Tuesday, November 29, 2011

How to Get Rich by using Credit Cards

Banks have learned how to get rich by offering credit cards a long time ago.

They basically offer easy credit to almost anyone who can fog a piece of glass. ( as long as they're breathing)
Then they charge a whopping 18% or more interest to those who don't pay off their balance each month.
(which is a large percentage of credit card holders ) Sounds like it should be criminal, doesn't it ?

Even in today's extremely low interest rate environment many cards interest rates remain at this outrageous level. As you can probably tell, I do not have too much good to say about most banks. Anyway, I'll get into that issue at a later time when I have more space.

Banks have been making a fortune on credit cards for years. Did you know that they even charge the merchants (stores, etc ) something like 6% of the purchases on credit cards. They make money no matter what from both ends of the sale. Do you still love your bank ?  Would you like to turn the tables on them ?
I thought you would !
 
                      
                                                      Turn the Tables on your Bank




Just so you know, by using the following advice your bank will still be making money, just not as much.

How would you like to get an interest free loan from your bank for 30 days or so. I hope you said yes !
That is basically what you will be doing if you follow the three steps below.

1- If you haven't already, apply for one good Credit Card, (VISA or Mastercard) and destroy all of your other store credit cards etc. When choosing a card, try to choose one that will give you some benefits such as purchase points or air miles. This way you get free stuff once in a while just for using your card.

2 - Now, when you purchase anything ( and I mean anything ) use your new card. This should apply to most purchases including groceries and everyday items. At first, you may have a small limit and that's ok. If you go over your limit, simply call the bank and ask to have your limit raised. I have never seen a bank refuse this request yet. They will sometimes even do it without asking.

3 - When you get your credit card statement every month, make sure you pay off the entire balance by the due date. No interest will be charged as long as you pay the entire balance on or before the due date. I would also recommend that you set up a preauthorized payment of the full balance each month. This way you won't accidentally forget the payment. Just make sure you have enough funds in your bank account when the payment is to come out.

That is it. Pretty simple really, but don't make any mistakes (especially in step 3 ) or the bank will win and charge you the whopper interest rate.

You make money in two ways from this. Firstly, up to 30 days free use of the bank's money which you can keep in your account earning you the interest up to the due date on your statement. Secondly, by using your card for everything, you can accumulate points or air miles etc. pretty quickly and get some good stuff for free.

I really do love getting back at the banks ! Maybe you can too !


                                                                    Warning

When making your purchases, don't go overboard. If you don't have the money in the bank or have enough income coming in to cover the costs, don't make the purchase. You should only be making purchases with the card that you could pay cash for. This is not the place to borrow money.


As always, I welcome your comments and requests for future topics.

No comments: