Credit cards get a bad rap and I think that's a real shame. They provide a useful service. The problem lies with people who don't properly use credit cards to their advantage.
People treat credit card purchases like gifts, rather than what they really are: a short-term interest-free loan.
The bottom line is this. Use credit cards responsibly and you can make a lot of money with them.
Use them irresponsibly and they will make a lot of money off of you.
This is just how I feel about credit cards #sorrynotsorry.
Let me go over some credit card hacks you can use to make money with your credit card.
Rewards on all purchases
By far my favorite way to make money with a credit card is by taking advantage of a rewards program.
Here are the rewards on some of the credit cards I use:
The end result is about $100 every month in rewards, just for paying with a credit card.
0% rate on expenses for 12 months
Many credit cards will lure you in with attractive introductory offers. One such offer is not charging interest on purchases the first year.
This type of offer is useful if you have other debt you want to pay off first. You could put all of your expenses on this new credit card, make only the minimum payment and use the rest of your income to pay for high interest debt.
This is ideal for the debt avalanche method, letting you laser focus on high interest debt first.
Never forget though that this new debt will accumulate and you'll begin paying interest in one year. So the clock would be ticking for you to get your financial house in order.
0% balance transfer for 18 months
If you already have a credit card balance and are paying interest every month - you're doing it wrong.
You are wasting money paying interest fees. There is another way out.
Enter the balance transfer credit card.
There's a few credit cards that offer very attractive balance transfer offers.
The way it works is you sign up and you get to transfer your existing high interest debt to them at a 0% introductory rate.
That period could be anywhere from 12 to 21 months.
The downside is paying a fee, which is anywhere from 2-5% of the total being transferred.
I'm currently carrying credit card debt, but choosing not to pay it off since it's sitting there not collecting interest.
This frees up some money to invest in my business or in stocks.
When the clock runs out and I have to pay it, I'll bite the bullet and do it.
Take advantage of teaser offers
Credit card sign-up bonuses are extremely common.
Many credit cards have sweet bonuses if you cross certain spending thresholds.
This is no excuse to overspend. It is, however, an excuse to switch your auto-pay bills to that card to reach their milestones.
Make sure the offer is good enough to waste your time trying to reach it.
And you also don't want any card to have an annual fee. I don't care how good the offer is, it's not worth paying a fee every year.
Have you ever gone to the store, bought something expensive that couldn’t be returned, only to see the same thing in another store for a significantly lower price?
For most things it’s just a few bucks so it’s not that big of a deal. But what if you spent $2,750 on an Panasonic HDTV and then a week later the price drops to $2,499? That’s gonna sting.
We all have, and we’ve all kicked ourselves in the backside for losing out on the deal.
You could go back to the retailer and tell them your plight and they make take pity upon you and refund the difference. Yeah, keep dreaming.
Luckily, some credit cards offer protection that meets the difference if we accidentally overpay.
Price protection through a credit card offers a reimbursement for the difference in price depending on how long between the purchase and the price drop. Citi is one card that offers a good price protection program. If the price drops at least $25 within 30 days of the purchase, you can request a refund of the difference.
The downside here, if any, is that these price protection programs require you the consumer to be vigilant about watching for price drops after your purchase.
You know as well as I do, we never do this.
This probably explains why the credit card companies offer this. It’s a great way to promote the benefits of using their credit card and they don’t lose much since few people take advantage of the service.
There’s a lot of fine print and rules that come with this protection, so before you start carelessly buying anything at any store, contact your credit card provider and make sure you understand the extent of which you are protected.
Additional discounts on select retailers
Most credit cards offer additional discounts on brands they partner with.
These offers change all the time and may require you to select the offer to qualify for the discount first.
You may get additional warranty protection on eligible items that are purchased with your credit card.
Typically, most products you purchase come with a one year warranty offered by the manufacturer. The store you bought it at, such as Best Buy, may offer you a costly extended warranty plan.
But if you made this purchase with a credit card, you may already have extended your warranty by an additional year at no cost to you.
American Express is one of the most popular cards for value-added extended warranties on major purchases, though many others offer this perk too. Check with your credit card to see if they offer this valuable perk.
