There are many ways to earn extra money and one of them is from using credit cards. There are a few different ways how to use credit cards to make money, including cashback and credit 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 use for different purposes. Cards that pay cashback are usually referred to 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, you require a good credit score. So if you have poor credit history you are less likely to 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 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 unlocks access to better deals, lower interest rates and higher likelihood of approval. 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.
Credit Card Stoozing
Credit stoozing is an alternative method to earn money from credit cards. This method is not suitable for everybody. It involves using interest free credit card borrowing and saving your cash into high interest savings accounts to make more money than you spend.
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 credit card with a 0% introductory offer. This is then used like an interest free loan for all of your spending rather than using cash.
All of your income that would ordinarily be used to pay bills and make purchases is instead saved into a high interest savings account to earn a high rate of interest.
Make the minimum repayments on your credit card each month from your savings. Once the 0% introductory rate is ending on your card, you pay this off in full from your savings you have built up and avoid paying any interest fees. What you are left with in your savings post is your profit.
To make credit stoozing effective you need to find the best introductory credit card offer and the highest interest earning savings account. Until recently interest rates on savings have been very low but now interest rates are on the rise again making this stoozing method a more attractive proposition once again.
As an alternative, you could invest this cash rather than save it. This has the potential to increase returns significantly. But it comes with a lot more risk – you could end up losing money.
How To Use Credit Cards To Make Money Conclusion
We’ve now looked at 2 ways how to use credit cards to make money – cashback and credit stoozing. At one point in time credit stoozing was a great way to make money until interest rates got so low that it was no longer very effective.
However at the current time with interest rates starting to be raised credit stoozing is a viable option to make extra income.
Just be sure to find the highest savings account interest rates. You can easily find the top rates from quality digital savings providers through a savings marketplace like SaveBetter. These allow you to easily open and manage multiple savings products from different providers in one convenient and secure account. Read in this post how SaveBetter savings marketplace works.
And for those that prefer not to stooze you can still earn from your regular spending with a good reward credit card. Especially when combined with cashback websites.
And don’t forget, before applying for credit cards you should always check your credit score.
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