There's a banking term called 'float.' It's the period between when you receive a loan (or credit) and when you're required to pay interest or fees on it.
Smart credit card holders utilize float. Unless you carry debt on your card, you have several weeks between when you make purchases and when the card company requires repayment or interest. In other words, you get to use the card company's money free for two to three weeks.
There are other examples in business and in life when you can create float for yourself.
Float occurs when you have a commitment from another party before you have to make a reciprocal commitment. For example, smart real estate investors try to tie up properties with minimal deposits and then wait to assess whether they want to buy. If they don't, they get their money back.
During this float period, they sometimes try to find someone to buy their rights – at a price higher than they are obligated to pay. In other words, they use the owner's real estate (at no cost to themselves) to attempt to make a nice profit.
Read more about credit cards, or check out the work-in-progress book 'Street Smarts 101: Lessons Textbooks Miss.'
Click here to learn more about the book The Skinny On Credit Cards.
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