How- to- Make- Credit- Card- Profits- in- 2021

Are you ready to make every credit card in your wallet profitable to you in 2021?

How can you profit from using credit cards? Is it possible to use a credit card and never enter into debt? Yes it is possible, and yes you can make a profit using credit cards.

The best credit card rewards will offer you a profit that fits around your lifestyle. Making passive income using credit card profits can be a good source of long term savings if you put enough time into the process to learn how to actually make money and not lose any money.

I have been using the cash back rewards from credit cards for about 5 years. Additionally, I have learned a little more each year about its profitability.

There are endless cash reward and point combinations that allow you to maximize your passive cash return. But, the combinations require your thoughts and planning to acquire the best return possible.

I found the following areas to be the most important situations to investigate.

Taxable credit card reward laws
Absolutes to know to make a credit card profit in 2021
General knowledge: Pros and cons of credit cards
Which profit is best, cash or points?
Comparing credit card profits
How to make credit card profits in 2021

1. Taxable Credit Card Reward Laws

Also, you must know that using credit cards and making cash profits could be considered as a form of income and thereby taxed. The “Items In General Ruling” announcement from the IRS provides a statement declaring that “cash rewards” may be taxable.

Tax court rulings on credit card rewards can be a bit tricky. In general the ruling shows that there is difference between cash back rewards and $300. account opening bonuses. Likewise, account opening bonuses are taxable.

Nonetheless there is a big difference between a $300. taxable account bonus and $300,000. in cash back rewards. Additionally, credit card companies are required by law to send you a MISC-1099 if they pay you $600.00 or more. The bottom line is to understand what you are getting yourself into when you start managing cash back rewards.

Affiliate Marketing Disclaimer: This article contains Amazon affiliate links, thank you for helping me out. Financial Disclaimer: This article contains strategies that I use personally, but should not be taken as a prescribed method of use for you.

2. Absolutes to Know To make a credit card profit in 2021

What are some absolutes you should know when you accept a credit card offer?

When you are looking for a credit card rewards system, you want to spend a good amount of time determining what type of profits you want from the system. You want to find a rewards program that supports (offers rewards in) your current spending habits. The review should include this information.

Balances: Determine how you will keep a zero or negative balance on your account. If you keep a owing balance on your card you will not make a profit.
Interest: Where can you use the card for the best profit (5% grocery or 3% on restaurants, etc.).
Interest Timelines: These state when and where you must use the card to get the best rotating profits (for example: gas station purchases, from July to September).
Purchases: Decide how you will use the card to make charges (for utilities, insurance, grocery and in general).
Savings Placement: Consider using the rewards for additional profits by putting them into a savings account, high yield account, CD, regular savings, etc).
Any fees Compare the amount of money you plan to use the card to pay with the fees associated with using that card such as annual fees, foreign transaction fees, etc. If the fees out weight the rewards, I recommend checking into a different card.

3. General knowledge: pros and cons of credit cards

Do I have to pay if I never use my credit card?

Make sure that you understand the general information concerning your credit card. There are some cards that require an annual fee. Annual fee means just that, you have to pay that amount each year.

Annual fees have nothing to do with the card’s usage or cash back potential. Therefore, if you choose a credit card with an annual fee, you will have to pay even if you never use the credit card.

Do credit card companies make money if you pay your bill in full?

Yes, they continue to make money. Companies make money from the amount of credit card interest charged to you, usually 14% to 29% on your balance. However, you should not have to pay any interest fees if you payoff your balance within the set grace time.

Many credit cards allow a 25-day grace period before you have to pay off the balance and not be charged any interest. I caution you that using the 25-days may be a problem. I personally, pay accounts off within 7-days.

4. Which Profit is Best Cash or Points?

Is it better to get a credit card that gives rewards with cash or points?

I believe that choosing a card that pays rewards in cash or points is up to the individual. I have one of both. I like the cash rewards better because the money can be put into a savings account and make the reward into a double profit.

