I know you are excited and want to know how I made $5,088 without any reward points or any sort of top cashback from credit card companies. I will tell you exactly how I made easy money using a very simple trick which works even today. So, if I can do it you can too. It didn’t take me more than 1-2 hours of total work to earn $5,088.
If you think that I might have earned this amount due to some kind of sign up bonus with a credit card company, then I save you some time by saying, that’s not the case either.
Also, neither did I buy any big items from these credit cards nor I earned welcome reward points.
The trick I used is in fact a very simple concept which is adopted for a long time in financial world. This concept is called Leveraging. I could make easy money using this trick which I will be showing you step by step in this post. But before proceeding, let me quickly explain what leverage is.
Definition of Leverage
In plain english the principle of leverage means “use something to maximize the advantage”. We all have used a lever (a hard metal mechanical tool) to lift or move enormous weight by applying a little force on one end of the tool. The magic here is that the little power that we apply gets multiplied many fold on the other end of the tool and we can literally lift enormous weights beyond our imagination.
Now you might be wondering why I am talking about forcefully moving something in a post that is about earning some easy money without putting any hard work to it.
Once Charlie Munger was asked in an interview – what is the secret to succeed in life? This is how he had responded to the question:-
to succeed in life, learn about various subjects such as physics, mathematics, literature, history, accountancy, metallurgy etc and take the best ideas from each one of them and try to apply them in other areas. This is the power of connecting dots and using knowledge to solve problems across various fields…
I believe the concept of leverage was borrowed by someone and applied in financial field and then seeing that person succeed, many others followed the same principle.
If I tell you that; you put $10 with $90 borrowed from someone else to make a $100 note. Then invest that $100 note to generate $30 in profits. Now you return $90 back to the person who you had borrowed it from, plus some interest say another $10. You are left with $30 minus $10 your initial investment. So, net profit is $20. If this was a real investment, you would have just made 200% profit on your investment. This is the power of leverage. It can make you huge amounts of profits if it’s applied carefully.
As you will learn later in this post, I didn’t even have to put my $10 into the game and still earn a good return without any risk.
There’s huge potential to earn when we play it right while taking leverage on other people’s money. We can make great returns on our initial investment by leveraging other people’s money.
It is a win-win situation for all. The money-lender get a fixed interest on his/her investment to you while you earned much higher returns by taking calculated risks.
Next, lets jump to specific approach that I used to make easy money using credit cards.
Easy Money offered by Credit Cards
If you live in US, you might be receiving at least one mail a month in your mailbox from one of the credit card companies. In my case, I get one mail at least every week from discover credit card, Citibank credit card, chase credit card, lowes credit card and many others. In fact I am bombarded by their marketing and promotional campaigns which I never signed up for. But I don’t mind it now, as I see it as a way to make some easy money without working for it.
Interestingly sometimes these credit card companies offer free money, literally. Here a mail for free money that I got from discover credit card in my mailbox last week:
As you can see here, I am offered 0% APR balance transfer for 14 months and $0 balance transfer free.
I got similar offers for making easy money from chase credit card and Citibank credit card as well.
Please note that I am not advocating for using credit cards by the way. I have no kickbacks from any one of them at the moment.
According to me credit cards are the financial weapon of mass destruction and if not used carefully, they have the power to ruin someone’s entire financial life including mental peace. So again, I am not asking you to go and fill up as many credit card applications as you can. If someone has a high debts on credit cards, then I suggest to not indulge into this trick at all and clear the credit card debts first. Here’s are few great book, book which can help you get rid of debt quickly.
What I am going to share with you is a method to make free & easy money whenever an opportunity knock at your door.
On a quick side note, I recommend following related posts for you:
- Financial Freedom and How to Get it
- IRA vs. 401k vs. Roth IRA – which one is the best
- Early Retirement – Before its too late
- How to get rich doing nothing
- My Ebates Review to Earn Unlimited Cashback
How to Make Easy Money through Credit Cards
Let me show you the exact steps that I took to make $5,088 from credit cards with $0 purchases or any top cashback. Here’s the first step:
1 Look for Balance Transfer Deal
Often credit card companies offer 0% APR balance transfers on new credit cards. They market it as if you can consolidate all your credit card debt to your new credit and then enjoy 0% interest rate for 12 – 18 months.
Lets say you had 4 credit cards with a debt of around $1000 on each of them. So, with you new credit card you can payoff all 4 credit card balances and then your debt will be fully paid off on them. You won’t have to pay any interest on them and all your debt (around $4000) will be moved to the new card which offers you 0% interest for first 12-18 months.
The deal gets sweeter if you pay entire $4000 in those 12-18 months period, then there’s no interest charged to you at all. That saves you quite a bit of interest payments. They often charge 3-5% balance transfer fee in such cases. Here’s one such deal offered by chase credit card:
If you are paying 19-36% interest on current credit card debts, then this kind of deal can save you a lot of interest cost and if you put that money back into debt payments, the debt will be paid much quickly than you can anticipated.
