Is There A Way to Make Free Money?
The short is answer is YES!
There is such a thing as free money. But you’ll need to read on to find out how to get it.
We know! Most financial experts say there’s no such thing as a free money unless it’s from a friend or relative. For the most part, these experts are correct. Financial institutions stay alive by lending out money and charging interest to the lender. The biggest loaners in the world are the credit card companies. They allow you to buy goods and services with money you don’t have and charge you exorbitant interest rates in return for the “privilege.”
However, the credit card companies’ greed can work to your advantage if you’re disciplined and play their game the right way. By the way, never forget, it’s their game that you’re playing and any slip-up on your part will give them victory over your wallet. So, be careful!
Step 1: Understanding the “0%” Trap
Credit card companies bank on a lot of things happening to make their money–not the least of which is that people pay back their loans very slowly.
The credit companies know and have been proven right time and time again that most people don’t pay off their balance every month. In fact, an overwhelming majority of consumers only pay the minimum payment. This is crazy if you ever done the math behind the “minimum payment” scam. An item you buy for $1,000 can end up costing several thousand if you just pay the minimum monthly payment or slightly above. This has the lenders licking their chops and banking free money every month. The credit card companies have such faith in the consumers’ “payback as little as possible” mentality that they are willing to give money away for 12 to 15 months without charging any interest. Visa, Mastercard, American Express and Discover all have multiple cards that boast 0% interest on all purchases made for the first 12 to 15 months that you own the card. And yes, this is actually true! They will honor this promise as long as you at least pay the minimum monthly payment on time–YOU WILL NOT BE CHARGED INTEREST for the promotional term.
Remember, the Visas and Master Cards of the world are not giving you this year of no interest because they like you and want to see you prosper. They are betting on the fact that you won’t pay this loan back by the end of 12 months and then…whammo!!!! You get hit with all the back fees and back interest that has been silently accruing for 12 to 15 months. Furthermore, you’ll get charged usurious interest fees for every month the card has a balance once the promotional period ends.
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Step 2: Getting a Truly Interest-Free Loan
A savvy and disciplined consumer can use the credit card companies’ greedy “lure” to their own advantage. The key is to be disciplined and already have the money to pay back the loan before you even apply for the card. In other words, we only recommend using interest free credit cards if you already have money saved to pay off the balance before you borrow the money.
For example, let’s suppose you have $4,000 saved to take a special family trip to Europe to visit relatives. Instead of paying with cash suppose you open up a Master Card with a 12-month promotional interest-free term. Then, you use that card to pay for your vacation including air fare, hotels and meals. Assume that your total balance on the card is approximately $4,000 when you return from your trip two weeks later.
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Step 3: Cashing In!
Now, you have two choices. You could either take the $4,000 you have saved and pay off the card right away or you could take the next 11 months and pay off the card $366 a month. If you’re disciplined about not spending the $4,000 you have saved on something else you can earn 3%-6% interest on that money while paying off your card over the next year. Depending on how much interest you earn–you could end up with $120 to $240 left over after paying off your card. In other words your letting the credit card company finance your vacation for a year interest-free while you collect a year’s worth of interest. Not bad, huh?
But wait…there’s more!
AN ADDED BONUS JUST FOR PLAYING THEIR GAME
These days almost all cards give reward points of some kind…points that can be redeemed for travel rewards, shopping rewards and dining rewards. Even though you’re paying 0% for their money, you’re still entitled to these points. For most cards you can estimate that $1,000 spent is approximately equal to $10 worth of rewards. For example, if you have 5,000 American Express Membership Rewards Points (or $5,000 in charges), you can get a $50 gift card to several stores and restaurants. So, if you play your cards right (pun intended) you can actually add another $50 to $100 to the interest you’ve already made on the loan.
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