Smart consumers have long used credit cards to make purchases easier, but some are even using their credit cards to generate additional money. Here’s how:
1. Interest arbitrage
New perks like 18-months of zero interest on credit card balances and balance transfers is encouraging some cardholders to accept zero interest balance transfers to invest the money in CDs and promotional bank accounts. Supposing that you had a $10,000 credit line and could find a 4% yield on a promotional checking account (there are plenty!), you could earn as much as $600 in 18 months on your credit card company’s money.
2. Bulk buying
Planning a new trip for friends or family? Want to go to a concert with 9 of your best friends? Consider being the organizer! Credit card companies offer impressive 1-2% cash back on all purchases, which means you could make as much as $20 on a $1000 ticket order when you combine your friends purchases with yours. Also, consider using a cash back credit card to pay for work materials that will be reimbursed by your employer, adding a kickback for you just for doing your job every day of the week.
3. Bill pay
Some companies allow you to pay your monthly bills with a credit card without a convenience charge. In such a scenario, you could reasonably earn hundreds of dollars in rewards by paying rent, utilities, cable and internet bills, as well as any supplementary costs like lawn care services or trash pickup with your credit card each month.
Maximizing your rewards is as simple as finding new ways to replace cash with a credit card in all your daily purchases.