Using Credit Cards to Earn Money and Travel for Free (Without Debt!)

northern lights at an Icelandic farm

In many people’s minds, “credit cards” are synonymous with excessive spending, high interest rates, and mountains of debt. And that kind of usage is exactly what the credit card companies want. The more debt you’re in, the more interest you pay, which is better for their profit margins.

However, by modifying the way you use credit cards, you can flip this around. With my system, your cards will work for you instead of against you.

Since I began making money with credit cards, I’ve saved thousands of dollars. I flew to Iceland for free, road-tripped the country, and stood under the northern lights (photo above). I flew to South Korea for free and backpacked around Asia. I went to New Zealand for a couple months and earned my flight back. This year, I’ll fly somewhere else and pay money for it (okay, just kidding, I’ll do that for free too). I earn these experiences every single day just by making ordinary purchases. It’s the ultimate passive income.

And the beauty of it all is that rewards like this are available to everyone. All you have to do is learn how to take advantage of them.




Let’s go over how credit cards work, why they’re superior to debit cards and cash, and how to “life hack” the system to make money from credit cards and travel for free. At the end, I’ll give a quick overview of all the cards I currently use and why.


How Credit Cards Work: The Basics


First, let’s cover the actual function of credit cards. The most important thing to understand right off the bat is that a credit limit is not free money in itself, despite the common temptation to treat them that way.  If you have a credit limit of $5,000, that doesn’t mean you should go out and spend $5,000 just because you can. 

When you use a credit card, you are not personally paying the retailer directly. The credit card company is paying them. You then reimburse the credit card company by paying your statement at the end of the month. Every time you swipe the card, it’s like taking out a short-term loan for the price of the item(s) you’re buying.

So, why would you want to take out these mini-loans all the time? Why use credit instead of paying directly with physical money or having the funds immediately withdrawn from your bank account via debit card?

It’s simple: because credit cards offer benefits that debit cards and cash do not.


Advantages (and Disadvantage) of Credit Cards


Yes, “disadvantage” is singular–we’ll get to that one later! First, here are some of the advantages unique to credit cards.

  1. group of keysEnjoy superior financial security. Honestly, this is my top reason for using credit cards. They add an additional layer between a potential thief and your money.

    Think about this. If you’re using cash and a thief steals it, it’s gone. The best you can do is file a police report, but good luck getting it back. 

    If you’re using a debit card and a thief hacks it, they have direct access to the money in your bank account. You may be able to get your money back by dealing with your bank’s fraud department, but it takes time and hassle to recover money that’s already gone. Plus, you might be unable to make payments or purchases in the meantime if the thief emptied your account.

    By contrast, if somebody steals or hacks your credit card, they are not stealing your money. They are stealing the credit card company’s money. With credit cards, thieves have no direct access to your bank account, so your funds are not actually compromised.

    Always check your credit card statements each month before paying. If you see a purchase on your statement that you didn’t make, simply notify the credit card company. They’ll open their own investigation, remove the charges from your statement, and send you a new card. Instead of having to wait weeks to get your money back, you just make the call and move on with your life.
  2. Improve your credit score. Having a good credit score is essential for many milestones in life. Buying a car? The kind of deal you can get is based on your credit score. Looking to rent an apartment? Beautiful mid-sized house from the outsideThe landlord will probably check your credit score. When you want to upgrade to buying a home, the type of mortgage you qualify for will depend on (you guessed it) your credit score.

    It makes sense that it works this way. When you’re entering into a financial agreement with an individual or company, they want to see that you have a history of paying your bills. That’s exactly what a good credit score demonstrates. If you have a poor score (or no score at all), it’s much riskier on their end to enter into a transaction with you, particularly an expensive one.

    Using credit cards regularly and paying them on time is by far the easiest way to build your credit score. Other types of loans (like student loans and car loans) affect your credit as well. Monitor it with a free tool–I use CreditKarma.
  3. Get rewarded for purchases you’d make anyway. Earning free money and travel is the most immediately gratifying benefit of credit cards. More on this in the next section!


Meanwhile, the list of disadvantages is much shorter:


  1. Get charged high-interest fees if you over-spend on the card and don’t pay it off in full every month. That’s it.

Credit cards can be an excellent tool, but the caveat is that you must use them properly. So now that we’ve covered the “what” and the “why,” let’s move on to the “how.”


