offers 3% or more back on all your food shopping. Some cards come with access to sites that allow you to shop your favorite stores through the site links and earn even more cash back.
Pay your balance in full monthly.
If you have credit card debt, this whole making money with your credit card is not for you. But if you have no credit card debt you can make money by paying your balance in full each and every month. Added bonus? You get to see your spending habits and naturally develop a budget.
Always make the full monthly payment on time and never make just minimum purchases.
Get interest on your money.
The nice thing about credit cards is that they all come with a grace period, usually in the range of 15-25 days. This means that from the date of your latest statement until the end of the grace period you have to make no payments. The money that you plan to use to pay your bill at the end of the grace period should be working for you.
Open a high interest savings account such as one you’d find at ING Direct and put your money in there. The account needs to be easily accessible and allow you to add or remove money at any time.
To get even more earned interest on your money, extend the grace period on big purchases by planning ahead. Say you know you’ll be making a $500 dollar purchase for a new dishwasher. Your monthly spending period for your latest account statement ends on the 25th of this month. Your grace period is 20 days which means the bill will be due 20 days after the 25th.
But if you wait until the 26th to make your big purchase, you’ve effectively doubled your grace period since the new purchase falls under the next billing cycle and won’t be due until the following bill after that cycle. You’ll keep your cash longer and let it earn even more interest.
Cash back is usually the best reward.
Many credit card companies offer full rewards programs where you can redeem points for balance credits, gift cards, airline miles, and merchandise. Almost always the merchandise is ‘overpriced’ when compared to the number of ‘points’ required. The gift cards are only worth redeeming if their actual value is worth more then the points needed to redeem them. And if you don’t fly a lot, your points may expire or be useless to you.
Cash back is one of the best options because no matter if you earn only 1% back or a combination of bonus points back and the standard % back, you’ll be either getting exactly the value of your cash back percentage or more. Some companies even offer perks for those willing to wait. I have a credit card that gives me 50 dollars for every 5,000 points, but if I wait until I reach 20,000 points I’ll get a check for 250 dollars.
Do these things and you’ll make a few extra bucks just for using your credit card. Don’t worry about the card companies either. There are enough people who carry balances to more than cover your lack of interest payments. Plus every time you swipe your credit card, the merchant pays a small transaction fee to the card processor and issuer.
You won’t get rich and spending more than you have will cancel out most of the cash earned. But with these tips you’ll get more out of every purchase.