If you’ve ever tried to return an item only to have your request denied, you may have wished you knew about the refund protection your credit card offers.
Refund protection is commonly used when you’ve missed the 7 day or 30 day refund window, but haven’t yet opened the item.
The protection allows the card issuer to reimburse you the purchase price of the item for an extended period after the purchase. Sometimes this is as much as 90 days later.
Your credit card company will require you to ship the item to them first and they’ll issue you a refund after they receive it.
Yes it’s a hassle, but it’s much better than being stuck with an impulsively purchased item that you no longer want.
Buying a new and expensive gadget like an iPad Pro can bring you a feeling of joy, but that happiness will soon be squashed if you smash it or it gets stolen before you get the chance to really enjoy it.
But if you bought it with your credit card you may have built-in insurance and be eligible for a full reimbursement of the cost of the product.
The credit card companies aren’t going to give you anything without you jumping through hoops though. So keep in mind there’s a time frame you need to be in to qualify, you’ll need the receipt and if it’s stolen you may need a police report too.
As with many things in life, the devil’s in the details. Read the fine print to see which of these purchase protection perks your credit card offers. If you want a quicker answer, you can google the name of your card or just call the number on the back and ask them yourself.
Get automatic insurance for a covered loss when you purchase the entire fare with your credit card.
This is a really convenient feature to know about, especially if you’re about to book an expensive vacation or you’re a frequent traveler. There are some credit cards that offer insurance in case you need to cancel a trip last minute.
Many of us know that when it comes to last minute changes, most hotels and airlines charge a fee - that’s if they’ll allow you to cancel at all. With insurance, this takes lots of stress off your shoulders when making vacation plans.
If you need a jump start, a tire change or towing, your credit card may offer complimentary roadside assistance.
Car Rental Insurance
When you rent an eligible vehicle with your credit card, you can be covered for damage due to collision or theft.
Hotel Room Insurance
This is not only a perk not many people know they have, but it’s one no one ever thinks to ask about.
Some credit card companies offer their users hotel room insurance when the book their room using their credit card. This means if their room gets broken into and something is stolen, the cost of those items are covered up to a certain amount.
Avoid fraud entirely
What type of protection do you get with your debit card or your bank account? Not much. If the money is gone, odds are it is gone.
But most credit cards offer protection in case your card is lost or stolen.
If you use your credit card to make all of your purchases, you are effectively eliminating ever being held liable for fraud.
Free credit score and monitoring
You don't have to pay to see your credit score anymore. With just a credit card you most likely will get access to see your credit report and credit score.
This tool is useful, as it shows you how your score changes over time.
Furthermore, when a new account is opened you are notified right away so you can identify a case of identity theft early on.
Some credit cards, like my American Express Blue Cash Everyday card, let's you buy concert tickets before they open to the public.
Many credit card companies offer pre-sale tickets or a subscription to sports seasons through their card. These offers are usually sweetened by allowing users to apply any cash back credits they’ve earned towards the overall cost of what they’re buying.
If there’s a huge concert coming up this feature is often a huge perk, especially when the event is one of the hottest of the year. Keep your eye out for what’s being offered, and don’t forget to ask what deals they’re applying to the tickets.
Credit cards offer the ability to buy tickets to concerts and sports events. While this is a convenience and often saves us a lot of time, there’s another perk that’s even better than that.
Most credit cards offer preferred seating, which is a huge perk if you care about where you are during your events. Not only are seats reserved for you, but often times you can only get those seats through really specific means - credit card companies being one.
For avid fans, this perk alone may be worth having a card for.
To turn this into a money making hack, you can sell your tickets on eBay.
Ditch the budgeting software
Put all of your expenses on one credit card and ditch the expensive budgeting software.
If you put everything on a credit card, you can see an itemized list of your expenses every month.
This eliminates the need to input any data anywhere or pay for software to give you a report.
You can set up your credit card to alert you when your balance is too high, your payment is due or a large expense just went through.
In short, it does most of what a budgeting app would do.
And at the end of the year, you get a full report showing you where your money went that year.
Wrapping it up
See, credit cards aren't all that bad. You just have to know how to use them to your advantage. If this post helped you out, please consider sharing it!