Credit cards are the #1 way to pay for products & services around the world. They are convenient and easy to use, and as many consumers will testify, they are especially useful for arranging payments for services like insurance.
Insurance providers, prefer the simplicity of credit cards payments for their insurance products. Payments by credit cards are a lot less awkward for insurance providers to handle than insurance payments by cash. When compared to insurance payments by cheque, they too provide advantages. Neither insurance provider nor insurance buyer has to wait for the insurance payment to clear when the insurance payment is made on credit cards, because the insurance payment is processed instantly when using them. Insurance payments by cheque on the other hand may take several days to clear.
Paying for insurance with credit cards of course means that insurance buyers must commit to the full insurance amount up-front. But paying for insurance in this way does not mean that money for the insurance has to be made immediately available. In fact, if consumers wish, they could choose to carry forward the insurance payment balance for a whole year without incurring interest charges on their insurance purchase.
Buy insurance now - and pay for insurance sometime in the next 12 months
Credit cards afford flexibility to consumers when buying insurance. Consumers can choose when and how to pay off the costs of their insurance purchase, tailoring physical insurance payments from their bank accounts to reduce their balance to suit.
Insurance buyers can pay off their insurance balance on their credit cards over several months. If they prefer, insurance buyers can even pay off their credit cards insurance purchases in monthly installments. But, should credit cards users opt to spread insurance repayments against their balance beyond the initial interest free period on their credit cards, credit cards users will need to be 'on the ball' with regards to interest charges applied to the insurance purchase balance by card providers.
Here is a two-step strategy to help insurance buyers avoid interest charges on their insurance purchases:
Step #1: Open '0% on purchases'
Before buying insurance products, insurance buyers should open credit cards that offer 0% interest on purchases (like insurance products) for six months. It is advisable for consumers to open these credit cards at least one month before buying insurance products. This gives insurance buyers time to receive and activate their them in readiness for the insurance purchase.
Step #2: Open '0% on balance transfer'
One month before the expiry of the '0% on purchases' deal for card used to buy the insurance products, insurance buyers should open '0% on balance transfer' card. Insurance buyers should look for deals where the actual transfers are free of charge, and where the deal is 0% interest for up to six months on the transferred insurance balance to the new cards.
By following this two-step credit cards strategy, insurance buyers can enjoy up to 12-months interest free credit on their insurance purchases.
