5 effective ways to earn money with credit card spending

Overview credit cards

Credit cards emerged as a big alternative for bundles of cash in wallets in recent times. They are termed as plastic money. Security and convenience offered by cards over cash is the reason for the increasing use of credit cards today. Interest-free credit for the period is a major benefit of credit cards, and it also keeps you worry-free about your purchasing power when you are in need big chunk at a go. Adding to your surprise, there are many ways to earn with a credit card. However, you are obliged to repay the used credit limit at the due date. Defaulting the timely repayment of the credit with penalize you with the late payment fee and interest rate.

Why is a credit card a good idea?

The credit card is a proven alternative for bundles of cash in the wallet today. Using a credit card as a cash alternative keeps you worry-free about the cash in your current account. The chances of transactions for the wrong amount are less likely when you use credit cards for purchases. Cash rewards and other rewards from the banks are your instant discounts on credit card purchases. Before you take any credit card, make sure you will use the credit card the right way and earn money from it.

credit card terms

 The credit card is similar to a short-term loan you avail from the bank, but the difference is you enjoy an interest-free credit period. Defaulting payment will penalize you with late payment fees and interest rates for outstanding balances. When you use a credit card for a purchase, the banker will give you interest interest-free credit period of 45 days. Prompt repayment will help you build a good credit score.

Interest Rate

Interest rates on the credit cards are high when compared to other types of loans offered by the banks. Not only outstanding balance, the purchases you make thereafter will attract high interest rates until the complete balance is paid off. Cash advances on the credit cards will also have high interest rates with no grace period. These banks will charge interest rate on the advances from the day one till you pay off.

Minimum due on credit cards

If you have overspent the credit limit in a month and fall short of money to repay the credit card bill, the banks provide you an option to repay minimum due amount over the total credit card bill. The minimum due amount that you are ought to pay towards the credit card bill remains much lower to the original amount and timely repayments of minimum due amounts keeps you off from the penalties charged. Be minded that consistent repayment of minimum due amount will lead to debt traps.

Smart ways to earn money from credit card purchase

Using the credit card the smart way starts off with taking the right credit card for your needs and using it carefully. Credit cards are misinterpreted as an option for people who don’t have cash in hand at the moment. This plastic money can be a smart option for people who have enough purchasing power and yet make a credit purchase to avail of the benefits. Before you make a credit purchase, ensure you have enough balance in your account or expected future income to clear outstanding bills on time. You can earn between 6% to 44% on your current spending with a credit card if you use it smartly. It could sometimes be equalling to the annual premium of a term insurance policy premium

Earn through investing in fixed deposits

Every bank offers an interest-free credit for the user for the first 45 days. If you are spending the credit card for monthly purchases with a balance in your account, you can move these funds to fixed deposits in your banks for a period and earn interest over it. You can settle the outstanding with the expected income on the next payday as you get an interest-free period for more than a month. As the purchase and payment cycle continues, the initial funds that are deposited for fixed deposits can remain untouched.

Rewards and cash backs

Every bank offers an interest-free credit for the user for the first 45 days. If you are spending the credit card for monthly purchases with a balance in your account, you can move these funds to fixed deposits in your banks for a period and earn interest over it. You can settle the outstanding with the expected income on the next payday as you get an interest-free period for more than a month. As the purchase and payment cycle continues, the initial funds that are deposited for fixed deposits can remain untouched.

Purchasing at affiliate stores

Every bank today is running at cutthroat competition to increase the maximum customer share in the market. Credit cards are one of the banks’ most effective products to win customers’ attention. Many banks have affiliate stores online offering additional reward points for purchase through affiliate links.

No-cost EMI purchase

Almost all the banks like SBI, HDFC and Axis banks are partnering with big e-commerce stores like Amazon, Flipkart and others. If you are making big purchases through partnering bank credit cards, you will not only earn some special discount but also enjoy no-cost EMI, which means you can get an interest-free loan for using the credit card at the store and repay it in easy installments over the tenure.

Improve CIBIL score

When you use the credit card the right way, you will improve your CIBIL score, which will enhance your eligibility for different types of loans and fetch you the loans at the best interest rates. Anything above 700 points is considered a good credit score, and you can save big on different types of loans with lower interest rates.

Possible tax savings

How can credit cards help you save taxes? The move of offering the tax benefit for using the credit card is yet to be implemented. By providing this offer, the government will be able to control black money circulation in the market. This can effectively reduce cash transactions in the market and promote the country’s digitalization. As the government of India is working seriously to offer tax benefits on credit card usage, be ready to avail them.

Best credit cards in the market

Card Name
Joining/Annual FeesCard Name
Apply here
Amazon pay ICICI credit cardJoining Fees = Rs. 0
Annual Fees= 0
Unlimited 5% cash back for prime customers, 3% for non-prime customers
Apply for credit card
Axis ACE


Joining Fees = Rs. 500+GST
Annual Fees = Rs. 500 +GST
Waived off on minimum spend of 10k within 45 days.
 Annual fee waived off on minimum 2 lakh spent in past 12 months.

Best for utility bills and 4 free domestic lounge access
Apply for a credit card
Apply for credit card
HDFC Money Back CardJoining/Annual Fees500
Waived off on minimum spend of 50,000 per year
2000 bonus reward points on annual card expenditure of Rs. 2.5 lakhs


Apply for credit card
SBI Cash Back Credit cardJoining Fees = Rs. 999 (1stYear)
Annual Fees = Rs. 999 (2ndyear onwards)
Waived off on minimum spends of 200000 per year


5% cash backon online spends and 1%on offline spendsApply for credit card
HDFC Diners Club Black Credit cardJoining Fees = Rs. 10000+GST (1stYear)
Annual Fees = Rs. 10000+ GST (2ndyear onwards)
Waived off on 5000,00 spent a year
complimentary Annual memberships of Club Marriott, Forbes, Amazon Prime, Swiggy One (3 months) and MMT BLACK
Complimentary Ola cabs | cult.fit Live | Book My Show | TataCliQ vouchers on spends of over Rs. 80,000 every month
 
Apply for credit card
HDFC Infinia Credit Card.joining fee 12,500 + Applicable Taxe
Welcome bonus 12,500 reward points*
Waived off on spending 10 lakhs or more in a year
Complimentary nights & buffet at participating ITC hotels
Complimentary Club Marriott membership for the first year
Unlimited airport lounge access across the globe for Primary and Add-on member
5 Reward Points for every ₹ 150 spent
Apply for credit card
The above-stated information is subject to periodic change

 

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