Tuesday, June 6, 2023

How To Live Off Credit Card Rewards

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Inventive Ways To Make Money Using Your Credit Card

Can I live off of a credit card? – Credit Card Insider

Americans are no strangers to credit card debt. In fact, the median amount owed on a credit card is $2,000, according to GOBankingRates.com’s 2016 U.S. Household Debt survey.

If you’re one of these people carrying a high balance on your card, you’re probably racking up interest charges. So, as your credit card issuer is making money off the interest and fees you have to pay, you’re losing more and more of your hard-earned cash.

But there’s a smart way you can pay off your credit card debt: Make your credit card work for you.

Sure, swiping your card everywhere you go won’t get you rich quick. But when you use your credit cards strategically, you can generate some cash for payments. Or, if you’re debt-free, you can use the extra funds to pay for an upcoming trip or that flat-screen TV you’ve always wanted. Here are seven creative ways you can make money with your credit cards.


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To make money using credit cards, get a card that pays you to shop. This type of card is called a cash-back credit card. Depending on the type of card you get, you can earn 1 percent or even 5 percent in cash-back rewards for certain purchases. Take the Discover it card, for example.

This card also offers a rare perk: Discover matches dollar-for-dollar all of the cash back you earn in your first year, which can add up quickly.


Use The Credit Card As A Budgeting Tool

If youre confident you can use a credit card responsibly and pay off the balance every month, try using it as a budgeting tool. By making all of your purchases with your credit card, you can see exactly how much youve spent at the end of the month. Of course, you should only do this if you know you can pay off the balance each month. To make sure your credit card spending doesnt get out of hand, never charge more to your card than you have in your bank account.

Low Interest Credit Cards

If you typically carry a balance from month-to-month or rely on credit as a back-up option to tie you over during a cash crunch, a low interest credit card will be a better fit for you.

While the majority of low interest credit cards don’t offer rewards and provide few frills, their low interest rates will help you come out ahead if you do end up carrying a balance – especially when compared to rewards credit cards.

Paying off your balance in full is the best strategy, but if thatâs not always an option, you should equip yourself with a low interest card.

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What Do You Spend On The Most

The majority of rewards credit cards offer additional points, miles, or cash back on certain types of purchases – known as bonus categories. Depending on the card, bonus categories can range from the all-to-common gas and groceries to everything from recurring bills, restaurants, cafes, flights, hotel stays, and more.

Youâll want to compare your options and find a rewards card whose bonus categories align with your most common expenditures.

For instance, if you own a car and gas accounts for a big chunk of your monthly spending, youâll want to consider a credit card that has gas as a bonus category, like the TD CashBack Visa Infinite, which offers three times the cash back for every dollar you spend at the pump. Meanwhile, if you donât own a car and rely on public transit and taxis to get around, a card like the Scotiabank Gold American Express will be better suited to your spending habits.

If you donât spend a particularly large amount on specific spending categories and prefer simplicity, you can consider picking up a flat-rate card that offers the same rewards on all purchases with no bonus categories.

Mint If Don’t Want Another App


If youre a Mint user and experiencing app overload, there is a way to track at least some of your credit card rewards in Mint.

The free budgeting app allows users to connect all of their financial accounts in a single place. Its intended to help people track their spending and saving to meet their budget goals, and some users have found a hack to incorporate credit card rewards into the mix.

Mint pulls in the statement credits from any credit card rewards you redeem for cash payments on your account. To add earnings from percentage-back offers, some users manually add additional categories to track inflows.

Also Check: Cabela’s Rewards Program

Use Your Card For Everyday Purchases Just Make Sure To Pay It Off

This ones a pretty simple way to earn credit card points fast. Using your credit card for all of your eligible spending will help maximise the points you can earn. Going grocery shopping? Credit card. Movies? Credit card. Gym membership? Credit card.

Doing as much of your spending on your credit card as possible can work wonders for the rewards points you earn, especially if you combine it with spending at partnered outlets, which well explain below.

This method should not be attempted if you cant pay off the balance in full every month. Using your credit card for everything will significantly increase your , which can lead to much higher interest charges. So be careful with this one, and have money aside in your bank account.

