You can earn money when you use credit cards. Purchases made on your credit card are in effect an interest free loan from the credit card company, as bill is paid in full at the end of the billing period.

Let us assume that in a given month you have $1000 worth of purchases. You pay for these purchases using your credit card instead of cash. The purchases could be groceries, telephone bill, insurance payments, etc. The purchases could also occur at anytime within the credit card cycle. The billing cycle of your credit card is 20 days and you are paid $500 every 14 days.

If you saved the $1000 that you would have used to make your purchases in a savings account at 4% interest you would earn $1.37 in interest. This is over a 20 day period. At the end of the year your interest earnings would be $25.

Just be careful and make sure that you pay your credit card bill in full when due. Otherwise the 28% interest charged would cost you $14. This would wipe out all of your interest earned and more.

The Numbers

Monthly Purchases: $1000
Yearly Purchases: $12,000

Billing Period: 20 days
Pay Period: 0 days - $500 and 14 days - $500

Savings Interest Rate: 4% APY
Interest Earned 20 Days: $1.37
Interest Earned 365 Days: $25.00

Late Payment Interest: 28%
Penalty Paid $1000, 20 Days: $14.00