** A word to the wise- Use of a credit card will not get you rich, in and of itself. However, using simple little hacks will benefit your bottom line significantly. With that out of the way, let us take a look at how the use of a credit card can improve your position in the world.
Most people look at credit cards as pure evil. In reality, they can be, if possessed by the wrong person. If you know for sure that you can not handle yourself with a credit card, by all means do not continue to use the tactics I am going to show you. For those that have no credit card debt, and can pay their cards in full, proceed.
In today’s world, the credit card can be your best friend, or your worst enemy. When used properly and hacked accordingly they can unlock the door for a little bit of side cash for little effort on your part.
When credit cards first came along, they were a prestige item. Only the wealthier people had them. It was a badge of honor to be accepted to hold a credit card. (Anyone remember Diner’s Club?) Card holders would make casual purchases on their credit card and then pay off the balance every month.
These days, everyone has a credit card. Even people that make little money have a credit card. It is used for every day purchases and big ticket items after all of the money is gone and then they make the minimum monthly payment. This is not a good practice.
Credit card companies make the majority of their money by people not paying their bill in full every month and carrying a balance. They also make money in the form of charging a fee to vendors for the convenience of the service to accept credit cards. There is nothing we can do about that one, but lesson one is to pay your balance in full EVERY month without fail and never pay interest. If you do this without fail, it does not matter what the interest rate is on the card. Most credit card companies will compete with each other by offering lower interest rates, but if the total bill is paid in full every month, the rate doesn’t matter, because you won’t be paying any interest.
The next thing to look into is rewards. Most cards will offer cash back rewards, bonus points, and/or a signing bonus. I tend to look for the ones with a sign up bonus as well as cash back. The rewards can be used as a statement credit or some will even send you a check or transfer the money to your checking or savings account. For simplicity, I usually use the rewards as a statement credit instead of waiting for a check in the mail. I click the button to redeem my cash back bonus and then have to spend that much less on my bill. If I wanted, I could take that money out or transfer it and earmark it for something else, like an investment.
Recently I applied for a credit card which had a $200 sign up bonus and another $25 bonus for signing up an authorized user. It offered 5% cash back at certain stores or types of stores (all of which I use) that rotate quarterly. Fortunately, October- December was marked for Amazon, perfect for Christmas shopping. On other purchases outside the categories, they offer 1% cash back.
As another example, I found a card that offered a $100 sign up bonus as well as 6% cash back at grocery stores and 3% cash back at gas stations. That makes this one my go-to gas and grocery card and lines my pockets with cash back rewards monthly.
These are just a few simple tricks to get started hacking credit cards to make some cash. If you travel a lot, some card companies will offer bonus miles and other travel points. This is especially handy on airfare and hotel rooms. I don’t travel that much, so I usually stick to the cash back cards.
So in a nutshell-
* Make sure you have your ducks in a row and can handle the credit card hustle. Have a good credit score, because it will help your chances of getting cards, though it may cause a temporary dip in your score by applying for them. It’s called a soft inquiry.
* Look for cash back and bonus cards that fit you. Don’t just go for any offer to get points on things you wouldn’t normally buy. This trick works best to get rewards for things you already purchase.
*Make sure you pay your bill in full every month to avoid interest charges.
*Keep your eyes open for other bonus cards and apply for them. Use caution though about cancelling old credit cards because they can affect your credit score. Ideally your first credit card will be kept open forever. This will help establish your credit history.
The credit card is potentially ultimate tool for automating your spending and finding the utility of your money. It can be used to pay all of your bills automatically and then all you have to do is pay one credit card bill. You can write a check or use a debit card for a utility bill, or you can use your credit card on auto pay, then pay the credit card out of the checking or savings account. This also gives you a 30 day window to dispute charges and most credit card companies offer fraud protection.
So if you’re ready to make a little side cash from hacking credit cards, get started today.
Rise up and stay strong!!