The No-Interest Credit Card
Guest post by Michael McGinnis
On this blog you have seen mention of numerous credit card sign-up bonuses. Of course, credit card companies don’t offer them out of pure generosity. No, they hope that after you’ve taken advantage of them, they can take advantage of you. It’s business, after all, and credit card companies are not charities.
Credit card companies (and their partners) hope to induce you to spend more than you would ordinarily. Their partners benefit from that, and so do the credit card companies, especially if their low promotional interest rates are for a limited time only. Or if after one year without an annual fee, they nail you with a hefty fee annually.
Credit card companies, of course, make most of their money from charging you interest. For instance, the Amex Blue Sky card has 0% interest, but only for the first six months. After that it jumps up to 13% or more.
But what would you do if you had a rewards/cashback credit card that never charged any interest? Is there such a thing?
Of course! I have a few of them, and chances are you do as well. Here’s the secret: by using a little personal discipline, you can turn any credit card into a no-interest credit card.
How? By paying it off in full every month, before the due date! Be diligent and read the fine print. Miss even one due date, and you could end up paying a “default” interest rate approaching 30%! Ouch!
Paying off your credit card every month helps keep your credit score high. It’s realistic too. After all, you (or your heirs) are going to have to pay it off sometime, so use your credit card like you would a debit card, and don’t spend money that you don’t actually have! Unless your state comptroller has promised that you’ll win the lottery next month, you probably don’t have much guarantee that you’ll have more money to pay your bills next month than you do this month.
Naturally, paying one’s credit card in full each month is not a new concept. It’s just one that people tend to preach rather than actually practice.
What? You didn’t think that paying 12% or more in interest each month in order to get 5% in cashback rewards is financially sound, did you? Just wanted to make sure. 
This is a guest post written by Michael McGinnis who comes to us from Debt Management Talk, a revenue sharing personal finance forum.
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It is not too late to start taking steps towards debt management. Get a cheap credit card with low interest rates.
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