Using credit cards to make money?

Geo-TH,In · Jan 9, 2017

I use credit cards to make money in the form of rebates or Lowes and sears 5% off pruchase price. Menards 2% rebate in the form of a check you spend at Menards. Bank America Card, 1, 2 & 3% back on diffent catagoires, 3% is on gasoline. Some credit cards are only 1%.

All my cards are auto paid the date they are due out of checking account. So my cards are like a debit card only difference I make money off cards. Been doing this for over 20 years. Never had the first problem with a bank or credit card company.

I don't pay dime one of cards. I pay no annual fees, no interest payments. I look at Credit cards as a way of making more money than a bank pays interest on a savings account.

I see some on TV advertising paying 5% on a credit card savings account, FDIC, but reading the fine print, these cards make up for that in annual payments, withdrawl fees.

My sister and BIL run their business using a credit card like I do and make a ton of money. BTW rebate money isn't considered taxable income.

Does anyone have a better credit card, no fees, that pays more in rebates?

4520BW · Jan 9, 2017

I buy everything on my card. No worries if something get hacked and bought on my card. Last year I took a free cruise with my card points.

LAA · Jan 9, 2017

I agree with you on the cards that offer rebate on purchases such as gasoline etc. but I see it more along the lines of ''saving'' money, not ''making'' money, that is why a rebate is not taxable, they are just giving you a discount after the fact.

Geo-TH,In · Jan 9, 2017

My sister flys to Florida many times a year on her points. Sometimes enough points to bring kids and grandkids to Florida over Christmas.

Greg K · Jan 9, 2017

I used to buy quite a bit for my business from menards and then use the rebates for home improvements. I use the wholesale houses now since I don't have the time to shop now, I can call the order in ahead of time, stop in and sign a paper, be on my way in minutes. Time is money, I don't have enough time anymore to shop for everything.

John T · Jan 9, 2017

I too use credit cards "wisely" as I don't like to carry huge sums of cash while on the road. Usually I get like 3 cents off gas and something like 1% to 3% cash back rewards on many purchases and, of course, I NEVER pay any fees or penalties or interest charges and pay it off monthly when due or before. Like anything else, there can be risks involved, same as if you carry several thousand in cash and they are NOT for everybody, especially those who cant manage money or cant pay the balance in full and incur interest charges, but in cases of an emergency its understandable to pay off an emergency debt over time as ones budget permits. They can be a good or a bad thing if not used wisely but to each their own choices and opinions. Use or not at your own risk or reward........and I will do the same.

John T

JOCCO · Jan 9, 2017

To accumalate much or a reward or rebate you have to spend a lot!!! Some people don't. Some times I see this as a "pyramid scheme" that will crumble.

Tom OConnor · Jan 9, 2017

I have used a Marriott Rewards card for years and have run all my business through it. My wife says she can track my every move through my credit card statement. Every two years we spend a month in the middle of the Winter in Hawaii compliments of Marriott Reward Points. This along with my check book gives me a receipt for nearly everything that is spent and where it is spent.

Butch(OH) · Jan 9, 2017

We use a Lowes credit card for everything we buy there. Costs zero and saves 5% on every purchase and pay in 30 days, why use cash?

Eric in IL · Jan 9, 2017

Right or wrong, here is what I think:

1) Credit cards are a convenience, nothing more nothing less.

2) Everyone who buys from businesses accepting credit cards pays for that convenience whether they use a credit card or not. (Even Geo-TH and everyone else jetting about thinking life has dealt them a freebie.)

3) Credit card companies will not put plastic in your wallet/purse unless they are making money off of EVERY plastic card. They will do everything in their power to make you think you are winning, but that is a fantasy.

Sorry if I ruffled any feathers, these are only MY thoughts and I alone shall bear the burden of dragging them to the grave with me.

Mike M · Jan 9, 2017

Lots of good choices around if you want to take the time to deal with them. So far I just don't want to mess with it. My Visa has some sort of rewards you can get. I tried logging on to check what I could get with 855 points but it has been so long I had trouble with my password or something ? If it is like before I might have enough to get a FREE ink pen. LOL.

Cmore · Jan 9, 2017

Soooooo, if you bought 2 million dollars worth of gasoline, you'd make $60,000!!!!!
What a deal.... sure beats working....
Cmore

fixerupper · Jan 9, 2017

If credit cards weren't such a money maker for the banks they wouldn't be tripping over each other trying to get more people hooked on them. Many millions of folks have a huge balance on their cards and they are paying interest. The banks are raking that interest right in to their coffers.

