Are you a digital nomad looking for a smart way to boost your income with minimal effort? 

Here’s a savvy financial hack that leverages 0% credit card offers to earn over $1,000. This credit card arbitrage strategy is perfect for anyone with a good credit score, and the earnings can pay for flights or hotels.  

The Strategy: Playing the Spread with 0% Credit Card Offers

  1. Get a 0% Credit Card: Look for credit cards offering 0% interest on purchases, like the Discover it® Cash Back Credit Card. These cards often come with no annual fee and cash back rewards.
  2. Maximize Cash Back: Use the card for all purchases, especially in categories earning higher cash back (5% on specific categories each quarter).
  3. Pay the Minimum, Invest the Rest: Instead of paying off the full balance, pay only the minimum each month. Invest the remaining cash in Certificate of Deposits (CDs) or similar low-risk investments.

    The best way to do this? Let’s say you will spend $3,000 per month in average day-to-day expenses. If you have that cash available, immediately put the entire amount of the credit limit the credit card issuer grants you into a CD, such as a 12-month or 18-month. (The idea here is to match the term of the CD to the length of the 0% interest term offered by the credit card issuer).  

    You can do it over time, but the most instant earnings will come from you depositing the amount nearly equal to your credit limit ahead of time, and then simply paying the majority of your bills on the credit card up to the credit limit.
      
  4. Reap the Benefits: After the 0% interest period ends (usually in 18 months), pay off the balance in full. Enjoy the profits from your investments and cash back rewards.

Zero Interest Credit Cards

I would have never thought about getting a Discover credit card in the past. However, if you score a 0% interest credit card with bonus cash back, like Discover it® with its 5% rotating categories and double cash back for the first year (BOOM, 10% off!), the earnings can add up fast.  

Let’s say you got a $15,000 line of credit. You deposit $15,000 right now into a 12-month or 18-month CD. With nearly zero effort, you’ll earn $800 – $1200 over the 12-18 months.  

Your additional cash back bonuses are likely to add another $300-$500 (or more). Therefore, this easy hack earns you $1,100 – $1,700!

There are quite a few other zero-interest, no-annual-fee introductory offers out there. For example, Chase Freedom Unlimited will even give you $200 back (at the time I write this) on your first $500 spend, on top of all the other benefits.  

Remember, these offers change over time. Interest rates on CDs could go down in 2024, so lock in the free income now!

Action Steps for Digital Nomads

  • Apply for a Suitable Card: Research and apply for a credit card with 0% interest offers and high cash back rewards.  
  • Strategic Spending: Use the card for all possible expenses, focusing on high cashback categories.
  • Invest Wisely: Invest the money you would have used to pay off the card in the short-term. Go here for the best options:  NerdWallet top paying CDs or banks such as Forbright Bank or Limelight Bank. You can open accounts online, and all accounts are FDIC insured.  
  • Monitor and Pay Off: Keep track of your expenses and investments. Pay off the card balance before the 0% interest period expires. This is a must! Do not pay a nickel of interest at the end.  

Keep In Mind

  • Credit Score Impact: This strategy may affect your credit score slightly, but it’s generally manageable.
  • Time Investment: The process requires minimal time – just applying for the card, making strategic purchases, and monthly monitoring.
  • Do NOT Take a Cash Advance! Use this for your daily spending (cash advances are expensive and will wipe out your savings).

Why Does This work?

  • Interest Spread: Right now, you’re borrowing at 0% and investing at 5%+ – that’s pure profit from thin air!
  • Cash Back Bonus: Maximize those 5% (or 10%!) categories on groceries, travel, tech, whatever. It’s free money just for spending, which you were already going to do!
  • Minimal Effort: Apply once, invest occasionally, and reap the rewards – digital nomad passive income achieved.

Summary: Credit Card Arbitrage Hack for Smart Nomads

For digital nomads, this credit card arbitrage strategy is a smart way to make your money work for you. It requires minimal effort and can yield up to $2,000 profit, certainly in the $800 – $1,200 range. It’s a smart move for those who manage their finances well and are looking for an easy way to boost their income.

credit card cash back for travel

Ready to Play the Spread?  Start by applying for a 0% credit card and plan your spending and investment strategy today!

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Mark Soberman has traveled to over ninety countries while running his e-commerce businesses remotely. He started his online trading systems company, NetPicks, back in 1996 in the early days of the internet. He and his wife, Monica, have been full-time nomads since March 2023, and they started their travel blog, Digital Roamads Life, in order to share international destinations, travel hacks and remote work ideas.