Let's Talk About Velocity Banking with a Credit Card 

I hope you understand better to realize how bad a financial practice this is.

Very interesting. But it still hasn’t quite “ clicked”. I mean… you’re just running the money in circles, but at end of the month, the credit card balances still have to be paid. What happens next week when you need another 48 for Starbucks a? Or 199 for insurance? Sooner or later… the bills have to be paid with real cash money

WOOOHOOOO!!! I remember when I was binge watching Christy's videos and I was like WAIT.A.MINUTE...I've GOT it!!! Go Connie!!! YES!!! 😁

This is smoke and mirrors. Just pay off all but 1 card if you really can't live without it and pay off with you extra. Then roll the money for other cards into your 1 card. Once it's paid put all your extra on your mortgage. You are robbing peter to pay Paul and your doing a ponzi scheme on yourself. Cut out things like Starbucks and eating out and just pay your stuff off!

When I first started, I'd say the first 6 weeks, I was still having my miscellaneous bills make my credit card payment but I was also paying the interest. I wasn't able to mine much cash flow doing it this way ($56 from two cards, if we're using the examples shown in this video), but it was something. And it's also crucial, when mining your credit cards for cash flow, to wait for that balance to come down before paying the miscellaneous bill with the credit card, otherwise we're adding to an already high balance.

@@askmehowibudget The balance needs to come down how far? Where in your videos can I see the explanation for this? Thank you.

I find your comment interesting simply because a lot of people who bought them struggled. Since she no longer uploads, the people can't be helped. That's the reason I find your comment interesting. Have a great day

If I'm reading your comment correctly, it sounds like you're suggesting people put all their expenses on ONE card and apply the cash flow from that one card to another card that has a higher rate. But if people have multiple credit cards, what would you have them do with all the minimum payments they have due on those other cards? When I started my Velocity Banking journey I had 6 credit cards that I could use in my Velocity Banking strategy. Prior to velocity banking, I was having to come up with $1,000 in credit card minimums. But when I figured out I could have my miscellaneous bills and expenses meet the monthly obligation on my credit cards, I was able to take that $1,000 I was shelling out every month in minimum payments across 6 cards (and making no progress paying down my debt) and redirect it to my primary card. That's what I teach on this channel.

@@askmehowibudget Yes, that's what I'm saying. Doing it that way, you are moving your debt to the lower interest card while also paying down the high interest card. While I understand your preference for increasing cash flow, without additional money from somewhere, all you are really doing is moving your money from your left hand to your right hand. With multiple cards, you put all possible expenses on the card with the lowest rate (a 0% card is great if available), pay the minimum payment on the rest, and put all extra cash towards the card with the highest rate. This saves you the most money and helps pay off the debt the fastest. "But when I figured out I could have my miscellaneous bills and expenses meet the monthly obligation on my credit cards...." That's basically what I'm doing, but instead of doing it on each card, I'm doing that across all cards. Let's say you have $500 in bills/charges that you can move to your credit cards to free up cash flow. You can A) split these up and send the expenses to 5 different cards to cover the monthly payments for those (like you typically do), or you can take the $500 that you've saved and send it all to the card with the highest interest rate. What was your cash flow when you had $1000 in credit card minimums?

Both of you make a great point. Just a different approach. The bigger the cash flow the less interest matters.

Not many banks allow this.

Hi, Patricia, yes, you can absolutely make partial payments as long as the full amount is paid on or before the due date. When you pay online, you are offered several options: pay the balance, pay the current statement balance, pay the minimum due, or “other amount.” You click “other amount” and then manually type in what you want to pay.

@@askmehowibudget That is hilarious! I’ve been doing the velocity banking, I hit “ pay other” and pay over the min payment, it never occurred to me that I could spread smaller amounts out over a couple of payments, (as long as it was before the due date of course!) Mindblown! Thank you!

@@Patricia.R. 🙂

The point is to pay down the credit card with the highest minimum payment. When I redirect the money from multiple cards to one card, I pay the one card down faster than if I were paying the traditional way. And when I strategically match credit cards with bills, I’m able to reduce the average daily balance on those cards thereby reducing the interest that will accumulate while I’m employing this method. The logical point is get out of debt as fast as possible.

My variables are 300 per week. I have 5 people here. It's definitely possible where I am.

