Do you have credit card? If yes, then do you know you can earn money through credit card? Yes you heard it right, you can earn good amount of money from credit card. There are very few people who know how to make money with a credit card and how?
There are 7 different ways that you earn money from your credit card, and in this post, you will learn this exactly, that How will you earn money through your credit card?
What are the difference between credit card and debit card?
First, let me tell you the difference, when you pay with a debit card, money is deducted from your account, but when you pay with a credit card, the money is not deducted from the account because you get money on the loan. Yes, and the loan is for how long?.
Suppose your credit card statement is generated on the 30th, then come 1 month before. A 1-month statement will be generated, if you spend on the 1st date, then on the 30th or 31st, its statement will be generated and even after that you get 20 days for payment of a credit card, means you get an interest-free loan of 50 days on the credit card.
Now if we get 50 days interest-free loan on the credit card, can it be beneficial for us? Absolutely yes, it can be an advantage. In this post I’ll tell you about the best way to earn money from credit card.
7 Best way to earn money from credit card
50 Days Interest From Saving Account
What is the way that you will save money and you will earn, that is for those 50 days you leave that money in your savings account and what we get in the savings account. We get interest. I will give you an example. The camera by which recording takes place. I had to buy the camera. Had to buy and assume that the camera is worth Rs 4,00,000, then there is money in my savings account.
Then I have 2 options, that I pay with a debit card. If I pay with my debit card. So today Rs 4,00,000 will be deducted from my account. But there is another option. That’s what I have to do. If I pay with a credit card, money is not deducted from my account. In my account Rs 4,00,000 is there and if it is lying.
Example
Suppose on my savings account, I get a 6% saving interest. How much is 6% of the year, Rs 24,000, for the month Rs 2,000. How much will the 50 days interest be, if I calculate it will come to around Rs 3,333. This is my income. If this is my income, which one am I denying that I will not pay by credit card? If I made payment with a credit card after that what I am going to do, 50 days later after I paid. I make more profit but not only did I earn money here. I made even more profit. What is that benefit? Let’s know what I made a profit from.
- Credit score will be increased
- Credit card limit will be increased.
- Earned interest from saving account.
No Cost EMI Options
The next benefit to pay from a credit card is that I purchased a camera. But when I went to get this camera, I didn’t want to spend rs 4,00,000 at a time. What happens sometimes after 50 days? But what Happen Sometimes There is an EMI option. While shopping a lot on many memberships just like amazon or Flipkart there’s a lot of places even where you go shopping. You went to purchase a phone, you must have seen, there is such a banner. When written no-cost EMI means that I do not want to give ₹ 400000 even after 50 days. I want to earn more interest then what will I do? I took an EMI option for myself. Now it is an option that this is ₹ 400000, it will go from my account in Easy EMI form for 6 months.
Improve Your Cibil Score
The third option, your CIBIL SCORE also grows. You spend millions with debit cards, your CIBIL SCORE won’t increase but If you pay with a credit card and you do timely repayment, then your CIBIL SCORE will keep increasing. There is a lot of benefit from growing CIBIL SCORE. If your CIBIL SCORE keeps increasing and has gone above 800, then you apply for a loan anytime, assume that. If you buy a car in the future or buy a house, you will get interested cheaper by buying a vehicle or House.
Example
You take a loan tomorrow. Not more, you take a loan of Rs 50,00,000 and your CIBIL SCORE is good, then SBI gives you the loan at a rate of 6.5%. You see your EMI will go to about Rs 37,000 and the total payment you have to make is about Rs 89,50,000 approx. But if you do not have a good CIBIL SCORE.
Suppose your CIBIL SCORE is less than 700, then the no-good bank will give you money on interest. Meaning if the bank does not give you a loan, then you will have to go to private banks. Suppose You go to IDFC Bank or you go after private players who give you a loan. Assume at 9% rate of interest, I do not say that 9% is more or less but you just compare Rs 37,000 or Rs 45,000. You have to pay extra for Rs 7,000 every month because if your CIBIL is not good and you cannot get a home loan or car loan from a good place. You have to make an extra payment.
Sometimes if Cibil Score is very bad, then you may have to pay 12 times interest. You have to pay interest up to 12 percent. You see this difference was 37,000 and the rate of interest of 55,000 is making a difference of rate of interest here. People here do not pay attention and that is why they lose their money every time and we want people to not lose the money.
Earn Attractive Cashbacks
You get cash back when using a credit card. You can see this everywhere. You will always see offers of this method. There is an offer on SBI Credit Card. There is an offer on HDFC. If you have a credit card from a different bank, so what happens, why not take the cashback. Our money is going if we use a credit card and you will see that the cashback that comes on the credit card itself. Now when Cashback comes on credit card It is beneficial for those who have a credit card because your money is getting saved. Let’s move forward. It also saves a lot of money.
Suppose you purchased an AC, you purchased a fridge, you purchase the thing of Rs 50,000 there was a cashback of 10%. you saved 5000 there and if you purchase 10 things like this in a year you will save 50,000 for the year this is when we talk about home appliances.
Earn Rewards Point on Credit Card
So whenever you pay with credit card you got some points on your spendings. It has a lot of benefits as many times you do shopping, you make payment with your credit card. The benefit of this is that you understand that for 50 days, you get a separate benefit from your savings account. Along with this, you get reward points.
