Just a few days ago I started doing my monthly credit card charges to pay various vendors and as usual I try to take advantage of the monthly cut-off dates for transactions on my credit card to keep more money for myself such as earning more interest in a savings account.

What I mean by this is that credit cards have a billing cycle where if certain transactions do not get posted on your credit card by a certain time period of the month then the charged amount will be posted on your next month’s bill instead. Therefore, you get to keep the money in your bank still and won’t have to worry about it for more than 30 days later.

As an example, for myself any transactions that do not get posted to my credit card by the 16th of any given month won’t appear on the upcoming bill but rather the next one. So let’s take a phone bill that I receive monthly usually around the first to second week of the month. Like most bills, it indicates that payments need to be received by a certain date like say the 28th of the month or else you will incur a late penalty.

Now, if I just paid the bill right away with my credit card upon receiving the bill like say on the 12th of the month then that means I would need to withdraw my own money to pay for it in the upcoming billing cycle. Instead, because there is a rather good grace period for the bill I wait until the 17th of the month to pay the bill with my credit card. Therefore, it satisfies the vendor as they got paid on time and I don’t really have to withdraw money to pay for it until more than 30 days later.

One thing to keep in mind is that if you try this technique then it would be wise to make sure you pay the bill with at least two to three days before the actual due date of it as many times there is a delay in receiving your payment. If your due date was the 28th and you submit your payment on the 27th with your credit card there is a good chance that the vendor won’t receive it on time and hence you will incur penalties. This technique has worked very well for me personally and is another example on how a credit card can be a great tool if used responsibly.

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This happened at almost around the same time last year as the credit limit on my credit card was bumped up for some reason. Last year it went up by $2500 and just recently it looks like my limit was bumped up by about $3500 making my total limit for this credit card $11,700.

I’m just trying to think when in the world would I ever need to use that much credit on a personal credit card? People must be shopping for like cars or something along that nature. As usual, I guess it’s the flexibility of having it available. The only other thing I can think of where it would benefit me is that it will help my credit usage to my credit limit ratio which should help my credit score in the long run.

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Today I was told about an incident where there was a person who did not pay his credit card bill on time and as a result he received a lot of interest penalty on it. The person then phoned in and questioned why it worked this way.

The representative then explained how he has to pay the bill on or before the due date listed on his statement to avoid interest charges. His answer was that he thought the credit card expiry date was when one has to pay their bills and so he pleaded to the company to erase his current debt because of it.

The representative never heard of this before in his life and so he gave the person the benefit of doubt and credited their account for the interest charges. Of course, he still had to pay what he charged on the card. I was just thinking is that really possible for a person to not know that or was the person just really creative in getting sympathy? Interesting story nonetheless.

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