10 Things I Want to Teach My Kids About Investing

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I've been blessed with three amazing kids. As their father, I feel compelled to not only protect and provide for them during their childhood but also to help them learn how to provide for themselves when they reach adulthood.

I've also been very fortunate to spend several years as an analyst at The Motley Fool, where I have had the pleasure of working beside and learning from some of the best investors in the world, including David and Tom Gardner.

Along the way, I've learned some foundational principles that have guided my professional and personal investing strategy. They helped me achieve market-beating results in Tier 1, the real-money portfolio that I manage for the Fool, and even helped my family and I purchase our new home.

The following 10 core investment (and life) lessons comprise some of the most important aspects of my Foolish education and form the foundation of what I hope to pass on to my children in the years ahead.

1. Investing in stocks is one of the best ways to build lasting, long-term wealth. Cases can be made for achieving wealth through real estate or the creation and ownership of private businesses, but few asset classes have a track record of wealth creation as solid as public stock ownership, especially on a real (inflation-adjusted) basis. 

Source: Ibbotson Associates. 

2. Stocks represent an ownership stake in a real business. Stocks aren't just pieces of paper or flashing blips on a computer screen. They're a legal claim on the current and future cash flow of a business and should be treated as such. When viewed through this lens, the fundamental drivers of long-term investing success become more clear and easier to grasp.

3. As such, buy shares in the best businesses you can find. This is the foundational principle of Tier 1, where I seek out and invest in the world's elite businesses. In fact, I usually begin my Tier 1 buy alerts with this quote from legendary investor Charlie Munger:

"And, by the way, the bulk of the billions in Berkshire Hathaway has come from the better businesses. ... And most of the other people who've made a lot of money have done so in high-quality businesses."

These include companies with the strongest competitive advantages, largest growth opportunities, and best management. They are the innovators, disruptors, and best of the breed. These businesses are ... Tier 1. And they tend to create tremendous wealth for their shareholders as they lead the world forward.

4. Buy stocks with the intent of holding them for as long as you possibly can. Warren Buffett has said his "favorite holding period is forever." Here at the Fool, Tom Gardner has implemented a minimum five-year holding period requirement in his Everlasting Portfolio, because he, too, is a big believer in the power of long-term stock ownership. While I don't impose that restriction on myself in Tier 1, I do strive to only purchase stock in businesses that I plan to hold for years -- and potentially even decades -- to come. I'm talking about outstanding businesses such as Amazon.com (NASDAQ: AMZN), Google(NASDAQ: GOOG  ) (NASDAQ: GOOGL), and Disney (NYSE: DIS). These companies have dominant competitive advantages that provide a wide moat around their cash flow, yet they still have tremendous runways for growth. They are all core positions in Tier 1 today, and I wouldn't be surprised if they form the foundation of my children's portfolios decades from now.

5. Winners tend to keep on winning. This is another core tenet in Tier 1, and another valuable lesson I learned from Tom and David Gardner. I like to invest in companies and management teams with proven track records of success. That's because I believe past success is one of the best indicators of future success. It certainly is not a guarantee, but I believe winning is a habit. The confidence and momentum achieved from past and current wins tend to pave the way for further risk-taking. Not blind risk predicated on arrogance, but prudent, calculated risks based on optimistic and opportunistic bets on a brighter future.

6. Strive to buy these great companies early in their growth cycles. The earlier you invest in a great business, the more you can profit as other investors catch on to the company's success. This is where fortunes are made, where the 10- and even 100-baggers are found. I have achieved multi-bagger returns in CAPS with several stocks, including 1,000+% gains in Apple (NASDAQ: AAPL  ) and Baidu (NASDAQ: BIDU  ), and it's a major goal of mine to find more of them going forward in Tier 1 so that I can help more people achieve these types of market-crushing -- and potentially life-changing -- returns.

7. Make your portfolio your best expression of the world. David Gardner once urged me to "Find out where the world is going, and get there as soon as possible." Your portfolio should reflect your passions, interests, field of study, and/or profession -- this is where your edge lies. But most of all, your portfolio should be positioned according to your vision of the future, and the more optimistic, the better.

8. Never stop learning. To have an informed opinion of where the world is going, we should seek to expand our horizons and circle of competencies beyond investing and even business, to include a wide array of disciplines such as psychology and the sciences. For the market moves not solely on others' rational thinking and is often swayed by the biases and other intricacies of human behavior. Each day, I strive to learn more about the world in which we live. I hope you'll do the same.

