Credit Card Arbitrage
How You Can Make Money Off Credit Cards
With the country in a recession and interest rates on the rise, many people are turning to side hustles to make an extra buck, or even replace their 9 to 5. I want to show you a way that you can do just that. Credit card companies make money off of the credit card user right? I’m going to teach you how to flip that script and how you can make money off of credit card companies.
What is Arbitrage?
First, I need to explain what arbitrage is. Arbitrage is the art of buying low and selling high. If you purchase an asset in one market at a low price, then you take that asset and sell it in a different market at a higher price which is arbitrage. House flipping is real estate arbitrage. You buy the house for a cheaper price than you plan to sell it.
What is credit card arbitrage?
Credit card arbitrage is a technique that can be used to earn interest on your credit card balance. Essentially, you are using your credit card to finance your investments, and then earning interest on the difference between the investment return and the credit card interest rate.
There are a few different ways to do credit card arbitrage, but the most common is to use a 0% intro APR credit card for purchases, and then invest the money in a high-yield savings account or short-term CD. As long as the investment return is greater than the interest rate on the credit card, you will come out ahead.
Of course, there is risk involved with any investment, so you need to make sure that you understand what you are doing before you get started. But if you are willing to take on a little bit of risk, credit card arbitrage can be a great way to earn some extra interest on your money.
Two Things You Need To Know To Get Started
There are two things you need to know in order to use credit cards to make money:
- The due date
- The statement date
What is the due date? The due date is when the credit card company requires that you make at least a minimum payment on any previous outstanding balance on your card. For example, if I have a $1000 balance on my card from a previous transaction, my minimum payment would be $50. I recommend paying the balance in full of course. But, you are only required to pay the minimum balance.
What is the statement date? The statement date is made up of two dates. The first date is called the statement end date. The second is the statement begin date.
I’m going to walk you through how to use the statement end date and the statement begins date to your advantage in order to give yourself the opportunity to make money. We will use a credit card for this example.
Due date: 1st of the month
Statement end date: 4th of the month
The statement begins date: 5th of the month
How To Make Money With Credit Card Arbitrage
So let’s say I have a business where I buy cars at auction and resale them for profit and I have a $15,000 credit card. I take that $15,000 on June 5th (the statement begins date) and buy $15,000 worth of cars. My first payment isn’t due until August 1st. That’s almost 2 full months of interest-free money. Let me explain this, The statement begins date is June 5. The statement end date isn’t until July 4th. That means the statement due date isn’t until August 1st. The due date is always the next month after the statement end date.
Ok, so I bought 3 cars at auction for $15,000. I now have almost two full months of interest-free money that I’m using for my investment instead of my own cash. I’m using the credit card money for my investment. This allows me to keep my $15,000 cash in a high-yield savings account, invest elsewhere, or worst case I can use the $15,000 cash to pay off my card balance at the due date.
Now I take those cars I bought and I sell them for $25,000. I take the $15,000 out of that and pay off the credit card on August 1st (the due date) and I have $10,000 in profit. I just made a $10,000 profit off of the credit card company’s money interest-free.
The Benefits of Credit Card Arbitrage
Another benefit to credit card arbitrage is it increases your credit score. Paying off your credit card balance every month reflects positively on your credit history. This is great credit card utilization. The other great thing this does for your business is that because you are paying off your cards every month the credit card company is going to increase your credit card limit.
Every six months or every twelve months the credit card company is going to offer you a credit limit increase. Why would they do that you may be asking? Also, how does the credit card company make money if you aren’t paying any interest? Credit card companies get paid in two ways. First, they get paid off of intrest on outstanding balances. Second, they get paid transaction fees. Every time you use your card the credit card company charges a transaction fee. This is why they will increase your credit limit. Sometimes the companies will just increase your limit on their own.
Break Down
Using credit cards this way is free money. You must pay these cards off every month so make sure you have the cash on hand to cover that payment. Now if you already have an established business or brand and you need the card to buy more products or advertise, this method will give you 55-57 of capital interest-free. This is a great way to get a side-hustle going, grow your business, or start an extra income stream.
Lets recap. We got $15,000 is free money, interest-free, for 55-57 days before the minimum payment is due (always pay in full!), and I made $10,000. Not only did I get $15,000 free, but I also made a profit from it of $10,000, and I paid off my credit card which in turn increased my credit score which will increase my credit card limits to invest more money.
If you need to repair your credit score to start getting better credit card offers before you can do credit card arbitrage take advantage of the offers on this page for credit repair. This is the fastest way to get your credit dialed in and start moving toward financial freedom. That way you can break free from the 9-5 grind and become an entrepreneur. Work from wherever you want. Become your own boss. Click the link below to take the first steps to becoming financially independent. Also there’s a link below to find a good credit card to start your side-hustle.
615 Credit Score| 638 Credit Score | 642 Credit Score | 644 Credit Score | 645 Credit Score
655 Credit Score | 656 Credit Score | 661 Credit Score | 665 Credit Score | 668 Credit Score
How To Fix My Credit To Buy A House | Credit Card Arbitrage