Credit card float / by kevin murray

The thing about credit cards, unlike let's say a debit card, or a check, or even cash, is a credit card when utilized is literally extending credit to the user of that card.  This means, that while a debit card, or a check, or cash pretty much are an immediate expenditure of money of which when used, the money basically leaves from the associated account or wallet, a credit card is truly a different proposition.  That is to say, when a credit card is used, those transactions are duly recorded, then, at the end of the billing cycle period, of usually about 30 days, a bill is created, and thereby the charges made during that billing period, are due back to the issuer of that credit card, usually in about 20-25 days from the issuance of the bill.  However, unlike cash that is immediately debited from a checking account or similar, those that have credit cards, actually do not have to pay off their credit card bill in full, in fact, as long as the credit card payer meets the minimal payment required by the date so required, they are thereby extended credit, of which, for having that credit extended, an interest rate is both accrued and charged.


Now, when it comes to credit card float, this essentially works for those that enough capital in their banking account in a manner in which by the user knowing when their billing date closes on a particular credit card, such as June 1, that come June 2 they can start charging on that credit card, recognizing that those charges starting from June 2, aren't actually going to come due until perhaps July 24.  This so indicates that those that use their credit cards in a manner in which they purposely make the charges on their credit cards immediately after the previous billing cycle ended, they then do not have to pay off in full those charges, until 50-55 days later, and therefore have effectively had credit "floated" at no interest cost for them over those 50-55 days, which is known as credit card float.


This signifies that the savvy credit consumer, utilizes the credit card float system in a manner in which this can benefit them, and can do so, with even more than one credit card, so that there is always a considerable distance in time between a charge and the necessity of paying off in full that charge.  That is to say, in matters large and small, those that get free loans floated to them, whether that is through a credit card, or through a promotion, or the equivalency, are using their financial acumen to essentially get interest free loans of short duration again and again and again.  In addition, those that play the credit card float game correctly, are able therefore to not be stuck having to wait to make their expenditures until they receive their paycheck but can organize their expenditures around the free credit card float that they have properly set up for that very purpose.


They say there is no such thing as free money, but actually there is.  Today's credit card companies issue many credit cards with no annual fees, often with come-on bonuses to sign up for that credit card, as well as generous credit card rewards for using their credit cards, with consumers also having the ability to use credit card float to their advantage.  Of course, in order for all of this to work, consumers must know their credit card billing cycles, and must also maintain a proper budget so that they are not stuck paying high interest rates on the credit that has been extended to them, but those that do, surely benefit from that knowledge well applied.