Increase Your Income With Your Credit Card
There are two ways to get rich(er): spend less money and earn more money. Both can be tough, but here’s an easy way to start earning more money immediately.
Credit cards are a real life game and depending on how you play, you can win or lose real money.
When you lose, your credit card issuer wins big. When you win, your card issuer still wins, just not as much as when you lose. So, if you’re going to use a credit card, then you better be winning.
Some people have lost and decided not to play the game anymore, they cut up their credit cards and swear off credit forever. Depending on your lifestyle this may or may not work. In many cases, you need a credit card to rent cars, reserve hotel rooms, book flights and buy online.
Credit card issuers make it easy for you to lose the game. When you apply for their card, they ask you what your income is. Once they know they can trust you, they increase your credit limit beyond what they know you can afford to pay back each month. If you take the bait, they start lining their pockets with your hard earned money. If you carry a balance, you instantly lose the game — if you want to be a winner, be sure you pay your bill in full every month.
That’s the first step to winning. The second step is to switch your card to a high dividend credit (or debit) card. Dividend cards pay you a cash reward for using your card, usually 2-5% of how much you spend. This might not sound like a lot, but many people can make over $1000 per year with this.
Your card issuer makes money in two major ways. Every time you use your card, they charge the retailer 2-5% on every transaction. Secondly, when people don’t pay their bill in full, they collect large finance fees.
With dividends, your credit card company rewards you for using your card because they’re betting that you’re not going to pay your bill in full every month. Even if you do, they still make 2-5% on everything you spend. They win either way, it’s just a matter of how much they get.
The secret is to get a good dividend card and use it for every single purchase you make. Stop using cash, no purchase is too small for your card. If you go to Starbucks, pay with your credit card. There is no reward for paying with cash. A good dividend credit card will pay a minimum of 2% cash back on everything along with up to 5% cash back on certain purchases. If you consider your income and take away how much you put away for savings, the rest is potential spending you can earn dividends on.
In this economy, you might be lucky if you get a 2% raise this year. Switch your credit card and get that raise right now.
If you want to reduce the risk of losing, have your card issuer lower your credit limit to half of your monthly income. Of, if you take some time to do the math, figure out exactly how much cash you need per month for the things you can’t buy with credit and reduce your credit limit by that amount. For example, you may have to pay your rent or mortgage by check or direct deposit. Deduct this amount from your monthly income and make your credit limit that number — a number you can definitely pay back in full each month.
Paying your rent or mortgage payment with credit cards could be a significant payoff in itself. Lets say your rent or mortgage is $1000/month. At the 2% minimum cash back, you will earn an extra $240/year just on rent alone.
Get out of credit card debt. Never carry a balance. Pay for everything with a dividend card. It’s easy money to earn, you just have to change the way you spend your other money.
Broken Secrets | By: Chad Upton
Photo: thetruthabout (cc)