A lot of folks hear “credit cards” and immediately associate them with little plastic money traps. What some of these people don’t realize is that they can use zero percent credit cards to actually come out on top financially. Now, this isn’t a get rich quick scheme – you won’t get rich at all doing this. This method is simply just a way to make a little extra money charging purchases to your credit card – something you do anyway.
The first thing you need to do is apply for a purchasing credit card that has an introductory interest rate offer of 0%. If you’re credit score allows, try to get qualified for one in the six to 9 month range. I should mention, the difference between a purchasing card (what we want) and a balance transfer card (also available) is that balance transfer cards are used for paying off large balances, and should never be used for spending. Purchasing cards are used for, you guessed it, purchasing. With a zero percent purchasing card, you can spend as much as your budget allows, and not accumulate any interest on your balance until the introductory rate expires.
So, now that you’ve been approved for one of the quality zero percent credit cards, you can apply for a high-yield savings account, or a money market account. The objective here is to sign up for an account that boasts the highest APY interest rate, with no associated fees. There are many available, particularly online – just do a little homework, and you’ll find one.
Now that you have your tools set up, it’s time to start building. The next step is to figure out how much you can get away with spending. The key here is to not go over, which you’ll find out why in just a moment. Budget how much you can charge to your card in such a way that will allow you to pay off the entire balance when the intro APR expires.
Go ahead and do your charging according to your budget. Only this time, instead of paying directly to the card company, pay into your high yield savings first. If possible, deposit the entire budget amount into the account ahead of time. Now, instead of simply paying the card off, you’re also accumulating interest. Once the introductory rate expires on the credit card, withdraw the amount owned, pay off the balance, and keep the money you’ve made through interest. Again, this isn’t going to make you rich, but with a high-yield savings account, and a large credit card balance, the potential is there to make a couple hundred dollars.
