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Make Money with Credit Cards ...

Many people don’t know that in addition to helping to reduce your bank balance, credit cards can also help top-it-up if you use them correctly.

Loads of credit card companies are willing to lend you money at 0%. So why not take this money and save somewhere that offers a high interest rate? Many have made hundred and even thousands of pounds a year through this method.

As a rough guide to how much you’ll make, you’ll need to multiply the amount you can borrow by the interest rate you’ll be earning. And you need to take into account how long you can do this for. Using an example of someone who borrows £5,000 which earns 5% interest for 16 months, we calculate that they’ll make around £335.

If you want a really accurate figure for how much you can earn, you will also need to incorporate any on the interest and the balance transfer fee that they card issuer may charge. Furthermore, if you take advantage of 0% deals using method one below, calculations will need to be adjusted as you’ll be getting interest gradually as opposed to straight away.

Despite the potential rewards, credit card arbitrage isn’t for everyone. You need to have a good credit score and you must be disciplined enough to know when your 0% deal ends so that you can pay off your credit card or switch to a new 0% deal.

If you do decide to proceed, unfortunately you cant simply take cash out

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of a cashpoint using a 0% card and then invest this into your savings account.
One of the golden rules when using a credit card is to never use it to withdraw cash as you’ll be charged an outrageous amount of interest. For more guidance on this and other things to avoid when using a credit card, see our credit card traps section.

In order take advantage of 0% deals, you can follow one of these two proven methods:

1. The first method is simple and easy to understand and action. You’ll need to take out a 0% for purchases credit card and use this to replace all of your current spending that is done through other means e.g. other debit and credit cards.

Set up a Direct Debit to only make the minimum payments on your 0% credit card which means that debt on the card will be gradually increasing. The wages that you would have normally spent are now being saved in an account which pays you a high level of interest.

Once the 0% period is up, you either need to switch to another 0% deal, or pay off the debt in full.

Make sure you don’t spend more than you normally would. You have to be disciplined and remember that this is a way to make money, not spend more money.

View our 0% for new purchases cards to see what cards offer you the longest deal. If you decide to switch to a new 0% deal once your current deal runs out, out 0% for balance transfers article will help point you in the right direction.

A way you can bump up the gain even more is by using a 0% cashback credit card. Although, the 0% introductory deals on these cards are usually shorter meaning that you’ll either have to pay off the debt or switch cards sooner.

The limitation to this method is that you’ll gradually be making interest on the amount saved rather than straight away. It would be ideal to be able to earn interest on all of the 0% debt straight away. This brings us to point 2:

2. Many credit cards offer 0% on balance transfers which allow you to move debt from your existing card to a new card, without interest being charged. Cards typically allow you to pay directly into your bank account by they’ll charge you heavily for it.

But thankfully there are some cards that allow you to pay straight into your bank account at a special cheap balance transfer interest rate. The benefit of this method is that you’ll earn interest on all of the 0% debt as soon as the transfer is done.

As with method number 1, make sure you make the minimum monthly payments on time. The easiest way to do this is by setting up a Direct Debit. If you miss a payment or make a late payment, you will lose the 0% offer so this step is crucial.

The two cards that currently allow you to balance transfer to your current account are the Virgin 0% for 16 months (4% handling fee) and the MBNA Platinum 0% for 13 months (4% handling fee) The Virgin card allows you to do that transfer within 60 days of account opening whereas the MBNA card has a 90 day window.

Before taking out any card, make sure you double check all of the details as terms and conditions and offers can change at any time.

Want to see more ways to make money online? Click here to review the online time sensitive money making methods before they expire!

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