Make Money from Your Credit Card? It’s Possible!


May 15, 2018
When I think of credit cards, I think of sky-high interest fees, finance charges, annual fees, balance transfer fees, cash advance fees… just a lot of fees. Credit cards are really useful, and you could say even a modern necessity, but it’s all too easy to get buried in an avalanche of exorbitant fees.

Fees are terrible, which is why I’m stoked to find a way to make money out of credit cards, for a change! This involves something called credit card arbitrage. We’ll discuss how to make money off your credit card via arbitrage in a bit. Right now, I need to explain what arbitrage means, exactly. The word sounds like a villain in a superhero movie, but it’s actually a common financial concept.

Arbitrage, Defined

At its most basic, arbitrage includes taking a security (fancy business term for a stock or equity) from one market, and selling it in another market at a much higher price. I need to add that this exchange happens simultaneously. A scenario where the trader buys the security, then prices plummet before they could sell it, cannot happen in arbitrage. That’s what protects the trader from fluctuations in market value.

Here’s a simple example:

Let’s say Earn that Buck goes public. Stocks are selling for $10 at the New York Stock Exchange, but at the same time, they’re selling for $11 in the London Stock Exchange. You can buy the stocks in New York, then immediately sell it in London at a profit of $1. During this exchange, you’re protected from price fluctuations because technically, the sale happens even before those fluctuations happen.

What do Stocks have to do with my credit card?

Good question. The above scenario is the most common one associated with arbitrage. But generally speaking, it can mean taking an asset from one place, then using it to earn a profit in another.

Here’s how that works with credit cards:

You take out a low-interest loan (or even a zero-interest one, if you’re lucky to find one) from your credit card company, then put it in a high-yield savings account.

You pay the monthly dues of the loan (You’ll do this out of your own pocket, which is why you need to be liquid to even try this)

Once your high-yield account matures, you’ll have more money than you started with. The interest rate you earned from the account will be your profit!

It’s pretty awesome. But it does come with a few risks. And you need to be good at planning your finances.

Let’s discuss each step in greater detail:

1. Apply for a zero-interest credit card

The first step is one of the more difficult ones, because it involves finding a card with a zero interest promo.

Credit cards don’t provide zero interest indefinitely (otherwise, they wouldn’t make money). Zero interest is an introductory rate used to encourage new applicants. The interest rate goes back to normal after a specific period, like one year after the card is issued. For the purpose of credit card arbitrage, the longer that period is, the better.

And if you can convince the bank to waive annuals fees (at least for the first few times) that would be great. Generally, you’ll want the card to come with as little fees as possible. There’s no such thing as a card that comes with absolutely no fees, but the fewer fees you have to pay, the more profits you’ll pocket in the long-run.

2. Take out a loan, then deposit it

When your application is approved and you get your card, you can now take out a loan (at 0% interest) from your credit card.

Next, you deposit that money (don’t use it to go on a shopping spree!) in a high-yield savings account. Make sure the account has a shorter term than your card’s zero interest period)

3. Pay the monthly minimum

Pay the loan’s monthly minimum due. Since you can’t touch the money in the savings account, you’ll have to make these payments out of your own pocket.

Since the loan is zero-interest, paying just the minimum won’t have an adverse effect. But make sure you pay on time, because late fees can really put a dent in your strategy.

4. Wait for savings to mature; pay off loan

Once you’ve paid off the loan, congratulations, you’re almost at the finish line.

When your high-yield savings mature, simply withdraw the entire amount. You’ll have the initial amount deposited, plus the interest earned. That interest is your net profit. You now have more money than you started with!

To further explain the process, let’s use some hypothetical numbers:
  1. You take out a loan for, say, $1,000 dollars, interest-free, from your credit card. You have one year to pay that loan at zero interest.
  2. You put that $1,000 in a high-yield savings account that earns you 5% interest per year.
  3. Pay off the loan in monthly increments within the zero-interest period.
  4. When your account matures, you will have $1,050. ($1,000 + $50 interest)
That $50 dollar profit may not look like a lot, but if you take a higher loan, or even take out multiple ones, your profits will quickly pile up!

As for me, I try not to touch my arbitrage money. I consider this money a long-term investment. Whatever I make, I roll back into my investment scheme.

The Verdict

Making money through credit card arbitrage is a legit method! Personally, I get a kick out of the fact that I’m the one making money from the credit card company, instead of the usual arrangement where the credit card company makes money off me.

Obviously, this method is not for everyone. For starters, you’ll need to be solvent enough to pay off the credit card loan while the money sits in the high-yield savings account. You will also have to be a great financial manager. If you’re careless with personal finances, this isn’t the method for you. You also need to be willing to take a certain amount of risk.

But if you fit the above criteria, give this a try!

Your Turn

This article is based on my own experiences making money via credit card arbitrage. Now it’s your turn to share! Do you have other methods for earning off your credit card?

Let’s hear your stories!


Apr 19, 2018
Pretty cool idea but I have yet to see a zero interest credit card. The ones I’ve seen are for durations of 3 months or less.