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Everybody wants to look for a cheap and easy way to set up a passive income source. Well, in the modern market that may not be as difficult to create as you may think, as long as you are aware of the potential pitfalls of what your business can do. Multi-level marketing, Payday lending schemes, and free credit card businesses are all very enticing (and profitable if done properly), but it is nevertheless always important to know what you are getting into.

Let us consider the free credit card business. The way this works is similar to a multi-level marketing scheme; the business offers a website to a prospective client/marketer, who can use the site and its content to market free credit cards through the organization. The client pays a small monthly fee, and once he or she has distributed a certain minimum of free credit cards, the website becomes free for use for as long as the participant wishes to use it. To top it off, the number of cards that need to be sold is exceptionally low, somewhere in the area of four to five. While this may sound like an excellent deal, the catch is that marketing credit cards in such fashion is more difficult than it sounds. These websites get very little traffic, and most of the distribution is done through word of mouth and social networking. Moreover, because the offer is so enticing, very few of the individuals who start a venture like this actually follow through, and the organization starting it ends up making a lot of money off of the membership fees.

This is not to say that a free credit card business cannot be profitable; if you are very good at marketing, then you will have little difficulty developing a large network and reaping the commissions that come about from the credit card sales. However, just like multi-level marketing and other such business ventures, this is more challenging than originally meets the eyes of many.

This Business article was written by Mark Karavan on 2/10/2010