by Jon Carlos Rodriguez, ABS-CBNnews.com
Posted at 12/22/2013 7:51 AM | Updated as of 12/22/2013 7:51 AM
MANILA, Philippines – While most financial experts frown upon the excessive use of credit cards, Chartered Financial Analyst Gavin Lee said there is a way to maximize it without going into debt and even growing your money.
Lee advised putting your salary in a short-term investment instrument like fixed income investments, money market funds, or time deposits and use your credit card in your purchases.
While waiting for the credit card bill, do not touch the deposited funds and allow it to mature in time for the cut-off date.
“Instead of using cash to purchase your gifts this Christmas or any point in the year, why not put your salary on a time deposit or short term money market investment, don’t use it, and use your credit card for your purchases whenever you can,” Lee told ANC’s “On The Money.”
Lee said credit card users should take advantage of the perks such as gift certificates and freebies, adding that the holiday season is the best time for this as “credit card companies try to outdo each other.”
He noted that purchases via credit card shouldn’t go beyond the initial cash funds.
“When your bill is due for payment, make sure that your short term placement is 30 days, 40 days, so when it becomes due for payment, your investment will mature at the same time, so that forces you not to spend the cash while you are waiting for your credit card bill to come,” he said.
He said the full amount should be paid when the bill comes.
Lee said that while timing is key to this strategy, it wouldn’t work without discipline.
“If you can build the discipline to track your investment maturity and your payment dates, it’s going to build a foundation of discipline in many other aspects,” he said.
“If you don’t have the discipline to pay in full, or if you are an impulsive spender, do not do this,” he added.
Source:http://www.abs-cbnnews.com/
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