Charge Everything!
January 4, 2007 – 3:02 amIf you're new here, I suggest you subscribe to my RSS feed. or bookmark this blog. You'll be able to easily keep up to date with new posts. Thanks for visiting!
Each and every month I try to charge all my expenses on my credit cards. Well, the most obvious reason is the free rewards, cashback, miles, etc. Some people associate heavy credit card usage with reckless spending. Charging everything spells disaster for some people because they can’t control their expenses. Unless the APR is 0%, I pay off all my cards in full each month.
It also makes sense to have different rewards cards to get the maximum rewards possible. I’m sure you already know about that.
Another reason for using a credit card besides the rewards, if you’re someone that’s responsible, is the fact you can earn interest on the money. Say you spend $5000/month in expenses, if you paid in cash, end of transaction. However if you pay with credit, you can stick money you’ll use to pay for that purchase in a high yield savings account and you’ll earn interest on that money. So in theory if you would be earning $5000 in interest for a full 30 days plus you can earn slightly more by paying a little later during the grace period. If you plan it right, you should never have a balance less than $5000 in your account at any time, since by the time you pay off your credit card at the end of the grace period, you should have already added $5000 at the beginning of the statement for that month’s purchases. The net effect is you constantly earn interest money you normally wouldn’t. The only thing here is it wont’ work if you’re spending money you don’t have.
