Pic Source: http://www.psdgraphics.com/file/credit-card.jpg

Credit card doesn’t figure on our list when we want to make money, Does it?

For some it is plastic convenience while others dread it, however smartly used. We can generate some extra money from it. A simple case will make things easy to Understand.

My Friend Freida (Not Pinto 😀 ) has monthly household grocery expense of Rs 10000.00 and she usually uses cash/debit card for purchases. The moment she swipes money is out from her bank account.

Can she be a smart shoppers (all women are :D)

Say if she has a credit card with Billing date of say 5th of every month and payment date as 25th of the next month, bit confusing let me explain you with an example – for things bought from 6th jan to 5th feb your credit card bill will be generated on 5th feb and payment will be due on 25th feb. the credit card effectively gives you 50 days to make payment of purchases made on 6th Jan.

So Now Freida armed with her credit buys her monthly grocery between 6th – 10th of every month and pays them next month on 25th diligently.

This way she earns extra Rs 60 (@ 3.5% bank Interest)on her monthly expenditure, this is small saving but by planning all monthly payments using credit card and using advantage of monthly cycle there could be good savings.

Freida is smart so she doesn’t keep these 10000 in bank rather she puts them into debt mutual funds and easily gets 8 – 8.5 % p.a

Most Important Thing
1. You have to very disciplined in monthly credit card payment, if you miss one payment your entire yearly savings will be halved.

PS : No sales pitch for credit cards