A Beginners Guide to Passive Income with No Money

Beginners can earn passive income with no money using this trick I started leveraging last year. The good news is that in addition to requiring no money, it also requires just about no upfront work.


Too good to be true?


There are plenty of articles that explain how you can earn passive income with little or no money, but many of them still require significant upfront work and may not be suited for all beginners.


For example, a popular suggestion is to start a blog that generates ad revenue. Trust me! This is a great option, but it takes time, energy, and still a little bit of cash. I recommend it for those who like to write because researching and writing is far from what I'd call passive. And often, to keep revenue coming in you must continually update content or add new content because traffic, for many, will decline over time.


But I discovered a little trick that uses short-term, interest-free loans in conjunction with cryptocurrency staking for low-risk, passive income generation.


Don’t let words like cryptocurrency or staking turn you off if they are unfamiliar to you. This is not complicated. There are many avenues in the world of cryptocurrency that are very complicated (and very lucrative).


This is not one of those avenues. This approach is definitely for beginners.


No Money Down


The more money you have, the more passive income you can earn. That’s true in most passive income generating schemes, and it is certainly true with this technique, too.


Nevertheless, you can start with absolutely no money in the bank using credit card loans.


What is a credit card loan?


Banks, including Chase and Citi, provide a service for its credit card holders that is somewhat unique among most credit cards you can choose from. They allow you to take a loan out against your credit limit.


It works like this.


Let’s say you have a $10,000 credit limit on your credit card. Typically, you use your card like normal to pay for things, and it chips away at your credit limit as you spend.


For example, if you use your card to buy a $1,000 computer, you now have $9,000 left in credit. If you pay off your credit card bill at the end of the month (which you should always do!), your credit limit goes back up to $10,000, and the month starts over. In essence, you took a $1,000 short-term loan that you received interest-free (since you paid off the loan during the monthly Grace Period).


A credit card loan is an option that lets you use that same credit limit as a lump-sum loan instead of instantly at the time of purchase.


So, in our previous example, I could choose to take out a loan of $1,000 against my credit limit at the start of the month because I know I want to buy a computer but haven’t found it yet. This money gets deposited into my bank account. In a week, I find the computer used from a friend who doesn't take credit cards and pay for the computer with cash. Then, near the end of the month, I pay back the $1,000 loan and therefore accrue no interest.


In the end, to the bank, it all looks the same.


What’s the difference, and why does this matter?


These two approaches to using your credit card are nearly identical, except that the credit card loan deposits a lump sum into your bank account to use as you wish.


This lump-sum loan is an important distinction for our passive income trick!


And I’ll explain why it’s so important right after I explain how we use this debt to earn passive income.


Stablecoin Staking


Stablecoins live at the border of cryptocurrency and fiat currency. Stablecoins are built on blockchain technologies just like other cryptocurrencies like Bitcoin and Ethereum, but they are designed to always trend precisely with a specific fiat currency like the US Dollar. (Many fans of cryptocurrencies do not like stablecoins for precisely that reason, but that’s a topic for another day!)


We are interested in how to use stablecoins for this passive income trick because of two reasons.

  1. Stablecoins present very little short-term risk. They are always exchange-able one-for-one with fiat currency, so you do not have to worry about the volatility that is so ubiquitous among cryptocurrencies.

  2. Stablecoins like USDC, Dai, and USDT, to name a few, provide staking rewards that we will use to earn passive income.

For our purposes, you can think of staking rewards like a certificate of deposit (CD). You essentially agree to lock up your money for a period of time to support the ecosystem, in exchange for rewards (passive income).


Different cryptocurrency exchanges provide different options for staking. Some provide different payout rates and different lock-up times.


I use a few different exchanges, but my current preference is to use Crypto.com for a variety of reasons.

  1. Crypto.com offers 3-month, 1-month, and “flexible” staking periods. With the Flexible staking option, you can choose to earn staking rewards (albeit at a lower rate) with the ability to take out your money any time. We will use this option for our short-term loan trick.

  2. Crypto.com lets you deposit and withdraw funds from its platform via ACH transfer at no cost. This is critical for making our short-term loan options viable.

The ability to transfer funds into and out of this platform without fees via ACH is exactly why I use the credit card loan option instead of simply buying cryptocurrency with a credit card transaction.


The credit card transaction incurs a 2.99% processing fee. This is true of nearly all crypto exchanges. If I need to withdraw my funds within a few weeks to pay back the loan every month, I cannot earn enough staking rewards to cover this fee.


But! The magic of the credit card loan comes to the rescue. I can issue the loan, deposit it into my bank account, and transfer this sum into my crypto wallet for free via an ACH transfer, avoiding all transfer fees.


In essence, this loan is completely free and available to earn passive income every month!


This trick for earning passive income from credit card debt is probably not going to be enough for you to live on alone (unless you are very, very frugal and you have a lot of available credit).


But it will get you started. That’s huge.


Once you start actually earning real passive income, you’ll be hooked. You’ll see how you can let your money, your assets, and debt work for you and it will likely help shift your attitude about your personal finances. Because every bit of passive income gets you that much closer to financial freedom.


For example, let's say you are just starting out and you don’t have any CRO staked on the Crypto.com platform. You can expect to earn about $47 per month with a $10,000 credit card loan.


If you have $30,000 in credit available, with $4,000 of CRO staked, you are earning at 8% APR and 3 weeks will earn you nearly $140 every month. That could be enough to cover your grocery bills!


And remember, this is all using debt. So, with that in mind, you can essentially create money out of thin air to eat for free!



And if you are an advocate of FIRE (financial independence, retire early), this will be music to your ears.


Ideally, you can use excess funds to go back into the pipeline of staking rewards to grow your asset base and earn more in return every week. Quickly turning earned income into passive income generating assets like this will fast-track your path to financial freedom.


Not bad for a beginner looking to earn passive income with no money!


One Last Trick


Finally, before you jump in, you might be able to make this even easier to get going if you are just starting out.


When you sign up for a Crypto.com account, you generally get 30 days of zero credit card fees for all crypto purchases. If you sign up for a new credit card with a 0% APR introductory signing bonus, you can get even more bang for your buck. If you try this route, go for the longest introductory period you can find.


This interest-free, long-term loan can allow you to avoid the need to remove your funds every month. This allows you to hold most of this loan in longer-term staking periods to earn higher weekly rewards.


One challenge you may run into is that some credit card companies do not allow cryptocurrency purchases. One point of irony is that Chase is one of them! So, although you can use the credit card loan they offer for ACH transfers and monthly staking rewards, you cannot get a new Chase credit card for directly buying cryptocurrencies in their app. This is both credit card and platform specific, and rules change frequently, so do your homework before you get a card if you want to try this option. But the homework is worth it.


With that same $10,000 limit, you could increase your earnings from $47 to $77 per month. And if you really up your game and manage to get that $30,000 of new credit with $4,000 of CRO staked, you’ll be earning nearly $277 every month for a year!


BEWARE: Leaving a huge credit card balance will likely damage your credit due to the high credit utilization. So, use this tactic at your own risk! Certainly, you will be able to pay this back any time you wish and realign your credit utilization. But it's probably best to avoid this tactic if you've got some upcoming demands on your credit score. But if not, and you'd like a couple hundred dollars a month for free, well, it may be worth diving in!


If you're interested in getting some bonuses during sign-up...

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