How to Leverage Credit Cards to Build Wealth (April 2024)

Whether you currently have a negative or positive net worth, credit cards can help you create and increase your wealth when used the right way. All cards have credit lines you can use to your economic advantage, and many have valuable rewards programs that can result in a bigger bank account balance.

Here are nine proven strategies that can leverage the power of credit cards. Put even a couple of them into action, and your net worth can grow faster than you think.

Many credit cards offer lucrative welcome bonuses to new cardholders. For example, the Capital One Venture Rewards Credit Card and Chase Sapphire Preferred® Card both offer a significant signup bonus after meeting the required spending amount.

It’s very important to meet the minimum spending requirement and pay the entire bill amount, so think in advance about what you need to buy and have the money to pay off the balance.

You’ll get the highest redemption value when you use miles and points for travel expenses rather than converting them into cash. Therefore, pay for flights and hotels with the rewards, then pocket the money you would have spent on them.

Cash back cards are great too and can augment your bottom line when used purposely.

Let’s say you have a credit card that offers a flat 2% back for each dollar you charge, such as the Citi Double Cash® Card. Add up all the expenses you can charge on the card that you can afford to pay with cash on hand. Examples include groceries, dining out, entertainment, clothes, gas, car repairs, vet bills, tuition, child care expenses, and utilities.

Charge these items to your card instead of using the cash in your checking account. After each transaction, pay the bill with the funds you have set aside so you don’t max out your credit limit (this can hurt your credit scores) or charge more than you can afford to repay. Otherwise, interest will be added to the bill, nullifying the value of the rewards.

Here’s an example of how it can work in your favor: If you regularly charge $5,000 a month and get 2% cash back on everything you buy, you’ll earn $1,200 in cash back over the course of the year!

No matter which type of rewards cards you have — whether miles, points, or cash — you can boost your rewards by taking on the role of the primary payer. Every time you go out with other people, whether it’s for dinner, to the movies, or a sporting event, use your credit card and have them pay you back right away.

Or, if a trustworthy friend or relative doesn’t have a credit card and needs to make a large purchase, offer to do it for them, as long as they will pay you with cash immediately. Not everybody has a credit card or likes to use it, so this method can be a favor to them.

Just be sure to deposit their funds into your credit card account so you never accumulate debt. The valuable rewards, however, will be all yours.

Imagine you came out $1,250 ahead with a welcome bonus from one credit card and earned $1,200 in cash back with that or another card. You would then have $2,450 not just to save but to invest in the stock market.

Open a brokerage account, deposit that money into a stock mutual fund, and commit to adding $100 per month. With a conservative 7% rate of return, you will have amassed $22,333 in 10 years!

Consider using a credit card that’s linked to a brokerage account, like the Fidelity® Rewards Visa Signature® Card, and you can seamlessly deposit your rewards into the money-making account.

Every credit card comes with a credit line, which is the total amount you can charge. With that credit line, you can purchase undervalued items and then quickly turn around and sell them for their rightful price.

You’ll have to be pretty savvy to do this, but it can work. For example, if you have a good eye for antiques, scour swap meets and identify items you know have a greater value or negotiate the price down further to increase the margin.

Buy and sell the items within your credit card’s interest-free grace period, which is typically 25 to 30 days. Not only will you collect the profits, but if you use a rewards card, you’ll also accumulate the points, miles, or cash.

Stuck in the paycheck-to-paycheck hamster wheel because you’re not qualified for a position with a higher salary? Look into classes that will put you on the fast track to an elevated income. A credit card can come in handy if you don’t have enough money to make it happen.

Charge the cost of the class and develop a feasible plan to repay it by or before 12 months (credit card debt, even in the best circumstances, should be short-term). If you cover a $1,500 course with a credit card that has a 22% APR and send fixed payments of $140, you’ll be out of debt in a year, and the interest will be just $184. Not bad at all.

The employment platform Monster.com identified 10 occupations that have significant pay increases with a certificate. For example, an actuary with a certificate earns 75% more on average than one who doesn’t.

If you have an entrepreneurial drive and are certain your business idea will result in a revenue stream, consider opening a credit card that offers 0% APR for a fixed amount of time. It can provide necessary funding for your small business at no extra charge.

For example, maybe you want to finally start selling your famous muffins at the local farmers market but don’t have enough savings to pay for the marketing, equipment, ingredients, and stall fees right now. A credit card with a long interest-free introductory deal — such as the Citi® Diamond Preferred® Card — can be just what you need to jump-start the venture.

As long as you pay off any remaining balance before the regular purchase APR kicks in, your credit card can be the conduit to a profitable endeavor!

If you’re looking to sell your home but it needs some remodeling or repairs, you can use the funds from a credit card to pay for what your home needs before putting it on the market.

The added value can be dramatic.

According to Realty Times, there are at least 10 excellent returns on investment, including cleaning and decluttering, which alone can add $1,990 to the price of your home. Home staging, which replaces your furniture with updated or more generic furniture for open houses, can cost around $550, but it can increase the price of your home by $2,194. And a landscaping project that costs $540 can translate into a $1,505 price increase. Not insignificant sums.

Haircuts, clothes, oil changes, restaurants…. the list of consumer items and services available on daily deal platforms such as Groupon are often deeply discounted — sometimes by 50% or more.

If you know you’re going to be buying these items anyway, use your credit card to take advantage of the time-sensitive opportunities when they arise.  As you do, calculate what you would have spent.

For example, imagine you wanted to go on a Hawaiian vacation that normally costs $3,000. If you purchase it through one of these discount companies, you may be able to get it for half off. Then you can add the $1,500 savings to your investment account.

You can clearly use your credit card to build wealth, but it often starts with getting the best credit account for you. One credit card might do, but a few may be better, especially if you use some for points and miles and others to amass cash back.

Just be careful to only apply for the accounts you qualify for and that you will use advantageously. All the methods described above are potential money-makers, but you can lose wealth by carrying over an expensive balance for too long — which is easy to do if you take your eye off the ball.

Therefore, when the intention is greater wealth, consider each charge before you make it, and review all your account activity regularly to track spending. With this kind of commitment, there is no reason a credit card (or several) can’t translate into positive assets rather than negative liabilities.