Credit Card Revenge

deedukes

I'm fairly new to this site but would like to share my variation on Martin's credit card revenge scheme where you get money from them and put in in a deposit account. It only works if you are not in debt and would normally pay off your balance every month and if you have a flexible mortgage that allows you to pay extra money and take it back if necessary.

I have a mint card that requires I make a minimum payment every month, I keep it maxed out to my credit limit of £6000.

Instead of putting the money in a deposit account, I transfer it to my flexible mortgage account. and in doing so I reckon I am saving around £30 a month ;D (I have a £43000 mortgage).

A different way of aving money is instead of paying the reduced payments on your mortgage, you actually pay the amount that you would have been paying if you weren't working the scam. I worked out that if I can keep this going for 20 years with just a £6000 credit card limit I will knock 5 years off my mortgage at no extra cost to me!! I am currently looking at ways to get higher credit limits so if anyone has any suggestions...

It does require discipline however, as you must keep the amount you have transferred to your mortgage equal to the debt on your credit card otherwise you will be getting into debt without realising it. I keep a record of the total amount of money I have transferred to the mortgage to make sure it equals the balance on my credit card.

Robert_Sterling_3

Would you care to tell us what the interest rate is on your flexible mortgage.  
There might be a lot of interest in your reply.

Reaper

What's this Pale Rider - I thought maths was your hobby?!

If he has 6000 and it saves him £30 a month that makes his interest rate 6%.

Sounds a bit high for a flexible/offset though. More likely it is 5.25% or so.

There are a few people here doing this sort of thing, including myself. Although instead of switching the mortgage payments to reducing the mortgage instead I reduced them and pay the minimum payments on the credit cards out of my salary. Much the same result though.

Figment

I have an offset mortgage, and presently have £23K of SBTs stashed safely in a savings account. Instead of earning interest it is reducing the interest on the mortgage, and because it is interest saved, not interest earned, there's no tax to pay

Each month I'm paying the minimum back from the stoozed pot, and when settlement day comes the cash is sitting there ready to go back.

This method needs discipline and strong willpower too, as it could be so easy to give into temptation and "borrow" some of the funds for rainy day causes.