How to Make Money with Credit Card Rewards as a Transactor
The Debate Over Credit Card Rewards
Many consumers use rewards cards, but not everyone comes out ahead. Find out what you need to do to make money from credit card rewards.
Who Benefits from Rewards Cards?
In a way, both sides are right. Credit card issuers win overall. They paid out over $40 billion in rewards in 2022, but they charged over $130 billion in fees and interest, according to a report by the Consumer Financial Protection Bureau (CFPB).
Revolvers vs. Transactors
The CFPB classifies credit card users as either revolvers or transactors. Here's the difference:
- Revolvers: Carry a balance and pay high interest charges.
- Transactors: Pay the full statement balance every month, avoid interest charges.
Tips for Making Money with Rewards Cards
- Use your rewards card for regular bills: Keep spending habits unchanged.
- Only make affordable purchases: Ensure you can pay in full.
- Build financial stability: Save for emergencies and reduce unnecessary spending.
Conclusion
By being a disciplined transactor and avoiding high interest charges, you can easily profit from rewards credit cards without falling into debt.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.