Making the most of zero per cent credit card rates
If you have a zero per cent credit card interest rate on purchases, then why not use it? There are few times in life that financial institutions are going to give you anything for free so you should make sure that you are in a position to make the most of it once the opportunity does arise. You can do this very simply if you have an interest free credit card and a regular savings account.
The trick is to use your credit card to make purchases, which you will not have to pay any interest on. You can then save the money that you would have used on purchasing these goods in a savings account and earn interest on the balance. For example, suppose that you have a credit card that offers you zero per cent on all purchases for twelve months, up to a limit of five thousand pounds. Now, a lot of people would simply keep this card in their wallet for a rainy day, comfortable knowing that if they need it, they will have access to a credit card.
However, what you immediately should do is start using this card to pay for everything, from you groceries, to your petrol, to your mortgage and even your household bills. You can even write yourself a few credit card cheques to rack up the full five thousand. What you should then do is put the five thousand that you would have had to spend on these items into your savings account for the twelve months. Assuming an interest rate of five per cent on your savings account, this would earn you two hundred and fifty pounds for doing absolutely nothing.