How can i make money using my credit cards?

Discussion in 'Investing and Retirement Saving' started by Simrin, Nov 25, 2015.

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  1. Simrin

    Simrin Newbie

    I have excellent credit and have built up my creditworthiness by religiously spending money on credit cards and then paying them off quickly before the money was due. I've recently been offered some top credit cards which I've applied for and should get in the next few days. I was wondering if anyone had any experience in making money with credit cards. I guess the way to go would be to borrow money cheaply or for next to nothing and then invest the money somewhere to get a better return. If anyone has experience doing this or any insights please let me know!
    Miles likes this.
  2. Miles

    Miles Newbie

    If you have a good credit history and you want to earn some extra money there are many ways you can use credit cards to make a profit from them, there are a couple of ways and I am asked many times how to make money from credit cards, there have been reports on the internet that people who have a good background often make a substantial part of their income from credit cards alone.

    #1: Cash Back Cards - CBC

    There are many companies who offer credit with cash back; if you are able to successfully get one of these and build up a good history then you can really make a lot of profit. What you need to do is everything that you need to spend money on you use the cash back plastic that you have been given, and the key is at the end of the month you need to pay back the amount in full, this does not mean you should go on a shopping spree, instead you only use it when you need to use cash or when it’s a essential item, basically you are replacing all your normal shopping habits with your CBC. If you spend $2000 per month every month and you have a card that offer 5% CB on purchases then you can earn $100 per months, if done properly you can earn up to $1200 per year!

    #2: Introductory offers on new borrowing

    Sometimes banks and lending companies in an attempt to really get your custom offer you CC which have a great introductory offer, sometimes you can get up to 0% interest rate on balance transfers, when this happens you need to find out how long you can borrow the money at the zero rate, if for example you have been given this low rate for 18 months then effectively you have been given free money, don’t spend this needlessly, instead withdraw the proceed and then set up a minimum payment every month on the card and then pay off the term ends.

    If you borrow $10,000 at 0% for 18 months and you have to pay back $100 per month as the minimum payment then set this up with your bank to pay every month without fail. At the end of 18 months you will pay back $1800 and on the last day you repay $8200 from the amount you borrowed, this means that you essentially have $10,000 that you can invest in high interest accounts and reap the benefits, if you can find a long term account that pays 5% per month then you can expect to make $500 per year which is not bad at all.

    Another strategy you can use is to drip feed your savings, sometimes backs will give you about 10% return provided you pay in a certain amount each month, you cannot exceed this amount and it is often about $500 per month, what you can do is once you have borrowed the money from the lender at zero percent you can then put it in a really high interest bank account which can earn you 5%, you can then also create a direct debit from the high savings account into the 10% savings account $500 at a time, this way you would really be maximizing your profits and making your money work really hard for you, using the example above you can expect to make about $750 per year using this method.

    Combining all the methods

    Now that you know all the methods you need a strategy to combine them altogether and maximize your profits. Firstly you need to apply to the banks and the lending companies who care offering CBC and the zero interest rate, now let’s assume that you are able to get $20,000 in credit for CBC and $20,000 for the zero interest then you have a combined capital of $40,000. Now you need to use the money effectively, with the cash or money back card you need to spend as much as you can on the things that you need, use the amount for the monthly shopping, use it to pay the mortgage, use it for business expenses, use it for immediate family who have their own expenses so that you can get the money at the end of the month. If you can spend the entire amount responsibly and get 5% on all purchases then you can expect to make $1000 if you receive 5% CB.

    For the rest of the money that you received from the zero rate lending you can put the full amount in a high interest savings account, normally they pay about 6%, make sure you pay off the minimum payments each month and drip feed the money from the high interest account to a 10% high interest accounts that take $500 per month, this way you will really be maximising your money and making the proceeds work incredibly hard for you. With $20,000 you can expect to make about $1850 per year.

    This is a great way to supplement your income and if you have worked hard to create credit then you really need to make it work hard for you, by implementing these methods you can increase your income and if done year in year out then you can really watch the money grow.
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