Yes, it’s possible to make $1,000 an hour selling tradelines. Here’s how I did during this past year.
Last year I wrote about my experience in starting to sell tradelines. I had read some articles that selling tradelines could be a $1,000 an hour side gig. I was really intrigued so I decided to give it a go. You can read how I got started selling them here.
It’s been almost a year now and I wanted to give a brief update on how it’s going. First of all, I wanted to say, yep, it still can average $1,000 an hour. I’ve learned a few things along the way too.
For those of you who may be wondering what a tradeline is here you go. For the purpose of this post, it is simply an authorized user added to your credit card. You have a line of credit and when you add another user to your line of credit they receive the benefit of your credit. Yes, it sounds risky, and it can be, which is why you have to take precautions. I go over a lot of these in the first article about selling tradelines.
This post is more about what has happened and whether or not I’m really earning any money. Getting paid to add someone to your credit card temporarily sounds like one of those too good to be true deals, right. It did to me too. That’s why it took so long for me to take action and try it out. Now after a year, I’m a little more comfortable with the idea. So here you go, in just about 1 year (I sold my first one near the end of May 2020, even though I signed up earlier in the month) and so far, through today, May 10, 2021, I’ve earned $4,125 and have some pending commissions still in the works. Not bad!
To do this I use 2 credit cards that were still open but not being actively used for any other specific purpose. With each card, I can add up to 2 authorized users at a time. The company I work with takes care of finding and selling the line to the people who are looking to buy a tradeline. For the most part, I’ve been consistently adding and removing authorized users from those cards for the better part of this past year. I did have one little snag though.
Toward the end of last year, I received an email like I usually do, but didn’t read it carefully. I was expecting a commission email but instead of an email stating I had earned a commission and could remove the authorized user, it was an email explaining that the authorized user wanted to extend for an extra fee. Since I wasn’t paying attention, I removed the authorized user from my card and afterward realized the mistake I had made. That started a bit of a mess. I quickly tried to add the person back on but learned that once a user is removed you can’t add them back on for 30 days.
I contacted the company to let them know what had happened. They were very helpful, but the end result was that the card I was using was temporarily put on hold for new tradeline sales to make sure the card company didn’t close the account. It was probably the best idea, but my mistake lost me the commission and the extension commission, not to mention I left it off of the program for a couple of extra months to make sure everything was cleared up. It’s back up and running now.
So after a year of selling tradelines, I’d call it a success. It’s not going to make a ton of money unless you have a dozen high-limit credit cards sitting around with no balance and have aged for more than 5 years. If that is you though, there’s an opportunity.
If you are younger and just getting started with credit cards and think this is something you might be interested in, here are the top, most important tips to help you prepare.
Have excellent payment history
The whole reason someone would want to purchase a tradeline and piggyback on your credit is to benefit them temporarily, hopefully giving their score a boost. The worst thing you can do that will affect your score the fastest is to make late payments. If you ever want to sell tradelines, make sure you are always paying on time. you want to have a card with an always-on-time history that will benefit the potential authorized user. In fact, many companies won’t even let you use a card with poor payment history, it would just damage the credit of the other person.
Don’t close your credit cards.
Most tradeline companies that I’ve come across factor in how long the card has been open when calculating the commission you will earn. The reasoning here is the longer the credit history, the more it could help the authorized user.
Raise your credit limits
Again this is about how it will help the authorized user. Adding a high limit account to this person’s credit history can significantly change the overall credit utilization rate. Here’s an example, let’s say the authorized user has 2 cards, each with a $5,000 limit, and both of them carry a $2,500 balance. This person is using 50% of his available credit, or in other words, this person has a 50% credit utilization ratio. Let’s say they decide to purchase a tradeline to improve it. You have a card that has a $20,000 limit. They purchase the tradeline and now they are using $5,000 of a total of $30,000 of available credit (their 2 $5,000 cards and your $20,000 card) so this person would now have a 16.67% credit utilization rate, which is much more favorable.
Manage Your Utilization Ratio
Remember, your utilization ratio is the ratio between the available credit you have and the amount you are using. We have an article on YMIDoingthis about utilization ratio. You can find it here. This is measured both by each credit line or card and by your account as a whole. Both will help your credit if you keep them low. Primarily though if you are focused on selling tradelines, make sure the card you want to sell the tradeline on always has a utilization ratio of less than 10%. Think of it from the buyer’s point of view. You wouldn’t want to get attached to someone’s credit line that was tapped out or was using a high amount of the available credit. This poses a higher risk to the credit issuer and can lower your score. If you were to buy a credit line like this it might have the opposite effect you are looking for too. Lastly, many of the credit line companies will monitor this and if you are using too much, they will not allow you to list the credit card with their services.
Selling credit lines is an easy way to make some extra money as a side hustle. So far, my experience has been good. Of course, there is a learning curve that will be different for anyone who starts selling, but there are some great benefits too. It’s easy to start and relatively easy to manage once you get a process that works for you. With just one or two cards though you are limited on the amount you can make, so if you are just getting started, planning on the cards you will use and the ones you want to use in the future will be key to turning this into a profitable venture that can help you build some passive income on your way to financial independence.