Hey everyone, I’m Joshua Rodriguez and today, you are reading my debut post here on Cents and Sensibility! Thanks for joining me! As a personal finance blogger, I do a lot of jumping around from one blog to the next looking for new interesting ideas to share. Although, this isn’t a very new idea, making money using credit cards seems to be an incredibly hot topic. So, today, that’s just what I plan to help you do.
Before we get into the actual “How to…” section of the post, I’ve got something very important to share. Although, everyone wants to make money using credit cards, not everyone will be successful at it. As a matter of fact, it’s an incredibly dangerous process that can lead to overwhelming credit card debt, financial hardship and even bankruptcy if you are not careful! That being said, if you would not consider yourself to be an incredibly financially responsible person, there are tons of less risky ways to make a little extra money but, this one just isn’t for you. If you think you’re ready to make money using credit cards, here’s how it’s done….
Using Credit Cards To Make Money…The Right Way!
Step #1: Finding The Right Credit Card – You will want to use a cash back credit card for this so, that narrows down the search quite a bit for you. Now, keep in mind, not all cash back credit cards are the same so, do a good comparison to find the offer that fits you best. As you compare, make sure to pay special attention to things like interest rates, annual fees, and any other fees that you may have to pay. Also, read about the different cash back programs to find out which one will be most profitable.
Step #2: Figure Out Your Monthly Spending Budget – The key to using credit cards to make money is using your credit card often. This is where the dangers of overwhelming debt come in hand. Therefore, controlling your spending is going to be crucial. The best way to do that is to figure out how much you have to spend before you do. Take a look at your budget spreadsheet and find out how much money you spend on things like food and gas. If the total comes up to less than 50% of your credit limit, that should be how much money you spend on a monthly basis. If your total is higher than 50%, you should keep it at 50% or lower.
Step #3: Use Your Credit Card Instead Of Cash – Now that you’ve got your budget, when you go to get gas or food or, anything else that you may purchase on a regular basis, use your credit card. Every time you do, you will be earning money!
Step #4: Make Transfers To Savings Nightly – Every night, when you are sure your spending is done from the day, transfer the total amount of money that you spent that day into a savings account. By doing so, you will be earning more money (interest) as your money sits waiting to be paid to the lender that issues your credit card.
Step #5: Pay Your Balance Off In Full Every 20 Days – If you keep a balance from month to month, you will not be earning anything, you’ll be paying…interest rates! So, to make sure your cash back is free cash, it’s important that you make sure to pay off your balance in full before your grace period. Because most credit cards have a 30 day grace period, getting into the habit of making payments every 20 days will help you to be sure not to pay interest!
And That’s All She…He Wrote!
Thanks again everyone for taking the time to read my debut post here! If you have any questions, concerns or you’d just like to connect about something on or off topic, please feel free to leave a comment below!
Thoughts from Lindsey: Thanks to Josh for writing this guest post! He offers some great tips on how to take advantage of credit card rewards programs. It’s always important to look at financial matters from different angles. Thanks for stopping by, everybody!
Images used under a Creative Commons License (Wikimedia Commons)
That’s a nice step by step guide on how a person can make money through the help of his or her own credit card. Thanks for sharing this. It gave me a new idea on how I can increase my assets and I’m sure this can help other readers as well.
We use cash back cards for almost every single purchase. It’s definitely an easy way to spend a little less. I wouldn’t necessarily call it “making money” though unless you’re into the churning that some people do, since you aren’t really producing income but just spending a little less from the income you already have.
Hey Matt,
I guess it’s all in the way you look at it, a penny saved is a penny earned in my book! Thanks for your comment.
You make a good point Josh, and this money earned isn’t taxed – so probably more like a penny and a half earned. 🙂
I love the idea of transferring cash to your savings to ensure you have it to pay off your cc at the end of the month. Weekly might work – I know my bank limits the amounts of between-account transfers per month so nightly is out of the question. I am thinking of beginning to use my CC for bills only – that way my CC bill should be just about the same each month.
It is a really good idea, isn’t it? I like the idea of having nightly or weekly transfers to the credit card. It allows someone to use their credit card for the points with a surefire way of paying it back before interest accrues. As long as you were to keep track of what you charged that day or week – you’re golden!