There are many ways to earn extra money and one of them is from using credit cards. There are a few different ways of earning from credit cards including cashback and stoozing. We’ll look at both of these options. So take a look below if you want to know how to use credit cards to make money.
Earn Cashback With Credit Cards
It is possible to earn money back on all your purchases, this is known as cashback. There are lots of cashback websites you can use for this. However you can also earn cashback on purchases from credit cards.
There are several different types of credit cards available to be used for different purposes. Cards that pay cashback are usually known as reward cards. Reward cards may offer other perks such as store discounts or travel miles. In this post we will be focusing specifically on cashback cards.
Cashback cards are a great way to earn money back on your purchases. Some will offer a flat percentage across all your purchases. Others may have tiered rates depending on the spend category such as groceries or fuel. Some may also offer a higher introductory rate which lowers after a certain period of time.
You should never use them for unnecessary spending. But if you use them for all your regular purchases such as groceries and transport, then you can earn back a decent amount of these outgoings and make your money stretch further. This works well providing you can pay back you full balance every month.
These types of cards may not be suitable for everybody. They usually come with higher interest rates than standard cards. So you need to be sure you can pay off your balance fully every month to avoid interest charges. Generally, a good credit score is required. So if you have poor credit history you will less likely be accepted.
Anybody with a good credit score, that pays off their balance each month and only uses it for regular spending can easily earn great freebies and big discounts on purchases.
Importance Of Credit Credit Scores
Before applying for any type of credit such as credit cards and mortgages, it is important to check your credit score. A good credit score will unlock access to better deals, lower interest rates and make it more likely to be approved. 90% of the top lenders use FICO scores, they are based on your Experian, TransUnion and Equifax reports. Check your FICO score
How To Boost Your Cashback Earnings
For the ultimate cashback earnings boost, use the combination of a cashback website and cashback credit card. This way you earn 2 separate cashback payments from one purchase, potentially saving you a lot of money.
For example, say you wish to purchase an item worth $1000 at an online retailer. A cashback website offers 4% cashback at that retailer and you have a credit card that pays 4% cashback on all purchases. You would navigate to this retailer through the cashback website. When you purchase the item on this website, use your reward credit card to pay. This way you will earn double cashback comprising $40 (4%) of the purchase from your credit card company and another $40 (4%) from the cashback website.
Find some of the best free cashback websites here; Cashback Sites, Discounts And Loyalty Programs
Credit Card Stoozing
An alternative way to earn money from credit cards is by something known as stoozing. This method is not suitable for everybody. It involves using interest free credit card borrowing and then investing the money into high interest savings to make more money. It is quite easy to understand, but if you make a mistake it could cost you a lot, so only do this if you fully understand it. We will explain how this process works below.
You would start by taking out a balance transfer credit card with a 0% introductory offer. This would then be used as an interest free loan. The interest free money would be deposited into a high interest savings account to earn interest. Once the 0% introductory rate is ending, you pay off this loan. What you are left with is your profit.
Stoozing isn’t as effective as it once was due to persistently low interest rates at the present time, but it is still possible to make money. You need to find the best introductory credit card offer and the highest interest earning savings account to make this effective. However if interest rates begin to rise again in the future then this may become a more attractive proposition once again.
Learn more about how to invest >>> Best Copy Trading Platform For High Returns
Conclusion – Should You Stooze?
At the current time with interest rates being so low we don’t really recommend stoozing as it isn’t worth the hassle for the lower rewards on offer. Unless you are luckily enough to find a great offer. You can probably earn more from your regular spending with a good reward credit card. Especially when combined with cashback websites. But stoozing is something to keep in mind if interest rates start to increase in future.
Before applying for credit cards you should always check your credit score.
In addition to credit cards there are more ways to earn money from credit including peer-to-peer lending. Learn more about it here; How Does Peer To Peer Lending Work?
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