9. Never quit. There will be times when you throw up your hands in frustration and question whether it's worth all the trouble. Seemingly irrational short-term volatility and vicious bear market declines tend to be brutal on high-quality yet often premium-priced businesses. These difficult market times can play havoc on your emotions. However, the only way to win is to stay the course through the inevitable downturns. Steel yourself with the knowledge that this, too, shall pass, and that your best-of-breed businesses will likely emerge from the rubble even stronger as they take share from weaker rivals. As such, learn to look at these sell-offs as opportunities to add to your positions at even better prices, and you will magnify your long-term gains.

10. Use for good the tremendous wealth these principles will help you create. Along with investing in businesses that lead the world forward, strive to have a positive impact on the world around you. Help others. Donate what you can to worthy causes. And pass on what you have learned, as I have attempted to do here.

On that note, I'd like to ask all the Fools reading this article to list the lessons you would like to pass on in the comments section below.

And lastly, to my children, know that Daddy loves you -- now, and always.

Source: http://www.fool.com/investing/general/2015/03/08/10-things-i-want-to-teach-my-kids-about-investing.aspx

To Combat Fraud, Visa Wants to Track Your Smartphone

Visa

NEW YORK -- Those days of calling your bank to let them know that, yes, you really are in Thailand, and yes, you really did use your credit card to buy $200 in sarongs, may be coming to an end.

The payment processing company Visa (V) will roll out a new feature this spring that will allow its cardholders to inform their banks where they are automatic, using the location function found in nearly every smartphone.

Having your bank and Visa know where you are at all times may sound a little like "Big Brother." But privacy experts are actually applauding the feature, saying that, if used correctly, it could protect cardholders and cut down on credit card fraud.

Credit and debit card fraud costs consumers and banks billions of dollars each year, and that figure has been growing as data breaches have become more common. The banking industry had $1.57 billion in debit card fraud in 2013 and $4 billion in credit card fraud in 2012, the latest years for which data are available, according to the Federal Reserve.

Facing these high costs, banks and the payment processors have been stepping up their efforts to cut down on fraud, and Visa's announcement is just one small piece of this drive. JPMorgan Chase (JPM) CEO Jamie Dimon has said repeatedly that his bank spends $250 million overall on cybersecurity every year and plans to double that spending.

Tracking Purchases

Here's how it works: starting in April, banks will update their smartphone apps to include Visa's new location-tracking software. If the consumer opts in, the Visa software will, over a period of time, establish a customer's home territory of roughly a 50-mile radius. If the person uses his or her Visa card at stores in that area, those transactions will be considered low risk for fraud.

When that person travels outside their home area, the phone will notify Visa that they've entered a new city or country, using either the phone's cellular data plan or the next time the phone connects to a Wi-Fi network. When that person uses their Visa card for a transaction in that location, Visa will already know he or she is there and will be less likely to flag the card for a fraud alert.

"We will be able to compare the merchant's location to the most recent cellphone location to show it's a less risky transaction," Visa executive Mark Nelsen said.

The feature is optional and can be deactivated at any time. Visa also says none of the location trackings will be used for marketing purposes.

Combating Counterfeit Cards

One type of fraud Visa's feature will directly address is counterfeit credit cards. Criminals can take stolen credit card information and code it onto a new card using equipment that can be readily purchased online. Counterfeit cards look like any other credit card but have someone else's information on the magnetic stripe.

Nelsen said Visa hopes the new security feature will prevent "a good portion" of fraud perpetrated with counterfeit cards because those cards are often used in a location other than where the actual card owner lives.

Visa's new anti-fraud measure, which the company announced Thursday, won't address every potential fraud situation. If a card user has both their phone and credit cards stolen, for example, Visa wouldn't necessarily know that the card was at risk of fraudulent use until the cardholder contacted the company.

The current version of Visa's anti-fraud software doesn't address the possibility of stolen credit card data being used to make online purchases, but a future version will Nelsen said.

Visa is just one of the dozens of financial companies trying to figure out the best way to use new technologies to combat fraud. MasterCard (MA) said Friday it is rolling out a pilot program later this year that will integrate biometric data, such as face, voice or fingerprints, into its payment system to help authenticate transactions.

