Credit cards are a wonderful financial product. For banks it is profitable and for users, comfortable. But it can be very expensive. How to pay zero interest?
I learned to use credit cards by observing a university classmate. He was from Popayán and his father had given him a credit card for all his expenses.
My friend, Carlos, paid the market on credit! In the cinema with card. Gasoline, dinner, clothes, barbershop and even gum with a credit card. He always asked, “two installments please.”
I pay everything with the credit card, and I don’t pay interest –repeated.
The rest of the partners paid with cash or with the debit card of the savings account. Sometimes, it was a problem to date him because he never had enough cash.
Why did a college student have a credit card for their expenses?
His father had found a way to order Carlos’ spending, not incurring financial or administrative costs for money orders and money transfers, and additionally reward him with points for his purchases.
It took me a couple of years to get my first credit card, but I never forgot what I had learned. I would pay for everything at a fee.
How to pay zero interest with your credit card?
The idea is very simple. Look at these tips:
- When using the card for cash advances or purchases, give the correct instruction.
- You should verify with your bank how the quota system works :
In some cases, by indicating that it is “no fees” or “direct payment”, you give the order to bill 100% of the consumption in the next settlement that the bank will make. However, even if all the consumptions are made in this way, at a fee, a “total payment” and a “minimum payment” amount will always appear on the statement that will not be the same.
Why does this happen? Because you will have the possibility to pay your total debt in installments. If you choose to pay only the “minimum amount” you will be choosing to split your total debt, automatically, in 36 months, paid in each interest installment. The bank will understand that you want to use the rotating system and will bill you for only one of the 36 parts into which consumption will be divided. The way to avoid paying interest, in this case, will be by canceling the value indicated in “Total Payment”.
The way to avoid paying interest, in this case, will be by canceling the value indicated in “Total Payment”.
- Use only one form of credit card payment. (If you combine several, you can lose track of what you have spent).
- For each purchase, choose the installment system and keep track of how much you will have to pay in the following month.
- Pay all consumptions and advances on the payment date or before it is indicated on the account statement (equivalent to the credit card bill). It will be a good sum of money, surely, but you will not pay a sun in interest.
- If you already have consumptions made in previous months and there are still several installments to pay, check the option of requesting from another bank a “transfer of funds” to pass all the debt to a new card with better conditions.
- Also, you could pay the total value of what you owe to date, using the Total Payment option.
What is the business?
- The financiers know that the success of a business is in the rotation of money.
- You can choose to pay all your purchases with the debit card until your money in your savings account runs out. You can use it to buy merchandise for your new business (read on, I’ll explain). Or you can leave your money in a savings or fiduciary account, generating interest, until the day comes to pay your credit card bill.
- In addition, each purchase on the card generates points or miles, to which you will be automatically entitled.
- Without the convenience of carrying a card instead of cash.
- The benefits of creating a good credit history, which will show more management and maturity if you have at least one credit (the one on the card) if you only have a savings account.
- This method allows you to keep accounts of what you spend, meet budget. Of course, there are some expenses that you cannot make with your credit card. Luckily, almost all of them are fixed, such as leasing, car credit or mortgage. Thus, it will be easy to control spending.
Why can you pay without interest?
Banks give you a grace period.
It is the time that elapses between the day you make the purchase on the day of the liquidation made by the bank of your statement. Let’s say it liquidates every 30 of the month and gives you up to 15 of each month to pay.
- The purchases you make on 29, you will pay in 16 days.
- The purchases you make on the 15th of the month, you will pay in 30 days.
- The purchases you make on 30 (in the afternoon, at night to not risk being billed), you will pay in 45 days.
Sounds familiar? Yes, it looks like the time a provider gives its customer for the payment of their bills. If you have more time, you can make more arrangements with the money. Therefore, you could have money to buy merchandise for your business.
The point is, of course, not to exceed expenses beyond capacity, beyond income. In that case, you would pay interest: those of a loan to pay debts or worse, interest for late payment for not paying the card on time