How to use multiple credit cards efficiently for longer interest-free period, better discounts, and higher credit score
ET Wealth Online explains how to use multiple credit cards.
Using multiple credit cards? How to extend your interest-free period
Credit cards offer interest-free periods on purchases. If you have multiple credit cards, you can use them strategically to make the interest-free period you get longer.
If your billing cycle for credit card A ends on the 15th of the month, say on April 15, the payment will be due in less than three weeks, i.e. by May 5. So, if you purchase anything using your credit card on March 16, you get an interest-free period of almost 50 days.
However, this interest-free window gets shorter with every passing day. So if you purchased on your credit card on April 14, you will get only 21 days of interest-free credit.
Now if you have another credit card with a billing cycle ending at the end of the month, you can use that card for purchases during the first half of the month to maximise the interest-free period.
How does this work? Say, the billing cycle for credit card B ends on the 30th of every month, say on March 30. The payment for this card needs to be done on April 19. When you want to make any purchase during the middle of the month, say April 10, use credit card B. You will then have around 39 days of interest-free period to pay off the bill.
So, you can use credit card B till the 15th of the month and switch to credit card A after that. Switch back to credit card B after the 30th. In this way, you can use multiple credit cards to enjoy longer interest-free periods.
If your credit
