Tradelines: The $1,000 an Hour Side Gig

Remember all those credit cards you acquired to earn out those bonuses and eventually canceled? You’re going to wish you hadn’t done that.

Credit cards are one of the most powerful wealthy building tools in existence today when used properly. They get a bad rap because irresponsible people rack up massive quantities of high interest debt and spend decades digging out if they ever get out. Still, credit cards can put a lot of ka-ching in your pocket if you understand the rules and never run a balance on the card.

If you are in the accumulation phase of your wealth building cycle, looking for a high income compared to the time invested or love gaming the system (your favorite accountant is guilty as charged), then you need to learn about tradelines.

To play this game you need a credit card at least two years old. The longer you’ve held the card and the higher the credit limit the better. This game requires you use said credit card and pay it off in full each month. The more credit cards you have the better.

Setting the Table

So what is this tradelines thing anyway? A tradeline is what a bank calls a line of credit. Your credit card is a tradeline.

A “seasoned” tradeline is at least two years old meaning it has a history. If you have no late payments on a seasoned card there is an active market for selling your tradeline.

Still confused? Me, too. It works like this. A credit card is called a tradeline. You can add authorized users (AU) to most credit cards at any time. People with poor credit pay to be an authorized user of your credit card so the bank reports the high unused credit limit on their credit report. This increases their credit score fairly quickly.

You know who they are, but they haven’t a clue who you are! A big concern surrounds risk of having your card cancelled. What if someone buys your tradeline and runs off spending all your money? No worries mate. It’s impossible. When you use a company acting as clearinghouse the buyer never knows who you are and a credit card never gets sent to the AU.

There is no need for you to spend effort looking for people willing to buy one of your tradelines either. There are a multitude of companies out there doing all the heavy lifting for you. They find the buyers, background check them (to prevent fraud), collect the money and send you the information. You add the AU to the card they purchased a tradeline from and sit back enjoying a cold one. Several months later you remove them as an AU and a check is mailed to you (direct deposit actually).

People buy tradelines to increase their credit score to get better loan rates and to reduce their insurance costs. This isn’t repair credit! If you went through a bad patch, buying tradelines can give your credit score a lift as long as you are not adding more negative marks to your credit report. A medical disaster is no longer a lifelong financial death sentence.

Car and homeowner’s insurance can be higher when your credit score is poor. It’s like kicking someone in the face when they are down. A medical emergency can destroy a life without hope of financial recovery. Buying tradelines can lower the interest on a mortgage or car loan, but also lower insurance premiums. Some people enjoy major benefits investing in tradelines.




Time for a Walk

The best way to understand selling tradelines is to walk through the process. By the end of the walkthrough you will know how your credit cards can add $1,000 or more per month to your pocket for an hour or so of your time.

Step 1: You need a clean credit history. No delinquencies in the last year or so. Your credit score doesn’t matter. If you’re like me you collected more than a few credit cards over the years and only use certain ones.

Open an account for free at Credit Karma. Credit Karma should list all your open and closed accounts. Each credit card should list the account open date and credit limit.

Step 2: Research companies brokering tradelines. You will need to vet each company for quality; most will not make the cut. More time will focus on finding the right tradeline company for you than the actual process of earning money with tradelines. The most important questions involve account verification. The banks generally don’t like tradelines being sold. Their biggest concern is fraudsters increasing their FICO score, getting a credit card or other loan and defaulting. Without adequate fraud control criminals can cause losses for the banks and that ends the party. Ask before selling your tradelines with any company. Better yet, ask for proof they are collecting all required documents and running a LexisNexis background on each client.

Step 3: Once you sign up with a tradeline company, you choose which credit cards you wish to sell tradelines on. Your tradeline company will tell you what their firm pays for each tradeline per card. You should try to get your credit limit raised on all your cards to increase the potential income from each tradeline sold.

Step 4: Your tradelines are listed by the tradeline company. In short order you will get an email explaining you sold a tradeline! It’s not money time yet. Follow the instructions for adding the AU to the card listed.

The credit card company will send YOU a card for the new AU. You don’t have to activate the card.

Step 5: The tradeline company will send you another email in two to three months informing you to remove the authorized user. Follow the instructions on how to remove an AU from your credit card.

