Your Credit Card: It's Not Just Plastic—It's Money
What would we do without credit cards?1 Most of us have at least one in our wallet. From purchasing airline tickets and shopping online to filling up the grocery cart and topping off the gas tank, we use credit cards as a convenient, quick way to pay.
But they can be far more than just fast and easy. Although it sounds counterintuitive and even an oxymoron, you can actually profit from credit cards if you apply the insider tips I share in the following chapters:
- Your cards will pay you between 1% and 5% in cash just for charging things you would have bought anyway.
- You can use cards as creative financing tools to buy virtually anything, at rates as low as 0%.
These ideas have helped countless consumers, including me, get hundreds and even thousands of dollars from their credit cards. It's my sincere hope and expectation that this book will do the same for you.
The Power of Credit Cards
With more than a billion cards out there—around five cards for every American—it's a safe bet that you've got at least one handy. Take a good look at it. What does it represent to you—a financial management tool or a burden? Do you receive many benefits from your cards, or is the lender the one receiving all the benefits, in the form of interest payments and fees from you?
Credit makes it easy to buy what we need and want, but in this society obsessed with obtaining all kinds of things, credit can become a crutch instead of a convenience. Still, credit cards have become virtual necessities in our capitalistic, technology-driven society. Try to rent a car without a card, and you'll see what I mean!
With credit cards, shopping online is a breeze. What about reserving airline tickets? Ordering from a catalog? And mailing a check is almost a thing of the past. Using a credit card is faster, easier, and generally a more secure way of doing business.
What's more, if you follow my advice and strategically use the right cards, you'll get many other benefits from them, including generous gift certificates, airline tickets, and cash rebates. If you're wondering how that can be possible, it's largely because of competition. At any given time, typically thousands of competing credit card offers are targeting you. Card issuers want your business so badly that they're willing to dangle all sorts of juicy carrots in front of you, chock full of tempting rewards and rebates.
Industry research indicates U.S. card issuers will spend $18.4 billion on rewards in 2010. In 2006, they "only" spent $10.3 billion. If they're giving away that much to get and keep our business, imagine how much money they're making! Still, isn't it great that competition is so tough for them, they have to offer generous perks just to woo and keep us?2 If you "play your cards right," you'll become what lenders call a deadbeat, meaning you reap the rewards of your cards without paying any interest or fees. Or maybe you're a cardholder with revolving debt, which means you don't pay off your balance in full each month—and you do pay interest. If you fall into this category, you're the credit card issuers' ideal customer.
Whichever type of card user you happen to be, you can learn a lot about using credit wisely, getting out of debt, avoiding a high-debt lifestyle, and taking advantage of the benefits and rewards of card usage. That's just the kind of valuable information we focus on in this book.
In fact, a very unique value proposition of this book is that credit cards can significantly enhance your financial well-being. Stick around, and I'll empower you to become a savvy credit card user who wisely manages your plastic for personal profit!