Cumbersome Process

Many travelers have had the experience of having their credit cards declined when using them for the first time in a foreign city or country because the bank assumed the charge was fraudulent. The only solution in those situations was for the cardholders to call the banks or credit card issuer every time they travel to let them know where they will be.

The process is cumbersome and time-consuming for cardholders and also for banks, which incur large expenses to staff call centers to deal with these types of calls from customers. Some banks use systems like text message alerts, but that usually requires customers to reply or call a number before the transaction will go through.

"The goal is to let more of those good transactions go through so we can focus on the real fraud," Nelsen said.

Privacy experts were generally warm to the idea, as long as banks are clear on how a customer's smartphone location will be used.

"When a trusted party -- and I think people think of their bank as a trusted party -- is looking out for you using what technology they have, I think people will welcome that," said Jules Polenesky, with the Future of Privacy Forum. Polenesky said Visa approached him six months ago to get feedback on this idea and to address any privacy concerns.

Justin Bookman, director of consumer privacy at the Center for Democracy & Technology, also supported the feature as long as banks are clear it's optional and how the data is being used.

"We effectively share our location with our banks every day when we swipe our credit cards," Bookman said. "As long as it remains optional, I believe it's a worthwhile idea."

Source:https://www.latimes.com/business/la-fi-visa-security-20150213-story.html

5 Easy Steps to Get Control of Your Finances

Being in control of your finances is a great stress reliever

If you’re living from paycheck to paycheck or your finances are feeling pinched, it’s a good indicator that it’s time to take control of your finances. One of the most important steps to doing that is to take a good hard look at the money you have coming in vs. the money you have going out so that you can establish a solid budget — and stick to it.

Here are 5 easy steps to get you started:

1. Evaluate Your Income

How much money do you have coming in? Including your paycheck is a given, but don’t forget other income: A second job, alimony, child support, or any other miscellaneous cash that you might have coming in. Write it all down and add it up.

2. Calculate Your Expenses

One of the most difficult steps in establishing a budget is determining how much money you’re spending – how much money is going out. First, make a list of all your fixed expenses. This would include rent, mortgage payments, car payments, insurance, utilities, cable, etc. Next, include variable expenses such as food, gas, entertainment, etc. And lastly, don’t forget about miscellaneous and maintenance expenses like property taxes, car maintenance, tag renewals, birthday gifts, etc. Once you’ve added up your out-going monthly expenses, subtract them from your income and that’ll tell you whether or not you’re spending more than you earn, and help you get a better idea of where you can cut back.

3. Trim The Fat

Now that you’ve gotten the hard part out of the way, it’s time to look at where you can cut back. If you’re spending $60 a month at the local coffee shop for your daily double mocha lattes, consider only splurging once a week and switching to coffee at home. One way to easily determine areas that you may be able to cut costs is to evaluate which expenses are actual ‘needs’ versus ‘wants’ or ‘nice to haves.’ This can add a whole new perspective to your budgeting efforts and give you the extra push you need to cut the expenses that aren’t necessarily ‘needs.’

4. Pay Yourself

In today’s economic environment it’s more important than ever to have a financial cushion for emergencies. Don’t forget to leave room to pay yourself. Setting aside enough money for savings or an emergency fund can make all the difference in the world when you’re blindsided with an unexpected job loss or financial emergency. Ideally, you should aim to have at least 3-6 months salary in your emergency fund, but even having $1,000 as a backup is better than no backup at all. If you’re struggling and can only afford a little each week, setting aside even $10 a week is better than nothing.

5. Stick To It

So you’ve established a solid budget and have a great plan in place – but how do you stick to it? It’ll take some dedication on your part, but the reward is well worth the effort. If you have a spouse, work together to hold each other accountable for any spending oversights. If one of you overspends, set rules that the guilty party has to contribute more to that month’s savings fund – a sort of quarter jar method with a twist. It’s much easier to do when you’re working at it together and you can make it more of a competition to keep it interesting. If you’re single, consider creating a support group amongst your friends with a monetary reward for reaching your budgeting goals. Whether it’s a vacation fund or a night out on the town, the extra incentive will help keep your eyes focused on the goal and make it fun in the process.

