Credit Card Rewards Can Earn You 15% Back but Be Careful

credit card
  • The average American household carries $270,223 in total debt
  • You can earn $750 for spending $5,000 
  • Do not sign up if you are in debt
  • You still lose money using this trick so do not go out of your way to spend $5,000
 
The Average American Household Carry $270,223 in Total Debt
 
Most American households carry a whopping $270,223 in debt. This is the average and the figure is likely pulled higher because of people who carry millions in debt. Nevertheless, our average debt per household is still significant. 
 

Take a quick look to see how you compare.

Student loan debt$46,783
Auto Loan debt$27,708
Mortgage debt$188,903
Credit Card debt$6,829
Total debt$270,223

 

As we can see, most of our debt is from a mortgage. But, even if we exclude this amount, Americans still owe about $81,320. How do you compare? For people who want to reduce debt, I wrote an article on how students can keep the cost of student debt under $10,000. Don’t be someone who spends $46,783 on a college degree!

How Credit Cards Can Make You $750

Credit cards can be your best friend or worst nightmare. Credit card companies like Bank of AmericaCapital One, and American Express love signing up customers for their reward programs. Credit cards are one of the best ways that banks can make money. If you want to learn more about banks, check out how a money market accounts from a major bank can earn you $1,000!

Credit Card Companies Make Money From Customers Who Carry a Balance

The more people who sign up, the more likely members will miss their payments or carry a large balance and pay the ridiculous interest rate and late fees. Simply put, credit card companies are in the business of charging fees and recruiting bad customers. Interest rates per month go as high as 12%. Furthermore, these companies specifically target less-educated people who may lack the basic financial knowledge to make good financial decisions. The main ways credit card companies make money are:


  1. Interest on your credit card balance
  2. Late fees on payments
  3. Annual fees on reward cards

The average yearly interest payment equal to $1,386. Moreover, late fees start at around $27 and annual fees go up to $58. The key to success is to be 10% who pays on time and in full. For anyone with a large unavoidable payment coming up, you should carefully sign up and pay with multiple new credit cards at once and cancel the credit card at your earliest convenience.

Please Read Before You Sign Up

DO NOT SIGN UP FOR A CARD… if you actually can’t afford to pay off your current credit card balance. This will only drive you further into debt. Thus, the key is to have enough in your savings to pay for this amount and be left with much more.

How I Use Credit Cards

I signed up for multiple credit cards and canceled my cards after I received my $750 cash reward. I did realize that some cards forced me to keep the balance open for a long time before canceling, requiring me to pay a bit more in fees. However, it did not change the overall rewards that I earned.

When you do it right, you just earned $750 for doing absolutely nothing or a brand-new laptop or a camera on payments you needed to make anyway. Tip: don’t intentionally buy something that is $5,000 just to save $750. You are still spending $4,250. You should only use this trick if you have to spend this amount anyways.

“Credit card companies exploit our desire to have things now rather than later.”

They are in business because most of us keep making mistakes such as incurring interest, fees, and penalties. This is why they are still thriving. Do not be a statistic and use this trick carefully.

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