Need Cash? Get a New Credit Card

Canadian investors are short on cash these days. Inflation has caused us all to cut back, as have interest rates. The days of spending as much as we want are simply out the window. We’re back to work, paying incredibly high gas prices, and receiving pretty much no extra cash from any source. This is why it’s time to start looking at your credit card.

Create cash

There are so many benefits to having a strong credit card on hand. You can get rewards points to pay for items, travel, gas, and groceries. Plus, many out there offer perks for choosing them, such as discount prices, insurance, and other benefits.

But here’s the kicker. There’s really no reason to stay loyal to one card in particular. Sure, you should probably stay with your bank’s credit card when it comes down to convenience. But beyond that, is there anything extra you’re getting by sticking to your current card?

That’s why right now is probably the best time to pick up a new one.

The perks

Right now, Canadians likely aren’t rushing to pick up a new credit card, because it’s merely another way to take on debt. This is absolutely true, and I’m not suggesting in any way that you should pick up a credit card to simply not pay it off.

No, instead I’m suggesting you do your research and use credit card offers to your advantage. Let’s say you could really use some extra cash and are tired of paying fees. Great! Find a credit card that offers a first-year annual fee rebate.

Now, let’s say you’re looking for more cash in your pocket. You can get that through rewards points, but a one-point-per-dollar system isn’t going to rack up points very quickly. So, look at a credit card that offers bonus points for choosing it. This comes with a minimum spend, let’s say $3,000 for the first three months. So, make sure you’re putting everything on it, from bills to coffee, and paying it off!

Turn it into more cash

Let’s say you signed up for a credit card offering you 30,000 bonus points and the first $100 annual fee for free. That’s a bunch of cash in your pocket you can use to help you throughout the year! It then potentially leaves you free to invest some of the cash you have on hand.

In that case, why not invest in a top credit card provider? Instead of investing in a credit card directly, I’d consider Toronto-Dominion Bank (TSX:TD)(NYSE:TD). TD stock has been making major partnerships with credit card companies lately — not just in Canada but in the United States as well. This includes a Target partnership recently extended to 2030!

Even better? TD stock is cheap right now, trading at 10.88 times earnings. You can therefore pick up the dividend for a steal and lock it in at 4.14%. This will turn your investment into even more cash.

Bottom line

Having a great credit card or two is an excellent way to increase your credit and stay on top of payments. But if you’re needing extra cash, cancelling a credit card and finding a new one with more perks and bonuses is an easy way to create savings. Then you can use those savings to invest in a strong stock like TD stock and create dividends that last a lifetime.

The post Need Cash? Get a New Credit Card appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has positions in TORONTO-DOMINION BANK. The Motley Fool recommends Target. The Motley Fool has a disclosure policy.