1. Parenting
Send to a Friend via Email

Pitfalls of Money-Making Apps for Your Smartphone

Yes, you can make money with your phone but be sure you don't lose any trying.

By

Smartphone Getty

This list of 9 ways to make money with your phone includes nifty little apps that allow you to make money in your spare time by participating in crowdsourcing, social media advertising, shopping rewards, loyalty programs, surveys and other micro jobs

And I do think people can earn money at these, but before you try them out, read about a few possible pitfalls of these money-making apps.

First, these are ways to make some extra money but not a lot of money. They are not a way to earn a living. A few of the crowdsourcing apps highlight participants who make hundreds of dollars a month, but that is rare.

Mostly these are going to be ways to help defray the cost of your smartphone or to save money on items you would buy. That said, these can mean extra cash in your pocket, just keep in mind that:

Time Is Money and Gas Isn't Free!

Be mindful of your time and expenses when using these apps. Many of these crowdsourcing tasks pay so little that you could spend more on gas and your time than you make. If you live in a city, there likely will be more tasks offered in an area that is easy for you to get to and from. On the flip side, in cities there will be more competition for the jobs. In many of these crowdsourcing sites, participants who have built a better reputation at completing tasks will have access to, or be selected for, more tasks--making it harder for newcomers.

If these apps can be used within your daily routine--while waiting at the doctor or while shopping--the time is not as much of an issue. If you have to drive out of your way, then you have to calculate whether it is truly worth it.

Beware of Spending Money to Make Money

Some of the rewards-based programs may either require or tempt you to spend money in order to receive the rewards. Be careful that you don't spend more than you earn. And be sure that those programs that don't pay in cash but with rewards (gift cards, discounts, etc.) won't cause you to spend money you otherwise wouldn't.

Fees Can Eat Up Your Profit

Any company that charges you a fee of any sort to participate in its program I suspect is a scam and should be avoided. However, there are other possible costs that can eat into your profits--namely PayPal fees. Sure it's nice when a place pays you immediately for each job no matter how small, but if PayPal charges you a fee on each tiny payment, that can reduce your profit significantly. Some companies will absorb the PayPal fees; others pay out in gift cards. Investigate the fees before you sign up.

Payout Threshold Pros and Cons

Payout thresholds are when a company requires that you earn a certain amount before it will pay out your earnings. Sometimes these can mean that if you are earning only a few bucks (or a few cents!) per job, you may give up before you reach the payout threshold, which might be as high as $50. So that is definitely a con.

However, believe it or not, there are pros to payout thresholds. As mentioned earlier, PayPal fees can eat up small payments. Some companies will allow you to adjust your payout threshold in order to help you avoid repeated fees.

Always investigate the payout threshold of any company that pays small amounts, whether its mystery shopping, surveys, crowdsourcing sites or any of these money-making apps for your cell phone.

  1. About.com
  2. Parenting
  3. Work-at-Home Moms
  4. Finances
  5. Save Money
  6. Pitfalls of Money-Making Apps for Your Smartphone

©2014 About.com. All rights reserved.