5 ways to make money from credit card

“The one who hugs a debt also shakes hand with a danger.” ― Amit Kalantri

Yes, yes, I am not supposed to tell you about credit cards. The very first thing you learn in personal finance, credit cards are bad for your financial health. But having said that, you actually can make some money every month if you use your credit card properly.

Anyway, if you do not have the discipline to pay off your credit card every month on time, please ignore this post!

# 1 Good exchange rate

If you like to travel, paying bills using a credit card overseas is the worst habit to have. The exchange rate is pathetic unless you can get 5-10x points for overseas spending.

For me, I use BigPay debit card, it is still the best debit card for overseas spending because it has the best exchange rate in town. Please sign up using my referral code: QF8HGEUJGF and both of us will get MYR10.

Basically, you couldn’t make money by using a BigPay debit card, but you save in terms of the exchange rate.

#2 Cashback

OK, there are 3 things to consider when signing up for a cashback credit card- % of cashback ( maximum of cashback allowed), what kinds of expenditure are eligible, and weekdays/weekend expenditure.

I am using Public bank Visa Signature card, the maximum cashback I can get is MYR38 per month with 6% cashback. Cashback is available for dining, groceries and online.

So, how to earn MYR38 every month with just a click? Just top up your e-wallets MYR 633 every month! I top up my Bigpay debit card and TouchNGO every month to get my MYR38 for free! Besides getting my free cash back, I also can monitor my expenditure using TouchNGO and BigPay apps.

For those who are more adventurous, you can get a few more cards such as Public bank Quantum cards and maximize your cashback by topping up your BigPay debit card since you can withdraw your money from BigPay to your bank account with a fee of MYR0.50. Do you get my meaning?

#3 Points reward

Even though I prefer cashback to points reward, some readers might want to get a credit card with excellent points reward, I would recommend HSBC Visa Signature and RHB rewards visa credit card. Some cards offer 10x points for overseas spending or movie ticket purchase. But as I said, spending overseas using credit cards is the worst financial decision to make unless you are rewarded with 10X points!

#4 Travel Miles

For me, I use Maybank Singapore KrisFlyer American Express credit card. A few years ago, I used this card to pay my income tax online and collected almost 500,000 KrisFlyer miles and redeemed flight tickets for my family members to Europe. Maybank stopped the miles rewards for tax payment one year ago.

Besides redeeming flight tickets, you can redeem the hotel stays via KrisFlyer Vroom and shop online. Take my advice, use your points to redeem business class tickets because you make the most from your KrisFlyer miles.

If you have a lot of points and do not know what to do with them during this pandemic, read this article and learn other ways of spending your miles!

#5 Zero Balance Transfer/Zero Interest

I was taught to buy depreciating items with cash. I bought my TV, rice cooker or even a second-hand car with my hard earned cash until one day I realized about Zero interest installment.

I would only use my credit card to buy something and pay in installment with 2 conditions- there is absolutely no interest or one-time handling/transaction fee and I am still getting the reward points!

And please make sure you pay your installment on time because one missed payment would defeat the whole purpose.

The second way of making/saving money from your credit card is Zero balance transfer. If you have a huge balance in credit card A, it is a wise move to transfer the balance to credit card B if it is a zero-fee balance transfer. This helps you to settle your credit card debt interest-free.

It is hard to come by this kind of offer anymore but just look out for limited time offer occasionally. Affin bank is currently offering a 12-month zero-interest balance transfer.

Conclusion

Don’t ever try to use these methods to make money from your credit cards if you have a habit of not paying your credit card balance diligently monthly.

Credit cards have the highest interest rate in the world! It is at least 15% and even up to 18% per year. The most lucrative business for a bank is the credit card business. If you just pay the minimum amount every month for credit card debt, you are the most valuable customer for the bank!