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Make Money Using Credit Cards

Updated on October 4, 2012

Knowing the right credit cards to use and how to use them can actually make you money. It is possible to learn how to play your cards right in order to earn maximum savings, rewards and even cash-back on credit card purchases.The trick to mastering the credit card game is learning and understanding the terms of agreement, and knowing everything you can about the different credit cards. If you can find the right credit cards, the opportunities are infinite.

Tip For Cash-Back Cards

  1. Carefully comb through and review the program rules

  2. Never carry a balance

  3. Charge everything, but don't blow your budget

  4. Keep up with your rebate on a monthly or quarterly basis

  5. Maximize your rebate based on your spending patterns

Cash-Back Cards

For those of you who pay your credit card bill off in full each and every month then you can cash in on card rebates. This is something that you will only benefit from if you pay the balance in full each month because reward cards have higher interest rates, and the interest you'll be charged will more than wipe out any rewards you might earn.

Cash-Back cards are exactly what the name implies—cards that give cash back as a reward. They are great for people who don't carry a balance from month to month. If you use your cash-back rebate card wisely and pay off the balance in full every month, then the cash you receive is a reward. However, the interest is much too high on this type of card for those who can't make the full payment each month.

Some cash-back cards ofer a higher rebate when you shop at places like supermarkets, gas stations and drug stores to make “everyday purchases”. You'll want to read the card's terms and conditions to find out what qualifies as a supermarket, gas station etc. For the most part, Wal-Mart is considered a superstore (department store), and Costco is considered a warehouse club.

You might also consider a card that directly applies your rebate to yoru mortgage, deposits it into a brokerage or high-yield savings account, or deposits it into a college savings account or other tax-advantaged discount. You'll have to do some research and find the card that suits your particular interest.

Gas Card Rewards

You can cut the amount you spend on gas by 5% with a gas rebate card. Here's how to take maximum advantage of gas cards:

Most gas cards don't charge annual fees

Plan to pay off your gas card each month. Gas rebate cards generally offer higher APRs than any other rebate cards, thus you'll lose a substantial amount of your reward if you carry a monthly balance and pay interest.

Pick a card that gives you rewards in the way you prefer. Usually gas rebate is given as a monthly credit on your statement. Sometimes, however, a gift card for a particular vendor is used.

Some offers come with incredible introductory rebate rates that will decrease within a matter of months. Find out the dates that the old rebate ends and new one starts.

Most cards have rebate restrictions on gas purchases at wholesale clubs, grocery stores, and discount stores.

Always read fine print carefully and make sure you understand it.

Airline Reward Cards

Airline reward cards won't benefit everyone, especially people who don't fly. People who will benefit more from airline rewards are frequent fliers and frequent buyers. The quickest way to earn frequent flyer miles is to fly and use an airline FFP. If you travel often you might want to supplement an FFP with a credit card affiliated or branded with that airline. These cards let you combine points earned on the card with the FFP points you've earned from flying.

Frequent buyers should think about using a generic bank card that isn't linked to a particular airline. These cards offer annual fees of around $20. Compared to the fees on branded cards, which are $60-$80, you are saving a considerable amount. Another big benefit is that you can choose to redeem your miles with any major airline instead of being restricted to just one carrier.

Airline reward cards typically have the higher fees than the other types of reward cards. If you don't charge fairly aggressively on your card then these high fees might cancel out any reward benefits.

What what do you look for when signing up for a credit card?

See results

Additional Free Perks

Most cardholders aren't aware of all the benefits offered with their credit cards. Chances are that you already have additional benefits, because some of them are very basic and others are required by law. You can't capitalize on perks if you don't know they exist.

Purchase Protection: Details vary by issuer and card, but you typically have some degree of free coverage if you bought something within the last 90 days that gets broken, stolen or lost.

Extended Warranties: Many card issuers extend the length of a manufacturer's warranty at no cost to you if you used their card to make the purchase.

Special Merchandise Discounts: Some card issuers offer free merchandise from their catalogs as a reward, and some cards offer you discounts at selected merchants without having to use your reward points. Registration is required for some of these perks so be sure to do some research and make sure you've signed up to get the benefits.

Travel Insurance: Some cards offer free accidental death and dismemberment insurance covering between $100,000 and $1 million. You have to have purchased the cruise, plane tickets, train rides etc. using their card

Rental Car Insurance: Many platinum and gold cards offer CDW/LDW for free on rental cars if you use their card to purchase the rental.

Price Protection: Some cards give you a refund if you buy something and see the exact same item advertised for less. Restrictions vary and the limit to the time frame is between 30 and 90 days after initial purchase.

Lost Luggage Help: If you find yourself in a situation where your luggage is misplaced, the card you used to book your flight might be able to help. At the very least, many cards offer a toll-free number you can call to enlist representatives who can keep you posted on the airline's progress in tracking down your bag.

International Travel Discounts: Credit cards offer much better exchange rates, however there is a fee.

Card Registration Services: For a monthly or yearly fee, card registration services come in handy if your credit and debit cards are ever lost or stolen. If your card is lost or stolen, the company will notify the issuers of all your accounts. Fraudulent charge protection benefits are also included.

Credit Card Protection Insurance: Pays off the minimum monthly payment when cardholders cannot make their payments (not a free service)

Some credit cards enroll you in some of these programs without you knowing it. You may see “card protection services” on your billing statement for a fee of $1 each month. If you don't want this service, you have to call your credit card company and opt out.

