How to Use a Credit Card to Make You Money

Instead of throwing your money away on interest charges every month to the credit card companies, this article explains the ways to make your credit card work for you to help you make money and maximize your savings.

Difficulty: Moderate

Instructions

Things You'll Need:

• Rewards Credit Card
• Good to Excellent Credit (For the maximum rewards.)
• Little to No Credit Card Debt (Ideal)
• Savings Account (To maximize your savings.)

1. Open up a credit card account that gives you rewards for your purchases. The Discover Card offers a really good rewards card that offers 5% cashback for seasonal purchases and 5-20% for online retailers. There are different types of reward cards and depending on your needs and purchasing styles, different cards will work better for different people. Use the site www.CreditCards.com to search and compare to find the best card to fit your needs.

2. Make a purchase with your rewards credit for any necessary purchases you need to make that you are able to make with a credit card. (i.e. Groceries, Gas, Bills, Clothes, Housewares, etc.) To maximize your savings, and to ensure you are not charged with interest payments, take the amount of the purchase and deposit it into a high-yield savings or money market account. (The higher the interest the more money you will earn.) Make sure that this account is linked to your credit card or that you are able to pay your credit card directly from the account. It is easier if your savings account and your credit card is from the same company!

3. At the end of the month make sure to pay off the balance in full. This should be easy if you religiously follow Step 2 and then you will have the balance in your savings account already (plus a little extra in interest)!

4. When your rewards on your credit card is due up, then you can accept the check or cash in the points. Be careful of some of the point cards where you cash in points for a check. Sometimes the longer you wait, the more money you get for your points, so if you can wait, then you will be rewarded more. I suggest putting this money away in a savings account that earns interest so you can earn money on your reward!! Also, at the end of every month, when you check you savings account you will have an interest credit of the amount you earned on your money that month!

Tips & Warnings

• Use your credit card for every purchase possible to maximize earnings.
• Never charge more to your credit card then you can afford to pay off in full.
• Do not charge unnecessary things just get the rewards.
• Do not open more credit cards than necessary. Two credit cards is the maximum you should have.

Resources

• CreditCards.com

[walsh1102]

on 7/27/2009 very helpful article... this person knows whats shes doing!