Make Money and Build Credit with a Credit Card

Make Money and Build Credit with a Credit Card

Make Money and Build Credit with a Credit Card

Are you using your credit card the right way? If you’re paying interest and not getting cash back or useful rewards, you’re using it wrong! Using a credit card can be a sensitive topic. Some will never use them and others feel guilty for using them irresponsibly.

There is also a stigma against credit cards and those who have them. But if you use it responsibly, you can make money and build credit with a credit card. 

Using your credit card responsibly

Never use a credit card for things you don’t need and can’t afford.  Some people believe a credit card is a gateway to buy whatever they want with money they don’t have. That mindset can lead to some serious financial consequences down the road. Instead, think of your credit card the same way you would think of your debit card. 

Remember you have to pay back every cent, so you are still spending your own money. It is best to use your credit card for necessary purchases like gas or groceries. Don’t use your credit card for things you wouldn’t normally buy. 

How a credit card can build your credit

You’ll hear a few different things when it comes to how to use your credit card to build or improve your credit. Some are just flat out wrong and others are close, but not exactly correct. Having worked for banks for many years, I’ve discovered the best way to use a credit card to build credit.   

  • Never carry a balance. Unless you are using a card with an interest-free promotion, carrying a balance will accrue interest.  You do not want to pay any interest, ever. Pay off your balance in full at the end of every month. You want a small balance throughout the month. Just make sure it is completely paid off on or slightly before the payment due date.
  • Never use more than 30% of your credit limit. Keep a small balance on your card throughout the month. 15-20% is ideal because it shows you only use a little bit of your available credit. If you want to make larger purchases over 30% of the limit, just pay it down right then instead of at the end of the month. 


Let’s say your credit card limit is $2k. This means you don’t want a balance of more than $600.  If you want to purchase something that’s $1,000, then pay $400 on your card as soon as the transaction goes through.  Then at the end of the month on or before the due date, pay it off in full. The key is to have a low balance that gets paid in full every month.

Following these steps will improve your payment history and track record.  By not using more than 30% of your available credit, making payments on time, and never carrying a balance, you’ll begin to build your credit. This is an easy and great way to repair your credit score.  

Making Money with a Cashback Credit Card

Making money with a credit card

First, you will need to do some research and find a cash back/rewards card that doesn’t charge any annual fees. It’s not a hard task but you will need to decide which one fits your spending lifestyle best. For instance, if you travel a lot, getting a card with miles rewards may be better than cash back.  

Personally, I use credit cards from reputable local credit unions that offer 1-2% cash back on all purchases and charge no additional fees. To make money, you must never pay any interest or purchase unnecessary items. 

Responsibility is key

If you are buying useless things to get rewards or cash back, you won’t ever come out ahead. But if you use it in place of your debit card whenever possible, you’ll start to get a nice little chunk of money. 

If you have a large balance that you’re working on paying down, you might want to take advantage of a balance transfer. There are some banks and credit unions that will give cash back on balance transfers. Just make sure you read all of the fine print and don’t get stuck with a higher interest rate. 

Other benefits 

Using a credit card is more secure than using your debit card.  It’s easier to dispute any fraudulent charges if they happen to appear. If your debit card info gets stolen, your checking account may be vulnerable. You will have better peace of mind using a credit card.  It isn’t directly linked to your bank account and has better consumer protection. 

Final thoughts

When seeking a new credit card, it’s important to research the terms/conditions and financial institution beforehand. If you are unable to pay off your balance, stay positive and make a budget to get back on track.

If a credit card promotion sounds too good to be true, it most likely is. 90% of the credit card offers you receive in the mail are junk and should be tossed in the garbage. Opening and closing too many credit card accounts can also have a negative effect on your credit.  

Just remember to be responsible and you can make money and build credit with a credit card!