Credit cards have a bad reputation as the big chain that have kept many in debt for years but do you know that you can actually make money using your credit card?
To make money using your credit card, all you need to do is to use it as strategically as possible. The money saved can go towards further clearing up any credit card debt you might have. If you are already debt free, then you can use the extra points to pay for any purchase you desire. This piece takes a look at four inventive ways to make money from your credit card.
Earn Bonus Reward Points
Credit cards with point reward programs are very common today. Points are allocated for every purchase you make. After a while, you can redeem accumulated points in line with the provisions of the credit card provider. The bonus points system varies from one provider to the other. So when signing up for such credit cards, be sure the bonus points system applies to your general expenditure. With some providers, you can only get bonus points when you shop for groceries at specific stores while other providers can allow you to charge your rent on credit card and enjoy the thousands of points that can be accumulated from such spend.
Use a cash back credit card
A cash back credit card literally pays you money for shopping. Depending on your credit card provider, you can get back up to 5% of the total amount of all purchases done with your credit card. If you spend up to £15,000 pounds on gas, groceries, utilities and so on over the course of a year, you can get back up to £750 by the end of a year with a 5% cash back credit card. The more you use the credit card, the higher the amount you will make. However, it is important to make sure you don’t go beyond an affordable balance. Interest charges that accrue as a result of not being able to pay off your balance will quickly eat up any cash back benefits.
Sell Reward Points
Let’s say you have racked up points that can be redeemed for air miles, for example. You can sell the points to your friends and family (at a price lower than the going rates for a ticket of course). This is a very fast way to make money off your credit card. However, it is important to make sure you are not breaching any contractual agreements by going down this route.
Don’t have immediate needs for the money made in the two options discussed so far? You can invest the proceeds and reap returns for decades. The power of compound interest means that the £600 saved as part of the perks of owning a cash back credit card can amount to a massive £8000 in the next 10 years, assuming a 7% yearly growth rate. Fortunately, more credit card providers are now offering credit card owners the chance of connecting their credit cards to investment accounts for such purposes.
See? You credit card can be incredibly useful!