MAKE Money With Credit Cards
It has been said many times over and over again that credit cards are nothing but root of all evil. Evil in a sense it can lead you to debt problems, if not used properly. On the other hand many people feel the benefits charge cards provide are quiet nice. For example:
You do not have to carry the cash.
It is a convenient form of payment.
You do not need to pay right away.
You can postpone the payment till your bill arrives in your mailbox in about a month.
Many charge cards carry an insurance that if you bought an item using their charge card, and if an item happens to break or gets stolen within 90 days, you have the recourse to go back and get the replacement or the money back.
Even though there are benefits, you still to pay for credit card charges. It is not FREE money. After three weeks or so, you receive the bill. If you can not pay the entire amount, you will be assessed a finance charges. Finance companies will let you pay as little as 1% on the outstanding balance (which they love) which means you will be paying finance charges as high as 25%. Moreover, if you are late in paying the required amount you will get hit hard with up to 35% finance charges and even in some cases 50%.
If you play your cards right, you will not only make money with charge cards, but will avail all the benefits they offer.
Steps to make money with credit cards
1. In order to make money with charge cards, you need to be self disciplined. You need to pay off your entire balance at the end of the billing cycle.
2 The first and foremost thing to do is to look for charge card which does not have any ANNUAL FEE. If it has annual fee, stay clear of it. There are many charge cards in the market which have no annual fee.
3. Look for the charge card that pays to back in the form of cash back. Either couple of percent cash back or in form of merchandise rebates or airline mileage. Some charge cards also give you cash back after accumulating so many points. Credit card companies are adding more benefits every day, so you need to check their benefits every so often.
4. Next thing to look at charge cards which offer balance transfer but with no transaction fee and 0% APR on the balance transfer for some time. Almost all charge companies do balance transfer but few do not charge for transaction fee. This is the one you need. This is very important step. It can make you a good deal of money (see step12 below).
5. After you satisfied yourself with above steps, go ahead apply for a card. Wait for the card to arrive.
6. Charge everything on the charge card whatever you can. I, myself even charge a cup of coffee on the charge card. Most of the fast foods like McDonalds, Burger King have this facility. So, utilize this service.
7. Credit card companies do good jobs organizing your expenses in a nice and orderly fashion. They will send you this organized report at the end of billing cycle. You know by analyzing this report where your money is going. This report can help you budget yourself in the future.
Now look at the savings and the benefits:
8. You are using credit card companies to pay for you for two months. You do not have to pay their bill for two months after you charge.
9. You are getting something in return. Either 2% cash back, or merchandise or airline mileage. This airline mileage can be redeemed for airline tickets.
10. Now, since you are using charge cards for almost everything, you have the right to avail all insurance and other benefits charge card companies provide.
11. By using charge card as stated above you do not have to carry pocket full of cash. You do not have to worry about losing the cash. In case you want Travelers checks, buy it on charge card and if you loose them you can collect your money from Charge Card Company.
12. If you have a card which has a high credit limit and no transaction fee, you can make even more money with this. This is how it is done.
a. Most of the charge cards let you take balance transfers money by transferring it your bank account. Let us assume you have a credit limit of $30,000. Credit companies will let you have up to $29,000 as a balance transfer.
b. Have credit company transfer this amount in your bank electronically or by a preprinted check, Credit Company sent you for the transfer. Invest this amount of money anywhere for the term you borrowed this money for.
c. About a month before the expiration term (I say a month earlier as credit card companies change their rules all the time), take out the money from your investment and return the original amount to Charge Card Company.
d. you keep all gain you made from your investment. Make sure charge card companies get the entire amount you owe before it is due.
Investing $29000 for one year at 5% interest will yields you $1450. Not bad?
One word of caution â€“ Credit card companies will ask you for a minimum payment every month. Keep making the payment before due date otherwise you will pay the finance charges. What I do, I put reminder in Yahoo where I have an e mail account and let it remind me the due dates every month and for the balance due at the end.
You do not want to be paying late charges or more finance charges. This will eat into your profit and will lead you to the path of Debt. This is not what you want it takes planning, determination and budgeting to make money with credit cards.