I have been doing some research recently with the best ways to get low interest money for borrowing needs.
Studies show that 39% of Americans do not pay off their credit cards every month. This means they are subject to the very high interest rates on most credit cards some as high as 29%. With the average credit card debt for US adults at $4,878 there is a lot of interest being paid to credit card companies.
Some people in need of quick cash pawn something, probably not the best idea. This can carry significant interest rates. Some people take out cash advances on credit cards. Also not a good idea. Not only are there up front fees, but the interest starts accruing immediately often at rates of 29% per year.
If you are need of temporary loan, this is possible through your credit card. It is possible to get an interest free loan for 55 days. How does this work? Every credit card has a billing period which is generally 30 days. After the billing period is the grace period which is usually 25 days. If you were to make a large purchase or use other techniques to get cash from your credit card on the very first day of the billing period, you could have an interest free loan for 55 days.
Even though you would officially get the loan for 55 day interest free, it can take several days to get the money into your bank account. Planning for 50 days is a safer option.
I am not recommending that anyone just go out and do this, but there may be circumstances where this is the best option. I remember when I was a sophomore in college. I was poor and broke. I once took a $500 cash advance on a credit card from an ATM. What's even worse is that this was a credit card that I had a balance on that was not paid off at the end of the month. At the time I did not completely understand exactly how much I was paying, but I likely paid over $150 to borrow $500 by the time I paid off the credit card balance. Remember that if you take a cash advance there are usually up front fees as well as high interest rates that start accruing immediately. There is no 25 day grace period. Also, you pay off the lowest interest borrowing first when you pay your bill. This means that if you already have a balance for other purchases, you will not pay off the cash advance until all of the other credit card debit is paid off first. This can get you into trouble quickly. I just want people to be aware of how this works and do NOT take a cash advance on a credit card.
There are other much less costly methods for getting access to cash quickly.
If you need cash for something like rent that you cannot pay with a credit card directly you can use Amazon Payments to transfer up to $1,000 per month to another person with a credit card for no fees. See my previous post: How to Meet Minimum Spending Requirements for Credit Cards - Amazon Payments for more information.
You can also use the method outlined in this post: How to Meet Minimum Spending on Credit Cards - Debit Gift Cards to Money Orders. This method will incur an upfront fee that varies depending on the fees for the $500 gift cards. A $5.95 fee is 1.2% fee on $500. If you need to get access to more than $1,000 cash.
It is easy to figure out when the first day of your billing period begins. Just look at your past credit card statement, and it will show the billing period as well as the due date. This will be the same days every month.
I am planning on testing out the benefits of this 55 day interest free loan with Loyal3. I wrote about how to use Loyal3 to make minimum spend requirements. You can check that out here. I am going to test out how much money I can push through Loyal3 in a 55 day period by buying stocks with a credit card for no fee, then selling those stocks. Churn, repeat. I will let you know the results when I finish my experiment.
If you have any questions or comments, please comment away!
Studies show that 39% of Americans do not pay off their credit cards every month. This means they are subject to the very high interest rates on most credit cards some as high as 29%. With the average credit card debt for US adults at $4,878 there is a lot of interest being paid to credit card companies.
Some people in need of quick cash pawn something, probably not the best idea. This can carry significant interest rates. Some people take out cash advances on credit cards. Also not a good idea. Not only are there up front fees, but the interest starts accruing immediately often at rates of 29% per year.
If you are need of temporary loan, this is possible through your credit card. It is possible to get an interest free loan for 55 days. How does this work? Every credit card has a billing period which is generally 30 days. After the billing period is the grace period which is usually 25 days. If you were to make a large purchase or use other techniques to get cash from your credit card on the very first day of the billing period, you could have an interest free loan for 55 days.
Even though you would officially get the loan for 55 day interest free, it can take several days to get the money into your bank account. Planning for 50 days is a safer option.
I am not recommending that anyone just go out and do this, but there may be circumstances where this is the best option. I remember when I was a sophomore in college. I was poor and broke. I once took a $500 cash advance on a credit card from an ATM. What's even worse is that this was a credit card that I had a balance on that was not paid off at the end of the month. At the time I did not completely understand exactly how much I was paying, but I likely paid over $150 to borrow $500 by the time I paid off the credit card balance. Remember that if you take a cash advance there are usually up front fees as well as high interest rates that start accruing immediately. There is no 25 day grace period. Also, you pay off the lowest interest borrowing first when you pay your bill. This means that if you already have a balance for other purchases, you will not pay off the cash advance until all of the other credit card debit is paid off first. This can get you into trouble quickly. I just want people to be aware of how this works and do NOT take a cash advance on a credit card.
There are other much less costly methods for getting access to cash quickly.
If you need cash for something like rent that you cannot pay with a credit card directly you can use Amazon Payments to transfer up to $1,000 per month to another person with a credit card for no fees. See my previous post: How to Meet Minimum Spending Requirements for Credit Cards - Amazon Payments for more information.
You can also use the method outlined in this post: How to Meet Minimum Spending on Credit Cards - Debit Gift Cards to Money Orders. This method will incur an upfront fee that varies depending on the fees for the $500 gift cards. A $5.95 fee is 1.2% fee on $500. If you need to get access to more than $1,000 cash.
It is easy to figure out when the first day of your billing period begins. Just look at your past credit card statement, and it will show the billing period as well as the due date. This will be the same days every month.
I am planning on testing out the benefits of this 55 day interest free loan with Loyal3. I wrote about how to use Loyal3 to make minimum spend requirements. You can check that out here. I am going to test out how much money I can push through Loyal3 in a 55 day period by buying stocks with a credit card for no fee, then selling those stocks. Churn, repeat. I will let you know the results when I finish my experiment.
If you have any questions or comments, please comment away!
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