Step 6: Keep an Excel spreadsheet listing all AUs, when you added them, which card added to, when the AU is removed and when you get paid. Recordkeeping is important! You need to know what you have and where.

Step 7: Collect a check.

Step 8: Repeat.

 

It is possible to have more than one AU per card. In fact, it is likely. This is good for you. The more AUs, the more income. There is a limit, of course. Each credit card has a limit on the number of AUs you can have at a time on their card. My opinion is no more than two AUs per card ever. If you already have numerous AUs on a card for your business you probably should keep that card separate and not use it for selling tradelines.

Is this legal? Another question people have is the legality of doing this. My research indicates it is legal, including remarks from a spokesman from the FTC. The illegal issues lay with tradeline companies not doing adequate background checks. This is why it is important to vet any tradeline company before signing up with them. My understanding is this cannot be listed as credit repair and money can’t be collected up front from the client. You get paid after the fact so reading FTC reports indicate there are no legal issues with selling tradelines. If you vet a tradeline company and later the company takes a shortcut there is liability risk to the tradeline company. Having your due diligence in order protects you.

A Few Rules

Tradeline companies will have some rules to follow. I want you to follow those rules and add my more restrictive rules to their list if necessary. The more restrictive rule applies to protect you from account closure.

When your tradeline company tells you to remove an AU from a card, DON’T DO IT, unless at least two months have passed, preferably three.  If you slap additional AUs on and off a card too fast the bank will cancel your card. Selling tradelines may not be illegal, but like counting cards in a casino, the bank will not like it if they know what you are doing, cancel your card and tell you to not come back.

All AUs stay on my cards for 90 days minimum!

The next issue is credit card usage. Your balance should be paid in full each month and should never exceed 10% of the credit limit.

You will be told to spend a token amount on the card. BS!!! Every card with an AU should have meaningful charges. You do the spending. The AU is not around to spend on your card. But meaningful spending on a card with AUs is a must. Don’t game the system with the card issuer getting a few pennies.

I’m lucky. With a business I can find plenty of things to put on the credit card. A typical paper order (in our paperless office) runs 250 reams. You may wish to consider previously published alternatives to spending, too.

If you are frugal (like me) without a business (unlike me) with few expenses to charge, there is a low limit to selling tradelines. Still, a couple hundred a month for less than an hour of time is a nice addition to the mad money account. One account handled properly can be worth $300 or so every couple months.

One Last Caution: There are plenty of companies brokering tradelines. I spent serious time reviewing multiple companies to verify I am with a “seasoned” firm and still discovered it wasn’t as seasoned as I would have prefered. There are other good tradeline companies out there. The real work is in finding them.




Action Plan

Vet several tradeline companies before committing. I use a tradeline company and am aware of two more who run a tight ship. The additional two companies I know of are doing it right so they don’t have much supply. Still, slow and steady wins the race. The company I am using was originally listed in this post and I edited them out until I can verify further. I want happy readers. The last thing I want is a mob of angry people who had their credit card cancelled. A background check on all clients is an absolute MUST!

This is a process. Consider adding to your credit card portfolio to increase future income. Go to the TWA Recommends page and scroll down to the recommended credit cards. Pick a card that matches your needs. Travel miles or cash rewards, et cetera. A good plan might be to add one card every three to six months or so for you and a significant other. Max out the bonus rewards and keep the card until it is ready for use selling tradelines. Don’t cancel the card. Keep it for future personal use too. Of course you will have a favorite card, but I use different cards for different situations as I suspect you will.

 

There is more to this, but I wanted to keep this under 2,000 words. Do your research; don’t just take my word for it. Crazy accountants from the backwoods of nowhere lead a guarded life. Before you commit to anything, do your due diligence. If you are uncomfortable with this idea; take a pass. My job is to share knowledge. There is no harm in taking a pass.

Note: My original post before the edit you just read contained more specific information and a referral to a tradeline company. I removed those references until I can verify more information this post brought up. Publishing a blog is an awesome form of crowdsourcing  knowledge. In no way am I indicating the firm I mentioned did anything wrong or was taking shortcuts! What I am saying is when I do something myself I am willing to suffer the consequences. When I publish it is imperative I check and double check to protect you, kind readers.

