Can I delay payment of bills with more than one credit card? Let’s say I’ve got two credit cards with one credit card with the start of its payment cycle at the 14th of the month and the other credit card cycle on the 28th of the month. Is it a good strategy to use multiple cards to time my purchases during the month on different cards as a way to give me as much time as possible to pay off the bill?
I am trying to give myself more time to earn and taking advantage of the credit cards to delay my payment as much as possible. Since I will have more money a month from now than today, this should make it easier to pay me bills. Can this strategy buy me more time to pay my bills?
What you are doing will technically work (if I understand your strategy properly). Basically you’ll use card #1 to pay for things between the 14th and 28th. Then wait to pay it off until near its due date. After the 28th of this month you’ll then use card #2 until the start of card #1’s next billing cycle on the 14th of the following month. You’ll also pay off card #2 right before its due date. This means the items you bought (or bills paid for) on card #1 won’t be paid for from your savings account until probably three to five weeks after the items were purchased. (Basically you’ll get a statement which includes the bills and items a week or two after you buy items on each card. From that point you’ll have another three weeks between the card’s statement date and its due date to pay from your bank account.
This will work. But probably just once. Doing this will successfully put a maximum amount of time between when you buy something or pay off a bill and when the credit card bill comes due. Staggering the usage of your credit cards can be useful if you were all paid and up to date on all your cards originally and then suddenly found yourself needing an extra couple of weeks to make a payment on a new purchase. This approach can be useful in that situation, pushing back your need to use your cash for a few weeks.
The catch is that it usually just works the one time because once you do pay your second card (card #2), then your first card is coming up on its next statement date. At this point you’re paying your items off four to six after you bought them, but your rate of payments (on one card or the other) will be steady from then on.
In short, if you’re steadily using your credit cards to buy things (utilities, food, and fuel) then you’ve managed to insert a delay during the first month, pushing everything back a bit. But after that first delay, the rate you are making purchases and then paying them off will be steady. In other words, your monthly budget will remain the same as it was before. You’ll get a break for a few weeks and then, after that first month, money will return to flowing out of your account at the same rate it was before.
If you want to pull the trick a second time, to give yourself another couple of weeks of breathing room between purchases and your payment, then you’ll need to get caught up on both credit cards (paying them both on their statement dates) first before you can pull the delaying trick again. Put another way, organizing your credit card purchases to maximize the time before you need to make a payment will give you a few weeks of space to earn more income. However, after doing this once, if you want to do it again, you’ll need to pay your cards down faster in the future to get them cleared off.
Basically, you are successfully delaying your payments one time, but after that your rate of purchases and payments will balance out. The price of giving yourself this extra wiggle room in your bank account is removing any buffer that you had on your credit cards. You are sort of buying extra time to get your bank account up to speed by draining your credit card buffer.
Ideally, once the current crises passes, it’s a good idea to start paying your credit cards on their statement days rather than their due dates to expand your credit buffer again.
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