In America, tens of millions of credit cards are issued each year, almost everyone uses them – including those who do not experience tough money problems. A credit card now is not just a way to pay something up to a salary, but also a tool for good savings. And in this case, we are talking not only about cashback and grace periods – the benefits can be obtained in other ways. Together with experts, we will tell you exactly how.
Ageless classics – a grace period
The main thing that attracts credit card banks is the grace period, it is also called interest-free or grace period. In short, this is the period between the credit card transaction and the moment when the bank starts to take interest in this operation. But in fact, everything is a little more complicated.
So, a grace period is such a period of time in which you need to have time to conduct an operation on the card (buy something or withdraw cash) and be sure to pay off the entire amount of the debt. It lasts from different banks from 50 to 120 days, and is divided as follows (for example, Sberbank):
reporting period – 30 days when it is possible to carry out card transactions on credit;
payment period – 20 days after the end of the reporting period, for which you need to pay off the debt.
Accordingly, depending on the date of purchase, Sberbank gives from 20 (if you conduct the operation on the last day of the reporting period) to 50 days.
As Alina Bazhulina from Fora Bank told us, their credit card grace period is 62 days compared to the standard 50 days at other banks.
Other banks can give up to 120 days – for example, Post Bank, but there are a bunch of additional conditions: the reporting period is also 30 days, and for the grace period to work, you must pay at least 5% of the number of purchases in the next 2 months.
In addition, the grace period is usually provided only for transactions on purchases from cards; banks are usually not ready to give it for cash withdrawals or transfers. TD bank routing number The reason is that banks earn more on the interbank commission for acquiring than when withdrawing cash from ATMs (which is usually already paid for banks).
Nevertheless, the grace period is a good thing to save, and you can come up with a lot of scenarios for its use:
- buying food or something else before your paycheck is the most common option;
- instead of installments for equipment or other expensive purchases (if the amount can be repaid from the first salary);
- payment of some general expenses, for which they will then return the money – you can not get into your pocket.
It is only important to remember the dates of the reporting and payment periods – they can start from the beginning of the month, with the first card transaction, or by some other rules. You can specify the start date of the next reporting and payment period by calling the bank’s hotline.
As it came, it will leave – cashback
Cashback is a refund of part of the purchase price on a card. Banks pay it to encourage customers to spend more on the card – and in the case of credit cards, cashback is usually higher than for debit. Banks earn from the interbank commission for transferring money from one bank to another when paying with a card – this commission is 1-2%, and in fact, they “share” this amount with customers.
Almost every bank has its own cashback program, and they differ not only in percentage but in categories of outlets.
An interesting story has recently happened with the categories. The Mir payment system introduced its Cashback Cashback program, and it provided a 10% bonus for purchases in some categories, including phones with MCC code 4812. But the fact is that telecom stores selling telephones also replenish accounts for customers and use the same terminal. The result is understandable – people began to “drive” money into the account (then they can be withdrawn from there) in order to collect more cashback, and the NSPK (Mir card operator) did not pay them anything.
In the meantime, you can use them, craftsmen find a way to save well. For example, Vitaliy Goncharuk from Krasnodar-room told us about the scheme according to which he accumulates up to 20 thousand dollars of cashback every month:
Thinking about what I want to get in the form of cashback, I stopped for miles. I travel a lot and pay for flights, hotels, car rentals, and other miles – a great opportunity to save. Moreover, through the Citi Travel website you can make partial payments by miles and if not enough, pay in dollars.
To get started, I opened the Citi Travel debit card with which you can get a number of advantages:
- cashback for purchases up to 9% by miles (2% if spending more than 10,000 dollars., 3% if spending more than 70,000 dollars). The maximum percentage can be obtained when paying for services on the Citi Travel website;
- free cash withdrawal around the world (first they withdraw 200 dollars per operation and in the new billing month they return it to the card account);
- up to 6% on the account balance;
- free annual service;
- unlimited internet abroad;
- free baggage packing 2 times a year.
There are still a few personal bonuses, but these are basic ones. The rest is discounts in restaurants, car rental, etc.
All conditions apply if your card spending is more than 10,000 dollars. per month. Citi Travel has a credit card, but it has a grace period of only 60 days.
Therefore, I opened two ordinary Citi-Bank cards with a limit of 100,000 dollars. and a grace period of 90 days. Now I can shoot 50,000 dollars. from one card (the maximum amount for cash withdrawals), put them on a Citi Travelcard, or make a transfer in the two-touch application – spend money and earn miles. If I do not have time to pay off the debt within 3 months, I withdraw 50,000 dollars. from a second credit card and, thus, I get a grace period of 180 days already.
The most important thing is to decide what bonuses you want to receive and direct all your efforts to this cashback. Otherwise, having 10 cards, you will not accumulate anything, and bonuses in the form of discounts on Burger King will not be of interest to you. Now, on average, I am accumulating 20 thousand miles a month. A big plus is that the 1 accumulated mile on the Citi Travelcard is 1 dollar. Collect miles and travel more!