I learned of this industry from another individual who had concerns before I edited. You can read his comments here. (And should!) I am working with same individual to verify my recommendation is valid. If it is I will add the contact information. I will only add the contact info once I am sure everything is in order. Check back for updates.



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Keith Schroeder

56 Comments

  1. whitecollarredneck on October 11, 2017 at 7:57 am

    I’ve never been so glad to not have a credit card. This seems ungodly sketchy, and a hassle.
    Very interesting content, however! If you have time and desire to fool with it “Good luck to yer”

    • Keith Schroeder on October 11, 2017 at 8:01 am

      It’s not for everyone, White Collar. My goal is to show all the different ways you can fill your pockets. With a side gig or two like this you don’t need much money to retire or cut back.

      It is a hassle, but for $1,000 I’d walk barefoot through an anthill. If I get sick of it, I quit. Ah, the life of the FI! As for sketchy. Have you seen people working in the tax system? Talk about sketchy. Present company not excluded.

      • WCRN on October 11, 2017 at 10:48 am

        No doubt that I’d like the money ….

        • Keith Schroeder on October 11, 2017 at 10:53 am

          Think about it, WCRN. If it seems like a good idea in a week or a month, dig further. There is no harm in tickling this side gig with one card for some extra mad money.

  2. Fabdog on October 11, 2017 at 8:31 am

    I had no idea such an industry existed. Does this show up as reported income? (1099, etc)

    • Keith Schroeder on October 11, 2017 at 9:52 am

      Oh, I forgot about that, Fabdog. This is NOT tax-free. You get a 1099 and report this as non-employee compensation. In other words, you report the income on Schedule C. Your credit card rewards remain tax-free as I write.

  3. DIY Money Guy on October 11, 2017 at 8:49 am

    Very cool concept! Thanks for sharing TWA! I have a handful of credit cards with fairly high credit limits that I got for the sign up bonus but don’t regularly use anymore. I’ll give it a try.

  4. Justin on October 11, 2017 at 9:13 am

    I did this. Made $125. Haven’t had a single add since then. Now Elan credit cards are on hold because they’re on to the adding lots of AU tradeline thingy. In hindsight it’s turned into much much less than $1000/hr for me given the several hours of research and maybe 20 minutes of actually adding the AU and cancelling the AU later. So a $40/hr side gig? 🙂 I’ll still take it!

    • Keith Schroeder on October 11, 2017 at 9:51 am

      Justine, certain credit cards work better than others. Elan is one of the worst and many are no longer using Elan for AUs. You used the MMM plan from the forums. So did I. That is why I expanded this to a larger company.

  5. Mr. FWP on October 11, 2017 at 9:17 am

    It’s an interesting idea. Though it’s not as lucrative anymore due to the huge supply from MMM readers and such. I know folks who’ve signed up a while ago and have yet to make anything.

    They actually warn new people about that now. Which makes sense: it’s basically arbitrage, and arbitrage loses value over time as others jump in. But you’re dead on that it’s easy if/when there are opportunities.

    • Keith Schroeder on October 11, 2017 at 9:49 am

      FWP, I’m one of those who signed up on the MMM plan and got nil business. This is why I expanded to another larger company. You are also right in that this may not last forever. Back on the farm we call this making hay while the sun shines. My audience is smaller than MMMMs so we might have a better opportunity.

  6. Eric on October 11, 2017 at 9:18 am

    Was interested enough to do some additional research into the gig, until seeing this: “Please email us back with your user name and password to your CreditKarma.com account…”

    General rule of thumb for watching out for scams is that passwords should never need to be exchanged (via email or otherwise, especially for a 3rd party’s service). While I don’t intend to imply that it’s a scam (I’ve read your work long enough to trust that you’ve done more due diligence than most would have pursued), there would be better ways to get the information they need without resorting to a flag-raising request. It may not cause issues in itself, but it could be a warning sign regarding how they may approach more critical security matters.

    Overall, interesting gig, but the IT professional side of me would slap the rest of me silly if I did that.

    • Keith Schroeder on October 11, 2017 at 9:47 am

      Eric, [redacted] needs to see if your accounts are valid without late payments. This is no different than the credit card company checking your credit, accept CreditKarma doesn’t provide access to your accounts.

