Amazing Grace Period: How to Get Free Loans from American Express

by Bavs

Just like any red-blooded American, my wallet is bursting with credit cards from various banks that are more than happy to give me huge amounts of purchasing power in exchange for exorbitant APRs.

My personal favorites are my American Express cards, as they give me tons of frequent flier miles and come with an almost three week grace period each month to pay my bill.

The following is a way to exploit this grace period, to help keep your account in good standing and avoid accruing interest charges.

Step 1: Determine how short you are for the month.

As soon as your account closes for the month at hand, check your balance online and do some quick arithmetic to determine if you'll have enough cash by the due date to pay in full.  If not, take note of how short you are and mosey on over to your local mall.  Don't forget your credit card.

Step 2: Buy something.

Walk into a store with a good return policy and charge something that costs at least the amount of money that you are short to the same card.

Step 3: Return it.

Make sure that you have the cashier credit your card.  This step must be done with sufficient time left to allow for the return credit to hit your account before the grace period ends.

Step 4: Wait for the credit to post.

Now here's the cool part.  The purchase that you made will be included in the next billing cycle but, if you check the outstanding balance for your current bill, you will see that it has decreased by the amount of the return as Amex applies the credit to your account immediately, creating a mismatch between payment cycles!

Step 5: Pay your bill "in full."

Keep in mind, though, that this trick will not give you a free pass on the return money.

You will have to repay it in full the next month, but you have successfully received a free loan from American Express and avoided accruing any interest fees!

Keep that credit crisis rolling!

Shout-outs: Galaxy and The Coot