The techniques involved in knowing how to profit by using credit cards to pay bills fall in to a number of different categories. They include having intimate knowledge of the terms and conditions of the credit card being used, paying the bills at the right time of the month and appropriating the funds which should already be available in the interim, pending receipt of the credit card statement and payment being required to be made.
The first way to profit by using credit cards to pay bills is by having an understanding of how and when the interest is calculated and applied to one’s credit card. It is entirely possible with many credit cards to effectively know an interest free period of up to six or seven weeks, provided the bill is cleared in full each month. This means that the card can be used to pay a bill just after the statement date one month and the card holder will have up to around seven weeks before payment is required or interest is likely to be charged.
What the credit card holder has to ensure if they are to effectively profit by using credit cards to pay bills is that the money for the bill is already available to them and they did have the option of simply paying in cash or by cheque or debit card at the time. What they should then do with this cash is put it in to a high interest, instant access savings account. These accounts are most readily and commonly available online. At the time when payment of the bill is required, the credit card holder simply withdraws the money from the savings account and uses it to pay the bill.
It is unlikely that the credit card holder will profit considerably in the short term by this method of using credit cards to pay bills. The potential of this system in the longer term, however – naturally dependant upon the size of the bills which are to be paid and the interest rate applicable to the account – could very well be considerable and provide the individual with a handy lump sum at the interest capitalisation point on the savings account each year.
Where the credit card is one which offers zero percent interest on purchases for a fixed period of time, the potential for profit by using the credit card to pay bills is even greater. In this instance, the credit card holder should use the card to pay their bills for the duration of the interest free agreement period and invest the funds in a similar fashion. They must ensure only that they are acutely aware of when the interest free period ends and that they clear the balance in full at that time, before resorting to the method described above.
It is therefore entirely possible to profit by using credit cards to pay bills, provided that the individual is careful to adhere to the stipulations discussed.