  7. Michael on October 11, 2017 at 9:21 am

    Interesting that you leave the AU on longer than asked. What if you’re at your max (some cards only allow 4 total) and are asked to add another?
    “The credit cards that use a different number” implies some banks create another account that is still tied to your original one somehow. I never knew that occurred since mine have always been the same.

    • Keith Schroeder on October 11, 2017 at 9:45 am

      I make it clear how many AUs I’ll allow. Once I hit the limit, I hit the limit. I refuse to add and subtract AUs too quickly. The biggest risk is account closure. If everybody wins, including the bank, this is unlikely to happen.

      Bank of America sends a card to me with the same exact number, with the AU’s name. Chase issues a new number (for me at least) for each AU. It’s all on one account and one statement.

  8. Michael Swansen on October 11, 2017 at 9:24 am

    You mentioned early in the post “A big concern surrounds risk. What if someone buys your tradeline and runs off spending all your money. No worries mate. It’s impossible. You receive all the information on them and they have no clue who you are.”

    Will you please clarify how this part works? How is the AU prevented from spending your money, and if they do, is there any recourse for getting repaid?

    • Keith Schroeder on October 11, 2017 at 9:41 am

      Michael, the AU can’t take your money and run because they don’t know who you are. Their credit report shows them with a tradeline with no connection to you. Also, if you have an employee in your company you make an AU, they are responsible for unauthorized spending and the bank takes care of it. You get THEIR info to add to your account, but they NEVER know who you are! This is important. If they would have a clue to who I am I would be out.

  9. JennBaron on October 11, 2017 at 9:29 am

    Mind. Blown.

  10. D.J. Ryan on October 11, 2017 at 9:31 am

    This is very interesting, thanks for the read. I’m going to look into this more. In fact, I just sent my card info to get an instant quote. TWA may be used shortly as a referral.

    • Keith Schroeder on October 11, 2017 at 9:38 am

      D.J., I like your approach. Get a quote, do some research and then decide if it is right for you. Remember, you can start small and expand from there. This isn’t all or none. Keep me in the loop on your results. I want to be ahead of any problem if one arises.

  11. Bob on October 11, 2017 at 9:37 am

    Who covers the credit risk on a default payment? Is this risk you take selling the line of credit to the AU?

    Unfortunately doesn’t work in my country, but I find it very interesting that the Banks in the US let you add people to another account without KYC and especially as they are an unrelated party, fascinating.

    • Bob on October 11, 2017 at 9:45 am

      Also, I’m surprised that the banks wouldn’t frown on this and go after the account owner – since effectively you’ve increased the credit score artificially to make it look like the AU is less risky – the bank then gives credit to the AU later on the artificially good score and they end up in default because their poor credit score reflected reality. If I were a lender I would go after the account owner, but clearly that’s just me??

      • Keith Schroeder on October 11, 2017 at 9:56 am

        The bank’s recourse is to close the account. An FTC spokesman stated his conversation with FTC attorneys find nothing illegal with the activity.

    • Keith Schroeder on October 11, 2017 at 9:54 am

      There are no default payments, Bob. Their credit doesn’t affect your credit and they never have access to you or the card.

  12. Dave on October 11, 2017 at 9:53 am

    So are the Authorized Users not spending money on your credit card? How is this done without not potentially leaving us with a nice credit card bill? I went to [redacted] website but still a little confused.

    • Keith Schroeder on October 11, 2017 at 9:57 am

      The AU will not spend or even possess the card! You are still the only one spending on the account.

      • Dave on October 11, 2017 at 9:59 am

        thanks

    • Dave on October 11, 2017 at 9:58 am

      never mind I just read other comments that came while I was looking at [redacted] website.

  13. Mimoza on October 11, 2017 at 10:22 am

    Now, in the light of all the breaches, would you, Keith, write an article how to protect our investment, SS, I-bond, Vanguard, brokerage, etc. etc. accounts? I’m quite risk averse when compared to people who do these kind of gigs.

    • Keith Schroeder on October 11, 2017 at 10:51 am

      Mimoza, as long as the government, banks and Equifax mishandle our info there is no amount of effort you can expend to fully protect yourself. I can add your request to the queue, but I will have to think long and hard to devise solutions that will work against such large institutional ignorance.

