Did you know you can create multiple income streams with your credit card? I know what you’re thinking…and the answer is NO! I’m not talking about cashing money out of it. In fact, you can do it with a $0 balance! Yes, you can MAKE money with a paid-off credit card! How? That’s what our guest, Bailey Stewart, the owner of The Credit Marketplace, will teach us in today’s episode. You will want to hear this!
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Bailey Stewart Bio
Bailey Stewart started his first business at 11 years old, inspired by both of his parents being entrepreneurs. From a very young age, he has been interested in business and finance. Bailey first saw the power of Authorized User Tradelines when they used them to help his parents recover after filing bankruptcy with both of their companies. His parents were able to qualify for an auto loan less than 3 months after the bankruptcy was discharged.
After graduating high school with nearly 40 college credits and an internship at Paradigm Life, he began to pursue a college education. Still, he quickly saw he was learning more outside of the classroom. Eventually, he dropped out to start his own business. He was able to use tradelines to build his credit to a 780-credit score when he was only 18 years old!
Chris Miles Bio
Chris Miles, the “Cash Flow Expert,” is a leading authority on how to quickly free up and create cash flow for thousands of his clients, entrepreneurs, and others internationally! He’s an author, speaker, and radio host featured in US News, CNN Money, Bankrate, and Entrepreneur on Fire, and he has spoken to thousands getting them fast financial results.
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Listen to the podcast here
How To Get Credit Cards To Pay You Each Month With Bailey Stewart
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This show is all about you. Those of you that create money, maybe you feel overworked. Maybe you are not even making that fantastic money yet, but you want to make more. You want your life to be more than the status quo, to be better than mediocre, and be something more. You want that life of freedom and prosperity now, and this is why we are here and teach what we teach. Thank you again for joining us.
If you have any questions, make sure to reach out to Chris@MoneyRipples.com if you’ve got any questions or any episodes you would love to have shared with us because some of my best episodes come from questions from people like you. please let me know. I’ve got a returning guest. I got Bailey Stewart back on. For those of you that maybe didn’t read his first episode before about how to boost your credit score, you want to go back and read to that before you read this one. It will help, at least.
I had known Bailey Stewart since he was eleven years old when he was just a kid but wowing people. I remember being in audiences of 100 people, and he would wow them with his wisdom beyond his years. Now, he’s an adult, and it’s the same thing. With what he’s able to offer with how to utilize, not only boost your credit score but what we are talking about is you are here to learn how to utilize your credit to create cashflow with no money out of pocket.
That’s an infinite rate of return, by the way, for those of you that like numbers. Infinite is a pretty awesome return. If you guys are looking for that, then this is exactly the episode you want to read. Bailey is helping people be able to use those credit card tray lines to be able to cashflow and create more money as well as boost credit scores, so it’s awesome. Bailey, welcome back to the show.
Thanks for having me again.
I don’t know if you mentioned this in the last episode but you were able to boost your own credit score by the time you were eighteen, didn’t you?
Yes. At the age of eighteen, I got my first credit card, and using this technique, I got my credit score up to 780 with two months of my own credit history but using trade lines to leverage my credit score.
How old was your credit history by that point when you were eighteen?
From the trade lines or my own?
From the trade lines.
The trade lines, I had somewhere at average 5 or 6 years.
It looked like you had a credit card since you were about 12 or 13 years old, then?
Twelve-year-old, yes.
By the way, did they allow you to get your own financing and stuff when you were eighteen?
Yes. I was able to get several credit cards. A way that I leveraged it further is my existing credit cards, I called and asked them to increase the limits, and most of my limits tripled. It set the foundation for me to build. Now, I can take the tradelines off, and I’m still pretty set with what I’ve done.
Those young couples out there, and I was one of them, where credit history is a big deal. They are having like ask you to, metaphorically speaking, pull down your pants and look at everything financially speaking. They are like, “We need to see rent payments because it’s not like you’ve ever had a mortgage before,” and things like that. You’ve already got that jumped to where they probably would be questioning you on that stuff, do they?
Yes.
