While millions of Americans are currently burdened with credit card debt , there is however an effective way of using a credit card – using it to make money and increase economic production. Making money with a credit card is somewhat intriguing and seems too good to be true but it is possible as long as you know the rules and learn to play with it.
The concept of cash back credit cards
Cash back credit cards have become popular these days. Basically, this type of credit card provides an incentive in the form of cold cash to cardholders once your credit card spending reach a certain milestone. You just have to know and select the right card – which to tell you honestly, can be really tricky.
Credit card cash rewards and incentives
Most banks and credit card companies spend hundreds of dollars in acquiring a new client in hopes that their new client would spend tens of thousands and this in turn would earn thousands in interest and charges. Hence banks and credit card companies nowadays offer an automatic cash reward once your credit card application is approved.
Yes, you heard it right. Banks and credit card companies will pay you to apply for a credit card. This trick will work well only if you make sure that your bank or credit card company does not have annual charges or other fees for inactivity.
Use your card to finance productive ventures
The best way to make money out of your credit card is by using your credit to finance productive ventures. Improper use of credit on nonproductive ventures contributes to inflation. On the other hand, using it to increase productivity will not only help improve your finances but also positively impact macroeconomics. Use your credit card to fund a business or perhaps to invest in mutual funds and short-term financial instruments.
Do not pay the minimum amount – always pay in full
Regardless of how much your minimum payment is, it is important to always pay in full. Your bank or credit card company will of course tell you that it’s alright to pay the minimum amount – bottom line; they want to maximize their income on interest.
Do not give them an opportunity to raise your interest or to charge additional fees. In short, pay them what you owe.
Stoozing – the oldest trick in the book
Stoozing is perhaps the oldest trick in the credit card book. The idea is to get a 0% balance transfer credit card and transfer money from your card to a savings account that yields a much higher interest rate. The only downside of stoozing is that the 0% balance transfer is pegged only at a limited time, usually not longer than six months.
Making money using your credit card is quite a paradox. It is a known secret in the field of banking and finance that’s why doing so has become more difficult. But that does not mean that it is not possible, the above article shows exactly how you can do it.
Jason Vandermeulen is a business consultant and works with small businesses to improve their online profile. When he’s not at his office, he could be found writing for. To read more of his articles including his latest, , please visit him at his personal website.