Don’t think of your credit card as a simply a means to an end. To be used in an emergency only, or as an extension of your income. While these aren’t necessarily wrong mindsets, you might be missing out on turning your credit cards into a money‒making asset. In short, your credit cards equal money.
And, no, you don’t need to be a financial whiz or an accountant on wall street to make this work. In fact, making extra cash off your credit cards boils down to three tips that anyone can follow.
If you’re in the market for a new credit card, it helps to be selective based on your credit scores. It’s absolutely vital to sign up for a card that fits your lifestyle. There are many horror stories about naive credit card users getting duped because they didn’t read the fine print. No one can hope to make any profit if they’re too busy battling high interest rates and scowling at ludicrous annual fees.
Another thing to keep in mind is to never be too eager to sign the dotted line. The credit card industry is a fiercely competitive marketplace. It’s a never‒ending war fought with juicy cash-back deals, extended travel points, and bonuses just waiting to be taken advantage of. So, remember, don’t settle on just a good deal, look for the best deal. Remember, credit cards equal money.
Your main earners: Signup Bonuses, Rewards, and Travel Points
Now, this is the part we start talking about actually earning cash on your credit cards. Your biggest earners will be signup bonuses and rewards points. Rewards in the form of cashback deals and points, on the other hand, will prove to be a more long term form of saving and earning. It’s relatively simple–you just purchase all of your regular items with your card and pay it off.
Most credit cards usually offer a minimum of at least 1%, so it’s certainly worth hunting for anything higher than the usual rate. Even if they don’t offer many of the flashier sign-up bonuses that other cards have, the long term benefits will outweigh any short term sign on bonuses.
Cash-Back vs. Cash Points
Many people claim that cash point programs aren’t too different than cash-back ones. And on the surface, they might have a point. Cash point cards usually match you one point per dollar spent, with some cards like the Capital One Venture Rewards offering two points per dollar. These points are spent just like cash except that they have restrictions on what you can and can’t buy. Cash-back is just what it says on the tin – you get cash back that can be spent on anything you choose.
Ultimately, you’ll want to choose cash-back over cash points. While you’re likely to earn points faster than you would cash, you can spend that cash however you want without any restrictions. Cash points are ultimately tied to the card you’re using, and having a similar rewards system just doesn’t have the same flexibility. So, if you’re debating whether to go points or cash-back, remember that cash is king.
Most travel points and rewards are definitely worth signing up for if you travel extensively. Some people save up enough flyer miles to travel for a year without ever actually paying a dime. If you think that could easily be you with the number of miles you rack up, then by all means, consider a travel rewards card.
Credit Cards Equal Money, So Be Smart With Your Dough
All of this advice was written on the assumption that you’re already a responsible level-headed card holder. You can’t expect to turn your card into an asset if you’re already struggling to keep up with your interest rates. Just remember to:
- Spend within your means. The thought of racking up rewards is fine, but be sure not to overspend.
- Pay on time and pay in full. Reward cards aren’t known for their non-existent interest rates. Always pay your bills at the end of the month, or else it’ll make the entire reward system moot.
- Limit the number of cards you keep. True, you could maximize the number of rewards if you applied for multiple cards, but you have to consider the time and effort to keep track of them all and the annual fees that you’d be accumulating. Best to stick with three cards at most.
All in all, as long as you use common sense and act financially responsible, you can easily turn your credit card into one of your most reliable money‒making assets. As shown above, your credit cards equal money, thus you should treat them exactly like that. ♦