Saving Tip: Save Like You’re Paying Off A High Interest Debt

Savings

I was driving down the highway on my way home from work the other day when I looked up and saw a billboard for a local bank. It had a two-sentence ad for their high-yield savings account that really caught my attention. It said:

Your future called. It said to send money

This really got me thinking about our debt culture, and how most people don’t even bother to save for their future. We value having things now, and for most people saving for the future never even enters their minds. In fact, according to MSNBC.com, the Commerce Department reported that the nation’s personal savings rate for all of 2006 was a negative 1 percent, the worst showing in 73 years. The article continues:

As the nation’s largest generation retires, that will further depress savings because typically retirees are drawing down their accumulated savings in an effort to make up the difference between the salaries they earned on the job and their smaller Social Security and other pension payments.

“We have to face the question of whether we are anywhere near where we need to be with our savings to see us through,” said David Wyss, chief economist at Standard & Poor’s in New York.

We are not saving enough for our future needs, and we need to find a way to turn that around. We need to start saving NOW!

Saving For The Future

We know we need to save for the future, but how do we start? How do we get motivated to start putting away the funds that we’ll need down the line?

I read an article on NPR.com where they were talking about debt. One of the quotes was from Financial Times columnist Tim Harford. He said:

Debt is your future self sending you money back in time. So the question is, are you and your future self both happy with the deal?

No, I’m not happy with the deal – that’s why we don’t do debt. This quote did make me think, what if this went in reverse, and it was our present self sending money to our future self?

Savings is your present self sending you money in the future.

Now that is a deal I’ll sign up for!

Dayana Yochim in her article, “Give Your Future Self a Raise” talks about how most people have been told to save 10% for retirement, but that it just isn’t enough. What does it take to turn that around? It’s pretty simple:

Save more. Work longer.  End of story.

Sounds dull, but if you get serious about those two things — work an extra two years and sock away just 3% more in savings if you can — you will turn your entire financial future around.

Saving Is Like Paying A High-Interest Debt To Your Future Self

Sometimes just saving for the future isn’t motivation enough. You need to couch it in different terms. Here’s what I’ve come up with for myself. When you have debts, the debts become a priority, you have to pay them off before you can buy the things you want like a new gadget or a vacation. If you don’t pay your debts eventually the creditor will repossess your house or other assets.

I like to think of savings as a high-interest debt that I’m paying to my future self. I have to pay myself for the future before I pay for other things because if I don’t my future prosperity will be repossessed. And I don’t want my future to get foreclosed on! Do you?

Tips To Jumpstart Your Savings

1. Treat retirement savings as a high-interest debt to be paid off.
2. Set a debt goal: Set a debt goal for your retirement savings and try to make payments on that debt as often as you can. Use the Dave Ramsey debt snowball and the concept of snowflaking to add more money to your retirement savings.
3. Save more: If you’re saving 10%, bump it up 15%. Save as much as you comfortably can. You don’t want to make your current life uncomfortable, but you do want to make sure you save enough. Check out PTMoney’s article, “7 Can't-Miss Ways to Kick-Start the Saving Habit” for more ideas of ways to start saving.
4. Work longer: Plan on working longer in order to save more. Take on part-time jobs or save other unexpected windfalls.

In my mind, the most important thing to do when it comes to saving is to just start doing it. Make it automatic, make it a habit. Turn it into a game! You’ll be happy to know that you’re paying your future self for a prosperous retirement. The billboard will now read,

Your future called, you’ve got plenty of money because you started saving!

 What are your tips for jump-starting a saving habit? Leave a comment here!

Source: http://www.biblemoneymatters.com/summer-savings-series-6-saving-tip-save-like-youre-paying-off-a-high-interest-debt/

Tax Payment by Credit Card Lauded

Tax Payment by Credit Card

KUALA LUMPUR, March 3. 2015: 

The Association of Islamic Banking Institutions Malaysia has lauded the use of credit cards to pay income tax, saying it would help avoid penalties while the government benefits from direct tax collection.

President Datuk Mohd Redza Shah Abdul Wahid said the initiative by the Inland Revenue Board (IRB) provides taxpayers with a convenient mode of payment.

“I think it is a good move by the IRB because the more the channels of payment that exist in the payment system here (the better) it is for people to meet their obligations.

“Of course credit will incur but those with no time to go to the IRB can go to the bank and make their tax payments via credit card. This will definitely ease the taxpayers.”

Taxpayers can plan their financing accordingly when using the credit facilities, he said in a phone interview.

