You don't have to be a financial wizard to make money out of credit. If you combine two simple strategies then you will be dollars in. The concept is quite simple really. Credit card companies offer incentives to gain new customers and you should take advantage of those incentives. One, 0% APR is very attractive, coupled with the points they give when you spend using their credit. So, the trick is to convert all your spending so that it gets spent using a credit card, making sure that you pay the balance off before the end of the month. If you can't manage to do that then make sure that you open enough cards so you can always transfer your balance to a card that is charging you 0%. There you have it. You can make money with credit cards.
Every time you buy something using 0% APR credit cards, you pay absolutely no finance charges or interest rate charges on your entire credit card balance. Just think... you can refurnish your home, pay for your child's college tuition or go out on a spending spree without paying a penny more.
With 0% APR Credit Cards it makes it possible to save money. Other cards, such as American Express credit cards, allow you to earn Amex rewards points with every purchase. In general, you earn 1 point for every dollar spent. In general, a point is worth between 1/2 to 1% of purchases, depending if you want to redeem your rewards for cash (1/2% value) or retail gift certificates and travel rewards (1%).
When you look to make money with credit cards, there are many options to choose from. I'm going to cover some of those here, but always, when messing with credit, please be careful, this is not your money you're dealing with. Here are the steps you should take:
Transfer all of your credit card balances to 0% APR credit cards. Most credit cards offer "introductory rates" at 0%. This low rate may be limited to a specific time period, such as 3 months or as long as a year. In addition, 0% APR credit cards often allow you to transfer balances (up to a specific amount) from another credit card to take advantage of the zero interest deal. But beware, once the introductory rate period ends, then the APR can go through the roof.
The idea of making money with a credit card is quite unusual. However, responsible credit card users can actually earn money from their credit cards if they follow a couple of rules. One, you must pay off the outstanding balance each month. Two you must have as many credit cards as you possibly gather. Then simply switch the balances around making sure you don't pay any interest. You then have created a cash flow of X which are then free to make money with. Big word of warning, please don't use credit cards as a source of long term finance, there are much cheaper options.
Cash back credit cards are a fantastic way for you to make some cash while spending on your credit card, although it does only suit the customers who pay their bill in full at the end of each month.
Credit cards have become a way of life for most individuals and families. The convenience of credit cards has led to their increased usage and with that increasing credit card debt. The statistics on the average credit card debt held by consumers is staggering at nearly $9000 by the average American said the Consumer Federation of America in a recent report. Credit card debt is not simply a problem because of the average amount owed, but also because of the interest rate charged, which only increases the amount of debt and makes it much more difficult to pay off. If you were to pay just the monthly minimum on $9000 of credit card debt at 18% interest, it would take approximately 42 years to pay off that debt. That's a long time to pay for that new television you so desperately wanted and probably don't have after 42 years.
With increased credit card debt, many of us are threatened by surmounting debt issues and many of us are looking for solutions besides bankruptcy since in 2047 we probably don't want to be paying for that now obsolete and probably non-existent television we bought way back in 2005. One possible solution is debt consolidation.
How can debt consolidation help with credit card debts?
While there are several ways to go about debt consolidation, if you are not quite in a position where you need a debt counselor and debt management plan and your credit is still in good shape, you may be able to consolidate your credit card debt with a bank loan or transfer your credit card debt to a lower interest credit card. The benefit of both is that you only have one monthly payment to make and the interest rate is usually substantially lower. If you transfer your debt to a lower interest credit card, you need to exercise some caution, though. Some credit cards offer special interest rates when you do a balance transfer, but this lower interest rate may not always be fixed until you pay off the debt. It may only last a few months and then the rate goes right back up. If you go this route, managing your debt may be easier than if you have to pay to several lenders, but much more difficult than if you were to consolidate with a single loan because you need to continually calculate interest rates and how they will affect your credit card debt.
Here's an example of how obtaining a lower interest consolidation loan or transferring to a lower interest credit card can affect your credit card debt:
Let's say you have $1000 in outstanding credit card debt with an average (APR) of 18%. If the outstanding balance remains at $1000, over the course of a year you would pay approximately $180 in interest charges alone. If you consolidate your credit card debt into a single loan with a lower interest rate or if you do a balance transfer onto a credit card with a low interest rate you would save a significant amount of money.
If the new loan or credit card have a 9% APR, the amount you pay in interest charges would be half of the higher interest cards meaning you would save roughly $90 in interest charges over the course of that same year. If you save $90 for a debt of $1000, then think about a debt of $10,000. You will save about $900 just in interest alone and pay down the debt that much quicker.
Both Allen Jesson & Robert Livingston are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Allen Jesson has sinced written about articles on various topics from Engagement Rings, Shopping and Gift Ideas. Allen Jesson writes for several sites, making sense of and. Allen Jesson's top article generates over 301000 views. to your Favourites.
Robert Livingston has sinced written about articles on various topics from Free Credit Report Score, Finances and Credit Cards. For more ways on how to save money and manage your debt, go to The author runs. Robert Livingston's top article generates over 33100 views. to your Favourites.