What is the Credit Card Float?

If you’re starting to look after your personal finances, there are seemingly gazillions of personal finance terms that you’ll start to encounter online. One of these is the Credit Card Float.

What is the credit card float?

Well, you're 'floating' on your credit card if you:

a) can't afford to pay the whole thing back today

AND

b) pay all your other expenses for this month.

If you can't, it means that you are borrowing from the future in order to pay your currently life/work expenses, and that you're in debt. You might be clearing that debt in full each month, but by then you've built up another month's floating debt... and so the cycle goes on.

Getting off the credit card float is a step in your personal finance journey: it means that you’re no longer living paycheck to paycheck and are starting to accumulate money for expenses (big and small, expected or unexpected) and for your other goals.

Being on the credit card float isn’t inherently bad. It is simply debt (and is definitely only short-term debt if you’re paying the credit card off in full every month). So if you’re on a debt-free journey, getting off the credit card float will be a part of that.