I use mine a lot but I'm still trying to get Marilyn weaned from writing checks for every little thing she buys. We do pay it off monthly and we do not pay fees. Each month when the bill comes I sit down at the computer and itemize every item on the bill on Quicken, It's clean and easy. Keeping track of points is way down at the bottom of my priorities. There are a few bills I write checks for but they are bigger farm expense bills. My son uses a couple of business cards, one for fuel and the other for parts. Because of the points he and his family haven't paid for a motel for quite awhile, though they are so busy they rarely have time to use motels.

Welding man · Jan 9, 2017

One question I have had for a long time. Are the rewards you get on credit cards taxable income as far as the IRS is concerned? Does the credit card companies report this to the IRS. They could easily do it, they already have all you info.

Brown Swiss · Jan 9, 2017

I don't use credit cards so the credit card company can't make money off of me, I am just cruel that way, there seems to be enough suckers in the world!

D beatty · Jan 9, 2017

If you have any rewards that are taxable the card company will send you a 1099 and it has to be over $10.00 to get a 1099.

Geo-TH,In · Jan 9, 2017

I have gotten hundreds back from CC and never a 1099. CPA says if rebates are for personal use, not business no income taxes apply. I asked if they are for business, he said techniqually yes, but how is the IRS going to know.

Geo-TH,In · Jan 9, 2017

I think there is a limit to how much you can earn on 3% gas rebate. I've never gotten to that limit. Can check out BankAmerica for details on rebate.

Geo-TH,In · Jan 9, 2017

I use credit cards because I don't like writing checks. I have to buy all my checks and they cost aroun $.35 each.

I think the place of business can charge a fee. I've never been charged a fee for using my CC.

The best part each month I get a CC statement which comes in handy for keeping business records. Many times I will forget to enter a check, or lose receipt.

I think it's a win/win. I don't write checks and they pay me for using their cards. Never have I paid for using a card. Never has there been any issues with auto pay. Never have I been charged a late fee. Yes it makes my like easier.

Geo-TH,In · Jan 9, 2017

My thoughts exactly, better than paying cash. Pay off CC when bill comes due.

Paid $600 for a dishwasher and got $30 taken off.

Geo-TH,In · Jan 9, 2017

You are right. I feel saving money in the form of a rebate, is like money in my pocket. Never seen any advantage to a debit card, so I've never had one. I have to stop off at bank about once a week, so if I need cash, get it then. Don't get charged a fee at my bank for taking out cash. Can't say that about all debit cards.

Cmore · Jan 9, 2017

You missed my point entirely
You can't spend your way to riches!!!!!
Cmore

sotxbill · Jan 9, 2017

I have even the power bill/telelphone/cellular go to the credit card each month.. I have everything go to the card... It gets paid off each month.. I usually get around $650 in cash every year. I pay no fees, and have done this every since they offered me the 2% cash back. So,, for about 20 years now, I get a notice of a 650 plus deposit in my checking account every January for the previous year. I order all farm parts, gasoline, virtually everything that will take a credit card, autopay,etc, this way. And I only purchase what I would have purchased anyway. Only negative is that I have to log on to all my autopay accounts every 2 years and update the card info. Most of my autopay accounts are even nice enough to notify my when the card is near expiration. 12000 dollars is nothing to sneeze at and I believe its tax free as its my post tax money they are returning. And 2% return on this type of money is a phenomenal return any way you look at it.

BarnyardEngineering · Jan 9, 2017

(quoted from post at 12:56:19 01/09/17) You missed my point entirely
You can't spend your way to riches!!!!!
Cmore

You miss the point entirely.

If you're going to spend the money anyway, would you rather get 1% of it back or let the credit card company or the shop owner keep it?

Yes, there's the whole deal of if they didn't offer the cash back they could charge less, and if they didn't take credit cards they could charge less, but you know they're not going to charge less. Everybody charges too much for everything. They're greedy, so get back at them by using credit cards with cash back incentives.

D beatty · Jan 9, 2017

The site ( affiliated with IRS ) I was in said there are certain instances that it is taxable. They did not go into detail but said bank or card holder would send you a 1099 if needed. I stay away from credit cards because every transaction you make with credit card you pay a fee.Credit card companies are in the busiess to make money not you.

dhermesc · Jan 9, 2017

So how do they make money off the car holder when they incur no fees or interest while 1% or 2% back? I made about $600 off mine last year while incurring no fees or interest.

Eric in IL · Jan 9, 2017

It is my understanding that any business which offers payment by credit card is charged a fee to offer this convenience to their customers.

It is my belief that the fee is not shouldered by the business, but likely passed on to the customers.

I have no faith that anyone offering me "free money" is telling me the truth. Free is the most misused word in the English vocabulary.