  14. Dave B on October 11, 2017 at 10:32 am

    Can I add authorized users if I’ve frozen my credit? (thanks equifax)

    • Keith Schroeder on October 11, 2017 at 10:52 am

      I believe so, Dave, since you are not opening a new account, only adding another user. Double check with [redacted].

  15. Tom on October 11, 2017 at 10:51 am

    Interesting and given the number of comments above I can see I’m not the only one that finds it so. Due to the administration involved and general nature of the practice, I won’t participate, but I did read the post with great interest. Good luck to all who give it a try. Tom

    • Keith Schroeder on October 11, 2017 at 10:55 am

      I also need to entertain to keep the crowds interested. If any reader has any doubts they should refrain. More ideas will spew from my skull, ideas less on the edge.

  16. badass247 on October 11, 2017 at 11:09 am

    If I add an Authorized User to my credit card via [redacted], then does the AUs credit history become part of my credit history. If the AUs credit score improves because he’s on my credit card, then does not the AUs credit history affect my credit history?

    • Keith Schroeder on October 11, 2017 at 11:20 am

      Absolutely not, badass!!! The entire benefit to the AU comes from have your unused credit limit added to theirs. No more. This is why you can’t spend more than 10% of the credit limit. Example: You have a cc with $20k limit. You spend $1k and pay it in full by the due date. The cc reports the same as always your info to the credit bureau. The AU also shows a $19 unused credit amount. This is considered in determining credit score so the AU sees her FICO increase.

  17. Chris on October 11, 2017 at 11:23 am

    I have been doing this through the MMM suggested sites with some success. Very slow though $1000 a year maybe! I will try this new company next month when another card comes of age. Thanks for the info and for doing the work to find a new legit company to deal with.

  18. Joe (AdventuringAlong) on October 11, 2017 at 11:36 am

    Tried to reach out to you via Twitter and Facebook, Keith, but no response. Looks like you’re replying to comments here though, so I’ll try one more time.

    Your readers will regret going with this company. There are a few (very few) good tradeline companies out there. This is not one of them.

    I include more details here:
    https://forum.mrmoneymustache.com/share-your-badassity/selling-tradelines-piggybacking-part-ii-$1000hr-20-40kyr-side-gig/msg1728435/#msg1728435

    Providing the tradelines idea to your readers is awesome. Recommending a good company for them, great! Recommending a bad one? Well, I think your readers will regret it. Higher card closures, more liability, less protections, and if there’s a fraud audit, they’re in big trouble.

    I say this as a fan of tradelines, who has sold many, and dealt with many different companies. I’m not just talking–I know the industry, I know the companies. I’ve met in person the guy you are recommending. I can’t, in good conscious, recommend anyone sell lines with them.

    • Keith Schroeder on October 11, 2017 at 1:01 pm

      The company I used from you, Joe, hasn’t provided much in the way of results. So far I’ve been good with [redacted], but I increased the restrictions myself. Is there another company you recommend? The affiliate feature isn’t a deal breaker for me as long as readers get the best options to earn money with the fewest issues.

      I’ll check my FB page when I finish my next consulting appointment. We can share ideas.

      Readers: Kick the tires if you wish. but wait for me to talk with Joe before jumping. Joe introduced me to this concept and he published in the Mr Money Mustache forum. Joe has also worked with the industry a lot longer than I have so I want to pick his mind and provide more info if there is more to share.

    • Jaded on October 11, 2017 at 1:04 pm

      Who do you recommend?

    • Keith Schroeder on October 11, 2017 at 8:41 pm

      Listen to Joe. He’s smarter than me. (And more experienced with tradeline companies.)

      • Joe (AdventuringAlong) on October 12, 2017 at 12:42 am

        I don’t know about smarter. I certainly wouldn’t want to match wits against you with anything important to me on the line. 😉

        But I think we both value experience, and I do have a little more in this one area, just from starting a bit earlier and the work I’ve put into learning about the field. Probably one of the very, very few areas of life where I do have a short lead on you.

        Either way, we’ll figure out a good solution for your readers, I’m sure. Thanks for the dialogue today.

