Do you know how you can earn free money using your credit card ?

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How to earn money using a credit card

How to stretch your money using a credit card?

I grew up in an environment where it was believed that buy only what you can pay for.
This meant if you want to buy something for $10 then you better have that $10 in your pocket before you go to the shop or the store to buy it.
Well I still believe that to have the money for what you want to buy is a good thing.
A lot of people come from the same thought and sometimes stretch the idea to a credit card as well.
They feel that using a credit card is not good because you may over spend and may fall in a credit card trap of spending more then what they can pay for and in this way end up in a debt trap.
Well this fear is not entirely unfounded. If you are not careful with your credit card spends you can get yourself into serious trouble financially.
however you can also use a credit card to your advantage and even generate some extra money without having to do any work for this money and for this reason this can be a source of a little passive income for you.

My first credit card experience

When I got my first credit card I was excited to have my first piece of plastic that had my name embossed on it.
However I still followed the rule of having the money with me before I spend it.
This time though I did not have it in my pocket instead in the bank.
Luckily for me I learnt a few tricks that have let me use my credit card to stretch my money and help me even earn from it.

#1 Be aware of your Bill generation date

This is the date on which the credit card gets generated.
If you look at your credit card statement you can easily find it.

If you do not where to look or do not have a statement handy then you can call up the customer care of your credit card company and ask the.
This is how I use my expenses. I have noticed there are two types of expenses planned and unplanned.
Now my credit card company generated my credit card bill on the 24th of every month.
This means if I use my credit card after the card statement gets generated on the 24th evening I do not have to pay the amount immediately.
Actually the next bill would be generated on the next 24th plus I get a 15-20 day window to make the payment.

#2 Be aware of the payment due date

The last day by which you can make a payment without a financial penalty is the payment date.
This due date is again mentioned on the credit card statement.
Now suppose I make a purchase of $1000 on 25th and this purchase would not reflect in my statement till the 24th and I get upto the 13th of the new month to make the payment.
This way I get roughly around 43 days of free credit period on my card.

#3 How do I use the free credit period ?

I put the money in the bank. If I leave the money in my savings account I get a fixed rate of return, however if I put the money in a fixed term deposit for say around 40 days I get a couple of extra bucks as a means of passive income.
Alternatively some banks have the option to turn the balance in your account into a term deposit automatically after a fixed date.This too can be used to earn some extra money.
I get this money just because I could plan my expenditure.
This way I can earn money.

This can be tricky

If I forget to pay my credit card bill by the 13th (that is the due date )the credit card company charges me a heavy fine which would not only make me look really stupid but also cause me a big financial loss.
Thus I have given standing instruction to my bank to auto debit my bank account and make the payment to the credit card account a day prior to my last date of payment.
This is possible because the bank account and my credit card company is the same and also because my bank allows me to setup standing instructions for the payments.

How to improve this strategy ?

For this strategy to work to your advantage you would have to do maximum spends as planned spends that you can time according to your billing cycle.
This way if the amount of purchase is larger then you put more money away in a term deposit and earn more interest thereby turning your credit card into a money earner.

Final thoughts

Managing your credit card spends gives you a better control of your finances. though initially the returns of this strategy many look meager however over months and years you can earn and save extra without having to work for this money in the literal sense of working.

his tweak helps me earn some passive income and
This is one of many ways of using my credit card to earn some extra money.
Over the years I have learnt a few hacks and tips that I would like to share with you.
Do let me know what you feel about this method and would this work for you or if you want me to share some other tried and tested methods to earn and better utilize your credit card.