Are credit cards free money?

The best credit card for free reward money is the Capital One SavorOne Cash Rewards Credit Card because it offers an initial bonus of $200 for spending $500 in the first 3 months. Plus, you can earn 1 - 5% cash back on purchases.

Generally, the best credit cards for free reward money give a good initial bonus, above-average ongoing rewards or both. Rewards and initial bonuses are basically free money if you can get them without spending more than you normally would – and without paying interest.... read full answer

Here are the best credit cards for free reward money:

Initial Bonus: $200 for spending $500 in the first 3 months

Ongoing Rewards: 5% cash back on hotels and rental cars booked through Capital One Travel, 3% cash back on dining, entertainment, popular streaming services and grocery store purchases, along with 1% back on all other purchases (except for 8% back on Capital One Entertainment purchases and 10% back on purchases made through Uber & Uber Eats)

Annual Fee: $0 annual fee

Min. Credit Required: Good credit

Initial Bonus: $250 bonus after you spend $2,000 within 120 days

Ongoing Rewards: 6% cash back on two retailers you choose (up to $1,500 in quarterly combined purchases), 3% back on one everyday category of your choice (up to $1,500 per quarter), 5.5% back on prepaid hotel and car reservations booked in the Rewards Center, as well as 1.5% back on all other purchases

Annual Fee: $0 intro 1st year, $95 after annual fee

Min. Credit Required: Excellent credit

Initial Bonus: $200 cash rewards after spending $1,000 in the first 3 months

Ongoing Rewards: 2% cash rewards on all purchases

Annual Fee: $0 annual fee

Min. Credit Required: Good credit

Initial Bonus: $200 cash back for spending $1,000 in the first 120 days

Ongoing Rewards: 5% cash back on two categories of your choice (up to $2,000 each quarter), 5% back on prepaid air, hotel and car reservations booked in the Rewards Center, 2% on your choice of one everyday category (like gas stations, grocery stores or restaurants) and 1% on all other purchases

Annual Fee: $0 annual fee

Min. Credit Required: Good credit

Initial Bonus: $200 for spending $1,500 in the first 6 months

Ongoing Rewards: 5% cash back in your top eligible spend category each billing cycle (up to $500 spent, 1% back thereafter), as well as 1% back on all other purchases

Annual Fee: $0 annual fee

Min. Credit Required: Good credit

Overall, those looking for a big chunk of change should probably go with the biggest initial bonus, as long as you can hit the spending requirement. In that department, the U.S. Bank Shopper Cash Rewards Visa Signature® Card provide the largest payoff.

The easiest way to make money with credit cards is by earning rewards, particularly cash back rewards and big signup bonuses. So long as you use a cash back credit card for purchases you were going to make anyway, and then pay your bill in full to avoid interest, you’re getting free money back. Same goes for credit card signup bonuses: As long as the spending requirement is money you would’ve spent in that timeframe anyway, the bonus is free money.... read full answer

Other ways to make money with credit cards, at least indirectly, include peer-to-peer lending. Nevertheless, taking full advantage of rewards remains the easiest, most reliable way to make money with credit cards, as you can discover in greater detail below.

Here’s how to Make Money with Credit Cards:

• Get a cash back credit card.

  Any rewards credit card will reduce the cost of the purchases that you make, but cash back credit cards make it easiest to make money. Cash rewards cards give you cash back on purchases that you can redeem for statement credits, personal checks and/or bank account deposits. You can also set up automatic cash back redemption, so that once your earnings hit a certain amount, they’re cashed out according to your preferences.

  The average cash back credit card gives a little more than 1% cash back on purchases, but you can find cards with higher earning rates. Check out the best cash back credit cards to see which will make you the most money.

• Earn a credit card signup bonus.

  Many of the best rewards credit cards come with high signup bonuses for meeting a minimum spending requirement in the first 1-3 months. For example, you could make $150 to $500+ from rewards bonuses without spending more than you would otherwise, just by using the right card.

  Once you earn the signup bonus, one redemption option is to apply it directly to your credit card bill to cover purchases you’ve made. You might also be able to redeem for a check, bank account deposit, gift cards, travel, merchandise and more, depending on the card, if you’d rather save money another way.

• Cash in credit card points/miles.

  The simplest way to cash in your points or miles is by using them to pay for purchases that you’ve charged to your card. You basically get those purchases for free. Most credit card issuers will let you apply your rewards to past purchases, usually at a rate of a bit more than 1 cent per 1 point/mile.

  You can also cash in rewards for gift cards to the places you shop at most. Another option to make money is to sell your rewards to friends or family members, but that’s a bit trickier.

• Buy gift cards with a bonus rewards card.

  Some credit cards offer bonus rewards on groceries. That would create the opportunity to buy general-purpose gift cards – like Visa gift cards, which can be used anywhere. There are fees for buying card-network gift cards, depending on the value of the gift card.

• Try peer-to-peer lending.

  Peer-to-peer lending is exactly what it sounds like: lending money to your peers. Essentially, you finance someone else’s personal loan and get paid back with interest. One of the reasons people take out personal loans is to refinance credit card debt. If you become a lender on a peer-to-peer lending site (such as LendingClub), you can give money to people who are looking to pay off credit card bills, and then personally reap the rewards of their interest payments.

  However, this is really only worthwhile if you have extra money you don’t need at the moment and are willing to get repaid over the course of months or years. There’s also some risk your loan won’t ever be paid back in full.

Using credit cards strategically provides unique opportunities for cardholders to make money. For example, applying for a new card with a signup bonus during a time when you’ll be making large purchases can put extra money in your pocket without much effort.

However, using a credit card irresponsibly just to earn more rewards won’t be worth it. If you don’t pay your credit card bill in full each month, high interest rates will quickly eat away at your earnings. And if you start missing payments, your credit score will suffer.

Some credit cards give you free money in the form of rewards. However, you still need to earn the cash back, points or miles by making purchases with the cards, or sometimes by doing things like adding an authorized user or referring a friend.

In rare cases, a credit card may even give you bonus rewards just for opening an account, with no spending necessary. An example of this is the Amazon.com Credit Card, which gives you a $50 gift card automatically loaded onto your Amazon account once you open the card.... read full answer

Plenty of rewards credit cards also charge annual fees, so your rewards aren’t really “free” with those cards, at least until you’ve earned enough to offset the cost of the annual fee. In addition, if you carry a balance on a credit card between months, you’ll owe interest, which can cost more than you earn in rewards. Below are some good rewards cards with $0 annual fees that essentially give you free money as long as you make purchases and pay them off fully each month.

Credit Cards That Give You Free Money via Rewards

You can learn more about the best rewards credit cards, as well as how rewards work, on WalletHub.