That’s incredible. We want to talk about the flip side. We talked about how to do creating and boost your credit score and allow you to do that. We did that in the last episode but I want to talk about how we can cashflow our lines of credit or our trade lines. Explain that more to us. How is that even possible?
This is the super exciting side of the business. I have cardholders that are registered with my business that are bringing in thousands of dollars of pretty much passive income every month. Essentially, it’s people that have worked hard and developed good credit. They are willing to add people under their credit cards as authorized users and get paid each time. Every authorized user they add gets paid.
Some people are willing to add others under their credit cards as authorized users. For every authorized user they add, they get paid. Click To TweetI’m sure people are asking, are people willing to pay money for that?
Every single day we are getting customers coming in and paying for spots. The benefit that they see in certain use cases far exceeds the investment that they are making.
I mentioned in the last episo, and I did this myself back in 2006 to “help me boost” my credit score for qualifying for my home to get a better rate, where it jumped up 23 points in 1 month by becoming an authorized user on my dad’s credit card that went all the way back to 1995 in credit history. Perfect history, low limits but he had kept a zero balance on it, so that boosted up my score by 23 points and put me in a whole new bracket of mortgages, interest rates, and everything. It’s pretty exciting.
You did mine, and I won’t give out all the details but this is a credit line I remember giving because I was trying to get something after I had already foreclosed on a property. I didn’t have the best credit. I always used this credit card to build my own credit but then you sent me a report for me to utilize that, and I can get five authorized users for $110 each, that’s $550 a month. I can make it from one little credit card. Now, I keep it, for the most part, zero balance. That’s pretty incredible. That’s with one little tradeline.
Most of our cardholders have several, and our average cardholder is bringing in over $1,000 a month.
How much did they pay you for that?
Does a cardholder pay me?
Yes.
I have their cards listed on my website, and when somebody goes on and buys their card, I give them a percentage of that every single time.
When you quoted me, you are saying, “This is what I’m paying you after that’s already taken out.”
I will then go list your card, and for everybody that buys it, I will give you $110 for every single person, and that can be five people at any given time.
This, to me, is still awesome because even if I’m looking at it from a standpoint of, “I don’t even see that. That’s what you take off the top.” That’s almost like what a mutual fund broker does, too. People that don’t notice it. They are like, “I made 14% in the market this year.” It’s like, “No, you made 15% or 16% but that’s what they paid you after.” You are doing the same thing. If I’m paying no money out of pocket to get that, even if I made $1 a month, that’s still an infinite rate of return because that’s cashflow from nothing. All those people say, “It takes money to make money.” That’s false. You are proving us wrong.
That’s what I like to hear.
That’s so cool to see that happening. What’s the range? What do people typically get paid for their line of credit? First, what are the factors that allow them to be paid more? How does that work?
The biggest factor is going to be your credit age because that’s something you must build up over time. A lot of people can go out and get a big limit but building credit age is something that we are going to pay a lot more for because it’s not as common. To list a card on our site, it has to have a 100% perfect payment history. We require the utilization to be fairly low but besides that, we accept credit limits as low as $1,000 and age as low as 6 months to 1 year. For our average card, we will be bringing in a cardholder somewhere around $60 but we have quite a few cards on there that are paying out $150 for each authorized user.
The question they are all asking is, are there any taboo credit cards that you don’t want to use?
We go through a process to make sure that the card can be posted. We have a list, for example, Chase, Capital One, Discover, Sears, Lowe’s, and Kohl’s. There are certain cards that do report their authorized users to the credit bureaus but there are several banks, such as credit unions, and a couple of circumstances where we can’t list the card because the banks don’t report the authorized users to the credit bureau, so it defeats the purpose.
It’s going to be something that’s going to show up in your credit report. I’ve heard that Amex is not a good card to use. For the most part, it depends on how it reports, right?
Yes. A lot of times, we won’t end up listing those ones.
One easy way for people to do this as go to CreditKarma.com, correct?
Yes. That’s an easy resource and free. That’s our preferred method.
