Using credit card float to deter payments and interest for almost 60 days

Credit card float is likely the biggest benefit of using a credit card to make purchases. With strategic planning, you can make a purchase and avoid making a payment and paying interest for almost 60 days.



A few caveats

To simplify things, in this article, we assume that the customer has no pending or posted transactions and that the only purchases made with the credit card are the purchases described in the hypothetical scenarios. 



We also assume that the credit card has a grace period. The goal of this article is to demonstrate how you can make a purchase and avoid any fees (including interest) for almost two months. Credit cards without grace periods start accruing interest immediately after the purchase posts to the account. 



How credit card float works

When you use a credit card to make a purchase, your credit card company will not request payment for the charge for at least 21 days. Credit card companies are  required to provide customers with at least 21 days to pay any bill that’s delivered to them. So, regardless of when you make the purchase in your billing cycle, you can count on not having to actually pay that portion of your credit card bill for at least 21 days.



Let’s consider the following scenario in which your billing cycle is normally 30 days and your credit card bill is due 21 days after the statement is generated.

  • March 28th: A purchase is made
  • March 30th: Purchase posts to account
  • March 31st: Billing cycle ends
  • April 21st: Payment will be due and will include the purchase from March 28th



In this particular example, the credit card float is 24 days. The purchase was made on March 28th and you don’t need to make the payment until April 21st, which is 24 days later.



Extend your credit card float

With minimal planning, the credit card float can be increased to at least 50 days in most cases.



Although rare, purchases can post to your account the same day. Normally, you can expect your purchases to not post to your account for one to three days. So, why does this matter if the payment will not be due for at least 21 days? Because you can time the purchase so that it appears on the next month’s statement.



In the previous example, a purchase was made just days before the end of the billing cycle. But, what if the purchase had been made even  closer to the end of the billing cycle? 

  • March 30th: A $1,000 purchase is made
  • March 31st: Billing cycle ends
  • April 1st: New billing cycle begins
  • April 1st: Purchase posts to account
  • May 22nd: Payment will be due and will include the $1,000 purchase from March 30th



By waiting a few days to make the purchase, you’ve allotted yourself an extra 31 days to make a payment, which brings the total credit card float time to 53 days.



Best uses for credit card float

Credit card float is most useful when used for large purchases or for recurring charges, especially recurring charges like rent and mortgage. 



If you use your credit card to make large recurring charges, you can probably increase the credit card float even more by changing your credit card due date. Changing the credit card due date will affect your billing cycle end dates. So, when changing your payment due date, you’ll need to remain mindful that it’s really the billing cycle end date that you’re aiming to manipulate. You should modify the payment date so that your typical billing cycle will end just before you make your large or recurring payment. 



The  minimum 21-day credit card float alone that credit card customers receive can be a gamechanger for those who had not previously seen the benefit of using credit cards for this purpose. It can also be a lifesaver for those who have a tight budget.



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