Making Credit Cards Work For You


There are two parts to making money with credit cards. One, knowing how to use the cards and avoid debt. Two, navigating the world of credit card rewards. This section will briefly cover both.


Using Credit Responsibly


When it comes to using credit cards wisely, I want to emphasize one thing. In order to enjoy the benefits of credit cards without succumbing to the pitfalls, you must pay off your entire statement balance every month.

This is the singular core principle of responsible credit card usage. There are three specific “sub-behaviors” involved here:

  1. Mentally treat your credit cards like a debit card, by which I mean only spend money you actually have at the moment of purchase. This way, it’ll be easy to pay the full balance, because you’ll already have the money in your bank account. If you’re mulling over a purchase but can’t afford it immediately, and you think “Eh, I’ll put it on the credit card and pay it off over the year,” you’re doing what the credit card companies want, and paying extra for the privilege.
  2. Don’t pay only the minimum payments. Many people do this in order to avoid late fees, but they’re still racking up debt. If you fail to pay the entire statement balance in a given month, you will be charged interest, even if you’ve made the minimum payment. It’s a trap you don’t want to fall into. If you already have and are carrying debt, cut expenses to pay it off, learn from the experience, and be intentional about your finances going forward.
  3. Don’t fall for the “you have to carry a balance” lie. There’s a common misconception out there that in order to build your credit score, you must carry a balance month-to-month. This is a lie. And it’s a lie that will cost you money. I believed this when I got my first credit card, and got hit with some nice interest payments before I found out. The way to build your credit is to pay it off on time, not carry a balance.

Tl;dr: Pay. Your. Entire. Statement. Balance. Every. Month.

Now on to the fun stuff!


Types of Credit Card Rewards


In order to incentivize people to use their cards, the vast majority of credit card companies offer various perks. Usually, this will come in one of three forms: cash back, points, or miles.

  • Cash back is exactly what it sounds like: for each dollar you spend, you’ll receive a certain amount of money back. This can typically be applied to the card statement as a credit or deposited to your bank account.
  • Points can be used in a variety of ways, depending on what kind of card you have.plane wing and lush green landscape form the air Most credit card companies will let you redeem them for gift cards, apply them as a statement credit, or make purchases through partnered retailers.
  • Miles are a form of travel-specific points. If you’re using an airline’s card, you’ll be able to redeem the miles for flights on that specific airline. If you’re using a hotel’s card, you can enjoy free nights at their properties. If you’re using a general travel card, you can use miles to pay for any travel purchases they deem eligible.

I’ve amassed a collection of cards that each offer different types of rewards for different types of purchases. Here are the ones I use, what I use them for, and what rewards they offer.


Credit Cards I Use to Make Money


Now and then I apply for new cards if they’re offering great sign-up bonuses, but these four are what’s currently in my wallet.

Note: Interest rates on all of these may be variable based on your credit score, but interest rates don’t matter if you’re paying off your statement in full each month, so they’re not something I personally consider when choosing cards.


High Rewards for Categories: Chase Freedom


If you want to truly maximize your cash back, the Chase Freedom is a must-have. 

The rewards: 5% back on categories that rotate throughout the year, 1% on everything else, plus a $200 sign-up bonus. You can use your Chase Ultimate Rewards points for cash back, or choose to redeem the points for travel or retail purchases instead of cash back.

The fees: No annual fee

Tips for using the card: Use it for all purchases in the active category. “Categories” are a specific type of purchase. For example, past categories have included restaurants, department stores, gas stations, internet/cable/phone bills, and more. They’re usually quite useful (e.g. around the holiday season, the category will be shopping-related).

Want to apply? Apply for the Chase Freedom here. 

You should receive an email when it’s time to activate a new category, so just keep a mental note of which category is active at the time. Use this card for all spending in the active category (and only that category). For instance, if the active category is “restaurants,” use this card only for restaurants during that quarter. Any non-restaurant purchases should go on a different card offering more across-the-board cash back, like this next one…


All Everyday Purchases: Chase Freedom Unlimited


While the regular Chase Freedom is great for the quarterly categories, the Freedom Unlimited is my go-to for everything else.

Chase Freedom Unlimited cardThe rewards: Earn unlimited 1.5% on everything, plus a $200 sign-up bonus. You can use your Chase Ultimate Rewards points for cash back, or choose to redeem the points for travel or retail purchases instead of cash back.

