Credit card as saving instrument

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Credit card as saving instrument

Post by kbharadwaj81 on Tue Apr 01 2008, 13:10

It might surprise you that some people use credit card as saving instrument. Itís a little weird but if the actual mechanism is understood the system can easily be beaten. Before understanding how a CC (Credit Card) can be used effectively we need to understand how the CC system works. Let us say Bank A issues a lifetime free credit card don't hesitate simply get one for your self.

Things to do Once you receive the card:-
Check your name/Card validity is correctly mentioned
Call up the call center ( its a painful process ) and ensure that your card is under the Zero rental plan and the min outstanding balance is ZERO.
Ask for the date of bill generation and the Date of payment. These two are the critical elements in the card. (Sadly most of us ignore this)
Ex: You receive your card on 21st September .your bill generation date (BGD) is 10th of every month and date of payment is 1st of every month. (This is how they answer)

Making credit card work for you:
During the first month use your credit card little carefully. Any amount spent using credit card unto 10th of October (BGD) will be billed and sent to you. You need to pay the money before 1st November to avoid any interest payment. Now for the money spent from 11th October you need not pay on 1st October but instead you pay it on 1st December as the bill from 11th October to 9thNovember is generated on 10th November.

I.e. the whole system works in a systematic cycle. The billing date and the last date of payment is the most critical part of the transaction. If you are disciplined and well informed and use the CC effectively then CC companies will shut the door in no time. Unfortunately most of the people have little or no financial discipline. If you are having a CC make the best use of it if you donít have better have one. But the key mantra is DECIPLINE.

And how did it become a saving instrument. Well you have the money in your bank account that is earning interest during the interest free time of your credit card. Now this can be considered as income Very Happy

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Re: Credit card as saving instrument

Post by enidhi on Tue Apr 01 2008, 15:15

Well, that was quite informative...But most people wont care for small things like this...

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Re: Credit card as saving instrument

Post by kbharadwaj81 on Tue Apr 01 2008, 17:07

Very true..... and this lack of information is actually benefiting the CC companies and helping them make tons of money. Embarassed

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Re: Credit card as saving instrument

Post by vishwas.tp on Tue Apr 01 2008, 21:00

Paying daily bills through credit card fetches an additional 50 day grace period (depends on the billing date or credit card) for clearing it and also allows one to maintain constant balance in savings account which will fetch some extra money through intereset.

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Re: Credit card as saving instrument

Post by enidhi on Wed Apr 02 2008, 11:27

Yes. But I hesitate to authorize ECS for utility bills... If I am billed extra recovering excess amount will be nightmare...

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Re: Credit card as saving instrument

Post by deal4loans on Fri Aug 28 2009, 18:20

How We can say that credit card is a Saving type of product.
kbharadwaj81 wrote:It might surprise you that some people use credit card as saving instrument. Itís a little weird but if the actual mechanism is understood the system can easily be beaten. Before understanding how a CC (Credit Card) can be used effectively we need to understand how the CC system works. Let us say Bank A issues a lifetime free credit card don't hesitate simply get one for your self.

Things to do Once you receive the card:-
Check your name/Card validity is correctly mentioned
Call up the call center ( its a painful process ) and ensure that your card is under the Zero rental plan and the min outstanding balance is ZERO.
Ask for the date of bill generation and the Date of payment. These two are the critical elements in the card. (Sadly most of us ignore this)
Ex: You receive your card on 21st September .your bill generation date (BGD) is 10th of every month and date of payment is 1st of every month. (This is how they answer)

Making credit card work for you:
During the first month use your credit card little carefully. Any amount spent using credit card unto 10th of October (BGD) will be billed and sent to you. You need to pay the money before 1st November to avoid any interest payment. Now for the money spent from 11th October you need not pay on 1st October but instead you pay it on 1st December as the bill from 11th October to 9thNovember is generated on 10th November.

I.e. the whole system works in a systematic cycle. The billing date and the last date of payment is the most critical part of the transaction. If you are disciplined and well informed and use the CC effectively then CC companies will shut the door in no time. Unfortunately most of the people have little or no financial discipline. If you are having a CC make the best use of it if you donít have better have one. But the key mantra is DECIPLINE.

And how did it become a saving instrument. Well you have the money in your bank account that is earning interest during the interest free time of your credit card. Now this can be considered as income Very Happy

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Re: Credit card as saving instrument

Post by sru123 on Sat Aug 07 2010, 14:43

hello everyone..
Thanku for the information..
i got some info from here thanku..

regards,
phe9oxis,
http://www.guidebuddha.com

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Re: Credit card as saving instrument

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