Yesterday, the government announced that taxpayers can make their income tax payments via Visa, MasterCard or American Express credit cards as well as debit cards issued by banking institutions in the country.

IRB expects the new initiative to increase online income tax transactions to 25% compared to 12.13% of the 7.53 million tax payment transactions recorded last year.

IRB recorded a tax collection of RM133.694 billion in 2014, up 3.6% from the previous year.

The government and IRB are confident that the new initiative will see direct tax collection reaching RM142.646 billion this year despite external challenges such as falling oil prices and the Goods and Services and Tax implementation in April.

Improve Your Health, Wealth - Without Spending a Lot

Health & Wealth

You know that staying healthy has plenty of positive benefits -- you feel happier, you have more energy, you may even live longer. But did you know being healthy can also have a positive impact on your wallet?

Here are six ways that taking good care of yourself can also pay off for your finances -- and six ways you can develop strong health without spending a fortune.

One disclaimer before we jump into this list: There are exceptions, of course. You might lead a perfectly healthy lifestyle but suffer from an accident or illness. Unfortunately, there are lots of people eat right, exercise, wear sunblock, don't smoke, floss -- and get diagnosed with cancer. It happens.

The tips in this article don't guarantee good health or low medical bills. They're simply intended to get you thinking about the relationship between your health and your money and to encourage you to take care of your health so that your wallet can hopefully share the positive effects. Yes, some people will become survivors of bad luck or misfortune, but let's do whatever is within our power to lower the likelihood of needing pricey medical care.

With that said, let's launch into six ways your health impacts your net worth, and six free or cheap ways you can improve your health.

1. Fewer Doctor's Visits

Every time you visit the doctor, you face a deductible and a co-payment (plus plenty of potential additional expenses depending on the course of treatment she recommends). If you need to see a specialist, that co-pay increases, and your co-insurance may also kick in.

But if you keep yourself in good shape and follow your doctor's advice when she recommends a certain lifestyle change or course of action, you'll be less likely to need too many visits. That "apple a day keeps the doctor away" saying has some truth to it –- and apples are cheaper than appointments.

2. Lower Pharmacy Costs

If you eat well, exercise regularly and follow your doctor's orders, you'll increase your likelihood of needing fewer medications for aches, pains and ailments. You could save on everything from pricey prescriptions to over-the-counter meds, which anyone in less-than-perfect shape can tell you could cost hundreds a month.

3. Less Time Missed From Work

Depending on how many days paid sick days your company allows, an extended illness -- or too many minor illnesses -- could wind up costing you several days' pay. Excessive absences also look bad to employers, which can affect things like your performance review, promotion potential and opportunities for raises. In other words, sick days harm your finances all around, both short-term and long-term.

4. Better Work Performance

When you're mentally and physically fit, the days you do spend in the office will be more focused, productive, and efficient. When you feel well, your mind is alert and you're better able to deal with problems as they arise. You can rise to challenges and exceed expectations -- which has quite a nice effect on those things like performance reviews, promotion potential, and opportunities for raises.

5. Less Money Wasted on Bad Habits

Plenty of things that are bad for your health are also bad for your wallet. Smoking, drinking alcohol, and existing on a diet of fast food and soda are expensive habits. Cut these out of your life, and you'll find you suddenly have much more money left over at the end of the month.

6. More Energy to Start a Side Hustle

If you've ever thought of starting a side business -- whether it's selling crafts on Etsy or launching your own landscaping company -- you'll find you have much more energy to pursue it if you're in good health. A side business can be a great way to bring in some extra money, but it's not the kind of thing you can do for a couple hours when you feel like it. As any shark on "Shark Tank" will tell you, it takes determination and plenty of sweat equity.

How to Improve Your Health -- for Free (or for Not Much)

So how can you maintain your health without spending too much of that money you've just saved by being so healthy? Here are six simple (and inexpensive) strategies.

1. Shop Smarter

You can eat better without spending a fortune by buying in-season produce, stocking up on cheap but healthy staples like brown rice and beans, planning your meals ahead of time, and keeping fresh fruits around when you're hungry and running out the door.

2. Cook Smarter

Make meals from scratch rather than paying for convenience foods and packaged meals. Use the same basic staples (such as rice or pasta, some lean protein and veggies) to make multiple meals, such as tacos, enchiladas and quesadillas, Thai curry, vegetable roasts and stir-fries. This will limit your food waste and simplify shopping.

