Tuesday's Tip: Delaying Interest for Two Months!!

The response from the podcast has been nothing short of amazing! We have connected with people near and far, and received a lot of great follow-up questions. Over the next several weeks, we will be posting the questions/answers we have received in a series of Tuesday’s Tips. (I know this one is coming a day late, but I promise it is not a dollar short; in fact, it might be a dollar saved!)

This week’s tip is regarding how to save two months of interest on borrowed money! During the podcast we hinted at how we save interest on money borrowed, but we did not have the time to cover how we actually do that, so here are the actionable steps you can take today.

It all started with one supplier who only bills us on a monthly basis, regardless of how many orders we place. At the end of each month, the supplier charges our credit card. When we receive our credit card statement, we submit it to our lender who then provides the funds for us to pay the credit card. The best part is the interest does not start until the lender draws from our account. For example you purchase a material today (May 9th) from XYZ Supplies, but XYZ Supplies doesn’t charge your credit card until June 1st. Your credit card statement for the month is run on any charges up until the 15th of each month. Since XYZ Supplies charged your card on June 1st, the charge is not on the May statement. Instead, it is on the June statement, which is not issued to you until July!! You take your statement in July, and submit it to your lender, and you receive the funds to pay off your credit card. The interest from the money borrowed does not start accruing until July when the lender disburses the funds. To recap, you received materials May 9th, but theoretically you did not pay for them until July, which delays your interest on the money borrowed for two months!!

There are a few points to keep in mind here. Most credit cards require you to pay off your balance in full to not accrue interest. And, the second point is the timing of when statements are issued is key to delaying the interest. For us it started with one supplier, however, all we had to do was just ask other suppliers if they were willing to do the same billing cycles.

We can all agree, a penny saved is a penny earned, and the same principles hold true for saving interest. Take action today, and delay the interest for up to two months! Even over just one year, you easily could be saving thousands of dollars!!