A friend of mine used to tell me that if he ever needed free money he would just take it off his credit card. I am still waiting for him to declare bankruptcy but so far he seems to be doing okay. Has he ever borrowed money from his credit card? I decided to ask him when I thought about writing this article. He told me he had done a few times but it took him a while to figure out how to get the money without paying interest.
For example, you don’t take a cash advance. Instead what he did was buy something expensive and get a gift certificate. He then had his wife return the item at another store. The first time they tried this she got a store gift card but since it was a store where they buy stuff all the time that was okay. The second time they did it they got cash.
But didn’t they still owe money to the credit card company? Yeah. Only they paid off the balance before the next payment was due so in effect they were charged no interest for their loan. Okay that makes sense but it seems a little risky to me. And if you’re paying for dinner you’re really not borrowing money off your card interest-free even if everyone else at the table pays you for cash.
I was intrigued by this crazy idea so I went searching for articles that talk about ways to borrow money from credit cards without paying interest. I found this one which offers a lot of ideas. I was kind of blown away.
So, yes, you CAN borrow money off your credit card without paying interest but it’s kind of a risky thing to do. And you have to repay the loan within 30 days (or before your next billing cycle begins). If you need the money the day before your billing cycle begins then I don’t think you’ll get the loan without paying interest so you had better hope you have a low-interest credit card.