It seems credit cards are always in the news for the wrong reasons - so-called rate tarts card hopping to take advantage of 0% balance transfers, insolvent consumers juggling debts from one card to another or irresponsible financial institutions dishing out cards like confetti. However, handled correctly, credit cards can be a tool to turn the table and cream money from financial institutions...twice!
Credit cards typically have an interest-free period of over forty days so as long as the balance is cleared every month, they do not cost anything to use. On the other hand, paying household bills and daily expenses from a bank account continuously decreases the balance and hence the interest earned each month. So, rather than flashing the credit card at every opportunity being financially reckless, it actually makes sense to shift as much expenses as possible to the card and leave the bank balance untouched. That way, maximum interest can be earned on the bank account and zero interest paid on the credit card as long as the balance is cleared at the end of the month.
Given that financial institutions constantly devise new ways of extracting pennies from their customers to boost their multi-billion pound profits, it is about time the spending public went on the offensive and start helping themselves to their institutions' largesse!
Credit cards typically have an interest-free period of over forty days so as long as the balance is cleared every month, they do not cost anything to use. On the other hand, paying household bills and daily expenses from a bank account continuously decreases the balance and hence the interest earned each month. So, rather than flashing the credit card at every opportunity being financially reckless, it actually makes sense to shift as much expenses as possible to the card and leave the bank balance untouched. That way, maximum interest can be earned on the bank account and zero interest paid on the credit card as long as the balance is cleared at the end of the month.
Given that financial institutions constantly devise new ways of extracting pennies from their customers to boost their multi-billion pound profits, it is about time the spending public went on the offensive and start helping themselves to their institutions' largesse!
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