One day per week, cook meals in bulk and freeze or refrigerate leftovers to eat throughout the week. The more easily you can pop something in the microwave during the week, the more likely you are to stick with your meal plan. Brown-bag your work lunches instead of grabbing something on the go.

3. Drink More Water

Carry a water bottle with you to make sure you're staying hydrated; it will keep you fuller longer and help you stave off dehydration symptoms like headaches. Keep a glass of water at your desk and sip it throughout the day; each time you get up to use the bathroom, refill the glass.

4. Exercise for Free

Staying fit doesn't have to cost a fortune. Try exercising to YouTube videos, walking your dog, jogging with a friend or joining a dodgeball league. Download free fitness apps that guide you through exercises, play Frisbee or soccer in the park on the weekends or learn a few yoga poses that you can practice in your living room. Do push-ups, squats, lunges and crunches.

Exercise your imagination: place a circular, uncovered trash can on the top rung of a ladder and use it as a backyard basketball "hoop." Tie some string between two trees and turn it into a tennis "net." Turn a gallon of milk into a "barbell" that can help you practice bicep curls.

5. Meditate

Studies have shown that a regular meditation practice can help with a slew of medical issues, including high blood pressure, insomnia and chronic pain. It can also help reduce your stress levels, and stress brings its own set of medical problems.

Taking 15 minutes a day to practice deep breathing and relaxation can have a big payoff. If that feels like too much time, start by deep-breathing and meditating for just one minute per day. Develop this habit by repeating it every day for a week. The following week, increase this to two minutes. The week after, increase it to three minutes.

6. Use an App

There are tons of health and fitness apps available for free or very cheap that can help you to maintain a healthier lifestyle. From step trackers to calorie counters to preloaded workout routines, there's an app for any health resolution you might want to make. Scroll iTunes or Google (GOOG) Play until you find a free app that sparks your interest. Start by downloading just one app, and commit to using it daily for 21 days, until it becomes an ingrained habit.

4 Reasons to Pay Your Credit Card Bill Before It's Due

Paid in full

There are many good reasons to never pay your credit card bill late, but are there any good reasons to pay it early? It would seem to go against all common sense to send in a payment well before the due date, but the more you understand about how credit cards and credit reports work, it can be smart idea under some circumstances. Here are four reasons why you might consider paying your credit card early.

1. Save Money on Interest Charges

When you carry a balance on your credit card account, you accumulate interest charges each day, based on your daily balance. So when you make a payment before the due date, you are lowering your average daily balance, which can reduce your interest charges significantly. Also, think of it this way: Since you earn very little interest from keeping money in a checking or savings account, but pay much more for that high-interest credit card debt, you stand to save money in the long run by making payments to your credit card as soon as possible. If you want to know how long it will take you to pay off that balance, this calculator can help you.

2. Improve Your Credit Score

When your statement period ends, and a statement is issued, that balance is reported to the major credit reporting agencies as debt, even if you ultimately avoid interest by paying your balance in full by the due date. That reported debt can lower your credit score if your balance is high during a particular month. By paying off all or some of your balance before the statement cycle even closes, you can reduce your debt-to-credit ratio and improve your credit score (you can see how this factor is affecting your credit scores by checking your free credit report data on Credit.com). This can be an especially important factor when you are applying for a home mortgage or another line of credit.

3. Pay Off Your Debt Sooner

By making an early payment, you are committing your funds to pay off your debt, rather than merely planning on doing so in the future. Without having those funds available for other discretionary expenditures, you are unable to change your mind and spend the money elsewhere.

4. Free Up Your Line of Credit

If you anticipate making a large purchase, you can quickly use up your line of credit before payment is even due. This is especially true when you consider that the typical statement period is about 30 days long, and your grace period, the time between statement closing and the payment due date, can be 21 to 25 additional days. And if you are traveling and have holds placed on your account by hotels or rental car agencies, then you may have even less of your credit line available by the time the due date arrives. By making early payments, you can free up your line of credit and ensure that all of your charges are approved.

When Not to Pay Your Bill Early

While there may be some very good reasons for cardholders to pay their bills early, it won't make sense for everyone. If you are always avoiding interest by paying your statement in full, and you aren't using a large amount of your credit line, then waiting until just before your due date to make a payment can be ideal. In this situation, you aren't saving any money on interest charges, and your funds will remain available to you in your bank account for as long as possible.