The fees: No annual fee.

Tips for using the card: Use it for all purchases that aren’t in the current Freedom category (or at retailers you have specific cards for). Alternatively, you could just use this card on its own for everything if you don’t want to bother with the categories of the Freedom. I enjoy maximizing my cash back so I don’t mind juggling different cards, but I also understand the appeal of keeping things simple.

Want to apply? Apply for the Chase Freedom Unlimited here.


Amazon Prime Purchases: Amazon Visa


If you order 90% of your life from Amazon like I do and already have a Prime membership, it’s worth picking up the Amazon Visa to go along with it.

Amazon Prime credit cardThe rewards: Prime members who use the card at (and Whole Foods stores) receive 5% cash back on every purchase.

The fees: No annual fee.

Tips for using the card: Make it your default card for shopping on Amazon. You don’t really need to keep this one in your wallet unless you also shop at Whole Foods, in which case you should use it there too.

Want to apply? Apply for the Amazon Prime Visa here.


(Advanced) Travel Card: Barclaycard Arrival+


This is the card I’ve most recently been using as my travel earner. However, fair warning, it’s not a card for credit beginners, as you’ll need an excellent credit score (720+) to be approved.

The rewards: Effective 2.1% rewards on all purchases that can be applied to any travel-related purchases above $100 (airfare, hotels, etc). Plus, a sign-up bonus of $400 worth of travel, which was the real draw for me!

The fees: Annual fee waived the first year, then $89 per year. (I’ve had this card for under a year, and I plan to cancel or downgrade it before the annual fee hits. This way, I can enjoy the rewards without having to pay an almost $100 fee.)

Want to apply? Apply for the Barclaycard Arrival+ here.

Tips for using the card: Because you must spend $3000 to get the initial 40,000-point bonus, this works best if you apply during a month where you’re anticipating big bills incoming. You don’t want to find yourself making unnecessary purchases just to get the points.

Example: When I applied for this card, I had a $1300 dentist bill after my previously undiscovered sleep bruxism earned me a root canal. Then I pre-paid about $450 for six months of car insurance. Then I used the card to book my $500 flight to South Korea, plus a ~$150? flight from there to Indonesia. Add in everyday expenses and activities for three months, and I was there. After earning my $500 worth of reward miles (the bonus was $500 when I applied), I simply applied them to “erase” the cost of the flight, and a few months later I was off to Asia. 


Temple grounds in South Korea


So, that’s making money with credit cards in a nutshell! If you only want one card to start with, I’d recommend the Chase Freedom, as it’ll get you accustomed to thinking in terms of categories and being intentional about your purchases. However, if you have poor credit or no credit at all, look up “secured credit cards” so you can start building a good score and get approved for better cards later on.

Just remember the cardinal rule of paying them off in full every month to avoid debt, and you’ll be well on your way to making money with credit cards.

Have you started making money with credit cards? Do you have a favorite? What’s your dream travel destination you’d like to fly to for free?

Further reading:

2 thoughts on “Using Credit Cards to Earn Money and Travel for Free (Without Debt!)”

  1. Thanks for sharing this post on credit cards Kate! Right now I’m using a few credit cards that only offer cash back. But I really want to start using some with some good travel rewards. You get a better value from those right?

    • Hey Scott! Many travel cards do offer higher values for travel-related redemption, though you have to watch out for the annual fees to decide whether you spend enough on the card to make it worth it.

      For instance, there’s one really popular travel card–the Chase Sapphire Reserve–that has a $450 annual fee, but gives you a $300 annual travel credit. If you spend at least $300 on travel per year, the fee is effectively $150. But that’s still only worth it if you earn significantly more than $150 in rewards throughout the year.

      So definitely look into travel cards, but make sure to get a card that works best based on your spending habits. A card with zero annual fee may have lower rewards but still be the wiser choice for someone who doesn’t spend a lot. Likewise, a card with a high annual fee might be smarter for someone who spends thousands every month.

      Also, one final note that you don’t HAVE to get a travel-specific card in order to enjoy higher redemption rates on travel. Most Chase cards (including the Freedom and Freedom Unlimited ones that I have) reward you with “Ultimate Rewards” points, which can be transferred to partner airlines and hotels for a higher value than the cash-back equivalent. I always save up the UR points to use them that way.


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