Credit cards are one of the best tools in finance that you can use to help save money and even make money when used the right way. Most people have a negative feeling when someone speaks about credit cards and they want to avoid the subject of spending habits and the way that they pay for goods. For those ignoring how to use a credit card the proper way, they’re missing out on how to make money using credit cards and how to save money with bonuses and other credit card tricks.
But for those that are interested in learning the best way to use their credit card and save money, to make money using credit cards, we’ll explain below. This ranges from taking advantage of credit card signup bonuses that are worth up to $1200 in value. Other ways including free airfare and hotel stays, avoiding foreign transaction fees and credit cards that give you cash back on purchases.
How To Make Money Using Credit Cards
Sign Up For Cards That Have High Signup Bonus
Instead of randomly signing up for credit cards that offer bonuses, the best strategy is to wait until a promotion with extra points to sign up for that card. For example many airline credit cards offer up to 60,000 points during specific times of the year for a sign-up bonus compared to the normal 30,000 or 40,000 point offer. This extra point signup bonuses happen mainly in the start of spring. The worst time to signup for a credit card to get the bonus is close to the holiday shopping season. An example of a great credit card that offers up to 100,000 points for signup is the American Express Platinum card that also comes with lots of features and benefits including an annual $200 in annual Uber credits, free either Global Entry or TSA PreCheck application fee, $200 in annual airline credit.
Based on the type of card you get, either an airlines card, hotel card, cash back card or travel credit card it’s a good idea to signup for these cards and meet the required spend amounts and claim your bonuses. Once you’ve finished with one signup bonus, you can move on and look for your next opportunity.
Use Cash Back Credit Cards
Cash back cards are great for those that don’t want to get travel points and prefer the straight cash back on purchases. If you mix this with the special category bonuses that some cash back cards offer, you can get up to 3% cash back on a purchase. When you add up all your purchases that you make in a year, you’ll realize that these small amounts of cash back quickly add up to big savings and essentially make money using credit cards.
Book Free Flights And Hotel Rooms
With the points and miles you can collect using your credit card, you’ll be able to later use these for flights and hotel stays anywhere in the world. On average a flight from the United States to Europe it costs about 50,000 points/miles for round trip airfare, with cards like American Express Gold Delta SkyMiles, you can get up to 75,000 signup miles. That’s more than enough to fly business class for free. Basically the amount you get when you signup for a credit card.
Other options include hotel stays which range anywhere from 5,000 points to 25,000 points depending on which hotel you stay at. If you compare that to paying each of these in cash you’re saving money using a credit card because a flight to Europe can cost thousands of dollar. If you think about it, you’re making money using a credit card instead of using cash or debit card.
Join Acorns And Link Credit Cards To Get Money Instantly Saved
A great app that helps you get the most out of your credit card is an about called Acrons. Once you’ve linked your credit card it’s time to make money using your credit cards. This app works in two ways, first it rounds up any of your purchases and invests it for you in a diversified portfolio depending on your risk tolerance. Lets say you buy something for $9.75, it rounds up that purchase to $10 and invests that $0.25 for you. Acrons also has an option to automatically withdraw a certain amount of money per month and invest that for you as well.
Avoid Paying Foreign Transaction fees
If you’ve traveled overseas and used a credit card that doesn’t have foreign transition fees waived, you’ll quickly see how expensive it gets. On average you’ll need to pay around 3% of the purchase in foreign transaction fees. Credit cards like American Express Platinum and Chase Sapphire Preferred allow you to avoid paying these fees and help save money using credit cards when traveling.
Use Right Cards For Bonus Categories Points
One of the most important things to help get the most out of your credit card is know which card gives you bonuses in specific categories. For example, if you’re looking to buy an airfare ticket, you shouldn’t use a card that gives you 1 point per dollar spent, you should use a card like the American Express Platinum card that gives you 5 points per dollar spent on airlines and flights. The same is true for cards that give extra points when using at gas stations, restaurants and other category specific places.
Get Free Car Insurance On Rentals
If you’ve ever rented a car, you’ve probably been offered rental car insurance from the agency. It’s a good idea to have it, but it can cost up to $20 per day. The great thing is that with a credit card like the Chase Sapphire Preferred card you automatically have rental car insurance, so you don’t need to pay for it and you can save money using your credit card and avoid those extra fees.
Get Extended Warranty For Free
When you go to make a large purchase on electronics or anything that comes with an extended warranty, you’ve probably had to think over it. Some warranty protection plans cover 10% of the purchase price which can cost into the hundreds of dollars. But many credit cards offer an extended warranty if you purchase it with the card. It’s important to note that you’ll need to keep the original receipt so if something goes wrong and you submit a claim with the credit card company, you can prove that you bought it with the credit card.
Get The Most From Your Credit Card
The most important thing that should be mentioned is that these benefits are only good if you’re able to keep up with your credit card balances and don’y have to pay interest fees that came with late payments. It’s very important to only purchase things that you can afford, because it because very expensive try to dig your way out of credit card debt.