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When it comes to credit cards, most people think they are simply a way to pay for items. Some may even talk about the dangers of credit cards and how they can ruin you financially.
But you don’t hear many people talking about how to make money with credit cards. And this is disappointing because there are many ways to easily make money using credit cards.
In this article, I walk you through 12 ideas you can start with.
How much you earn will depend on how much effort you want to put into this side gig. Some people can walk away with a couple hundred dollars a year, while others can make thousands.
#1. Sign Up Bonuses
Credit card sign-up bonuses are where the real money is at.
You could earn a few hundred dollars in sign-up bonuses with a cashback card or up to 100,000 points for travel rewards cards. Most sign-up bonuses have you spend a certain amount of money in a certain amount of time.
It will commonly look like this: Spend $1,000 in the first three months to earn $150 cash back.
These bonuses are in addition to the cash back or points you earn using your card. So if you earn 2% cash back on purchases, you will earn $20 on the $1,000 you spent, plus the $150 sign-on bonus.
The catch to sign-up bonuses is that they are for new card members only. But each credit card issuer defines a new cardholder differently.
Some say you can’t be a cardholder for two years. So, many people open a credit card to take advantage of the bonus, then close the account. Then in 2 years, they repeat the process.
It’s a fast way to earn many points or cash back.
#2. Cashback Credit Cards
Cashback credit cards offer a cash reward every time you pay with your card. In most cases, you earn between 1% and 2%.
While this doesn’t sound like much, the cashback amount adds up if you use your card for everyday purchases.
For example, you spend $1,000 a month and earn 1% cashback. Each month you earn $10 or $120 a year simply by paying with your credit card.
Using a 2% cashback card increases your earnings to $220 a year.
#3. Travel Rewards Credit Cards
Instead of using a cashback credit card, you can opt for a travel rewards credit card. This type of credit card offers points for every dollar you spend.
You might earn 1 point for every dollar you spend. If you spend $1,000 a month, you earn 1,000 points or 12,000 a year.
You can redeem these points for all sorts of things, like statement credits or free gifts. But the most popular way to use points is for travel.
Depending on the card you pick, you can redeem your points for discounted or free airfare, hotel stays, rental cars, and more.
You can even transfer the points you earn to your loyalty programs.
Related: Discover how to travel cheaply
#4. Take Advantage Of Bonus Points
While both cash back and travel rewards cards are great, what makes them even better are bonus rewards. These bonuses are on top of your usual cash back or points earned.
For example, the American Express Blue Cash Preferred card offers cashback rewards of 6% cash back at grocery stores and 3% cash back at gas stations.
Returning to the example above of spending $1,000 a month, let’s say $500 is at the grocery store. Now you earn $35 cash back per month or $420 a year.
Travel cards offer bonus rewards too. You can earn 2x or more points when you spend money on travel or other services.
#5. Use Your Credit Cards Strategically
This point piggybacks off the above point. If you really want to make extra money using credit card rewards, you need to have more than one credit card and use them strategically.
This will help you to maximize your points.
For example, I have the American Express card I mentioned above. I use it to buy groceries and gas only.
I then use another credit card offering 2% cash back on all purchases. I use this card for all my other spending.
Finally, I have a third card that has 5% rotating categories.
I will use this card a few times a year to spend in categories where I earn 5% cash back.
This usually is around the holidays. By using my cards in this fashion, I maximize the money I earn.
Every year I earn $1,500 on average in cash back from my credit cards.
I pay my bills on time, so I never pay any interest or late fees. And only one card has an annual fee.
Ultimately, I walk away with nearly $1,400 in extra cash.
Take some time and assess your spending habits. Then decide if you want cash back or rewards.
Once you know this, you can find the right credit card.
Start slowly and apply for a new credit card account over time.
This way, you limit the risk of spending too much and only making minimum payments or, worse, missing your due date and paying late fees.
#6. Shop Online
This is a great way to piggyback your earnings.
When you make online purchases using a portal like Swagbucks or Rakuten, you earn cash back because you shopped through their site.
And since you paid with your credit card, you also earn your cash back here. Let’s look at how this works.
I need to buy something at Best Buy. I head over to Rakuten and see they offer 2% cash back on purchases made at Best Buy.
I click the link and go to the Best Buy website. I buy $100 of computer ink.
Rakuten puts $2 in my account for the cashback I earned by shopping through them.
