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1/19/2020

How to keep your money longer when paying your bills

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There is a way to keep your money longer by using credit cards and autopay. I have been using this strategy successfully for several years. It has evened out my cash flow and put cash and rewards in my pocket. This strategy is only valid if you pay your credit card statement balance in full every month. Here how it works.
DATES are important. 
You need credit cards with different closing dates throughout the month. Credit card transactions are billed at set times called billing cycles. The last day of the billing cycle is the account statement closing date. The due date is the date by which you must pay your credit card statement balance. There is a grace period between the statement closing date and the payment due date. By law, the credit card company is required to offer a grace period of at least 21 days. This is the time from your statement closing date you get to make a payment before interest is charged on new purchases. That is 21 more days to keep your money.

The credit cards I use:
  1. Discover closing date 26th due date 21st of the following month
  2. MasterCard closing date 17th due date 14th of the next month
  3. Visa 6th due date 3rd of the next month
  4. I also use my wife’s cards if the closing date is more advantageous.
  5. Closing dates can vary by a few days based on the credit card billing cycles. For example, the 23-day billing cycle may have different closing dates after February, July, August. So don’t cut this too close. The credit card due date will always be the same.
You can often change your current due date if you contact your credit card issuer. Most will let you switch your due date. So if you already have multiple cards, you can spread the due dates and get started. Changing your due date will change your closing date by a corresponding number of days also.
All transactions since the last closing date will be included in your credit card statement. Credit card transactions are billed at set times called billing cycles. The last day of the billing cycle is the account statement closing date. You have a grace period between the statement closing date and the payment due date that’s roughly between 21 and 25 days, depending on the card you have. Your card has a grace period, The credit card company is legally required to offer a grace period of at least 21 days. This the time from when you get your statement to make a payment before interest is charged on new purchases.
  • DTE autopay on the 27th of the month. Statement closing date the 17th of the next month. The credit card due date is the 14th of the following month. 
  • Autopay DTE March 27. I get a credit card statement on April 17. Pay credit card in full on May 14. That is 47 days, I get to earn interest on my utility payment.
Resist temptation. You can’t spend the money on anything else. You must pay the credit card bill when its due.
I use this strategy with reward credit cards for cash back or travel rewards to help maximize the benefits. I love accumulating miles from paying for utilities. I use the same strategy for cell phones, cable/internet, streaming subscriptions, and natural gas.
If you actually deposit the deferred payments into an interest-bearing account, you may even see a modest gain over a year.
Other considerations 
Monitor your credit card statements carefully. Auto-pay amounts may change. I do not auto-pay my credit cards. This forces me to interact with the website to pay the bill. Therefore I get to monitor my statement before I make my payments.
Using this strategy will allow you to pay your bills on time and keep your money longer while doing it. 


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    Mansa Musa is a homeownership counselor and homebuyer educator. He is currently the Principal at MoneySmartLife.org. He blogs and speaks on subjects of financial well-being and financial capability. Helping working class families live a sustainable MoneySmartLife through pragmatic solutions and behavior changes.

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  • Home
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