    • Susan on October 13, 2017 at 12:11 pm

      I agree with Joe in that this guy is not professional. I put a call in to him last Wednesday, 10/11/17 & he called my home phone # back in several hours despite the fact that I told him if I was not @ home to call my cell. So, when I returned home I called for a brief clarification. I gave him an example of a card I wished to offer with $26K monthly credit limit & my FICO score >800. He was curt & told me to read his site first. Then I told him that I had already done that, as well as, your email details (FYI He gave no indication of $25 rebate for the first submission), and he gave me a lower than expected offer based on information in your email & said fill out form on site & submit & then you’ll receive info on how I score the value of what you’re offering. Completed form 48 hrs ago & no response to email to date. When I tried to call David Melnicoe back just now, it seems the number is disconnected. Furthermore, when I see that he wants my username and password for credit karma, I find that absurd in this day and age & very unprofessional since I could just as easily provide that information with “screen shots” of the pages that he’s interested in. I know you did your best but I don’t think this man is reputable and professional enough. Certainly not the type to handle the amount of bussiness that you would generate for him IMO. Furthermore, it just doesn’t seem worth it to me for this hassle. I now see his name & phone number i’ve been redacted from your email.

      • Keith Schroeder on October 13, 2017 at 12:20 pm

        I am working with another individual to see if we can’t resolve the issues. What started out good either went south due to too much extra traffic or,as you say, lacking necessary professionalism. Hopefully this works. If not, I provided readers with good info, but no referral. You are right, Susan, I redacted comments and edited the article until the new information is cleared. I have no recommendations for any tradeline company at this time. I may have a follow up post where you can use tradelines in a more limited, safer manner. No third parties involved.

        Thanks for the update.

  19. Jaded on October 11, 2017 at 12:16 pm

    Are they registered with the BBB?

  20. InfoSec on October 11, 2017 at 1:56 pm

    Here’s a red flag for me:
    [redacted]

    How do we protect your information?
    We do not use vulnerability scanning and/or scanning to PCI standards.
    We do collect credit card information, but did not know PCI compliant scans are now required.
    We do not use Malware Scanning.

    I love TWA blog but I also am disappointed by “$1,000/mo” From the few comments it seems that nearly everyone is not going to get even close to this amount. Otherwise, thank you for a well-rounded article of another income opportunity I was not aware of!!

  21. Samuel on October 11, 2017 at 3:12 pm

    I no longer can see [redacted] contact info.

    • Keith Schroeder on October 11, 2017 at 3:15 pm

      I redacted [redacted] info until I can review more information provided me after publishing this post. Crowdsourcing is a powerful tool to uncover information.

      Samuel, I want to review the company info with the guy who introduced this to me. I’ll bring the contact info back once I completed the review.

  22. PleaseDontDoThis on October 11, 2017 at 5:24 pm

    There are a lot of red flags about this process beyond the moral/legal questionability. Anyone giving out log in info or credit card info and trusting a company selling the info is asking for trouble. I’m terribly concerned to see that multiple times it is stated that there is no risk to the account holder of the authorized user charging to the account. This is simply not true. All the AU has to do is wait for it to show up on their credit report to identify the lender and then call up to ask for another card. Some credit reports will even show the name of the other account holders. The same people willing to pay for artificial scores are definitely thinking of ways and waiting to scam people. The account holder would have absolutely no recourse for disputing the charges if this were to happen. Allowing a stranger access to your account, even if you believe they “don’t have your info”, is asking for trouble.

    • Susan on October 13, 2017 at 12:16 pm

      Agree

  23. Bear on October 11, 2017 at 9:26 pm

    This is interesting.

  24. Chris on October 12, 2017 at 11:43 am

    Interested in follow up to Joe’s comments. Thanks for publishing this TWA. I just signed up to receive emails from you.

  25. dan fletcher on October 12, 2017 at 4:02 pm

    i miss the old format of the blog! it was easier to navigate/read. the quality of content is as good as ever though.

    • Keith Schroeder on October 12, 2017 at 5:23 pm

      Use the contact button to comment to my desktop. Many of the things from the legacy system had a lot of bugs waiting to crash and would have with the increasing traffic. However, if there things you liked better I may be able to sweet talk my IT guy into some changes.

  26. Scotty on October 18, 2017 at 10:05 am

    Subscribing to this.

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