I recently came across a post on Side Hustle Nation that talked about selling tradelines and posed the question, “The $1,000 an hour side hustle?” Of course, I was interested, so I read on. I didn’t even know what tradeline was. I think I had seen it on someone’s online income report before but never really looked into it.
The first thing I had to learn was, what is a tradeline? To keep it short for the purpose of this post, it’s your credit line with a particular credit card or bank. When people are talking about selling tradelines they are usually talking about a credit card tradeline or a credit line.
That sounded a little off the first time I read it. How can you sell your credit line and wouldn’t there be an enormous amount of risk if you did? Those were some of my first thoughts as I was reading through the articles and visiting some of the sites that spoke about tradelines. Quickly I realized that I needed to know more if I wanted to prove whether or not you could really earn $1,000 in an hour with selling tradelines. So although I started out by trying to keep it short, I’ll share what I’ve learned and then go into how much I made selling the first round of tradelines. Yep! That’s right I took the plunge and gave it a go.
What is a tradeline and who uses them?
First, here’s the definition from Experian, the credit reporting agency:
“A tradeline is a term used by credit reporting agencies to describe credit accounts listed on your credit report. For each account you have, there is a separate tradeline, which includes information about the creditor and the debt.”
Additionally, here’s Investopedia’s definition of a tradeline:
“A trade line is a record of activity for any type of credit extended to a borrower and reported to a credit reporting agency. A trade line is established on a borrower’s credit report when a borrower is approved for credit. The trade line records all of the activity associated with an account.
Comprehensively, trade lines are used by credit reporting agencies to calculate a borrower’s credit score. Different credit reporting agencies give differing weights to the activities of trade lines when establishing a credit score for borrowers.”
Companies use tradelines for all types of businesses. These are different types of credit lines they use for doing business. A good example would be in a small business like my Amazon Arbitrage business. I have to constantly buy inventory. I may not always have the cash necessary to purchase some inventory that is available, so I access a tradeline to make the purchase. This could be done in a number of ways. For example, Amazon has lending opportunities, there are peer to peer lending sites I could take advantage of, I could establish a credit line with my local bank or even just use a business credit card. There are a number of benefits to each ranging from payment terms, interest rates and ease of use. In my case I just opened a business credit card with the intent that I would always pay it off before the balance had time to go through a billing cycle. This way I get an interest free short term loan (and earn a bunch of credit card points along the way)
Individuals use tradelines too. If you think about it you probably already have a number of tradelines. For me starting with my mortgage, there are a couple there, then student loans, car loans, and credit card accounts. Some others might have personal bank loans, consolidation loans, home equity loans, department store credit cards and even payday loans. Try and stay away from those last ones, they bury you with interest.
What is selling a tradeline?
This is where I had to stop and take a second look. At first glance, I thought I might be selling my credit account, which is not what selling a tradeline is. I like to think of it more like renting. For example, if you are renting a house, you get the benefit of the home for a specific amount of time. When you sell a tradeline, you are essentially renting out your credit limit and history for that particular account for a couple of months. Once the order has been completed the seller (like the landlord) removes the buyer (like the tenant) from the account.
Have I sold any tradlines?
Yes. I’ve been waiting to write this post until I had completed one full process of selling the tradeline, adding the user, waiting, getting paid, and then removing the authorized user from the account.
There are a number of companies that do this. I ended up going with Tradeline Supply Company. To me this one seemed the most straight forward and easy to understand. I will admit though, as I was going through the process for the first time, it did make me a little nervous. You see, the older the credit card and the higher the limit the better commission or fee you can earn. I started with a couple of old cards both having over 10 years of history and limits above $20,000. Both cards have essentially no balance since I’ve been using another card for all of my purchases due to the higher rewards benefits.
So here’s the process.
Create the account and add your cards
First I had to create an account and list the cards I wanted to use. The company has a process to make sure you are the owner of the card so when they find a tradeline buyer they can be assured that the seller has the ability to add them to the card. Once this process is complete you just have to list the cards with the number of authorized users you are willing to allow to purchase a line on your card. For me, this was just a choice between 1 or 2 users. After that the listings were active.
Confirm the orders by adding authorized users
On the site, you can monitor the progress. There is a way to see which accounts are in your inventory and out of those how many are available, pending or enrolled. Once someone moves from pending to enrolled I received a notice to add them as an authorized user. This was a simple process for both cards. Each credit card company had a section online to add authorized users. I simply entered the information that I was given and added each one.
Monitor and safeguard your accounts
Here’s where I got a little nervous. When you add someone as an authorized user you are taking responsibility for any credit card activity that occurs on the card they are issued. Thankfully both credit card companies in this case only ship authorized user cards to the primary cardholder’s (my) address, so as soon as the cards arrived I was a little less concerned. That said, I did take my own precautions to help with possible risks.
For starters, I put an alert on the cards to let me know if there were any purchases over a certain amount. If you decide to do this just make sure it’s not an amount that you’ll be passing with the normal use of the card every day unless you like getting a lot of notices from your card company. Secondly, I added a daily alert from one card that sent me the balance each day. At first, this was a little bothersome, but I got used to seeing the same balance every day and I think that reduced some of the potential stress.
Collect your commissions and remove the authorized users
At this point in the process, it’s been about 2 months. The company I used sends an email confirming the order is complete and that my commission is being sent. I saw the funds in my account the next day. From here, all I needed to do was to remove the authorized users from the accounts. With one of the credit card companies it was even more simple than adding the authorized user, I simply had to log in to my account, go to the authorized user section and click a delete button. The other was a little more work. The only way to remove the user was to call in and request the removal. They were good about verifying that I had the card as it would still work, which I did since it never went to the other person. That’s it. The process is complete!
So here’s the question, can I really make $1,000 an hour selling tradelines?
My answer is yes, I did it! No, it’s not some factored amount based on the time and multiplying it out either. In my case, the 2 cards I used netted me commissions of $1,100. Each authorized user (a total of 4) earned me a commission of $275. The total actual work time involved was pretty slim too.
Sure, for the first round if you may want to add in some one-time charges against the clock that I took researching the sites, finding answers to questions, and registering on the site. Since I’m an overthinker, this may have taken more than an hour, but when it comes down to it, you can set up your account in 10 minutes or less. Verifying your cards, probably another 10 minutes. Once you receive an email that your lines have sold and you need to add them. It may take another 5 minutes each if they don’t come in all at the same time. So far we are up to about 30 minutes, and some of that is a one-time activity. When you get the notice to remove them you might do like I did and take a couple of minutes to see your deposit and then log in to your credit card account to remove them, so maybe about 5 minutes. I also had to call the other credit card company to remove a couple of others, this one took about 10 minutes, mainly because of heavy call volume and having to wait for a few extra minutes.
All in the whole process took less than an hour!
One more side note. Make sure you take action as soon as you receive your notice. I thought that it would take a few days to turn them around and have the listings active again, but guess what? They put them right back up and I’ve already sold 2 more lines out of the 4 available. It was on the same day I removed the first authorized users! That was fast! That’s another $550 set to come in after a couple of months. I will let you know that the process is going to be much faster the second time around. It only took me about 5 minutes to add both of the authorized users, and when they complete it’s only a 5 to 10 minute call to remove them again.
I’m interested to see how the process goes and will keep you posted of anything else I learn along the way. Lastly, if you’ve made it this far, I would like to know if you have any experience with selling tradelines? I’m new and would like to learn all I can.
UPDATE:
I wrote a follow up on how things have gone after the first year. You can read about it on the post titled: Make Money Selling Tradelines, a 1 Year Update
