Why I Still Carry a Credit Card Balance of $13,000

My wife and I paid for our own wedding, and were saving up very aggressively in order to afford the wedding of our dreams. From a financial standpoint, it would have saved us a ton of money if we had skipped the big celebration with the fancy dinner, open bar, DJ, and professional photographer, so if that's what you choose, you're already better off financially than we were. We just decided that it would be a once-in-a-lifetime experience for us and our families, so we wanted to be able to fill that day with memories that we could cherish for years to come. Anyway, my wife and I were both saving as much money as we could to make sure that we didn't need to make any compromises due to cost. Throughout the year that we were saving up, I was getting the usual junk mail that we still get every week advertising 0% interest credit cards with substantial limits. That's when it dawned on me that I could use one of these credit cards to help with some of the wedding expenses.

Initially, I thought it would be a nice safety net, in case we needed some extra money, or went a little over budget. Even though we were saving up each month, if there's an extra $500 charge we weren't expecting, or emergency expense like a car repair at the same time, we could put it on the 0% interest credit card, and not worry about paying it back for another 18 months (the initial 0% interest period). The piece of mind alone was worth it. The week leading up to and the day of the wedding were much less stressful for me, because I knew we'd have enough capital to cover the expenses, even if something went completely sideways. And as the wedding bills came due, I actually decided to put everything on the credit card, and continue saving over the next 18 months, just as I had the entire last year. 

By doing that, I was, and am still, carrying a large credit card balance ($13,000), but I was able to allocate the money I had already saved towards other investments during the same time period. In the 18 months that I was getting 0% interest charged on $13,000, I was able to buy a completely rented duplex as an investment property, and I have a condo under contract that my wife and I plan to move into in early 2020. I wouldn't have been able to afford either property if I had $13,000 less. My duplex cashflows just over $400 each month, and I am projecting my current residence to cash flow close to $200 each month after we move to our new condo. That's $600 of income each month while paying 0% in interest. In the grand scheme of things, it might not make a huge difference, but I knew the sooner I invested, the sooner I'd be increasing my net worth, and gaining valuable, and I didn't want to wait any longer.  

Now I can't stress this enough, this strategy isn't for everyone. In fact, I would say this strategy isn't for most. If you're expecting a large expense, and you trust yourself financially, and can control your urges, it might be worth looking into a 0% interest credit card simply for the piece of mind. If you can handle those things, and can stomach carrying large credit card debt, AND can quickly save up large sums of money to pay it back, then it might be worth looking into. If you have any doubts about even one of those aspects, then I wouldn't suggest it. This is extremely risky, because my investment property could have needed immediate repairs, I could have lost my job, or I could have lost track of my spending or savings and fell short of paying the balance back on the credit card before the interest rate hikes up above 20%. I was willing to accept those risks, and I felt confident that I could control my spending and continue to save and invest aggressively over the 18 months after my wedding, so I decided to charge much of my portion of the wedding expenses to the credit card. 

Here I am in 2020, and that credit card debt is still looming, and I have yet to make any substantial payments on it. My plan is to start paying $2,166 each month from March to August in order to pay it off just before the 0% interest period expires. I could instead save up $2,166 each month in a high-interest savings account and pay the entire balance off in one, lump-sum in August, but I don't trust myself quite that much. I want to have a more fool-proof way of depleting that balance before the high interest rate kicks in, and I will even try to allocate a few additional payments towards it if I'm able. In less than a year I was able to take $13,000, set it aside on a credit card, and leverage that money to help buy 2 additional properties which will provide me with $600 each month. Now all I need to do is keep saving, control my expenses and get that balance back to $0.