How to Make Money with Credit Cards

How to Make Money With Credit Cards!

There are a plethora of credit card deals out there ranging from utilizing 0% interest offers, cash back programs, and signup bonuses. Here are three ways to make money with credit cards!

First and foremost, you need to start building credit as early as possible in your life or now if you haven’t done so already. Apply for a credit card that doesn’t have an annual fee, use it, and pay the full balance every month. Moving forward in this article, I am going to assume you have built your credit and have a decent credit score, usually over 675 or so should be good enough to take advantage of these offers, but it will vary by program and company.

Get a Card With a 0% Purchase Offer

If you are trying to get out of credit card debt, take advantage of the 0% credit card deals as this is a great way to make money with credit cards. Or at least avoid spending money on interest from credit cards. They are generally no interest for 12 or 15 months and then you must pay the balance off to avoid interest after that. You will want to rotate new offers every 10-12 months and avoid paying interest on your debt until you are debt free. It is magical! To make this work, start with a new 0% interest offer on purchases a few months prior to the other card offer expiring. This way you can build up a balance on one card accruing no interest while paying down the other card. Ideally the older card is paid off prior to the 0% promo period ending.

A few key points to talk about with this strategy. First, avoid using balance transfers which usually require charging you a 3% balance transfer fee. Second, as previously mentioned, you need to make sure you are paying off the full balance on the card prior to the expiration of the offer. Lastly, if for some reason you cannot pay off the full balance, then using a card with a 0% interest rate on both new purchases and balance transfers would be a good option. In other words, pay the 3% balance transfer fee rather than keeping the balance on a card that requires you to pay over 20% (varies by card) on the balance that didn’t get paid off.

Utilize Cash Back Card Offers

A second way to make money with credit cards is to utilize cash back offers and this can be very financially rewarding. Bottom line here is, if you have a credit card you should do everything possible to make sure it offers a cash back reward. Essentially how this works is simple if you want to have one card for all purchases. However, I am going to be reviewing strategies that can provide much larger sums of money in the form of cash back rewards by using higher reward rates based on categorizing of purchases. For example, some cards provide a higher rate for restaurant purchases.

The simple method involves getting a cash reward across all purchases. The best I have seen is 2% such as the Citi Double Cash card. https://www.citi.com/credit-cards/citi-double-cash-credit-card. You don’t have worry about picking a category to apply the credit to, it automatically applies to all purchases.

The more complex, but more rewarding strategy is to have multiple cards for different purchases. You can get 5% cash back on all Amazon.com purchases with the Chase Prime Rewards Visa Signature Card. This is simple to use because you just set this card as your default payment method in Amazon.com.

Another great cash back option is to use the Discover It card. You earn 5% cash back on two categories of their choice. For example, for this second quarter of 2022 the offer applies to restaurants and Target stores. The benefits are worth it even though it requires signing up for the program before each quarter starts. One other negative is it will require you to carry this card around with other cards. You do have a limit of $75 in rewards per quarter that can be attained, or $1,500 in purchases ($75/.05).

The last option worth mentioning is the Capital One Savor card which offers 3% on food and entertainment categories. You do need to look up how these are defined. From my research, all restaurants qualify, and most grocery stores do as well. Places like Walmart do not qualify based on being a superstore that carries far more items than just food. Other items that qualify include Hulu, Roku, Redbox, and other movie and television related purchases.

Find Cash Bonus Card Offers

A third way to make money with credit cards is by taking advantage of cash bonus offers where the credit card company pays you a bonus after a certain spend over a specific time frame. For example, you may receive $200 after you spend $1500 within the first two months of card opening. Wells Fargo has a good one, the Active Cash Card which offers $200 after you spend $1000 in the first three months. This card not only offers the cash bonus, but also offers 0% interest on purchases, and 2% rewards on every dollar spent. It doesn’t have category limitations either.

Four Final Takeaways

In summary, I would have four final takeaways for you:

Do your homework and find the best credit card offers out there. There are plenty of great options to choose from!

Be careful not to try to take advantage of every offer you can find all at once. Each time you do this there is a hard credit pull and this can negatively affect your credit. If you take on too much credit at once you may find yourself getting rejected on these offers as well. Find the best deals and pace yourself.

Finally, do not get too crazy spending money that you normally wouldn’t spend just to take advantage of an offer. I use them for my every day living expenses for things like the electric bill. You can also put them auto pay using the highest cash back card.

I do recommend taking the extra time to use different cards according to the best rewards payback. Get the 5% as often as possible.

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