We live in a world of credit. It’s rare to find a person that does not own a credit card of some kind. Often people associate credit with debt and for good reason. In spite of the negativity, however, it is possible to make credit cards work for you and actually earn money while using them. Keep in mind that this is best accomplished if you are able to pay your balance in full each month and not pay interest charges. So, how do you actually make money with a credit card?
There are many credit cards that offer cash back. A percentage of what you spend, usually 1-5%, is returned to you as cash. This usually accrues in an account and you can request a check when you reach a certain dollar amount. This is a very easy way to earn money just for using your card as you normally would.
In place of cash back, some credit cards offer travel rewards. Basically, you earn points for travel based on how much you spend. Some cards offer large sign-up bonuses for new cardholders when you spend a certain amount. If travel seems out of reach to you, this is a great way to earn it for free!
~Points for Shopping
Sometimes, a credit card will give you the chance to earn points to use for shopping rather than actual cash. These points are sometimes restricted to specific retailers, so be sure to check where they can be used. If it is a place that you shop at regularly, you can be earning points to shop there for free.
~Points for Products/Gift Cards
There is another type of point system where you earn points to shop for items directly from the credit card company. To use them, you will often be directed to a site that is like an online catalog, where each item costs a certain number of points. You can often find great gift or household items here or redeem points for gift cards from various retailers.
~Invest Your Cash Back
Instead of spending the cash that you earn, you can choose to invest it and earn money on it. You can invest in something like a high-yield savings account or even a retirement fund, such as a Roth IRA, to earn money for later in life. It’s like making money twice on your credit card!
You many never have thought of using credit cards to benefit your personal money management, but when used correctly and responsibly, they can provide some benefits and help you earn money as well. Always do your homework before you apply and keep your spending in check and you can be on your way to earning money and making credit cards work for you, not the other way around!