Use CC to save interest on bond

TheMacintosh

TheMacintosh

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hi,

So can anyone explain to me how and when banks calculate your interest on your outstanding amount on your credit card?

I was thinking.. my credit card "apparently" gives me 60 days interest free. So whats stopping me from transferring the available credit to my bond on the 2nd of each month, and transfer it back say the 29th again (and repeat)? My available credit on my CC is like a crap load and I dont use it at all. So I would transfer the whole available amount and only technically use it for +-27 days in any given month.

The bond's interest is worked out daily, so I could transfer like R200k to my bond for +-27 days and score on interest (9%+)?

Credit card and Bond is both at same bank, and I can transfer between them no problem.

Or have I gone nuts? :)
 
adidas said:
hi,

So can anyone explain to me how and when banks calculate your interest on your outstanding amount on your credit card?

I was thinking.. my credit card "apparently" gives me 60 days interest free. So whats stopping me from transferring the available credit to my bond on the 2nd of each month, and transfer it back say the 29th again (and repeat)? My available credit on my CC is like a crap load and I dont use it at all. So I would transfer the whole available amount and only technically use it for +-27 days in any given month.

The bond's interest is worked out daily, so I could transfer like R200k to my bond for +-27 days and score on interest (9%+)?

Credit card and Bond is both at same bank, and I can transfer between them no problem.

Or have I gone nuts? :)
Click to expand...

The interest free period is normally only for swiped or online purchases, so this won't work. Also, you'd need to be able to draw money out of your bond each month at no penalty.
 
ah damn.. :)

But yeah - my bond is flexi without any fees when withdrawing etc..
 
adidas said:
hi,

So can anyone explain to me how and when banks calculate your interest on your outstanding amount on your credit card?

I was thinking.. my credit card "apparently" gives me 60 days interest free. So whats stopping me from transferring the available credit to my bond on the 2nd of each month, and transfer it back say the 29th again (and repeat)? My available credit on my CC is like a crap load and I dont use it at all. So I would transfer the whole available amount and only technically use it for +-27 days in any given month.

The bond's interest is worked out daily, so I could transfer like R200k to my bond for +-27 days and score on interest (9%+)?

Credit card and Bond is both at same bank, and I can transfer between them no problem.

Or have I gone nuts? :)
Click to expand...

Good Idea. Pay 22% interest to save 10% interest. We know where to find the next Finance Minister!
 
Billy said:
Good Idea. Pay 22% interest to save 10% interest. We know where to find the next Finance Minister!
Click to expand...

Interest on most credit cards, for swiped and online purchases, isn't charged until 20 to 60 days after the purchase.
 
The last time I checked interest is not only charged (or at least calculated) immediately on transfers out but if you have a few purchases on there and then you do a transfer you will pay interest on the whole amount.
 
Billy said:
Good Idea. Pay 22% interest to save 10% interest. We know where to find the next Finance Minister!
Click to expand...

The OP had an idea, and wasn't sure if he understood it correctly. So he asked the question. I have no problem with that approach.

What would really be nice is if there is a bank out there that allows you to pay your bond payment via credit card. It would enable the interest saving as per the OP, and would probably give a decent Ebuck return in the process.
 
Rather do this:

On pay day, transfer your entire salary into your bond. Then as you have to make payments for bills etc. take the money out in bits and then pay your bills. That way, you save little bits of interest daily, because bond interest is calculated daily.
 
I have been doing this for more than 1.5 decades now. I live on my credit card monthly, and keep as much as possible in my bonds

At first you wont see a difference, but after 1 year it snowballs slowly. (It all depends on how much you prepay)

Picture 5 guys prepaying the same bond .... I know a few friends who buy together property, and they are doing that, buying more and more as the last one's debt is below 50%
 
Tacet said:
The OP had an idea, and wasn't sure if he understood it correctly. So he asked the question. I have no problem with that approach.

What would really be nice is if there is a bank out there that allows you to pay your bond payment via credit card. It would enable the interest saving as per the OP, and would probably give a decent Ebuck return in the process.
Click to expand...

In 2005 FNB had a eB rule, you earn 1% of the outstanding amount of your bond in eB. That was a very nice rule, until they took it away ( lol )
 
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