Using Amex Charge Card and paying off next month.

greenlightluke

Hello MSE’s,

So I have a AMEX Green Charge Card which I use for all my normal spending (groceries, fuel etc) spending that would be done regardless of anything else and that is so I can take advantage of the points and rewards they offer.

I, of course have to pay this off every month which is why I picked it.

THE QUESTION:

I pay off this card using next months pay and so on and so on and do a zero-based budgeting off of that. I’m trying to think of a downside to this and was wondering if anyone could offer insight. A brief example is this:

I know after all my outgoings are accounted for and I have paid my charge card off I have around £250 I then move this into savings and use my charge card to pay for everything that month and just repeat that cycle.

What are the cons to this?

If this doesn’t make a lot of sense I’m happy to clarify.

Thanks in advance!

[Deleted User]

It's how credit cards should be used.

greenlightluke

Hi,

Thanks for your reply. I guess the point I was getting at (lack of clarity on my part) is that I’ve heard the term “floating credit” applied to this and it being in a negative way.

[Deleted User]

Clearing in full each month (unless you have a 0% deal) is the idea way to go.

It shows you can handle credit and are not reliant on it.

SuperHan

The main downside is if there is a change to your circumstances and income, then you cannot adjust your spending to accommodate this (as you are essentially a month behind). However, if you have savings then this is negated.


You manage your cards in the same way I do. I do find it makes overspending a bit easier as I can rack up on the credit card without seeing my cash balance go down, so to speak, but again - nothing that can't be combatted with a little bit of thought and common sense.