4 Ways to Get Your Credit Cards to Pay You
It is all too easy to spend money on your credit cards – just ask anyone who is struggling with high-interest debt. But there is another side to the credit card dilemma, one that could actually benefit you and improve your finances.
If you take a disciplined approach and keep a careful budget, you can enjoy all the great things credit cards have to offer, all without spending a single penny on interest and late charges. Better yet, you could actually get your credit cards to pay you back. Here are four smart ways to enjoy the convenience of credit card payments without any of the downsides.
#1. Get Free Money with New Card Bonus Offers
The credit card business is more competitive than ever before, so much so that issuers are willing to pay for new cardholders. If you keep your eyes open and do your homework, you can find credit cards with welcome bonuses of $150, $200 and even $500 or more.
Some of these bonus payments take the form of cash or statement credits, while others offer gift cards, merchandise and travel. Just pick the card with the rewards that appeal to you most, read the rules and rack up your bonuses.
#2. Rack Up Extra Interest by Arbitraging Your Spending
When you use your credit card instead of paying cash, you are essentially using the bank’s money to pay for your purchases. Of course, the credit card issuer hopes you will stretch out the payments, and that the interest charges they receive will make up for that initial use.
If you want your credit card to pay you back, you can turn things around by paying your bill in full each month. In the meantime, your bank account continues to accrue interest, money you would have missed out on had you paid cash or used a debit card in the first place.
#3. Reduce Future Spending with Gift Card Purchases
Many of the welcome bonuses referenced earlier require a specific level of spending, often $500 to $1,000 in the first 60 or 90 days. If you put every penny on your credit cards already, you will probably not have much trouble reaching those spending levels, but what if you use your credit cards more sparingly?
If you want to enjoy the welcome bonus and reduce your future spending, you can use your new credit card to buy gift cards. You can then use those gift cards for future purchases, reducing your spending in the process. Buying gift cards for groceries and other staples is a great way to reduce your future expenditures while getting some great rewards.
You can save even more by purchasing those gift cards at resellers, which often discount the cards significantly. Just be sure to check the balances when you receive the cards to make you are getting what was advertised. Even if you only get a 5% discount, that is still extra money in your pocket.
#4. Take a Free Trip with Free Miles
Travel has gotten pretty expensive lately, with high prices for hotel rooms, rental cars and airfare. If you play your cards right, your credit cards can ease the burden of air travel and allow you to get away.
Just about every airline offers an affiliated credit card, and many entice new cardholders with bonus miles. In some cases, those initial bonus offers could give you a free trip. In other cases, you will need to accrue some additional miles. Either way, getting the credit card company to pay for your plane ticket will feel pretty good.
One word of caution here – many of these airline-affiliated credit cards come with hefty annual fees. The good news is that those fees are often waived for the first year, so you can grab that free ticket and cancel the card later.
The overuse of credit cards can be very bad for your finances, with high-interest rates, late payments and other costly gotchas, but it does not have to be that way. If you have a solid budget in place and know how to control your spending, you can grab the goodies from the credit card issuers and actually make money in the process.