Can you use credit cards to make money? Yes, this is totally possible because I do it all the time. In this article, I’ll share with you all the strategies I use and which cards I personally opened up. Make sure to stick around to read the last couple cards I mention, since they are my most used.
One of the first things you need to understand is that credit cards are not free money. They are a form of debt, and it's important to use them responsibly and to pay them off on time each month.
The first way I've used credit cards to make money is by taking advantage of sign-up bonuses. Many credit card companies offer generous sign-up bonuses for new cardholders, and these bonuses can be worth hundreds of dollars. For example, when I signed up for the Chase Freedom Flex, I got $200 cash back after I spent $500 on purchases in the first three months after opening the account. And remember, I was going to spend the $500 anyway, so the $200 to my eyes was just free money.
The Capital One SavorOne Cash Rewards Credit Card also lets you earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening
The Chase Freedom Unlimited lets you earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back.
Oh and by the way, as I’m listing all of these credit cards, I am not sponsored by any of them. This is all from my own personal research and I actually own all the cards I just mentioned. Do you use any of these? Comment below.
The Capital One Venture Rewards is another card that lets you enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, which is equal to $750 in travel.
Similarly, the Chase Sapphire Preferred Card lets you earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®.
And lastly, the Wells Fargo Active Cash Card and Autograph Card lets you earn $200 after you spend $1000 in purchases in the first three months. If I had to choose, I would go for the Chase cards since you only have to spend $500 instead of $1000 to get the free $200.
Another way I've used credit cards to make money is by taking advantage of cash back rewards. Many credit cards offer cash back rewards on purchases, and these rewards can add up quickly. For example, I have an AmEx Gold that offers 4% cash back on most purchases, and I use this card for most of my everyday spending on supermarkets and restaurants. Over the course of a year, I've been able to earn thousands of dollars in cash back rewards, which is money that I've made from buying things that I was going to buy in the first place.
Here are some other examples:
The Chase Freedom Flex gives you 1-5% cash back.
The Chase Freedom Unlimited gives you 1.5%-6.5% cash back.
The Wells Fargo Active Cash Card gives 2% cash back.
And the Capital One SavorOne Cash Rewards Credit Card gives you 1-10% cash back and also has a ridiculously long credit card name.
All of this is a quick summary since everything depends on which category of items you spend on.
It's important to pay your credit card balances in full and on time each month. This is because credit card companies charge high interest rates, and if you carry a balance from month to month, you'll end up paying more in interest than you'll earn in rewards, which is the opposite of what we’re trying to do here. By paying your balance in full each month, you'll avoid interest charges.
If you’re a busy guy like me that has a hard time tracking everything, I recommend using a budgeting app like Mint or YNAB to track your spending and to make sure you're staying within your budget.
Another way to use credit cards to make money is by taking advantage of credit card offers and discounts for specific stores. Many retailers and online stores offer discounts and cashback offers to customers who pay with a certain credit card. For example, I often use my Amazon Rewards Visa Signature Card and Amazon Business Prime AmEx to shop at Amazon and I get 5% cashback on all my purchases. Again, this is a great way to save money on things you were already planning on buying, and it's an easy way to make money.
If you’re like my wife who loves to shop at Target, you can get the RedCard, which lets you save 5% off every day at Target and Target.com. Why is it that when we go in to buy soap, but come out with a cart full of random snacks and home decor instead? I will never know.
Are you a hardcore Apple fan? If so, you can get the Apple Card, which lets you get 3% daily cashback on every purchase at Apple. It’s also a nice, shiny titanium card to show off to your friends.
If you don’t know where to find details of all these credit cards, I recommend saving time by using a credit card comparison website like Credit Karma or NerdWallet to find the best credit card offers and rewards programs. I've personally used these websites to find credit card offers with the best sign-up bonuses, cash back rewards, and discounts.
Remember, credit cards can be a powerful tool to help you make money when you are already going to buy things anyway, but it's important to use them responsibly. By taking advantage of sign-up bonuses, cash back rewards, and credit card offers, you can make a couple of hundred to a couple thousand dollars a year. Just make sure to pay your balances in full and on time each month, and please don't overspend.
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