Now why we get these reward points first understand this, and I will tell you what the benefit of this is whenever you make a payment from a credit card.
Example
Suppose, sometimes you pay me too. When you buy one of my training courses, then when you pay me with credit the payment that I get comes after deducting. I am telling you an average of 2% so if someone makes a payment of 1000 then I will get it after deduction of Rs 20. Why it will come? I will get Rs 980 only because you paid with a credit card, but all this goes on in business because people pay in different ways and there are habitual to pay by credit card, the businessman has to accept credit card.
When you make a credit card payment, you have to keep in mind that the payment is being made to the front after deduction, you are paying in any restaurant or you are purchasing anything. Paying the front by paying from credit card, you feel that you have spent Rs 1000. Rs 1000 will be deducted from your account when you pay to post the statement. But he will have less money. No issues, because the money Rs 20 your visa or your MasterCard has earned from you. It will give you a reward point.
Now when we are spending, we have received reward points. From this there are many things that you can buy from your reward point. You can redeem them in terms of cash and we will see every 3 months or every 4 months that reward points will come to you by which you buy a lot of things again your money is getting saved.
Income Tax Benefit on Business Expenses
Suppose I have expenses today. Assume I talk about my camera. What am I doing with this camera? I am recording a video with this camera. I make money by making videos and if I make money. It is my business to make a video and if I buy a camera, then what is my expense? This is my personal expenditure? The answer is no, this is my business expense. I built a studio, I put a lot of things in the studio. It took millions of rupees in making the studio. I bought this screen in front of you.
Suppose I bought it for Rs 4,00,000, again for making the payment it is my business expense. What happens when there is a business expense, whatever revenue is coming to me minus business expenses. After that, I get taxable income. A businessman has a huge advantage if making payment by credit card. Especially for his business expenses, he is saving income tax legally, then you are saving income tax legally. Most of the people are businessmen. Their income is above 10,00,000 rupees, you have to pay 30% income tax. You want to pay more tax above 50 lakhs income, then the tax is getting saved.
Track All Your Expenses on Statements
When you pay by credit card, then you get a statement. Statement means it is written that you will know where you have to make a payment. If you have purchased the mobile phone you will get to know, if you paid the electricity bill then you will get to know and if you recharge your phone then you will get to know and if you have a party then you will get to know. Your credit card statement will say everything. You will track every one-rupee where you will spend, so you can be a little wiser to not spend anything extra.
Read Also : How to Apply for Personal Loan In HDFC Bank?
Golden Rules
Pay Your Bills Before Time
See, credit card saves your money. You understand it. But first of all, keep in mind that if you spend by credit card, then you always have to make a timely payment. Because if you do not pay timely, then the 6% you are saving will take 15% from you. You don’t think that I will make payment on the last day on the 50th day. You should make payment 4 to 5 days before the payment day. It is very important to pay on time, so it is very important to make timely payments.
Don’t Spend Over 60% of Credit Limit
The second thing is whatever your credit limit is. Suppose it has a limit of Rs 1,00,000 so do not spend more than Rs 60,000 on your credit card because your CIBIL Score will go down because of it. Whatever you have a credit limit, you are exhausting it completely every month. Because here it is happening in the negative marking. So whatever limit you have you don’t have to spend more than 60% of it.
Always have sufficient funds in your saving account
Third, Whenever you spend on credit card. Check money in your savings account. If you do not have a sufficient balance then why are you spending it with a credit card? You have to understand that that expense is worth it too.
Don’t spend because you have credit card
You are doing these expenses because people do it when they start spending because they have a credit card. Brother, I have a credit card now. Now I will purchase the expensive phone and will get EMI made so you will get caught in the trap of credit card. They increase the limit of it. Today a credit card has come to you which has a limit of one lakh, you spent 60,000. You are doing Expenses continuously for a few months.
They will increase your limit to Rs 2,00,000, then you will increase it to Rs 5,00,000 from Rs 2,00,000 and they will do 10,00,000 from 5,00,000. The limit will keep increasing as your income and your expenses will also grow.
One thing they know somewhere a person will miss any payment here or either he will be late or he will spend so much that he will get an EMI. One was no cost EMI but when you made EMI from credit card, then you get an interest rate of 12 percent or 18% for a year.
So, they know that this person has a credit card at some time, it is going to cost unnecessarily and because he going to do useless expense. The credit card company’s earnings start from here. The income they are earning because we do stupidity. So you don’t have to do it that is why I am telling you that you can spend from the credit card. You can do anything. You can manage your money but don’t spend on a unnecessary things because you have a credit card.
Conclusion
See, if you have a credit card, then you have this advantage, but you have to take care of these golden rules. So I hope you know about these 7 ways by which you can earn money with your credit card. So revise again one by one, first, you can track all the expenses. Earlier than you could get a benefit in your income tax, If you are doing business expenses. Before that, you would get reward points. You can take benefits from the reward point. You can get merchandise, you can get home appliances. You get cashback offers with the credit card, which saves you money. Your CIBIL SCORE gets increased by which increases your money and you get to benefit in the long term loans. You can avail no-cost EMI and finally you get money from your savings account.
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