Don't Quit Your Day Job Just Yet - Statistical Data Included

Kiplinger's Personal Finance Magazine, April, 2000 by Courtney McGrath

INTERNET | Can you make money FUNNELING

CUSTOMERS to other Web sites?

WHEN DON Steitz stumbled across NextCard Visa's Web site while idly surfing the Net, he was ready to take the bait. He was frustrated by the lackluster performance of his online seafood-sales business, and NextCard's affiliate program was offering webmasters $20 to $30 for each new account opened by someone referred by the affiliate's site.

The Gulfport, Miss., man bit. He signed up online, spent about half an hour setting up a couple of Web sites with a link to NextCard, and sat back to wait for a nibble on his line.

"Two weeks later, I got an e-mail from NextCard telling me I'd made $60," says Steitz. "I figured, if I can do that in half an hour, maybe I should spend more time doing this."

Less than a year later, Steitz is making an average of $6,000 a month referring Internet users to NextCard. His dozen or so Web pages, with domain names such as www.visa-creditcard.net and www.creditcard-approved.com, don't sell anything at all. They just bounce visitors to NextCard. If a visitor qualifies for a credit card, Steitz earns his bounty.

Steitz is doing so well that he chucked the seafood in favor of setting up Web sites, and he's spending even less time on his day job selling alarm systems. The secret to his success, Steitz says, is coming up with domain names--the "www.whatever.com" or ".net"--that will attract search engines looking for credit cards.

What does it cost Steitz to set up and maintain his site? He pays $35 a year to register each domain name and about $25 a month in Web-hosting fees for each site.

Far from a sure thing.

Steitz's success has made him something of a poster boy for NextCard's affiliate program.But don't assume you can turn your personal Web site into a cottage industry.

"People are always surprised when they go online and they fail," says Declan Dunn, Internet business consultant and author of Winning the Affiliate Game. But if you don't have eyeballs looking at your site, you're not going to make any money." According to Dunn, sites drawing fewer than 5,000 users per month probably won't deliver much affiliate revenue. What's more, many affiliate programs require participants to deliver a certain amount in sales before they'll cut them a check.

NextCard's plan is unusual in that it pays a flat dollar amount for each account opened by someone referred by an affiliate's site. Barnes and Noble .com and CD Now.com pay affiliates a percentage (usually 5% to 15%) of each sale they refer. At $15 for a CD or $25 for a book, it would take most affiliates a long time to rack up the $ 100 or so they would need to see any money. And note this: Some arrangements require that minimum levels be met each month or quarter--and reset the commission clock to $0 at the end of that period--to prevent low-volume participants from getting paid.

Still, Dunn believes that affiliate programs can offer fledgling Internet businesses a worthwhile source of additional revenue. They also allow small businesses to replace blank space on their pages with links to well-known companies. For instance, Dell Computer's program pays just 1% per sale--not likely to make anyone a millionaire. But, Dunn points out, affiliates get the intangible credibility of listing the Dell name on their site.

Dunn also believes that well-placed affiliate links can make sites more appealing to paying advertisers. "I'd much rather buy space from a site that looks like it's in demand," he says.

Dunn suggests joining affiliate programs at sites related to your site. For instance, if your site offers dog-obedience tips, a link to a pet store makes more sense than a link to a CD e-tailer.

For more on how affiliate programs work, check out www.sitecash.com and www.webaffiliateprograms.com. Each one groups programs by category--such as books, gardening and art--and lists the commissions available from each program.

RELATED ARTICLE: CREDIT CARDS: A silver lining for tax debtors

Generally, we think it's dumb to pay taxes with a credit card. Why incur a "convenience fee" and rack up interest while you pay off the balance? Last year the average amount paid by taxpayers who used plastic was $3,900-an amount that triggers a fee of $109.

But in yet another sign of the unlimited resourcefulness of the American taxpayer, a few have found a way to make saying "charge it" pay off. Official Payments Corp., the company that handles the payments and collects the fees, reports that one taxpayer who owed $360,000 in tax last year paid a $9,000 fee to charge it to a credit card. The eye-popping charge earned enough frequent-flier miles to earn four round-trip tickets to Australia that would have cost $8,420 each.

Hmmm. What's your credit limit?

--JOAN GOLDWASSER

Low-interest premium cards

Best if you carry a balance

                           RECENT    CASH-ADVANCE   ANNUAL
ISSUER                     RATE(*)   RATE/FEE(c)     FEE

Pulaski Bank & Trust (G)    7.99%     7.99%/none     $50
USAA Savings (G,P)          9.75      9.5/none        45
Simmons (G,P)               9.95      9.95/none       35

                           LATE/OVER    TELEPHONE
ISSUER                       LIMIT        NUMBER

Pulaski Bank & Trust (G)    $29/$29    800-980-2265
USAA Savings (G,P)          20/none    800-922-9092
Simmons (G,P)               20/20      800-636-5151

No-fee premium cards

Best if you usually pay the balance each month

                      RECENT    CASH-ADVANCE    GRACE
ISSUER                RATE(*)   RATE/FEE(c)    PERIOD

Capital One (P)         9.9%     19.8%/2.5%    25 days
Main Street             9.9        15.9/3      25 days
AFBA Industrial (P)    10.5        15.9/2      25 days

                      LATE/OVER    TELEPHONE
ISSUER                  LIMIT        NUMBER

Capital One (P)        $25/$25    800-822-3397
Main Street             25/25     888-712-7915
AFBA Industrial (P)    15/none    800-776-2265

Rebate cards

Best of the retail cards

                          RECENT        CASH-ADVANCE   ANNUAL
ISSUER                    RATE(*)       RATE/FEE(c)     FEE

Kroger Visa              16.7% to         20.7%/3%      none
                      20.7%([dagger])

Macy's Premier Visa        19.4            19.4/3       none

Bloomingdale's             19.4            19.4/3       none
Premier Visa

                        REBATE       TELEPHONE
ISSUER                STORE/OTHER      NUMBER

Kroger Visa              2%/1%      877-257-6437

Macy's Premier Visa       3/1       800-922-7028

Bloomingdale's        3/1([double   800-670-9840
Premier Visa           dagger])