Woukd this idea save money?

Chris1962blue

I have a credit card with a small balance of £250.00 . I also spend about £150.00 per month in petrol from my basic current account. I hit on the idea of paying £150.00 straight off CC when I get paid then spending on CC to pay for day-to-day petrol.

My question:

Would this save me much as the money sitting in my current account for petrol does just that..it gains no interest and just hangs around until I spend it?

By transferring my "petrol money" onto my credit card would immediately reduce the balance and thus the amount of interest that CC company charge me for that month. Admittedly, the balance would go back, albeit to previous level less normal monthly payment.

May only save a pound or two, but hey, better in my pocket than theirs!

I am also going start transferring out all money not needed for Direct Debts and keep my own "free / unallocated" money in a savings account that I can access via a cashpoint.

Your thoughts are most welcome...

goodgirl80

I guess if you know you'll be saving interest and not making any money from having the cash in your account then go for it :-) Will you not be paying off any of the balance?

Chrisblue1962

Yes, I'll be making the normal monthkly payment.

It is just an idea so that CC company make less money out of me!

taxsaver

Assuming your monthly cc interest rate is say 1.5% and that you spend the £150 for petrol more or less evenly over the month then it would save you about £1 pm in interest. If you were to put your 'free/unallocated' money into the card in the same way then the interest savings would ofc be increased.

The danger is that you might inadvertently spend more on the card than you mean to, but equally if you happen to spend less than you budgeted then you've succeeded in reducing the cc balance more quickly which would be wonderful.