If you know that your credit card will pay you between 2% and 5% in cash just for charging items you would have purchased anyway, would you want to open a credit card?
- You can buy $400 gasoline and earn $20 monthly, or $240 yearly.
- You can buy $400 grocery and earn another $20 monthly or, another $240 yearly.
Or, you could use credit cards as creative financing tools to buy virtually anything at rates as low as 0%.
For example, with My Chase Plan, you can break up card purchases into budget-friendly payments with no interest. Plus the Chase bank will waive the monthly plan fee during your 0% APR introduction period for up to 18 months.
Or you can simply have great deals from the places your love like Amazon, Bestbuy, or Costco.
1. Understand The Credit Card’s Dominance
Most people have at least one in their wallet. We use credit cards as a convenient, quick way to pay for everything from airline tickets and online shopping to filling up the grocery cart and topping off the gas tank.
It is called credit card dominance, or the power of credit cards. It is not just plastic. If we know how to use credit cards correctly, we can build wealth faster.
What would we do if we didn’t have credit cards today? It will be very difficult to shop on Amazon or eBay.
It is a good idea to build wealth by using credit cards only if you are disciplined. It helps me and thousands of people to make more than $100k and if you invest this money in the correct way, you can be wealthy.
2. The benefits of using credit cards
Credit cards make it so convenient to purchase what you want and need. It becomes a normal practice to shop online, rent a car, and buy an airline ticket with a credit.
- credit cards give you access to a bank’s line of credit.
- credit cards provide better consumer protection against fraud. For example, if you use a credit card to buy something and later discover that it is defective or damaged, some issuers may refund your purchase up to a certain amount.
- most credit cards have no annual fees.
- credit cards help you make large purchases that you may not have the cash to purchase right away and spread the cost over 6 months. For example, you can buy a laptop to work and pay $150 per month for 6 months with Chase Pay PLan.
- credit cards help you build a solid credit history that will appear on your credit report.
- a good credit report will help you get approved for a loan, or mortgage with lower interest rates.
Furthermore, if you follow the good advice and strategically by using the right credit cards, you’ll receive a slew of other benefits, such as:
- generous gift certificates.
- airline tickets.
- cash rebates.
- $1250 sign-up bonus.
If you’re wondering how that’s possible, the answer is largely due to competition. At any given time, thousands of competing credit card offers are targeting your attention.
Credit Card companies want your business so badly that they’re willing to dangle a slew of enticing rewards and rebates in front of you.
According to industry estimates, card issuers in the United States will spend $28.4 billion on rewards in 2020.
If you can make $5000 yearly by using a credit card, and invest it for 30 years, you will be wealthy. The only problem is that you have to know how to use your credit card:
“Earn the reward without paying any interest or fees and invest the reward to retire.”
3. The practical guide to creating wealth using a credit card in 4 steps: BORI
Before learning the practical guide “BORI = Build, Open, Refer, Invest”, you should learn the risk of using a credit card too.
Credit cards make it so easy to spend money you don’t have, resulting in debt.
If you do not pay your credit card balance each month, the interest accumulated will increase your debt very fast. You will end up broke. So if you are not disciplined, do not use a credit card at all.
To avoid this, only use your credit card when you know you’ll be able to repay the debt quickly and easily.
Here are the 4 steps to creating wealth with a credit card:
Step 1: build a good credit score by opening a Chase Checking account and Chase’s student credit card.
It will take one year to have a credit score above 680 if you pay your credit balance each month. Remember never to use a credit card if you can not afford it. You can earn a bonus of up to $225 when you open a new Chase Checking account and set up a direct deposit into this account totaling $500 or more such as payments from payroll providers or government benefit providers.
Step 2: open one credit card per year when you have a good credit score (above 680):
- Chase Freedom Unlimited: It is a very popular credit card. It has a sign-up bonus of $200 if you spend $500 on purchases in your first 3 months.
- Chase Freedom FLEX: The Chase Freedom Unlimited and Chase Freedom Flex credit cards offer the same generous rewards on dining and gasoline purchases.
Both cards also come with first-year bonuses that are roughly the same amount.
While Chase Freedom Flex provides high earnings rates in rotating bonus categories up to a quarterly spending limit, Chase Freedom Unlimited provides a better base rate with no bonus categories to activate every quarter and no limit on how much you can earn in rewards.
- Chase Freedom Student:
New cardholders receive a $50 bonus after making their first purchase within the first three months of account opening, plus an additional $20 per year for up to five years simply for keeping their account in good standing.
There is no annual fee, and you may be eligible for a credit limit increase after making five on-time monthly payments. However, there are other options that compete for the top-of-the-class ranking.
In summary: with the Chase Freedom Unlimited and Chase Freedom Flex, the sign-up bonus is $200 after spending $500 on purchases in your first 3 months from account opening.
You can earn 5% cashback at any gas station up to $6,000 spent in the first year and start earning 1.5% cashback on everything you buy automatically.
You can earn 5% on travel, and airline tickets purchased through chase ultimate rewards.
For example: If you buy a ticket for a Euro vacation for $2,000, you can earn $100 for doing nothing.
Step 3: Refer your friend, your family to earn rewards
Chase credit cards have a program to lets you refer anyone to earn up to $500 cashback per year for chase credit card freedom and up to $500 for a Chase Checking account.
You can refer it to your family member to earn $1,000 per year by sharing your link when using the Chase Refer a Friends.
If you want to make more money by referring, you can open Chase Sapphire Credit Card to earn 80,000 bonus points.
After that, you can refer your friends, or your local community to open Chase credit card to earn 75,000 bonus points which are $800 toward travel, hotel, or pay yourself back.
Step 4: Invest all your rewards
You can easily make $5,000 per year by using a Chase Checking account, and Chase Freedom Credit Card for charging items you would have purchased anyway such as grocery, gasoline, internet, water, and phone.
You can travel for free if using Chase Sapphire Prefered and refer your friend with a value of up to $2,000 per year, every year.
When you have a $5,000 reward per year, invest it in an index fund to create wealth for your future.
A good way to invest is to open a Roth IRA account at TD Ameritrade, or Vanguard, and buy a VOO.
As a result, $5,000 invest yearly, with a 10% return for VOO. After 30 years, you can retire wealthy by doing the normal thing you would do anyway.
Or you can buy S&P500 by signing up an account at Robinhood or Webull.
If you follow my method “BORI” which is a practical guide I am currently using to build wealth for myself, you will retire with more than a million in your bank account.
