The concept of spending money in order to make money is one that is does not seem a foreign concept to anyone that has been in the business of making money for any length of time. However, stating that you can actually pay for your annual holiday by spending money on a regular consumer credit card does seem like a bit of a foreign concept. However, there are reward credit cards on the market that not only have interest free periods but also reward you for using them.
Rewards Credit Cards
Definition : A rewards credit card is a credit and that provides you an incentive to use the card for everyday purchases. Such rewards can include things like Airmiles, Avios Points, Cashback, Discount Vouchers, and Supermarket Coupons.
Avios Miles and Airmiles Cards
Avios and Airmiles credit cards work on the premise that an air line will award you an Avios point or an Airmile for every pound, dollar or euro you spend. You are then able to spend these Avios Airmiles on flights and hotels: effectively bagging yourself a free holiday just for making you normal everyday purchases.
The sceptics will think that it is impossible to build up enough Avios Airmiles to get a full holiday without spending an exorbitant amount of money first. However, due to merchant partnerships that the credit card companies run, you can actually super charge the amount of points you earn. For example, many reward credit card vendors will have a deal with large chain stores and online retailers to provide their customers with even more points or cash back if they use their credit card at that store. Simple acts like buying groceries at the right supermarket or buying fuel at the right petrol station could see you collecting 3 times the amount of points in some instances.
Cashback Credit Cards
Some credit card vendors such as American Express and MBNA will offer you a cash back incentive on your purchases. This means that for every penny you spend you will get a percentage of your spend back at the end of the year. This type of credit card is an excellent option for people who pay off their credit card bill in full every month.
If you can find a credit card deal that allows a 40+ day interest free period then you can effectively use the cash back credit cards to make your everyday purchases in line with your monthly salary. This means that you can pay off the full balance of your credit card every month, incur no interest and get up to 3% of the amount you spend paid back to you at the end of the year.
In the age of austerity that we are all living in currently, it is important that we find small loop holes like this in the financial products and squeeze ever drop of value out of them. With bank accounts paying interest at an all time low, sometimes saving isn’t the smartest option. Sometimes, thinking outside the box is the only option. As long as you are disciplined with your spending and make sure you can pay off the full balance every month then you should be able to game the system and get you credit card company to pay you.