Basic Credit Card Shifting
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Smart Credit Card Shifting
Overview
Imagine you buy a $500 TV, but you don't have $500 in cash on hand. Luckily, you have another credit card. What should you do by the due date? If an interest-free balance transfer offer is available, you'd consider that. But what if it's not?
Understanding Your Expenses
First, assess your weekly maximum cardable expenses, which includes everything you usually buy with a credit card?"like groceries, fuel, and bills. Let's outline an example budget:
- Groceries: $300
- Fuel/Transport: $100
- Other Bills: $100
- Total Weekly Expenses: $500
Shifting Balances
Charge these expenses to your second card and use your income to pay down the first card. This way, you're effectively moving the balance without incurring interest?"creating a makeshift balance transfer.
By alternating payments, you can carry a debt of up to $1,500 interest-free, all while earning reward points. Here’s a simplified example:
| End of Week | Card A | Card B |
|-------------|--------|--------|
| 0 | $0 | $0 |
| 1 | $500 | $0 |
| 2 | $1,000 | $0 |
| 3 | $1,500 | $0 |
| 4 | $1,500 | $0 |
| 5 | $1,000 | $500 |
| 6 | $500 | $1,000 |
| 7 | $0 | $1,500 |
| 8 | $0 | $1,500 |
Eventually, you'll need to pay off the debt, but paired with a reduction strategy, this method can be quite beneficial.
Important Considerations
1. Calculate Smartly: Determine your average weekly cardable expenses, rounding down for safety. Include as many typical expenses as possible to maximize interest savings.
2. Avoid Overspending: Don’t charge more than usual to the card, as that defeats the strategy. Keep some cash available for non-card purchases.
3. Maintain Records: Don’t rely on memory?"track your receipts and totals. Use calendars to note statement periods, due dates, and payments.
4. Second Card Needed: Ensure you have a second card. A section on card selection is available in the report.
By implementing these strategies, you can effectively manage your credit card debt and potentially reduce interest payments.
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You can find the original non-AI version of this article here: Basic Credit Card Shifting.
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