Easy way to make more interest.

[shultice24]

Maybe my recent idea is old news to some, but I'll share it anyway...

Basically I'm making interest off of the money I spend on routine expenses (gas, groceries, etc.). Here's how:

1.) Charge everything to credit card.
2.) Transfer amount charged to card from my local checking account to an ING savings account.
3.) Link ING savings account to credit card online payment.
4.) When credit card payment is due, pay from savings account.

I think it's a pretty snazzy way to make some interest off of purchases you have already made. You're taking full advantage of the time difference between when you charge something on your card and when you actually pay for it.

Even if you wait until your card statement comes out (mine is on the 15th of every month, with payment due around the following 9th), then transfer the entire statement amount at once, you still get paid several weeks worth of interest. Plus, in a way you've paid off your monthly balance well before it's due, since it's already gone from your checking account.

Of course, interest rates are crappy now, but it's still better than making 0% in a regular checking account, and it takes almost no time to do.

[simpleyme]

just wondering, how much have you made doing this?

[shultice24]

just wondering, how much have you made doing this?

Personally, not much (yet), for two reasons.

1.) I'm a college student. I don't have a ton of expenses to charge. Over the next year or so, my average monthly credit card statement will only be $200-300.

2.) I just started not long ago, and as we all know interest rates are crappy right now.

But think, say you can charge $500-1,000 worth of monthly expenses on your card, and let the money sit in an interest-bearing account instead of a 0% checking. And then say that interest rates rise again to the 5-6% range. There would be no question that it would be worth the 1-2 minutes a month to operate that way.

Obviously it won't make anyone rich, but if you could eek out some extra interest with very minimal time spent, why not?

[ScrimpAndSave]

I seriously love ING. I know they don't hve the best rates right now...but I love their customer service and how easy it is to use their website. LOVE LOVE LOVE them.


Jeffrey's little points incentives help as well.

[boosami]

I do basically the same thing with my AmEx... I charge all expenses possible and let my cash earn interest until the due date when my CC is automatically paid. I don't do this primarily for the interest, but rather for the AmEx reward points.

Here's something you might not know, and could accelerate your plan... My Diner's Club card doesn't expect payment for charges until after the next billing period (a "grace period" of 55-62 days!). That's at least double the timerange other credit cards offer. With that card, you could effectively get two month's interest on each month's spending. The DC card has no interest rate (as you are required to pay in full and not allowed to carry a balance past the second billing period) so there is no cost outside the annual fee. It also has tons of other benefits and rewards.

With an average monthly balance of less than $300, though, the annual fee (between $100 and $300 I think) is definitely going to outweigh your earnings. But maybe it's something to keep in mind for the future...

[shultice24]

I seriously love ING. I know they don't hve the best rates right now...but I love their customer service and how easy it is to use their website. LOVE LOVE LOVE them.

Then why don't you marry them?

lol, junior-high comeback aside, I too LOVE LOVE LOVE ING!

[shultice24]

Thanks for the info Boosami. Definitely something to keep in mind- that is a seriously long grace period!

I forgot to mention the 2% cash back I get on my Citi card, which makes it even more worthwhile to charge as many of my expenses as possible.

[cooliemae]

I've been doing this for a couple of years now and don't do to bad. Discover paid me about $255 last year for using their card, then made the interest off the money that sat in my savings account waiting to pay the balance in full each month.

[Ima saver]

I make at least $50 a month from the Chase rewards card. They send me a check everytime I accumalate 5000 points. I get triple points on everything that is home improvement and my husband is a builder! My business checking account did pay 3.14% interest for a whole year, but it just dropped to 1.98% two weeks ago. I still make about $30 a month in interest on that checking account.