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5 Surprisingly Easy Ways To Borrow Money For Free

5 Surprisingly Easy Ways To Borrow Money For Free

There’s no shame in borrowing money. Almost everyone does it, whether it’s a mortgage, credit card, or line of credit.

There are very good reasons to borrow and many times, it can be a smart financial decision, like when borrowing to buy a home that appreciates in value, or buying a car that gets you to and from work. Other times, borrowing can help alleviate an emergency situation, like when used to fix a leaking roof.

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What we want to focus on, are the opportunities to borrow for free. Most of these opportunities are riddled with landmines intended to trip you up. But, play your cards right and you could be funding your dreams with someone else’s money.

Credit Card Grace Period

Almost every credit card will give you an interest free period from the time that you make a credit card purchase, to the time your minimum payment is due. The period between the time you receive your credit card statement to your payment due date is called the grace period. It’s usually between 21 and 28 days long. That means you get to use your credit card, earn points, and once you receive your statement, get an additional 21 days to make your payment, all without ever incurring interest.

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Just make sure you’re never late making a payment. If you’re late by an hour, most credit card companies will remove your grace period privilege the following statement period, and start charging you interest from the day you make a purchase on your credit card.

Balance Transfers

Balance transfers are an incredible opportunity to borrow money interest free for an extended period of time. Let’s say you currently have a credit card balance with a 19.99% interest rate. A balance transfer shifts the debt from the higher interest rate card to a balance transfer card that often comes with an introductory rate of 0% for 12-20 months.

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Because there are so many 0% balance transfer offers in the market, you can be pretty aggressive in exploiting them to your advantage, probably the most common is call balance transfer surfing. Essentially, a month or so before the expiry of your 0% introductory rate, you will get another 0% balance transfer card and transfer your balance yet again. Rinse, wash, repeat.

Deposit Transfer

Let’s say you have a credit line you need to pay down. A balance transfer won’t do you any good, since it only pays down existing credit card balances. What you can do instead with a deposit transfer is shifting money from your credit card to your checking account at 0%. You can then use that money for anything you like, including paying down your line of credit. Although not as prevalent in the United States, several balance transfer credit cards in Canada and the U.K. also offer deposit transfers.

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0% Intro Rate

If you don’t have a credit card balance, but you need to borrow money and you want to do so at 0%, look for credit cards that offer 0% on purchases. These deals will typically allow you to borrow up to your credit card limit during the first 90 days or so, and then have a 0% interest rate for the following 12-24 months.

No Interest, No Payments Sales Financing

Ever walk into a furniture or hardware store and see an advertisement for 0% financing for 12 months? These are great deals, where the retailer is paying you to take the item now, versus later. Some of these sales financing loans don’t require you to make any payments during the 12 month period, others require you to make some interest-free fixed payments. Whatever the case, always be prepared to pay the loan back in FULL on the due date. If you miss your payment, often times the lender will retroactively charge you interest from the first day you took the loan.

As you can see, there are plenty of ways to borrow at 0%, whether you’re looking to cut interest rates on your current debt, or looking for a new loan. The one recommendation we have is to always set-up automatic repayment of your loans, so that you’ll never be late.

Featured photo credit: Flickr creative commons, Benjamin Smith via flickr.com

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Marc Felgar

Marc Felgar is an aging, health & senior care expert focused on improving the lives of mature adults.

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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