Let's say I bought a $500 TV even though I didn't have $500. I'm smart, though, and I do have another card. What do I need to do by the deadline? A transfer of balance? Well, I'd think about it if I had a current offer to transfer a balance with no interest. But let's say I don't anymore.
The first thing I'd do is figure out my average weekly maximum cardable spending (not income), which includes everything I usually buy and can buy with credit card purchases. For example, groceries, gas, and some bills (some companies don't take credit card payments for bills, and others only do so in an emergency). ..., etc. (Obviously, rent or home loan payments are big ones, but depending on who you pay, you may or may not be able to do these with a card!)
For the sake of this example, let's make up some numbers for how much it costs me to live each week. Since all plans are based on a multiple of the cost, we can use any number for the cost to figure out and show the plans. So let's say:
Groceries $300
Fuel/Transport $100
$100 for all other bills
Total per week $500
If I put all of these living expenses as purchases on my second card and used my income to pay off my first card instead of the living expenses, I would move the balance from one card to the other. A very easy-to-make balance transfer with no interest!
If I kept switching the balance back and forth every month, I could get up to $1500 in debt ($500 x 3 weeks) without ever having to pay interest or even pay back a cent. (Plus, I'll get a lot of reward, loyalty, and frequent flyer points.) This is how it would look:
Card A - Card B - EndWeek
0 ————— 0 ———— 0
1 ————— 500 ——- 0
2 ————— 1000 —— 0
3 ————— 1500 —— 0
4 ————— 1500 —— 0 - End Statement Period
5 ————— 1000 —— 500
6 ————— 500 ——- 1000
7 ————— 0 ———— 1500 - Due Date
8 ————— 0 ———— 1500
I'd have to pay it off at some point, since I might want to use the money for something else in the future. When you combine it with a plan to pay off debt, it really is a sweet piece of knowledge.
Before we move on to better and better methods, there are a few things we need to think about before we can use any of these. The first thing you need to do is figure out how much you can spend on average each week (rounded down to give some leeway.) By "maximum," I mean try to include as much as you can, everything you'd normally buy with cash. Because if this amount is higher, you'll be able to swap more and save more interest.
But don't add more than you would normally spend, because that would defeat the purpose! Also, don't forget to leave some small change for places that don't accept credit cards. We'll use the number you come up with for spending in all the plans, so it's important to figure it out carefully.
Second, and just as important, you'll need to keep track of what you do. Don't count on your memory. Who wants to keep track of the money they spend or owe? So keep all your receipts and add them up at the end of the day to see how much you owe on that card (you may wish to highlight tax deductible items too, if so remember to get itemised bills.) Near the end of the month (or week, for later methods), you'll need a way to keep track of the total so you know when you're getting close to the amount you want to swap.
Your record will have a calendar with clear dates for statement periods, payment due dates, and payments made. You may also want to write down when you reach the number of swaps you want to have for future use (so you can adjust expenditure if needs be.)
Last but not least, if you don't already have one, you will need a second card. In the Report, there is a part about how to choose cards.
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