Credit cards are often seen as a source of debt and financial stress, but they can also be a powerful tool for building wealth if used wisely. In this article, we will show you how to leverage credit cards to boost your income, save money, invest smartly, and achieve your financial goals. Here are some of the strategies you can use to transform your credit card into a wealth builder.

## Maximize Big Welcome Bonuses

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 amount¹. These bonuses can be worth hundreds of dollars in cash or travel rewards, which you can use to pay off debt, save for a rainy day, or invest in your future.

To maximize your welcome bonuses, you should:

- Choose a credit card that matches your spending habits and goals. For example, if you travel frequently, you may want a card that offers travel rewards and perks. If you prefer cash back, you may want a card that offers a flat rate or bonus categories for your purchases.
- Meet the minimum spending requirement within the specified time frame. This usually ranges from $500 to $4,000 in the first three to six months of account opening. You can do this by using your credit card for your regular expenses, such as groceries, gas, utilities, and subscriptions. You can also use your credit card to pay for large or planned purchases, such as insurance premiums, tuition fees, or home improvements.
- Pay off your balance in full and on time every month. This will help you avoid interest charges and late fees, which can negate the value of your bonus. It will also help you build a good credit score, which can lower your borrowing costs and increase your chances of getting approved for more credit cards in the future.

## Rack Up Cash Rewards

Cash back is one of the simplest and most popular types of credit card rewards. You can earn a percentage of your purchases back as cash, which you can redeem as a statement credit, a direct deposit, a check, or a gift card. Some credit cards offer a flat rate of cash back on every purchase, while others offer bonus rates on certain categories, such as groceries, dining, or travel.

To rack up cash rewards, you should:

- Use a credit card that offers the highest cash back rate for your spending. For example, if you spend a lot on groceries, you may want a card that offers a high cash back rate on supermarket purchases, such as the Blue Cash Preferred® Card from American Express². If you spend on a variety of categories, you may want a card that offers a high flat rate on every purchase, such as the Wells Fargo Active Cash℠ Card³.
- Optimize your cash back by using multiple credit cards for different categories. For example, you can use one card for groceries, another card for gas, and another card for everything else. This way, you can earn the highest cash back rate possible on every purchase. However, you should only do this if you can manage multiple credit cards responsibly and pay off your balances in full every month.
- Redeem your cash back regularly and use it to build wealth. You can use your cash back to pay off debt, save for emergencies, invest in the stock market, or fund your retirement account. You can also use your cash back to treat yourself occasionally, as long as you don't overspend and derail your budget.

## Always Pick Up the Check

If you often go out with friends or family, you can use your credit card to pick up the check and earn more rewards. You can then ask your companions to pay you back with cash, a check, or a mobile payment app, such as Venmo or PayPal. This way, you can earn credit card rewards on their spending, while getting reimbursed for the full amount.

To always pick up the check, you should:

- Use a credit card that offers the best rewards for dining out. For example, you can use the Capital One Savor Cash Rewards Credit Card⁴, which offers a high cash back rate on dining and entertainment purchases. You can also use the Chase Sapphire Reserve® Card⁵, which offers a high point value and perks for travel and dining purchases.
- Make sure your companions are trustworthy and willing to pay you back promptly. You don't want to end up paying for their meals and not getting your money back. You also don't want to ruin your relationships over money issues. You should only pick up the check if you are comfortable with the arrangement and have a clear understanding of how and when they will pay you back.
- Pay off your credit card balance as soon as possible. You don't want to carry a balance and pay interest on your purchases, especially if they are not yours. You should pay ofyour credit card balance as soon as you receive the money from your companions, or at least by the due date of your statement. This will help you avoid interest charges and maintain a low credit utilization ratio, which can boost your credit score.

## Invest Your Rewards

One of the best ways to transform your credit card into a wealth builder is to invest your rewards. You can use your cash back, points, or miles to invest in the stock market, a retirement account, a college savings plan, or any other investment vehicle that suits your risk tolerance and time horizon. By investing your rewards, you can take advantage of compound interest and grow your money over time.

To invest your rewards, you should:

- Choose a credit card that offers rewards that are easy to invest. For example, you can choose a credit card that offers cash back, which you can redeem as a direct deposit to your bank account or brokerage account. You can also choose a credit card that offers points or miles that can be transferred to a partner brokerage, such as Fidelity or Charles Schwab. Some credit cards even offer rewards that can be directly invested in a specific fund, such as the Fidelity® Rewards Visa Signature® Card⁶, which offers 2% cash back on every purchase that can be deposited into an eligible Fidelity account.
- Choose an investment strategy that matches your goals and risk tolerance. You can invest your rewards in a diversified portfolio of stocks, bonds, mutual funds, exchange-traded funds, or other securities that align with your objectives and risk appetite. You can also invest your rewards in a tax-advantaged account, such as a Roth IRA, a 529 plan, or a health savings account, to save on taxes and fees. You should consult a financial advisor or do your own research before investing your rewards, as investing involves risks and fees that may reduce your returns.
- Reinvest your dividends and capital gains. If your investments generate dividends or capital gains, you can reinvest them to buy more shares and increase your wealth. You can also use your credit card rewards to buy more shares and boost your investment returns. By reinvesting your rewards and earnings, you can benefit from compound interest and accelerate your wealth growth.

## Buy Low, Sell High

Another way to transform your credit card into a wealth builder is to buy low and sell high. You can use your credit card to buy items that are on sale, discounted, or undervalued, and then sell them for a higher price later. You can do this with various products, such as electronics, clothing, books, collectibles, or even cryptocurrencies. You can also do this with services, such as travel, entertainment, or education.

To buy low and sell high, you should:

- Use a credit card that offers the best rewards and benefits for your purchases. For example, you can use a credit card that offers bonus rewards on the category of your purchases, such as the Amazon Prime Rewards Visa Signature Card, which offers 5% cash back on Amazon.com purchases. You can also use a credit card that offers purchase protection, extended warranty, or price protection, which can help you save money and avoid losses if your items are damaged, defective, or drop in price after you buy them.
- Do your research and find the best deals and opportunities. You should look for items or services that are on sale, discounted, or undervalued, and that have a high demand or potential to increase in value. You should also compare prices and reviews from different sources and platforms, such as online stores, marketplaces, auctions, or forums. You should also check the quality and authenticity of the items or services you buy, and avoid scams and frauds.
- Sell your items or services for a higher price and profit. You should look for the best time and place to sell your items or services, and that can maximize your profit margin. You should also consider the costs and fees involved in selling, such as shipping, taxes, commissions, or platform fees. You should also provide good customer service and feedback, and build a reputation and trust with your buyers.

## Pay For a Course That Will Give Your Salary a Bump

One of the most effective ways to transform your credit card into a wealth builder is to pay for a course that will give your salary a bump. You can use your credit card to pay for an online or offline course that will help you learn a new skill, improve your existing skill, or earn a certification or degree that will increase your earning potential. You can do this with various fields, such as technology, business, health, education, or arts.