A common belief is that credit cards are mostly utilized for buying things, however, did you know they can also assist in generating income? It is crucial to use credit cards responsibly, while also maximizing the rewards they provide in order to save money and possibly gain additional cash. In this article, we will explore various ways to earn money using credit cards, such as cashback rewards and travel miles, while also avoiding accumulating debt.
1. Cashback Rewards: Direct Money Back on Purchases.
Earn money with credit card cashback benefits is one of the easiest methods. Several credit cards offer a cash back percentage on qualifying purchases. Typically, these percentages range from 1% to 5%.the process involves getting back a portion of the amount you spent in cash as a refund. For example, if you spend ₹5,000 on groceries using a card that offers 2% cashback, you will get ₹100 back.
When it comes in handy: Cashback cards are most beneficial for everyday expenses like groceries, gas, and utilities. If you consistently use the card and pay off the full amount every month, the “cashback” reward can greatly reduce your living expenses.
Maximizing cashback: Certain cards offer extra cashback in particular categories. Boost your earnings by utilizing a range of credit cards tailored for different expenditure categories.
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Another common method of earning money through credit cards is by accumulating reward points. The points are exchangeable for various rewards, such as gift cards, merchandise, and money.
The process is as follows: Every time you make a purchase, you accumulate points that increase gradually. Various types of transactions can lead to varying amounts of points. Buying items for travel can accumulate 3 points for every ₹100 spent, while regular purchases only accumulate 1 point.
Redeeming points: Once you’ve earned enough points, you may exchange them for gadgets, household appliances, or even gift cards from partner businesses. Some credit card providers also allow you to redeem points for cash.
Optimizing points: Look for cards that provide bonus points for spending in categories such as dining or retail. Check for promotions on a regular basis, since many cards provide double or triple points over specific periods of time.
3. Travel Miles: Converting Spending Into Free Travel
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Travel aficionados can earn air miles or travel points by using credit cards linked to airline loyalty programs or travel rewards schemes. This can lead to free flights, hotel stays, and other travel-related benefits.
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How it works: You earn one air mile for every rupee you spend. Once you have gathered a certain number of miles, you can decide to use them for free or discounted travel options.
Maximizing Mileage: Some credit cards provide signup bonuses with thousands of miles after reaching certain spending requirements. Moreover, buying flights or hotels via the credit card’s travel portal could result in accruing twice the standard miles.
Extra benefits: Many travel credit cards earn money offer additional advantages like access to airport lounges, free travel insurance, and discounted baggage fees that can help you save money while traveling.
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Several credit card companies offer sign-up incentives to attract new cardholders. These bonuses have the potential to be substantial, often amounting to thousands of rupees.
If you request a new credit card, the provider might offer a reward if you meet a specific spending requirement within a certain timeframe, usually three months.
Using the credit card for ₹50,000 within the initial three months could earn you a ₹5,000 cashback. Essentially, this provides a 10% cashback on the initial purchase.
Maximizing the incentive: Check that the spending requirement aligns with your usual costs before getting a card. Refrain from spending unnecessarily just to receive rewards, as it can result in financial obligations..
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4. Earn cash by recommending others through referral programs.
Certain credit card companies offer referral programs allowing you to receive rewards for persuading friends or family members to apply for a credit card.
The process is as follows: You will receive a distinctive referral link to distribute to others. Should someone submit an application using your link and get accepted, you will get a referral reward in the form of cash, points, or miles.
Referral rewards vary from ₹500 to ₹5,000, depending on the card issuer and promotional offer.
Suggestions for increasing referrals: Ensure that you refer individuals who have a true interest in credit cards, and relate your own positive encounters to motivate them..
5. Shopping Portals and Offers: Discounts and Cashback for Online Purchases
Many credit card issuers work with shopping portals to provide exclusive promotions and rebates when you use your card to make online purchases. This might be a great way to earn extra income or save money on your regular internet purchases.
How It Works: Log onto your credit card’s online shopping gateway and make purchases using their platform. You will receive cashback, bonus points, or discounts for certain purchases.
Maximizing Savings: Keep an eye out for special discounts, such as holiday season specials or exclusive weekend deals. You may also utilize credit card-linked mobile wallets to earn extra rewards.
Categories to watch: Travel, electronics, fashion, and eating are often the categories with the highest payback rates during promotions.
6. Annual Fee Waivers and Cashback: Reduce Fees
Many premium credit cards charge an annual fee, which can be eliminated if you satisfy specific spending requirements. This essentially allows you to use the card’s perks without paying the cost.
How it works: Some credit cards waive the annual charge if you spend a particular amount within a year. Others may provide cashback or benefits equal to the cost if you use the card regularly.
A card with an annual charge of ₹5,000 may offer 10,000 reward points if you spend ₹1 lakh in a year, effectively covering the fee.
Maximizing Savings: Before applying for the card, make sure you understand the fee-waiver rules. Calculate the yearly spend to determine whether it makes sense to keep the card in your wallet.
8. Introductory 0% Interest Offers: Save On Large Purchases
Some credit cards provide introductory 0% interest on purchases for a limited period, allowing you to save money on significant purchases.
How it works: If you need to make a large purchase, such as a new appliance or a vacation, you can use a credit card with 0% interest for a specific length of time (often 6-12 months).
How it works: You can extend out the cost of the purchase without paying interest, allowing you more time to repay it while avoiding the cost of financing.
Caution: Pay off the balance before the 0% interest period stops, or you may be charged a hefty interest rate on the remaining balance
9. Avoid interest charges by paying in full and on time.
The golden rule of Earn money with credit cards is to pay off your entire bill each month. Interest costs can quickly deplete any rewards or cashback you’ve earned, so avoid carrying a balance