I like the points card because I can use the points to purchase items that I can give to others as a gift. Also, I have found that the best point cards, have points that never expire.

Can I get rich off my credit cards? You probably cannot get rich off of credit card profits, however you can put the cash into your long term savings accounts.

5. Comparing Credit Card Profits

When choosing a card that pays cash rewards you may want to consider the percent of the return and any additional signing bonus. Once again, remember that signing bonuses may be taxable, where cash back rewards usually are not taxable.

Nonetheless, these were the best cash back rewards cards without an annual fee. If you are like me and don’t think it makes sense to take away from your cashback with an annual fee, the credit cards below may offer what you are looking for in todays market.

When you are looking for a credit card with cash rewards, the choices can be overwhelming. However, you should fair well if you follow your reasons for getting the credit card. The credit cards below were the best for individuals who want to transfer a balance.

I have personally used the Citi Bank Credit Card for a balance transfer. In my case, I needed to transfer a couple thousand dollars over my card limit. Citi bank made it easy for me, they increased my limit and everything went through without any problems.

However, I was not able to pay off the balance in less than 18 months. But, the interest fee was so low, that I was able to pay it off within 3- years.

There are endless rewards available to individuals with good credit scores. The higher your credit score the easier to get the best perks offered by almost any credit card company. Yet, when you over-extend yourself and tarnish your credit, rebuilding can be challenging.

Likewise, if your credit score is less than 550 you pay additional fees on everything you buy. Even more so you have ridiculously high APR rates on everything like your mortgage, car payment, and credit cards. These cards offered the best rates I could find as of 3/10/21 for individuals with tarnished credit.

The Chase Ink Business, American Express Blue Business and Capital One Spark Cash for Business cards (shown below) were the top three I could find for small business owners. As you can see the top two cards do not require an annual fee.

Additionally, I believe the Chase Ink Business card is the best credit card because it offers the $750. cash back bonus on a specific dollar purchase. Using the specific purchase amount protects you from falling into paying tax on a sign-up bonus. Nonetheless, and as an extra bonus, Chase Ink Business also offers fraud protection for free.

While teaching students to get into debt is not something I feel is appropriate. I guess that it is better to teach your students how to handle a credit card and money while they are still in a learning mode and before they ruin their credit.

These two cards offer the best deals for students. So I want to reiterate you can only make credit card profits if you keep a zero or negative balance on your account.

When choosing a card that pays with travel points you may want to consider the percent of the return and any additional signing bonus. Also, remember that a signing bonus may be taxable, where points (which have a cash back value) usually are not taxable.

Nonetheless, these were the best travel rewards cards with or without an annual fee.

6. How to make credit Card profits in 2021

Which credit card offers the most profits in 2021?

In trying to determine which credit cards are the most profitable in 2021, I have presented 19 credit cards. I also presented them in categories that seemed to be most used by the average consumer.

Although there are some other credit cards available, I feel these are the best in each category. Most importantly remember that credit card companies compete with one another, so their offers change from time to time.

How can you make money using credit cards?

Recap of how to use credit card rewards to make a profit.

Keep a zero or negative balance on your credit card.
Only purchase what you can payoff within the pre-determined grace period.
Investigate the various types of credit cards and get the one that supports your life style.
Put the cash back into a long-term savings account to make additional interest on the money.

Conclusion

We began the article by asking if you would like to make every credit card in your wallet profitable. We also stated that there are two types of card rewards, which are cash back or points. Also, we pointed out that bonus offers could be taxed because they are not considered to be a spending rebate. Next, we explained the importance of investigating the various types of credit cards and knowing what type of card you want in order to make a profit.

We moved forward into the pros and cons of credit cards and the choice of using a cash back or points card. After that we completed a comparison of the various types of credit cards. Finally, we recapped how to use credit cards to make a profit.

If you enjoyed this article, read one of our other articles on using scarce savings rewards to increase your wealth.

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