Want an easy way to get a little extra money? Something you are already doing could work in your favor. That thing? Paying your expenses with credit cards.
Credit is a flawed system of “I owe you.” When you look at the finances of our country, it’s clear we’ve borrowed more than we can repay. Borrowing more than we can repay is what to avoid. Instead, pay regular and necessary bills with credit cards. The simple act of using a different card to pay bills can accumulate a lot of cash back.
I’m not a fan of money either because I believe it causes a lot of trouble. Money is, however, an essential tool for certain things in life. Therefore we must protect it and build on it. I learned that I could make more money by a simple change. All I had to do was use a different card. I thought about the years I missed out on “free” money only because I believed credit cards were evil. Now let us take a look at how cards can earn you cash back.
Many cards offer 1% cash back on everything. For every $1,000 in expenses you have each month, that’s $10 back. Over a year, that’s $120 you wouldn’t have had.
Many cards extend 2%, 3%, or 5% back on items in specific categories. These may stay the same or change but can include gas, groceries, home improvement, and more. If we start talking the same $1,000 per month at 2%-5%, we’re talking an extra $240-$600 a month. Then, considering how many cards offer a sign-up bonus, the cash back can add up quickly.
Making purchases with credit cards can extend warranties, help you out of situations with bad businesses, and offer protection and other services for the consumer. Many of these services make the cards quite valuable to the buyer, but there are rules to making these cards work for you.
- Always pay your balance off. One look at interest and you’re throwing money away in the opposite direction. If you’ve built up cash rewards, you may lose them. Stay on top of your spending and make sure you’ve got the money to cover what goes on the card.
- Keep in mind, regular recurring expenses. Be careful about the item’s that you “need.”
- Explore cards to see what they can do for you. I prefer cash rewards, but if you spend a lot of money traveling, travel rewards may work better for you.
- Look for other bonuses. Many companies offer extra cash back for spending with them or offer discounts for shopping with them.
Using credit responsibly can help bring in a little extra money. Someday, it is likely that you’ll need to depend on having a good credit score (think to buy a house). When the times comes, you’ll be glad.
For more finance tips check out Minimalism & Your Money.