How can I pay no interest on my credit card? How can I make sure I can pay my credit card in full? How can I maximise my rewards points?

Are you scared of credit cards?  Are you nervous you will end up with a massive debt if you get one?  Are they truly the "root of all evil"?

Let's have an open honest discussion about credit cards.  

Firstly this blog is for those of you that don't already have credit card debt.  I have written a different blog for you if you already have debt on a credit card, here is the way out for you: 

https://granniesarahssolutions.blogspot.com/2023/03/is-there-truly-way-to-get-out-of-credit.html 

Those of you who are thinking of getting a new credit card, please know I support you totally in this decision, in fact I recommend the use of credit cards.  

There are a few "absolutes" about having a new credit card that you need to understand 100% before you apply.

• a credit card is not a loan, this is not a way to borrow money to get something you cannot afford.
• a credit card should be used, wherever possible, instead of an eftpos card.
• apply for a credit card that can earn you maximum points per dollar spent.
• pay the total amount owing on your credit card when it is due each month without exception.

I have often been asked the question "how can I be sure I can pay the credit card off each month?"  the answer to this is easy if you follow the following process:

• Pop your eftpos card in a drawer and only get it out to withdraw cash at an ATM, never use a credit card to withdraw cash.  Stop using your eftpos card to pay merchants.
• When your wages go into your day to day account, leave them there.
• Pay all your bills and get all your groceries, fuel etc with your credit card.
• Don't worry about "convenience fees"  pay by credit card anyway.
• Cancel all Direct Debits and Automatic Payments, arrange with the people you are paying to pay by credit card, most of them will set it up so the payment will be charged on your credit card on the due date.
• Pay only merchants with your credit card, if you are transferring money in a private sale you need to use your other account.
• Your normal day-to-day account should only be used for: cash withdrawals, rent/mortgage payments, transferring money to a non-merchant

Here is the MAIN THING YOU MUST DO

Make sure your negative balance on your credit card is no greater than the positive balance in your day to day account!

Here is an example:

If you have been paid $1000 per week, then your rent goes out of $400, you have $600 left.  

Leave the $600 in there and know you can spend only $600 on your credit card, no matter what the limit on the credit card is, you will never go below -$600.  You are all adults now, I am not going to wave a big stick about sticking to this, know you can control this, there is no one else to blame,  there is no reason ever to go over this amount, consider it as not your money at all.  

The following week you get another $1000, so there should be now $1200 in that account and the credit card balance should be no more that -$1200 and so on.

By the fourth week you will have received your statement from the bank for the credit card, which will be around the same or less than the $2400 bill for the credit card.  You have enough money to pay this now, however, that bill is not due for another few weeks, 

DO NOT PAY IT UNTIL THE DATE IT IS DUE.

By the due date, you will have $3600 in your bank account and -$3600 or less owing on your credit card.  

You will now need to pay the amount of the bill which is $2400 (pay the exact amount, to the cent), so you will still have $1200 in your bank account and -$1200 on your credit card bill as you start the process again.  In fact you will probably have more in your day to day account than $1200 because the fact it is a "scary" credit card has made you more careful and you spend less.

DO NOT PAY YOUR CREDIT CARD TO ZERO, ONLY PAY THE FULL AMOUNT DUE ON THE BILL SO YOU CAN PAY ZERO INTEREST

If you stick to the one rule of keeping the amount due on the credit card to less than the amount in your bank account you will never, ever pay interest.  

I know this is true as I have been using this system for over 10 years and have a high limit on my credit card, have never paid interest on it, and earn a massive amount of rewards for free https://granniesarahssolutions.blogspot.com/2023/04/are-loyalty-programmes-worth-it-should.html.

Please read the above example over and over until you get it.  This is a gamechanger on so many levels.  You will find you are less likely to waste as much money because you are nervous about spending on your credit card.  Please try it and earn lots of points, but make sure you have read and understand all the loopholes above.

There is also another advantage to this, it gives you financial power, it shows you that you DO understand money, you ARE good with money, and you can understand complex financial situations.

Remember I have nothing to gain from this, if you feel you can stick the "absolutes" above then by all means have a go, you will never look back.

Have a fabulous day and remember you are absolutely worth it!  You can do this, all these little tips come together to save you an awful lot of money in the long run.  As I get into talking further about mortgages you will see how this can help you save a huge amount on your mortgage as well.  I will be referring back to this blog so please please please make sure you understand the concept.

Once you understand this, you are well on the way to being much much much better off financially.  

You can absolutely do this.

Please follow along on my blog, I love your questions, comments, shares and likes, it helps me keep up with what I need to explain.  So happy to hear I am helping you.