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6 Ways To Squeeze Free Money Out of Your Credit Card

6 Ways To Squeeze Free Money Out of Your Credit Card

It’s not every day your credit card company gives you money for free. But here are 6 bank beating strategies, and the landmines to avoid, that can help you milk your credit card for all it’s worth, on the bank’s dime.

1. 0% Balance Transfers

This strategy can save you thousands! A balance transfer is simply when you transfer high interest balances from one or more credit cards onto another credit card with a lower interest rate.

Banks are hungry for credit card balances, because they earn interest income from them. Many banks offer promotional interest rates of 0% for 12-36 months in the hopes that you’ll either miss a payment and your interest will get jacked to 19.99%, or you’ll keep your balance with them after the promotional period expires and they’ll jump your rates to 19.99% thereafter.

But if you follow the rules of the game, you really will pay 0% interest – a huge savings opportunity. For example, if you have $7,500 in credit card debt at 19.99% interest, a 0% balance transfer will save you more than $1,500 a year in interest costs alone!

Don’t be one of the fools their counting on, and you’ll be laughing your way to borrowing at 0% rates! Just make your payments on time, and find another balance transfer offer before the current one expires, and you’ll never pay interest on your credit cards again – a real bank beating strategy.

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2. 0% Interest Rates on New Purchases

If you know you’re going to make a purchase but you can’t afford to pay for it right away, let the banks front you the cash at 0%. Whether you’re buying a new sofa, dishwasher, floors or even a vacation there are tons of 0% financing offers in the marketplace. In some cases, you may even find offers where you’ll have no interest AND no payments for 12 months or more!

Just remember, the banks are betting on you missing a payment. In many cases if you do, you’ll not only have to pay interest for the payment period you missed, but for all previous payment periods in which you received 0% interest! Our recommendation is to always make your payments via pre-authorized debit, so you’ll never have to worry about missing a payment again.

Make your payments on time, and you’ll be laughing you’re way to free money.

3. Interest Free Grace Periods

Almost all credit cards offer some type of grace period, where you won’t have to pay any interest between the time you use your card and the time you have to pay back the credit card company. It can be a great tool to manage cash flow – especially for the self-employed and entrepreneurs.

In most cases credit card companies will give you a 21 day grace period from the time you receive your credit card statement. In some cases, you may get as long as 55 days (small business cards)!

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That means banks are giving you close to a month or more to pay your bills interest free!

But there’s a catch many people don’t know about. If you’re already carrying a balance, or if you’ve been late during the year, you’ll lose the privilege of your grace period, and you’ll start paying interest on new purchases the minute you make them.

4. Juicy Welcome Bonuses

Banks are competing hard for your business – especially if you have good credit and spend a fair bit on your credit card.

In fact they’re competing so hard, their willing to pay you to try their credit card, in some cases as much as a free round trip flight to Europe!

With credit card welcome bonuses as high as 100,000 miles, you can really milk the insatiable appetites and deep pockets of the banks. Think about it, just for signing-up for a credit card, you can fly from New York to L.A. absolutely free. Name another product that offers an incentive as big – you can’t.

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In fact, it’s such an effective strategy, you can apply, collect, and redeem on multiple different cards throughout the year. Just rinse, wash, repeat your way to free goodies and travel over, and over again on the bank’s dime.

5. Annual Fee Waivers

Despite offering hefty welcome bonuses, some banks will waive the first year annual fee as well – all in the hopes of removing every hurdle you may have to trying out their card. That’s a value of $120 to $150.

Think about it, you’ll get a free flight or hotel room for signing-up for the card, without having to make any commitment to the bank, at all. It’s house money.

Not only that, for an entire year you’ll get things like free lounge access, car rental and trip cancellation insurance, foreign exchange with no fees, and of course rewards on all of your credit card spend  absolutely free!

The bank is totally trying to buy your loyalty, so what of it? Be a free agent and take advantage of as many first year free credit card offers as you can – it will cost you nothing. Just make sure you have the credit to do it.

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6. Reward Stacking

Banks are willing to pay you to make purchases with their credit card. Whether, you’re getting cash back, air miles, or points, if you don’t carry a balance month to month, there is no excuse not to take advantage of free rewards.

On average, credit cards offer 1%-2% in rewards for each dollar you spend on your credit card. However, in some cases, you can hack your way to 5% cash back by combining different cash back categories from multiple cards in categories such as gas, grocery, restaurants, pharmacy and even with individual retailers such as Amazon. Why pay with cash or debit when the banks are willing to literally hand over money to you, just for your presumed loyalty?

Just make sure you don’t get in the habit of spending more, just to get rewards. Also, if you do carry a credit card balance from time to time, you’re far better off with a low interest rate credit card, than a rewards card – always.

So that’s it folks. The banks are beating at the door to get inside your wallet. They may have laid a few land mines in the fine print, but follow the right path and the prize is yours!

Featured photo credit: Credit-Cards / CC0 Public Domain via pixabay.com

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Marc Felgar

Marc Felgar is an aging, health & senior care expert focused on improving the lives of mature adults.

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Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

Reference

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