Credit Cards

For most people the idea of making money from credit cards is a completely foreign idea. But guess what. You CAN!

Yes, Dave Ramsey would cringe (well, probably yell/scream) at the idea.

Yes, this method is NOT smart for 95%+ of the population.

I won’t go into all the details here. There are many blogs out there that are completely dedicated to this. But basically I make money with credit cards in 2 ways:

Credit card sign-up bonuses – You’ve seen them…”get 50,000 points when you sign up with _____and spend $3000 in the first 3 months. Manufactured spending – Buying Visa gift cards, loading prepaid cards (I have the

prepaid Target Redcard for this). Once again, I won’t go into any detail here. My

blog does have some of the basics if you want to learn more.

Between me and my wife, we have 30+ credit cards ….and yes, my FICO score is in great shape (currently it’s 740ish). I don’t use them all, and I always pay them off in full every month. I have never paid any credit card interest. If you don’t do these things, DON’T get credit cards. I have paid an annual fee a few times, but that was because the benefit was worth it to me. However, normally I either cancel the card or get the fee waived before having to pay an annual fee.

Am I crazy? How many credit cards do you have?

On top of getting cash from credit cards I have also enjoyed points and miles to get free or extremely cheap travel to Hawaii, Florida. St. Louis, Georgia, Utah, and California in the last 3 years…and that includes taking my small family with me.

NOTE: If you are planning on getting a loan in the next year, it is not wise to open (or close) credit cards. There is a possibility I may purchase a home this summer/fall when I get my assignment in the Army, so I am not planning on getting any new credit cards until after I purchase a home.

Even though I will not be opening any new cards until the end of the year, I still plan on manufacture spending. So I expect to get at least $200 in extra income a month for this year. If I were signing up for a lot of new credit cards, I would expect to bring in on average $400-$500 a month.

One really nice thing about earning money through credit cards is that the IRS does not consider bonuses and earned points and miles as taxable. On the other hand, if you were to get a cash bonus from opening a bank account, you would need to pay taxes on those bonuses.

Anyways, I hope this helps clarify some of my miscellaneous income when you see my income reports in the future. Or maybe I made it more confusing? I would be happy to go into the details if the interest was there.

Next time I will share my Q1 Financial Update along with my 10-year financial independence plan!