What Type Of Rewards Can I Earn

The most common types of rewards you can earn are: travel points, cash back, and store points. Travel rewards credit cards offer travel points every time you make a purchase, which accumulate and can be redeemed towards purchasing plane tickets or hotel stays. Cash back credit cards offer cash rebates on your purchases, typically in the range of 0.5-4% your rebate will either be applied to your statement or deposited into your bank account. Finally, store credit cards are offered by some specific retailers and help you earn points that can be redeemed for merchandise in their stores. Many rewards credit cards also include insurance products, such as travel medical insurance, trip cancellation and interruption insurance, and rental car collision and damage insurance. These insurance products come at no extra cost and can provide meaningful value to you in the event of any accidents or unforeseen events.

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Not Understanding Terms Of The Account Agreement

Banks and credit cards supply the terms and conditions of specific cards at the time the application is completed and when the card is issued. It’s important to know what these terms and conditions are before you use the card. Doing so will help you have a better handle on what’s expected of you from the credit card issuer, and it will also help you manage your spending habits better.

Don’t Close Credit Cards

How to Live Like a Boss On Business Credit Cards

Closing a credit card may seem like a harmless action, but it can have adverse effects on your credit score. A May 2019 Bankrate survey found that 61% of American credit cardholders said they had cancelled at least one credit card, but just 42% knew that canceling a card typically decreases your credit score.

Experts generally agree that it’s not a good idea to close a credit card since your credit score can drop. Cancelling a credit card negatively impacts your credit utilization rate , which is the amount of credit you use divided by the amount of credit you have available across all your cards.

Before you close a credit card, you should ask yourself some questions about why you want to cancel the card. Generally, it’s a good idea to keep the card open, but there are are few exceptions, one being a card having a high annual fee. Hutchins recommends you downgrade to a no-fee card. You can also call your card issuer and ask for the fee to be waved. It won’t always work, but it’s worth trying.

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The Ultimate Spreadsheet To Track Credit Card Churning

The Blog » Travel Tips » The Ultimate Spreadsheet To Track Credit Card Churning

For those like me that love to collect credit card rewards and travel everywhere for free, keeping track can become difficult and cumbersome. Among the bonus requirements, reward structures, annual fees, and application deadlines, there are many things to pay attention to. At any given time, I have about 15-20 active credit cards for just myself. Each year, I will open 5-10 new cards and subsequently also cancel 5-10 credit cards since I do not want to pay the annual fee. This practice is called churning and can become stressful and difficult to manage. Ive created a spreadsheet in Excel that will solve all your problems!

This post is part of my comprehensive guide to travel hacking and credit cards which explains everything you ever needed to know about how to use credit cards to maximize traveling.

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  • How Do The Credit Card Rewards And Sign Up Bonuses Work

    Seonwoo begins with the caveat that if you cant manage credit cards responsibly, you should not pursue credit card rewards in any form. If you pay any interest at all when you do this, you are likely not going to reap the benefits of rewards. Emily adds that you already need a good or excellent credit score to pursue these strategies. If you carry a balance on your credit card, this strategy is not for you. Emily says make sure you are using your credit card like a debit card, and if you are you can consider this strategy.

    Further reading:Perfect Use of a Credit Card

    Seonwoo says that plenty of credit cards offer sign up bonuses. These require you to spend between $500 and $4,000 within the first three months of signing. The bonuses will vary from credit card points to straight cash. The offers will range from $100 to $500 in cash or 30,000 to 100,000 points. Seonwoo says there are ways to meet these minimum spending requirements without spending more than you normally would.

    Emily talks about fitting these credit cards into your normal spending. She signed up for a credit card with a minimum spending requirement of $3,000 over three months. She had to put everything she was purchasing on that one card. She picked a time of year when she had to pay for car insurance and flights. She timed signing up for the credit card with when she knew she had above average expenses. Reaching the minimum spend requirements is a hurdle for people with lower income.

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    How Rewards Set You Up To Overspend

    Shannon McNulty was 20 when she applied for the Capital One Venture credit card in 2015. She was preparing to go to England for a college study abroad program, and she had heard that using a credit card overseas was safer than using a debit card.

    The card boasted no interest fees for the first year, and would allow her to earn miles toward future flights. It wasnt her first credit card, but its $5,000 limit was much higher than the limit on the starter card she already had.

    She hoped the card would help her earn miles toward her flight back to the U.S. from England, or to go toward travel between her home state of Vermont and her college in Indiana.

    In the months before her trip, she started using the credit card so she could start earning miles.