It’s totally free. It’s a little monitoring service. I’ve had people do this as a freeway to check your credit score. This is not an accurate reflection of your credit score. Credit Karma, I’ve noticed that it either reports high or even reports 50 points lower than your actual credit score. Not the most reliable if you are trying to find your credit score but great when you want to see what accounts are reporting with different credit bureaus. That is the key. How does it show up on the credit bureau? Does it show what your utilization rate is, which they already talked about it anyway? That’s another thing, utilization rates. For cards that people are going to use, what percentage would you like it to be under?
Typically, we try and keep our cards between 1% and 10% utilization.
Does it matter if it’s paid off or not?
We try and keep a tiny balance on the card because if a card carries a zero balance from month to month, a lot of times, the banks won’t stand through the whole credit report and report things because it’s a zero balance. We require that there’s 1% utilization so that the banks register that there has been a change from this month to last month.
If you have a $10,000 credit limit, then make sure you charge at least $100 to it in a month and let it carry over.
It can be less than 1% as long as there’s at least some balance on there. You can pay for gas with that card and then set up an automatic payment.
If somebody is saying, “I’ve got cards like this,” should they go and ask the credit card companies ahead of time, even if now, to say, “Can we increase the limit?” Should they do that?
Yes. That’s something that I recommend to all of our cardholders. I call every six months with my credit cards and ask for an increase in the limit. A lot of times, they will give it to you if you’ve shown that you’ve used it responsibly. I’ve had them triple my limits before. That can be a very powerful tool for building up your limits.
Any tips on what they should say or do?
Your credit score is a numbers game. Click To TweetA lot of times, it’s nice if you have another credit card on there that’s a higher limit because it’s showing the bank that you’ve responsibly used their card already that’s of that limit. Say you are looking to increase your limit and as long as you’ve made good payments on there. One thing that I would recommend is I see a lot of people that don’t use their credit card at all, and then they call the banks asking for an increase in limit, and what the banks will say is, “You’ve done good at not going over your limit but you haven’t proven to us that you can use it effectively.” You will want to be using the card throughout those six months, and typically they have no problem giving you an increase.
That’s a good point because there are a lot of times that, if you are not using it, then why have it? That’s what somebody is going to ask you. We know why we keep it but that’s why it’s always good to keep it active as a good practice in general because I’ve seen situations where credit lines have been shut down because you haven’t been utilizing it. You haven’t used it for a couple of years, so why keep it open? It doesn’t just create an opportunity cost and not be able to create cashflow but it can also hurt your credit score too. That’s a double whammy. I’ve heard like Barclays, for example, has awesome terms. It’s like gold.
Barclays is nice because you can have something like 40 authorized users on there at a time but it depends on the card. We try not to fill it completely up but they have a lot of flexibility there with the authorized users.
Any other ones that are great? Capital One is a good one.
Capital One is great. Discover card is great. A lot of people don’t think of it but we accept store credit cards as well. We accept Kohl’s, JCPenney, Home Depot, and Lowe’s.
Traditionally, those have been told that they hurt your credit score because they are store charge accounts.
Some people think that but with your credit score, a lot of times, it’s a numbers game. A $5,000 limit from a JCPenney card is going to be no different than a $5,000 limit from a Capital One card. If you are applying for something that involves a bit more scrutiny, maybe a mortgage or something, then they might not value that store card as highly as a regular credit card. For the purpose of what we are using them for, they are pretty much just as effective.
That’s pretty cool because there are people that tell me all the time and say, “I’ve got this Kohl’s card from years ago or Home Depot.” Home Depot was one of those cards too, correct?
Yes.
Again, that’s money for you, guys. That’s money that you may not even be capitalizing on. Not to mention you can be using that credit line but still be able to have that to boost people’s credit scores. It’s pretty cool. What would be the process for people that say, “I want to see how I can cashflow on my cards?” What would they do?
They would go on our website, and we have a page that says, “Become a cardholder.” You will go to that page and fill out the form and give us your contact information. It’s a pretty simple process. We will contact you, take a look at your current credit accounts, and give you quotes for each of them. For example, it’s Chase card, “We will pay you this much per spot and they allow three spots. This is how much revenue you can generate in this amount of time.”
