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PFT #42 - Personal Finance Tip: The Hidden Advantage with Retail Credit Cards and Paying Them Off

Updated: Mar 5, 2022

The number one thing that we talk about is to refrain from using credit cards to make purchases.

In short, if you use a credit card and cannot payoff the statement balance within one month, it technically means that you cannot afford the purchase that you made.

Now, if you have the ability to pay for purchases in full this can be to your advantage especially for large in scale items.

Recently, I purchased a $2,000 piece of furniture and I was given the option to open a credit card and I was given three options:

1) That my purchase will be considered the same as cash for 18 months meaning, as long the balance is paid in full, there would be no accrued interest at the end of the promotional period. This is known as a deferred interest credit card.

2) I could open a credit line and redeem points to use at their stores which equated to $180.

3) The third option was to use my debit or credit card and earn some points or cash back that way.

So I opted for option two: one because I had the money to pay in full and two, I do not possess a credit card that provides the same rebate.

The bottom line is this: when you have your budget in place, it creates opportunities to do more with your money. In my case, I just earned an easy $180 that I put toward birthday and holiday gifts.

Episode Link:


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