Make money from a credit card

Did you know that there is a way to actually make money on credit cards? If you have good credit, there is probably a good possibility that you can make some money off of the big bad credit card companies. The next time you get one of those 0% interest credit card offers in the mail, you might want to think twice before you throw it away!

When you receive your 0% credit card offer in the mail, don't throw it away! Instead, read through the terms listed under "Terms and Conditions" either on the back of the application or on the credit company's Web site. What you are looking for is something with no fee for balance transfers and no annual fees. Or no annual fees and no fees for a cash-back advance. If you do the balance transfer, you can transfer it to another card with no cash advance fee or put it toward a bank card you already have from which you can pull the money. If you receive a cash advance, you can simply place the check in your account and utilize it from there.

Where do you invest the money for the year you have it? When we do this, we usually put it into the highest yielding money market account we can find. The highest we usually find is 5%, though in these days, the highest yielding is usually under 3%. Throw your money in and watch it grow! Well, at least a little bit. Assuming you have a $20,000 credit and you put it into a money market yielding 3%, you'll make only about $600...or less. But if you enjoy the "game," it could be worth it to you. Some people also put it into high yield savings accounts.

One thing that is CRITICAL to know is that you must pay the minimum payment each and every month on time. If you don't you will be burned by a brand-new high interest rate (in which case, you should just liquefy the money and pay off the balance) and a ding on your credit report.

An important thing to note is that you should not do this if you are projecting a large credit-score driven purchase such as a vehicle or home purchase. While your money is out on this, your credit score will take a slight dive because you will have a higher debt-to-income ratio and a higher debt to available credit. The good news, though, is that your credit score pops back up once you pay it off at the end of the year (or however long your offer was for). At the end of the term, if you want to close your card, your credit score may drop by a few insignificant points, but it won't be a permanent issue.

Also, don't forget to check your credit report for mistakes regularly. You can do this for free one or more times per year, depending on the state you reside in.