ryan-born-16317-unsplashWith an average credit card debt now over $6000, applying for a card of your own may not seem like a great money making scheme. However, if you are careful with your finances, you could build an investment model around your credit card. With a few simple changes to your habits, you can use all the advantages of a card to invest and grow your wealth. This will help you to limit the amount of debt accrued and could even make you a sizeable profit within a few years. Start by selecting your credit card carefully and weighing up the investment potential of the benefits on offer.

Invest Your Cashback

low interest, cash back credit card offers you the opportunity to earn money back on your purchases without you having to pay an annual fee. Most people just keep this money as a small perk of the credit card company. If you do this, then you may end up simply buying more stuff with the extra money. However, this is the perfect investment fund.

If you maintain your buying habits as normal, then the money returned by your credit card company isn’t needed as spending money. So you should track the cash back you receive and redirect to new investments. The average family in America spends $57,000 a year. With only 1% cash back, this family would have $570 annually to invest.

Sell Your Reward Points

Many credit cards will offer loyalty points for certain purchases. For example, frequent flyers can use a card which offers points which can be exchanged for flight tickets. Unlike cash, however, this is useless for someone who rarely needs to take an airplane. If anything, you can end up purchasing something you didn’t need, simply for the rewards points.

Instead, continue to save up these points before selling them to someone who could make use of them. They’ll get a discount on, say, flight tickets by using your card and you’ll get their cash in return. It’s a win-win situation, but be sure to check the terms and conditions of your credit card to check that this is allowed. If it is, then purchasing that card could be a profitable investment.

Invest Your Spare Change

Sometimes, it’s better to make small frequent investments, rather than waiting around for a large lump sum. You can download free apps that will automatically monitor your bank account and round purchases up to the nearest dollar. The change will be redirected into a savings account, so that you can gradually build up a sizeable investment. Over several years, this will add up to thousands in accrued interest.

These credit card investment tips might not make you a fortune overnight, but they reveal how creativity goes a long way. Rather than viewing your card as a financial burden, turn it into something positive. Explore the benefits, including reward points and cash back closely before applying for a new card. See if you can find a way to invest this money for long term gains.