A lot of people don’t know about this, but you can be getting paid just by using your credit card for your everyday spending. A lot of us use a debit card to make purchases, but I’m going to explain why that is a bad idea.
I currently make about $400 a year just by using my credit card, and you can too. I’ll show you everything you should know on how to get started and how to stay safe.
Welcome to the World of Credit Card Rewards
The great news about rewards credit cards is that they offer you POINTS! A lot of these financial institutions have a rewards website also where you can redeem your points for all types of merchandise, gift cards, or travel options. Yes some rewards websites offer options to redeem your points for cruises, airfare, hotels, and other travel options.
There are reward websites that enhance your online shopping too. Many people shop online today, and these rewards websites offer more cash back on your shopping. Many of them have hundreds of stores to choose from. I recently bought my son a pair of sneakers through my rewards website and earned 8% cash back on the purchase. (At Footlocker.com)
Shopping online for major purchases such as your traveling expenses is a big plus. You may spend hundreds of dollars on your airline tickets and earn a significant percentage cash back on the whole transaction. Another benefit, is some credit card benefits offer free luggage insurance and free auto rental insurance!
How Does the Point System Work
Usually the point system is 1 point for every dollar spent. A sum of 2500 will equal $25 to redeem. Usually, different credit card companies offer 2-5% on different things like gas, restaurants, groceries, etc. With that in
perspective you can visualize how much rewards you can really add up! One way or the other this is free money!
A lot of credit cards will have 5% cash back on certain things quarterly or for the first six months. You can earn a lot during these promotions. Ex. Let’s say you spend $500 in groceries, and $300 on gas during the month with a 5% cash back promotion. That’s $40 cash back in one month, and $240 over the six months!
Keep an eye out there for introductory promotions. Occasionally, companies will come out with $150 bonus for using $500 on your credit card over 3 months. Who doesn’t spend $500 over 3 months? This is free money folks! A popular promo I see often is 10,000 points for spending $1,000 over 3 months. (100 points = $1) That’s a $100 bonus!
After the promotion you can put the card away, and apply for another card! If you find yourself having too many credit cards, you can go ahead and close 1 at a time. If you do this once every six months it will not affect your credit so much. It will look a little fishy to lenders if you closed multiple cards at once. (Caution: careful not to open to many if you’re planning on taking out a loan soon.)
$0 Annual Fee
Preferably, you want your credit cards to have a $0 annual fee. The math has to make sense compared to what you will be earning on it. Don’t worry too much about the interest rate because usage of the card is for daily expenses you plan on paying anyway. You should never be carrying a monthly balance. Taking advantage of 0% interest financing would be an exception.
I want to clarify about the interest rates, and why they are not so important. Now don’t go for a credit card that is 29% interest, that’s is just outrageous! In case you plan on keeping the card and using it in case of emergencies. That’s is why it would be ideal to have more than one credit card; one with your lowest rate.
How to Pick The Right Credit Card
There are many rewards credit cards out there. I want to show you how to pick the best ones. There are a couple of variables to look for. Also, there are different types of rewards credit cards. There are gas, cash back, and just rewards points credit cards.
If possible you want to go with a flexible benefit rewards cards. What it means is the rewards can convert to cash or rewards points. This is the ideal way because there will be times when you have so many points and may not know what to do with them. When you can simply convert it to cash and ask the credit card company to send a check or transfer it to your checking account.
I don’t recommend gas rewards credit cards because most of the time other rewards cards offer more rewards on your purchases than the gas card. Not only that but be careful in choosing a rewards card with an annual fee. It won’t make sense to pay an annual fee to try and earn money. However, do the math and if it adds up fine, but it has to make financial sense.
You can earn hundreds of dollars a year using rewards credit cards, but you need to manage your credit card responsibly. Using your credit card on daily expenses means you are going to pay it off in full on a monthly basis. You’re using it just like cash!
I have seen so many people get into thousands of dollars in debt because of not using their credit cards properly. Having a credit card is not an invite to spend more money. It is an invite to spend your money more wisely. Using a credit card has benefits as opposed to using your debit card.
“The Fact of the Matter Is..”
The fact of the matter is that you’re going to use your debit card anyway on your daily purchases. You might as well be using a rewards credit card and earning rewards on your spending. So if you spend $10,000 on monthly expenses through the year, that’s $100 or more cash back just for using the card! Furthermore, credit cards were designed to use for everyday expenses like groceries, gas, dining out, and traveling.
Most importantly, you will be protecting your checking account at the same time! If there is fraud on your account, the money will NOT be coming out of your checking account. With zero liability it can take up to 90 days to get you your money back. You will be much more comfortable waiting for your money to be put back into your credit account than your own checking account.
Do Savings Accounts Even Pay Anything These Days
One of the most outrageous things I have ever seen these days is the interest bearing accounts the banks hold these days. Seriously, these interest rates are way under 1%. If anyone is remotely close to being concerned on earning money on your own money, rewards credit cards are the way you want to go. Last year I earned $300 + a free night hotel stay just for using my credit cards.
Would You like to Make Even More Money Online?
Another way to earn extra money at home is doing what I do. You don’t have to blog about credit cards :-). You can blog about what you’re most passionate about. If you want to join in follow this link to Wealthy Affiliate University where you’ll learn everything you need to know on how to make money online. It is FREE to join.
Do you have any questions on rewards credit cards, or how to earn more money online? Please ask in the comment section down below.
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