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How to Save Money Every Month With The Credit Card Float

Updated on February 28, 2014

This is not a get rich quick, or cheating the system strategy. This is a concept for those that can consistently pay their credit card bill in full each month and take advantage of the “Float”, rewards, and other perks that come with using a credit card properly.

The Float

It is not hard. All you do is have a credit card, use it for purchases, and pay it off in full each month. Simple right? Well, not really. First, it takes discipline. You cannot view your credit card as a form of credit, but as your own money that you are using a smarter way, or stretching it further. Remember you will be paying it off each month, so there is no payment plan. You are using your money, just in a way that earns you free rewards and interest.


Make sure you set up your credit card for auto pay. That way, your card will be paid in full each month and you will never pay an interest fee or late fee. This is crucial because if you carry a balance, the float does not work, as you spend more money than you make.

Choose the right card. I recommend picking a card that does not require a yearly fee. If you have to pay to benefit from the rewards, you will either lose money overall or not make as much as you could using a free card. You may think having an airline, or miles card is a great deal, but if you have to pay $100 a year for the card, that’s a lot of miles to earn just to break even. Personally I use chase sapphire. No fees, you earn points, and double points on any food purchase, and you can redeem the points for anything. Great customer service when I have had to call.

Know your limit. If you know you can only afford to pay off $500 dollars a month, do not spend more than $500 on your card. This only works if you do not carry a balance or incur any fees.

How do I save and earn money?

Now that we have the general idea and some tips, let me explain how you save money. Let’s say your credit card payment is due on the 1st of each month. Now every time you make a purchase you are actually using the credit card company’s money to make that purchase interest free for the entire month. Think of it as the credit card company floating you the money each month. Remember, you only pay interest on the balance that goes unpaid after that month. That is where the “float” comes in. The money is being borrowed or floated to you for the month. This works to save money because your money stays in your savings account earning interest instead of slowly being drained by little purchases over the course of the month.

No, this is not going to make you rich or save you enough money to change your life, but it is something, and just for reorganizing you’re spending and doing it a little differently.

Another reason is your credit score. Your credit score today is a very complex beast. If you have too much open credit it is bad, not enough it is bad. Too many cards it hurts your score, not enough cards it also hurts your score. If you max your cards out it hurts your score, if you never use them it also hurts your score. By playing the credit card float, and not using more than 60% of your limit, and paying it off each month, you will maintain or improve your credit score.

The main way you save or earn money is not by floating the money from the credit card company but from the rewards. By paying off your balance in full each month, and earning reward points or airline miles for free, you are playing the game at zero cost to you.

Again, playing the credit card float will not make you rich or solve your problems, but it can lead to some nice perks for free, all from playing the game the right way.

My best example is my own. My wife and I opened a credit card about 2 years ago. This August we will take a trip to New York, and one of our plane tickets will be paid in full from our reward points, and with a little left over. Now you can say oh that’s only $350 for a round trip ticket over two years. I say to that, I didn’t do anything but use my credit card and pay it off each month to get it.

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      Shane Cash 6 years ago

      Thanks for the tips about credit repair on this amazing blog. What I would tell people will be to give up the mentality they can buy today and fork out later. Being a society most of us tend to make this happen for many things. This includes vacations, furniture, as well as items we'd like. However, you'll want to separate a person's wants from the needs. While you're working to raise your credit score make some sacrifices. For example you can shop online to economize or you can visit second hand suppliers instead of highly-priced department stores to get clothing.