I always advocate for living a life with no debt at all this is one way to make living good. If you have debt, then above offer comes in a category of saving your interest payments not making money. In this post, I want to share how I made easy money from such deals. So, here it is;
0% APR Balance Transfer
Look for a balance transfer offer with 0% APR & $0 balance transfer fee.
This is the key to my method. The balance transfer fee must be $0. I don’t want to put any money down to make money. What could be sweeter than that, right? <creepy laugh>
With 0% APR interest and $0 balance transfer fee, we can maximize the returns in our favor. Do you remember when we discussed financial leverage concept? This is one example to use it to our benefits.
As it’s a multi step process which must be followed precisely to make money in this game, so let’s move to 2nd step now.
2. Apply for Credit Card
Next step is to apply for such a credit card immediately. You can fill out the form online using invitation number on back of the mail that you received or call their call center to apply for the card. While opening the card on phone, do not forget to mention the specific deal that you were offered in mail and only that deal is the reason for you to get this new card.
I usually fill the application and then call their call center to speak to an agent. On phone, I specifically mention to the agent that the prime reason I need this new card is because I want to make a balance transfer. If the credit limit isn’t already provided to me online, I ask agent to ensure that I get X dollar of credit limit to make maximum benefit of balance transfer deal.
On one occasion, discover credit card agent had offered me only $6000 credit limit as their policy restricts anything more for new customers. I had immediately asked him to cancel the application and do not send the card. Few months later they offered me same deal but with much higher limit.
I have used this trick with Citibank credit card to raise my credit limit from initially offered $6,500 to $17,500 on same 2 minutes of call with the agent.
Another key point to remember is to always ask agent if you make the balance transfer directly into your checking or savings bank account. Most credit card companies allow this. I have successfully transferred the balance from credit card to my checking account with Citibank credit card & chase credit card multiple times. Discover restricts direct deposits to checking account occasionally. So, it’s always better to check with them beforehand.
3. Online Account setup
As soon as I receive a credit card which offers me free and easy money with 0% APR and $0 balance transfer fee, I setup my online account immediately.
Then, I link my checking bank account with the new credit card account.
Once that is done, I initiate a balance transfer to my checking bank account for maximum amount that is permitted within credit limits.
In most cases, the money is transferred to checking account in 3-5 business days.
This whole process from opening a credit card account to requesting balance transfer into my checking bank account doesn’t take me more than 1-2 hours of actual work.
After the money is transferred to your bank account, let’s move to the most important step of this whole process – investing.
4. Invest it to Make Easy Money for free
Once I receive money into my checking account, I am free to use it anyway I want.
I recommend to go for safer investing options giving good returns on investment. I do not advise to use this cash for purchasing home goods, or shopping or even stock trading. All these will not guarantee a safer return on your investment.
Remember we are trying to make some easy money after paying back borrowed money in set time period.
With my Citibank credit card, I had done a balance transfer of $16,500 and I had 18 months at 0% APR and $0 fee for the balance transfer.
To invest that amount, I had researched a safe investment beforehand which was offering 10.75% return with very low risk at the time. So, on same day I transferred entire balance of $16,500 into this investment for 18 months.
Around same time, I had got similar offer from chase credit card. From chase card, I transferred about $13,000 into my checking bank account.
So, collectively I had got $29,500 of free money to invest anywhere I wanted to, for a duration of 18 months. I invested all of this $29,500 into an investment which was giving a safe 10.75% APR. From there onwards, I just had to wait for next 18 months.
At the end of 18th month, I received net pretax amount of $34,588.16 including interest earned. If I take original investment of $29,500 out, then it leaves me with $5,088 in net profit. It was earned for just 1-2 hours of total work done in whole process.
Also, since I didn’t put in any money of my own so entire $5,088 was profit for me and easy money.
I highly recommend you to not get excited and ignore the next important point.
P.S: I am not advocating you to withdraw money from your credit card and invest in stock market or other investments with risk of losing the principle. The investment that I had chosen was similar to bond and certificate of deposits which offer fixed return and 100% security on principle.
I do not use these funds for stock trading at all and suggest you to not to do as well. Besides this, if you are interested in knowing a $0 free trading company, then I highly recommend this. I have used it myself for other investments and its great. All trades (buy or sell) are free absolutely meaning more money in our pocket. Moreover, you can get one free share of an US company by using my link to register.
5. Return 100% of Money back
Again, it wasn’t our money to keep forever. We should never forget this. Many people make mistakes here and forget to return the money back to credit card companies on time. Thats why they are in debt in first place.
Sometimes greed takes over our senses and makes us take irresponsible steps.
Remember there’s a heavy interest rate of anywhere from 19-35.99% APR on money that isn’t returned back to credit card companies on time.