Mastering Advance Techniques

Mastering the advanced techniques will bring you the most savings and make the most money using your credit cards. However, only consider using these techniques if you:

  • Are good with details.
  • Always meet deadlines.
  • Don’t have any existing card debt.
  • Have good to excellent credit.
  • Have a steady cash flow, with money to invest every month.
  • Will not need to borrow money or do anything else that will get your credit report pulled.

These techniques lower your score dramatically. You shouldn't try these if you are barely making ends meet or if you are worried about the implications of your credit score getting lowered. Unless you're on more solid ground--with an emergency fund stashed away in the bank, you’re better off focusing on the tips mentioned earlier.

Credit Card Arbitrage

These days, a small but growing number of enterprising cardholders practice what is sometimes referred to as credit card arbitrage. Arbitrage is a fancy way to say “buy low/sell high".They use cards that offer 0% or very low introductory rates on balance transfers as a source of investment capital. The proceeds from the card offers is invested right away in various types of investments..

These are the only cards to consider for arbitrage:

  • Cards that allow you to write a check to yourself or that will direct-deposit the money automatically into a checking account so you can invest it right away.
  • Cards that don’t charge balance transfer fees (these are hard to find) or “cap” the fee at a low amount.
  • Cards that will not treat your transaction as a cash advance. Instead of the 0% introductory rate, a cash advance could easily cost you 20%+ in interest.
  • Cards that have a relatively long introductory term—ideally, a year or more.

Reallocating Card Lines

Many issuers allow you to reallocate credit card lines. This allows you to move the credit limit from one card to another. By doing this you can save money, extra rewards, more freebies, and build up an investment fund.

Making Biweekly Payments

Instead of making one payment every month to pay off the balance due on your card, consider making biweekly payments. By sending in two payments a month, instead of one, it can save you thousands of dollars.You’ll also cut the length of time it takes to pay off the debt by up to 75%.

Card issuers are required by law to credit payments when they’re received. To save the most, pick the bill that carries the highest interest rate, and be sure not to charge anything else to that card. Make certain you get this month’s minimum in by the due date. After that send in half that amount every 14 days.

This will start you off on the right foot but you have to make sure that you send your minimum payments in like clockwork every two weeks in order for this to save you the most money. If you are afraid you will forget, you can arrange to make biweekly payments that automatically come out of your checking account.


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    • profile image

      Olga 3 years ago

      If you do not have a credit card ysrloeuf you can use a parents or a friendsI use my moms credit card to pay for WoW (technically they pay for WoW for me too)My Brothers friends uses my brothers credit card to pay for WoWBut if you dont want to mooch off of your friends or family you can buy game cards which they have at most;Best Buys, Game Stops and Walmarts but buying with a credit card is easier and you can buy 6 months at once for cheaper which i do it goes from 15$ s a month to 12$ s a month. What you do is pay 72$ every 6 months.

    • rasta1 profile image

      Marvin Parke 4 years ago from Jamaica

      These are some great tips. Especially the one about credit card arbitrage.

    • crissytsu profile image

      crissytsu 4 years ago from Texas

      LindaSmith1: Thanks for the comment...All your success stories and advice are inspiring...its good to see someone who has figured out how to get the most from their credit cards. kudos! We could all learn a lot from your experiences, I hope you continue to check in on this hub and share more tips and advice. Thanks again.

    • LindaSmith1 profile image

      LindaSmith1 4 years ago from USA

      tamaarwilhite: I pay not interest. I paid no activation fees. I pay no fees whatsoever, but earn points that are good for 3 years which I can redeem when they hit the required points, or let the funds sit and take them before the 3 years is up. My reward points are 1 point per dollar spent. I put all of my expenses on my credit card and then pay it off monthly which is nothing that I would not have written a check for anyway.

    • crissytsu profile image

      crissytsu 4 years ago from Texas

      angelsteelrolln76...thanks for the comment, it is always nice to get other people's input, I appreciate it.

    • angelsteelrolln76 profile image

      angelsteelrolln76 4 years ago from Alabama

      The use of rewards cards is the way to go. Strive to become what the credit card industry calls a deadbeat, a person that pays the bill in full monthly to collect the full rewards. A cash back bonus is the best.

    • LindaSmith1 profile image

      LindaSmith1 5 years ago from USA

      Tamara: I earn points every month which I exchange for cash when I accumulate enough points. I pay my credit card bill off every month, therefore I pay NO INTEREST or any other fees.

    • tamarawilhite profile image

      Tamara Wilhite 5 years ago from Fort Worth, Texas

      Credit cards give rewards based on the interest you pay them. Don't spend more in interest in the hope of "rewards".

    • crissytsu profile image

      crissytsu 5 years ago from Texas

      That's awesome LindaSmith....Thanks for sharing

    • LindaSmith1 profile image

      LindaSmith1 5 years ago from USA

      I got a cash back credit card through my local bank,which does not charge you for activation like major credit card companies do which can be several hundred dollars. Because I get interest on my checkings account, I use the credit card to make my purchases and pay it off every month, therefore my money stays in my bank account longer while it continues to draw interest until I pay of my credit card.

      My local convenience store sells gas, and I got one of their discount cards for customers, not a credit card, but I get sale prices, special discounts, and I get 3 cents off of every gallon of gas I purchase.