How To Make Money On A Credit Card? Gone are the days when a credit card was considered a luxury and was issued on surety and extremely unfavourable terms. Today, you do not need to have a doctorate to save on bank fees and use credit funds to your advantage – it is enough to have minimal financial literacy.
Credit card generator funds can be used absolutely free of charge, moreover, you can earn money on such cards. How to do it?
Choose a suitable credit card:
1. With a grace period.
The grace period allows you to spend money without paying interest. On average, the grace period is 50 days, but some banks extend it to 100 or even 240 days. At first glance, the longer the grace period, the better, but this is not a fact.
Long-term preferential feedback is convenient if you know for sure that you can pay off your debt in 3 months. Try to plan your expenses and do not use a credit card unnecessarily if you are not sure that you can cancel your debt on time.
In most cases, the grace period leads to financial blindness. A person begins to spend more than he can return, as a result, he spends the entire limit on the card and cannot return the required amount. The credit card turns into a loan with high-interest rates.
How to be? Take a credit card with a grace period of 50-60 days. This is enough to properly distribute funds.
2. low maintenance fee.
Banks write – the commission for the service is 0%, but only if the conditions are met:
- You spend a certain amount.
For example, a free card service is provided if you spend at least RUB 30,000 per month on the card. If the condition is not met, the monthly service fee will be 99 rubles, depending on the bank. Calculate in advance if this is right for you.
- You receive your salary on your credit card account.
Some banks offer free services to those who receive a salary by credit card (it must exceed a certain amount, for example, 50,000-70,000 rubles). You can contact the accounting department of your organization and write a request to transfer funds to your credit card details.
On the one hand, it is convenient to receive your salary by credit card, since you do not need to transfer money to pay off debt (sometimes with a commission) or run to an ATM.
The required amount will be debited on the day of payment, you will not have any delays. On the other hand, there may be problems with cash withdrawals – some banks charge a commission. Clarify this point and weigh the pros and cons.
- Store your own funds on a credit card.
You can use a credit card like a debit card and store money on it. This can be useful if certain conditions are met. For example, if the daily balance of own funds on the account is at least 50,000 rubles during the reporting month, then the commission for using the card is not charged (the amount of the balance depends on the bank).
If you are in doubt that you will be able to fulfil the conditions, check the monthly service fee. If the commission is more than 200 rubles, think – the card will cost 2,400 rubles per year.
3. With cashback.
Banks offer good interest on cashback when paying for purchases from companies of a certain category. You can get back up to 10% for purchases in cafes and restaurants, 5% at gas stations, from 1% for transactions in online stores, and so on. The amount of interest depends on the bank and the type of card.
4. With interest as a deposit.
Credit cards can be used as debit cards, keeping funds on them and receiving interest on the account balance. For example, using a credit card “Bright” of Bank St. Petersburg, you can receive up to 10% per annum on the account balance from your own funds in excess of the credit limit. By credit card “Mastercard World Travel” – up to 3% per annum with miles.
How to get income?
1. Use a card with a cashback.
2. Disable all unnecessary paid services.
3. Use a credit card checker for everyday expenses: groceries, fuel for cars, tickets, pay at cafes and restaurants, etc. Put most of your salary on a debit card with interest on your balance, or better, debit your salary.
The card is in the same bank. Payment of the required amount on a car loan at the end of the month from the debit of the salary, transfer without commissions.
4. Research which partner stores are available to you on favourable terms and try to buy from them with a credit card, as they usually offer discounts and/or cashback.
5. You can run a credit carousel if you have two credit cards (with a grace period of at least 50-60 days and free annual service) and one debit card (with a monthly interest rate of 7% on the balance and 1 cashback %).
How the carousel works: You store your salary funds on a debit card that calculates interest, while paying for purchases with credit cards in a specific order: January 1st, February 2nd, March 1st again.
You repay the credit card that was used for payment in January at the end of February with a debit card (to the debit card account you will receive two salaries and interest on the balance for the first month). At the end of March, pay with a second credit card with a debit card.
Then repeat from month to month, alternating the use of the cards. Return the money without delay, then the “carousel” will work for you. Use bonuses and discounts, then this system will be even more profitable.
6. If you already have credit cards, refinance them. For example, you can transfer multiple credit cards to one credit card at a bank and pay interest to only one bank, which is more beneficial. Refinancing allows you to reduce the percentage of payments, change the term and get additional funds on hand.
Things not to do with a credit card:
1. Withdraw cash, as a large percentage is taken (check with the bank).
2. Spend more than you can afford.
With the correct spending of funds from a credit card, you will not go into a negative, but on the contrary, even increase your funds.