Also, we should never think that we are smarter than credit card companies and they do not have an idea about our method of making easy money this way. They are very smart people and they know how to play with our emotions. They lured us into taking their money and then consume it so we won’t have it later to return back to them on time. This is how many people get into debt.
We must be in control of our emotions all the time while following these steps. Never by too greedy.
How to avoid credit card debt
It is very important that we have a disciplined approach towards steps mentioned in this article.
I always put multiple reminders in my online calendar and in my phone’s reminder apps so I don’t forget the date when I have to return the money back on time.
Usually I set these reminders to notify me 3 months in advance. This gives me enough time to arrange for the money and plan the things around. As the date comes closer, these reminders get more aggressive and pops up on my screens at least once daily.
I normally make full payment about 5-7 days before the last day to avoid any penalties or credit issues.
Again, I highly recommend you to add enough reminders in your online calendar (such as google calendar which is free) and phone apps. Remember if you missed the payment on time, then you will have to pay penalties which we definitely want to avoid.
Why you might not get 0% APR balance transfer deals
It is quite possible that you won’t get such a deal in mailbox. The prime reason might be your credit history. Credit card providers look for consumers with good credit history with good track of making timely payments before giving any such offers.
Remember that this is a loan that you are taking from credit card company and it will impact your credit score temporarily. I use creditkarma to track my credit score which is simple easy to set up and use.
During the period of my loans, I have noticed that other credit card providers did not offer me 0% APR and $0 balance transfer fee. In fact I received all balance transfer offers with 3-5% fee on it.
So, if your credit history isn’t looking good today or you already have other loans, then they might not offer you 0% APR with $0 balance transfer fee kind of deals.
In this case, I will recommend you to either pay off your loan first and clear your credit history. Or, use one of the options I mentioned above to consolidate your debt to one card offering low-interest rate & pay off your debt quickly.
How to find 0% balance transfer deals
If you have good credit history and you don’t have any loans currently going on, then you can also search for the 0% APR deals yourself.
Here’s how I look for such deals myself when I do not receive them in my mailbox.
I use bankrate website and look through their credit cards section. When on their website, these are the key things that I look for and which you must as well:
- Credit card offers 0% Balance Transfer
- Credit card offers $0 Balance Transfer fee (not annual fee – that is different)
- Free balance transfer period is at least 12 months ( this gives us enough time to invest the money, earn meaningful return & pay it back on time )
Here’s one such deal available today that I may be interested in:
As you see in above image, chase credit card provider is offering a $0 balance transfer fee on a 0% APR for 15 months for new cards. If I can negotiate with them to give me a high credit card limit of about $50,000 then I can easily make close to $7,000 in 15 months from this card and then pay back their $50,000 on time to avoid any penalties.
What to do after making easy money from credit cards
First and foremost important thing that I do is to return 100% of the balance amount back to credit card. Then I do not use that card for sometime or never if there are no additional rewards or top cashback offered on regular use. In most cases there won’t be any top cashback or reward points on such credit cards.
So, they are not really useful for day-to-day expenditures later as there are no rewards on purchases. In some cases, I also try to cancel the card after a while if there are no penalties or conditions around its terminations. Please check their policies before you cancel the card. Sometimes, they might send you a surprise bill later. So, be careful while cancelling the card immediately.
What about minimum payments every month
After a balance transfer is done on a credit card, you will receive a monthly bill. In the bill, you will notice the balance due will be shown as the same amount that you had transferred. Credit card companies expect you to make small minimum payments on the amount that is transferred.
I highly recommend you to do these two things while your balance is still not paid back fully:
1. Pay off minimum amount every month
This is not an interest by the way but just a minimum payment that credit card provider is expecting you to make monthly. If you do not pay this amount every month on time, they will start charging you interest and other penalties. So, pay this minimum amount on time. This is not substantial in comparison to easy money that you will be making from investments. It will hardly impact your return by 0.5% or so over the period; so don’t worry about it much, just do it to avoid penalties.
2. Do not use this card for anything else
I leave the card at home after making the balance transfer. This is because there’s usually a small clause in the agreement when you sign up for the balance transfer which says something about interest charge on entire balance due in case card is used for other payments after balance transfer is done. So, leave this credit card at home like I do until you have paid back full amount and balance due is $0 on the account.
I recommend you to thoroughly read the agreement and all conditions because credit card companies keep changing them from time to time.
What else should you expect
If you have followed above steps and made all minimum payments on time without a miss then you will also notice your credit score going up really fast. It will first go down immediately after you initiate the balance transfer. But when you make regular minimum payments & a final full payment later, it will slowly go back to earlier credit score. In my case, I have always gained 10-15% extra points on my score by the end of the loan. In general, paying off the loan will prove to be a better indication for future creditors that you have made all your payments on time.
This simple trick helps me get a little closer to my financial freedom. If I can do it, you can too but just be beware of pitfalls that I mentioned above.
How much debt you have on your credit cards and what are you doing about it? Let’s meet in comments below.
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