Petert · Jan 9, 2017

If it works so good for one card why not get 4 or 5 cards and use the second card to pay off the first and then use the third card to pay off the second and then use the fourth to pay off the third and so on. Why would anyone need a job?

Good luck PeterL

Geo-TH,In · Jan 9, 2017

the people that pick up my trask like using auto pay from CC. PREPAID cell
phone too. Not everyone will do auto pay from CC. Pay pal is tied to CC. Amazon
CC is 3%.

We think alike, if you are going to spend money why not get something back,
rebate.

Geo-TH,In · Jan 9, 2017

I think it will cost a transfer fee and the amount is limited. I pay all my bills on time, including CC. Late fees on electric and sewer bills are steep.

dhermesc · Jan 9, 2017

And if you paid in cash you would still be charged this fee even though you didn't use a credit card.

dhermesc · Jan 9, 2017

Most cards don't give "cash back" on balance transfers - only on purchases.

Ark68SS · Jan 9, 2017

Whether you realize it or not, you are paying for folks using credit cards even if you never use them. Credit card companies charge merchants a fee that is a percentage of the card purchase, a fee for each card swipe, a fee for equipment maintenance, and other fees. Merchants add the cost of the fees to their merchandise and pass the costs to you.
BillL

Eric in IL · Jan 9, 2017

Yes, please refer to item 2 in my original comment.

Welding man · Jan 9, 2017

Would be very easy in my case, it's a business credit card. I got over $400.00 dollars last year alone.

Cmore · Jan 9, 2017

Have you ever heard of a Debit Card!!!!!!
Gezzzzzz, get with it man!!!

Russ from MN · Jan 9, 2017

I recently asked the owner of a nursery if they would rather have a check for a tree order ($600) and he said it didn't matter, so I put it
on the credit card, because I am 1800 miles away. I thought they might want the extra 2%, but I guess not. We probably make 2% on it.

Rollie NE PA · Jan 9, 2017

I don't use a credit card unless I really have to. A lot of the places I do business with locally don't accept credit cards so they can sell their products cheaper. I also pay cash for most of my purchases. Makes my life easy.

Steve in VA · Jan 9, 2017

I too use a card for most purchases and the rebates are nice, but with the caveat that I always pay off the balance [as several here do] and so avoid the interest fees. Interest on CC balance will easily exceed the rebate and that's where the under-writers make their profit. It appears from reading the responses that everyone here who touched that aspect pay their card in full when due. That puts you in the minority of users and also makes it financially sound for you.

The second reason I rely on a card so much is that the billing cycle allows me to hold my money for 30 to 60 days beyond the actual purchase. Use of cash can't do that. In fact, when I recently ran up a pile of vet bills, the specific card I used had deferred interest for 6 months. That equals a 0% loan.

Hobo,NC · Jan 9, 2017

(quoted from post at 01:33:37 01/10/17) I think there is a limit to how much you can earn on 3% gas rebate. I've never gotten to that limit. Can check out BankAmerica for details on rebate.

A Penfed Cash PLUS card pays 5%

steve_in_mo · Jan 9, 2017

Don't try that "rebate money isn't considered taxable income" on an IRS agent.
A better answer would be "I didn't know" because you will pay a smaller penalty on that answer.

showcrop · Jan 9, 2017

(quoted from post at 09:51:50 01/09/17) Right or wrong, here is what I think:

1) Credit cards are a convenience, nothing more nothing less.

2) Everyone who buys from businesses accepting credit cards pays for that convenience whether they use a credit card or not. (Even Geo-TH and everyone else jetting about thinking life has dealt them a freebie.)

3) Credit card companies will not put plastic in your wallet/purse unless they are making money off of EVERY plastic card. They will do everything in their power to make you think you are winning, but that is a fantasy.

Sorry if I ruffled any feathers, these are only MY thoughts and I alone shall bear the burden of dragging them to the grave with me.

Eric, The way that you are wrong in your number 3 is that you can think of credit cards as a phishing scheme. The companies know that of all of the people that they get to sign up for cards, that a good number will overspend and make minimal payments, resulting in very good high rate income for the companies. The don't need to make any money on most of them because they make plenty on a lot of them.

Pete in MD · Jan 9, 2017

Sam's Club MasterCard (rebates)

5% - gas and diesel at any station up to $6,000/year. If gas is $2.40/gal. the rebate is 12 cents a gallon.

3% - restaurants, lodging, air travel

1% - all other purchases.

stonerock · Jan 10, 2017

GEO so you cheat the IRS??

stonerock · Jan 10, 2017

so you cheat the IRS??

Using credit cards to make money?

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