We would do the same thing, “This Discover card allows five spots,” and we would lay it all out for you in a spreadsheet. Whatever cards you want to move forward with, maybe there’s a card that you want to keep authorized users off because you want to have higher than a 10% utilization. You can choose not to move forward with those cards but you can tell us what cards you want to list. We can have them up on our website and no time.
It’s a pretty simple process. We try to handle everything, so it’s not too complicated for our cardholders, and we will reach out to them based on when the reporting date is. We will reach out to them a couple of days prior to that and tell them who to add, and that’s pretty much the whole process. It’s simple. You can make a lot of money doing it.
The website they go to is www.TheCreditMarketplace.com. Here’s what I see as the big vision with this it’s so cool. I have clients that are like, “Chris, I want to make $10,000 or $20,000 a month passive income so that I can keep working my business or my job because I want to, not because I have to.” For most people, it’s usually time for freedom, “If I can take an extra day or two away from work, or a week, that would be huge. That would change my life.”
We will look at different things. We will look at leveraging how we can take their money and create passive income with it. We’ve got some awesome results from people that do that making thousands of dollars a month, even in the first year. What’s so cool about this is even those same people or if they have the cashflow and the cash to do it, or they are working on creating that cashflow might take the next 5 or 10 years to get to that goal, still this is one way to boost that up. You’ve known people that have done this that are making sometimes $1,000, $1,500 or $2,000 a month.
My dad is a pretty good success story for this. He was on the client side back in 2009 and 2010 and was able to use trade lines to build his credit up. Now, he’s making between $1,500 and $2,000 every month off of his credit cards. The cool thing about it is all you need is a phone or a computer, and you can call when you are on the road. We try and make it as simple as possible to where you have the people you need to add and add them to your card and call it done. You are all good after that.
You are the matchmaker. You’re like, “It’s not that sexy. It’s not quite fiddle on the roof but it’s good.”
I’m working on that part of it.
You are like, “The dating apps are coming next.” That’s so cool. I even had another idea, too. With many of my clients, one thing we are trying to find is how we create more income going to the spouse. This is another great way to, especially if the spouse has lines of credit. This could be a fast, easy way that a spouse to boost some income, isn’t it?
Yes.
That creates more opportunities because if that spouse is trying and doing other things to qualify for other credit or whatever it might be, there’s such a ripple effect with this. As you know, we are all about creating ripple effects. That’s why it’s Money Ripples. I love this. I see the vision. Hopefully, you guys do too.
If you are in the place where you got those cards and you are like, “I try to pay these off every month. I’ve got pretty low balances on these things or I could get them to be low balances if it’s worthwhile here.” Check it out. Go to TheCreditMarketplace.com. Check out Bailey’s site. Go and have them do an assessment. It’s exciting. It’s so much fun. This is one of the most fun episodes I’ve done in a while for that reason. I feel like I’m unloading Christmas in the middle of June. Bailey, thank you so much for being on here again. This has been awesome and educational.
I’m a huge fan of that show. I’m thrilled.
Everybody, check out his website TheCreditMarketplace.com. Know that there are so many ways to create freedom and income. Think about the people you are surrounded by, even people you work with that don’t even think these things are possible. This is why you need to be directing people to first say, “Are you open to learning something different and going beyond that status quo?” Second, once you open your eyes and see what’s possible. It’s amazing. It’s awesome.
I hope this expands your vision for each of you, no matter what side of the coin you are on, whether you need a credit boost or the one wanting to utilize this credit. I hope you take this to heart and utilize this in your life because the best things that get me excited are when you guys apply these things, make them work in your life, and your life changes because this is the ripple effect I’m trying to create. It’s that ripple effect of freedom and prosperity.
That cashflow is what leads to having more options in your life or that freedom. That’s why we talk about that. That’s what we focus on cashflow. We are all here to create that for you and that life of abundance and freedom that’s possible that I see in my own life. Sometimes I can’t always get out of my brain to help you see, too.
It’s principles 1st and strategy 2nd, but sometimes, doing these strategies help reinforce that, “Maybe these principles do work.” Sometimes it is a little bit of creativity that allows you to do it. I love what Einstein says, “Intelligence is creativity having fun.” I hope you make this a prosperous week, not just a prosperous week but prosperous life. We will see you guys all later. Have a great day.
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