My credit card also gives me $2 because I get 2% cash back on my purchases. In total, I made $4.
Had I not used Rakuten, I would have only earned the $2 from my credit card.
The great news is that many retailers on Swagbucks and Rakuten offer up to 25% cashback.
Related: Here are the best ways to get free gift cards
#7. Invest Your Rewards
Here is another piggyback idea to boost your credit card cash back.
When you earn your cash back, you should invest the money you earn. This way, it can compound into more significant amounts of money.
It is up to you to invest your money in the stock market or go with a safer investment.
But let’s look at a couple of examples. Let’s say you earn $1,000 annually in cash back and invest it at 5% annually.
After 20 years, you have close to $35,000! Where can you get a safe 5% return on your money?
Look no further than Worthy Bonds.
I’ve been using them for three years and have had nothing but positive experiences with them.
If you want to earn more, look into the stock market. Here you can earn 8% annually on your money.
After 20 years, you end up with almost $50,000!
By making it a point to save and invest your cash back, you end up with a lot more money that will open doors for you in the future.
#8. Transfer Points
If you are interested in travel points, are there any piggyback opportunities here?
The main one is to transfer your points to loyalty programs, like frequent flier programs or hotel rewards.
Sometimes, you can transfer points at a 1:1.5 or 1:2 ratio.
This means that if you have 1,000 points with your credit card and transfer them at a 1:2 ratio, you end up with 2,000 points.
The catch is not all loyalty programs allow for transfers. And many do transfer at a 1:1 ratio, so you aren’t coming out ahead.
Still, if reward points interest you, you need to look into the transfer rates.
#9. Use Acorns
Here is another way to make money with credit cards.
Acorns is a micro-investing app that allows you to invest small amounts of money, including your spare charge.
It works by rounding up your purchases to the next dollar and investing the difference.
So if you spend $5.15, Acorns will take $0.85 from your linked checking account and invest it for you.
Since you spent using your credit card, if you earn 2% cash back on your credit card purchases, you earned $0.10. This is something to consider because the round-ups add up over time.
Many people tell me they have $750 or more in their Acorns account after one year from round-ups alone. Add in the cash back you earn, and you are making good money.
#10. Zero Percent Balance Transfer Offers
This idea is harder to pull off today because of low interest rates. But it is still an option for many to look into.
You might have heard it called stoozing or credit card arbitrage, which is another way of making money using balance transfer cards.
Savvy cardholders have used this trick for years to make free money.
Here is how it works. You get an offer for a 0% balance transfer from your credit card.
You take the convenience check, cash it for $5,000 and deposit it into a high-yield savings account or other investment where your principal is safe.
Each month you withdraw money from this account to pay the minimum balance on your credit card. You repeat this until the month before the 0% promotion ends.
At this time, you withdraw money to pay off the entire balance and keep the interest you earned as a profit.
If you do this over 18 months and earn 5% on your money, you will make around $300. Keep doing this over and over, and you can make decent money.
There are two things you need to keep in mind.
First, you have to earn a safe return where you don’t risk losing money. Usually, this is an online bank account.
But you could use Worthy Bonds as well.
Second, you have to take into account any balance transfer fee.
This is usually 3-5% of the transfer amount, so you need to earn more than this to make money.
Credit card companies previously offered balance transfers without this fee, but not anymore. However, you could ask for a lower fee, as this has worked for some people with a good credit score.
Related: Learn the pros and cons of balance transfers
#11. Sell Your Rewards
This one toes the line with what you are allowed to do. But many people do it, so I wanted to include it.
If you have many points you don’t have plans for, you can sell these points to others.
The catch here is many credit cards say you cannot sell your rewards for cash, so use this one at your own risk. Before you do anything, read the fine print in the terms and conditions to know for sure.
It works by booking travel for others using your points. The other person then pays you for doing so.
You will usually charge less than the cost of the travel, so you both benefit. The exception is that the credit card company will allow you to gift your points to friends and family.
#12. Use Expired Credit Cards
This final idea doesn’t involve spending or the risk of going into credit card debt. Instead, you take expired credit cards and cut them up to make things out of them.
One of the more popular things to make expired credit cards out of is jewelry. People are cutting old credit cards into small pieces and turning them into necklaces and earrings.
Others are making artwork out of them. The amount of money you can earn varies, but people charge $5 or more depending on the item.
If this interests you, consider asking friends and family members for their old credit cards, so you have a supply to get started with.