How to Make Money on Credit Cards
Select the right credit card., Charge the right expenses to the card., Pay your entire balance each month., Stay on task.
Step-by-Step Guide
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Step 1: Select the right credit card.
In order to reap the benefits of a cash back credit card, and ultimately reduce the costs of your credit cards, you must consider a variety of factors when selecting your card.
Ask yourself where and when you'll use your credit card.
Know what habits or activities you spend the most money on and plan accordingly.
Are you a big traveler? Look for credit cards that offer cash back rewards for airfare and hotel stays.
Do you shop a lot? Make sure your card offers cash back for a variety of purchases and not just at specific locations.Read the contract carefully.
Some cards offer rewards for virtually every purchase while others have higher rewards for specific categories.The most commonly accelerated cash back category is gas, followed closely by groceries, and then dining/restaurants.
Accelerated categories offer higher cash back percentages than other purchases.
If these are areas where you don't typically spend money you might want to look for a more specific cash back offer. -
Step 2: Charge the right expenses to the card.
While people are wary of going into credit card debt, you do have to rack up charges on your cash back cards to make money.
The more you spend on the card, the more you're likely to make when you earn 1-3% cash back on purchases if you pay your monthly bills on time (and don't pay interest).
Yet again, know where you're getting the most cash back.
If your card is accelerated when it comes to gas, put your gas on your card whenever and wherever you can.
If your card gives a great cash back percentage on travel, buy your airline tickets using your card.Many times, you can set up automatic electronic payment on bills.
If you're getting cash back for putting your gas or cable bill on your credit card, it might be worth setting up an automatic payment so you're consistently earning cash back each month.While getting cash back can be addictive, be careful.
Many of us are tempted to spend money with the goal of getting cash back, but this process is counter intuitive.
If, for example, you charge $100 of merchandise you don't want to earn $30 cash back you're not really making a profit.
Stick to purchases you need and would use cash or a debit card to buy if you did not have a cash back card., Do not let your balance roll over to the next month.
This adds interest, meaning most of the cash back you earned, if not all of it, goes towards paying off your debt.
Interests increases the longer it takes you to pay off a loan.
If you earned roughly $5 of cash back by charging $500 to your card, and only pay off $100 of that in the first month, you'll end up paying over $5 in interest the next month.Yet again, only charge items you would be willing to pay for up front to your cash back card.
Buying things you cannot afford will only increase your interest and plummet you into debt, regardless of any cash back advantages.
Credit card companies want to recruit responsible users.
If you're not paying your balance on time, or only paying it in part, some companies may lessen or even take away cash back rewards.
Depending on the details of your contract, this could the case for you., Points do expire and special offers do not last forever.
Stay on task when managing your cash back to maximize the money you can make with your card.
Make sure you know when your cards expire.
Many people want to save their reward money for a big pay off in the future, but you don't want to let your opportunity to claim your rewards pass.
Nearly a third of credit cards have an expiration point on cash back rewards.You can make cash back redemption an annual event, something to do before your birthday or a big holiday.
This will help you remember to cash in and grant you with extra money for a big event.Many credit cards have rotating accelerated categories, that offer 3-5% cash back on certain purchases during certain time frames.
For most of these offers, you must register for the special online.
Make sure you know what promotions your credit card company offers and that you sign up on time and don't miss out great deals. -
Step 3: Pay your entire balance each month.
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Step 4: Stay on task.
Detailed Guide
In order to reap the benefits of a cash back credit card, and ultimately reduce the costs of your credit cards, you must consider a variety of factors when selecting your card.
Ask yourself where and when you'll use your credit card.
Know what habits or activities you spend the most money on and plan accordingly.
Are you a big traveler? Look for credit cards that offer cash back rewards for airfare and hotel stays.
Do you shop a lot? Make sure your card offers cash back for a variety of purchases and not just at specific locations.Read the contract carefully.
Some cards offer rewards for virtually every purchase while others have higher rewards for specific categories.The most commonly accelerated cash back category is gas, followed closely by groceries, and then dining/restaurants.
Accelerated categories offer higher cash back percentages than other purchases.
If these are areas where you don't typically spend money you might want to look for a more specific cash back offer.
While people are wary of going into credit card debt, you do have to rack up charges on your cash back cards to make money.
The more you spend on the card, the more you're likely to make when you earn 1-3% cash back on purchases if you pay your monthly bills on time (and don't pay interest).
Yet again, know where you're getting the most cash back.
If your card is accelerated when it comes to gas, put your gas on your card whenever and wherever you can.
If your card gives a great cash back percentage on travel, buy your airline tickets using your card.Many times, you can set up automatic electronic payment on bills.
If you're getting cash back for putting your gas or cable bill on your credit card, it might be worth setting up an automatic payment so you're consistently earning cash back each month.While getting cash back can be addictive, be careful.
Many of us are tempted to spend money with the goal of getting cash back, but this process is counter intuitive.
If, for example, you charge $100 of merchandise you don't want to earn $30 cash back you're not really making a profit.
Stick to purchases you need and would use cash or a debit card to buy if you did not have a cash back card., Do not let your balance roll over to the next month.
This adds interest, meaning most of the cash back you earned, if not all of it, goes towards paying off your debt.
Interests increases the longer it takes you to pay off a loan.
If you earned roughly $5 of cash back by charging $500 to your card, and only pay off $100 of that in the first month, you'll end up paying over $5 in interest the next month.Yet again, only charge items you would be willing to pay for up front to your cash back card.
Buying things you cannot afford will only increase your interest and plummet you into debt, regardless of any cash back advantages.
Credit card companies want to recruit responsible users.
If you're not paying your balance on time, or only paying it in part, some companies may lessen or even take away cash back rewards.
Depending on the details of your contract, this could the case for you., Points do expire and special offers do not last forever.
Stay on task when managing your cash back to maximize the money you can make with your card.
Make sure you know when your cards expire.
Many people want to save their reward money for a big pay off in the future, but you don't want to let your opportunity to claim your rewards pass.
Nearly a third of credit cards have an expiration point on cash back rewards.You can make cash back redemption an annual event, something to do before your birthday or a big holiday.
This will help you remember to cash in and grant you with extra money for a big event.Many credit cards have rotating accelerated categories, that offer 3-5% cash back on certain purchases during certain time frames.
For most of these offers, you must register for the special online.
Make sure you know what promotions your credit card company offers and that you sign up on time and don't miss out great deals.
About the Author
Mary Brown
Enthusiastic about teaching cooking techniques through clear, step-by-step guides.
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