    Looking back, I did swipe more when I first got it, before traveling, for the points, she admitted.

    I went over with the card, and with a big chunk my debit card to transfer in to pay it off, she said. But she soon realized, I have this extra money. I should use it.

    During her four-month stay in England, she racked up a $3,000 balance on her Venture card. The bulk of her spending on the card wasnt for food or drink, she said, or daily necessities.

    It was on souvenirs to bring back for friends and family.

    Three years later, at age 24, she regrets it. No one really cares what you bring back for them.

    Studies show that rewards credit card users like McNulty are more likely to accrue debt than reap the benefits.

    Build Credit Without Going Into Debt

    Credit Card Offers

    Using a credit card responsibly is a great way to build credit. If youre worried that youll overspend, dont use the card for shopping. Instead, set up one pre-authorized charge for a set amount each month, such as a gym membership, and then lock the card up. Youll still build a positive credit rating because the account is being used, and youll know that it fits your budget because youve planned for that expense. But by not carrying the card with you the temptation to overspend will be a step removed.

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    Merchant Codes That Limit Category Bonuses

    If youre using your credit card for purchases abroad, youre probably looking to maximize your point earnings. Many , with some as high as 5 points per dollar spent. Unfortunately, purchases that would earn you bonus points at home may not code the same abroad.

    There are a few workarounds. The easiest option would be to use a card that earns more than 1 point per dollar spent on all purchases. The Capital One Venture Rewards Credit Card and Capital One Venture X Rewards Credit Card fit this criterion. Both cards offer 2X points on all spending and no foreign transaction fees. Theyre ideal for folks who want to earn elevated rewards without the hassle of trying to maximize rewards. This can work out well when youre on vacation and dont want to obsess about which card to use for different purchases.

    If youre one of those people who cant stop thinking about maximizing every dollar spent, you can look up merchant codes ahead of time to determine how your bank codes them. This can be lucrative if youre paying a significant amount for a boutique hotel or tour operator and are unsure whether it will be coded as a travel purchase. If your Amex card doesnt code the purchase as travel, but your Visa does, you know which card to use.

    Awardwallet Helps You Track Rewards

    AwardWallet was one of the first credit card rewards-tracking apps on the market. Founded as a website in 2004, it now boasts more than 700,000 users and partnerships with more than 670 businesses ranging from credit cards to retail stores.

    AwardWallet is made for travelers. It offers a single place to track credit card rewards, airline miles, hotel points, cruise rewards, and perks from retailer and restaurant loyalty programs. It also includes detailed information on point conversion rates and timelines as well as their estimated value.

    The app allows users to add travel itineraries, insurance information, a drivers license, even a vaccine card. The one thing this app wont do, however, is tell you what credit card to use to get the most back from your credit card company.

    AwardWallets free version is enough to track all of your awards. The paid version costs $30 a year and adds quicker balance updates and email notifications about expiring rewards.

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    Are Credit Card Points Worth It

    10 Min Read | Oct 25, 2021

    Are credit card rewards really worth it? Nope. Those credit card points youve been racking up always come at a priceand that price is the money in your wallet . . . and maybe your dignity.

    Listen: Credit card companies are pretty stinking smart. They are master marketers. Last year, the industry was valued at over $100 billion.1 So . . . how do they make all that money? Well, from those hard-working, interest-paying, credit-card-carrying members around the globe.

    They reel you in with sign-up bonuses, credit card rewards, cash-back incentives, restaurant discounts and airline miles. Bottom line? They use the word free to their advantage . But were here to expose the credit card industrys biggest secret: All those free rewards are not actually free.

    Welcome To Canadas Largest Bank

    How to get FREE MONEY from credit cards (But be careful)

    The RBC Rewards program is all about you. We offer the most ways to earn, save, and be rewarded with things you actually want, when you want them.

    As a program member, you have access to amazing value and exclusive member experiences that are only available through the RBC Rewards program.

    How to become an RBC Rewards member

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    Build Your Emergency Fund

    Finance experts agree that the first step toward financial independence is to have an emergency fund with three to six months of living expenses set aside. This will protect you in the event of a job loss, medical emergency or another unforeseen crisis. It’s not easy to put that money aside for emergencies, especially if you’re just starting out or are paying student loans. Taking the money from your credit card’s cash back or rewards program and putting it straight into your emergency fund will help you get where you need to be faster.

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