Strategic Credit Card Cash Flows

With so much competition in the credit card space, companies are constantly providing offers to differentiate themselves. These offers include rewards, travel credit, and straight up cash back benefits. The Ink Cash Business credit card by Chase, for instance, offers 5% cash back on purchases of office related items, 2% on gas, and 1% for everything else with no limit. It also gives you a $200 bonus if you spend $3,000 in the first three months. If you pay your balance at the end of the month, you incur no costs, so by using a credit card you are basically getting free money. You can even call up a credit card company and say that you have had better offers (lower rates and annual fees) from other companies; many times they will give you a better deal to secure your business.

If you know what you are doing, you can use credit cards as a form of interest free, short-term credit. Get a credit card with free balance transfers, and then transfer the balance just before the payment is due. There are a few caveats to this method (such as no rewards and limits on how much you can transfer), but if you read and understand the fine print, you can essentially borrow money for free. Whatever you do though, always avoid cash advances. Card companies typically demand an upfront fee of 2% and begin charging interest immediately after the advance has taken place.

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