In my immediate household, just my husband and me. (But we have 6 adult children, so come holiday season if they're in town, you'll see that budget skyrocket.) But we currently have a couple of things going for us in this area of our budget: In 2020 we moved onto a family property with my husband's mom and dad, grandparents, and aunt and converted two of the barns on the property to residences. We each have our own place but we're able to come together for community meals, grow food, etc. My mother-in-law started a home baking business and she grows micro-greens, has her own chickens for fresh eggs, grows fruits and veggies, cans, freeze-dries, bakes bread - we are her food tasters. :-) 🙂 Also, I work out of state 3-4 days a week and my meals are provided for. When I'm gone, my mother-in-law brings food over to my husband. Prior to moving to the farm, and prior to my mother-in-law getting her garden, canning, and baking business going, we were spending a fortune on groceries for the two of us. But honestly, I never learned how to cook and certainly didn't know how to meal plan or shop or coupon. My husband refers to my cooking skills as "tragically cute." My mom once told me anyone who can read can cook. Then she came over for dinner and as she hid her food in her napkin, she asked if I was illiterate or dyslexic. 🤣When there's a family potluck, my sister tells me to bring the paper towels. My eldest son, at the age of three and while visiting his grandma, didn't recognize scrambled eggs because, as he said, "Those aren't eggs, Grandma, they're not black!" I've got a million of 'em! So if you want suggestions on how to lower your food budget, I'm going to have to hand it over to someone else because that is not my area of expertise but I would love to hear what folks are doing to save!!!

Excellent question! This will make a great video. I'll answer it on the whiteboard tomorrow and post probably tomorrow evening.

Yes! The bill/expense becomes your credit card minimum payment (you just have to make sure the bill/expense meets or exceeds your credit card minimum or you'll need to make up the difference). And then because you don't have to pay those expenses AND your credit card minimums, you use the money you were GOING to apply to the credit card minimums and apply it to that primary card. So, you're not paying down the other cards they're just in a holding pattern until you get that one card paid down and then you work the next card the same way and so on and so forth until they're all paid off. Now, for anyone reading this who has a question about the interest, yes, interest continues to accumulate. Any card that carries a balance will be charged interest once a month based on the average daily balance. However, when the entire minimum payment is being collected from several credit cards and being redirected to one card, that one card gets paid down faster than the interest across multiple cards can accumulate. So even with interest, your main card gets paid down faster AND you still come out net ahead.

Thank you! And yes, the car does still incurred interest however, I don’t really look at it like that because you are covering an expense and at the same time the payment is getting met so I don’t really see it as you are paying anything towards interest. Maybe I’m looking at it the wrong way? But also, if you think about it, your expense is probably more than your minimum payment by a fair amount so you’re actually a larger payment to the card anyway, then just a minimum and going to naturally pay down faster that way.

@@nessfittraining9679 Yes, but just to be clear to others who might be reading this: You're still putting an expense on the card. However, your payment to the credit card is the exact amount of that expense. AND, the longer you can stretch between the time that you make that payment to the credit card and you charge that expense, the better. BECAUSE, the payment brings the credit card balance down (meaning less interest charged) and the expense brings the balance right back where it started.

That’s great, okay I understand even more now where I was leading myself wrong slightly but this is still an amazing tactic! Looking forward to watching more of your videos, thank you!!

@@askmehowibudget This point is key to emphasize with this process, but the power I see in this training is cash flow management. If you are a detailed person, at least when it comes to your money, then it seems like a lot of fun and it is empowering to play with the options. After all, we are not all going to be real estate moguls. :) #cashflowmanagement#redirectionataprice#bypassingpeterforthemomenttocalmdownpaul

Excel, Google sheets, and a smart form format are in the works!

Hi! You're primary card is always going to be the one with the highest minimum payment due. Not necessarily highest interest, just highest minimum payment (it will make sense as you learn more about velocity banking). Your sleeper cards will be the exact amount of the bill you're matching to it. So if you're cc (not your primary card, but one of your multiple other cards), if that cc has $185 minimum payment due, and you have a monthly bill that is $195, you'll put $195 on that sleeper card. And when that bill comes due, you'll pay it with that cc. Caveat: if you are maxed on that card, make your payment for the exact amount of the bill you're matching to it AND whatever your credit card interest was on your statement. I'm not taking on any more case studies at this time until I catch up on my backlog. Keep watching the videos and asking questions. I make videos off the questions I find in the comments. 🙂

When ever you run an expense (bill match) through a LOC/CC you gain the minimum monthly payment on the LOC/CC as cash flow. Old Way Thinking: 146 (CC5) + 191 (Insurance) = 337 [You have to come up with 337 dollars] VB (Bill Matching): 191 insurance (bill) -> satisfies CC5 146 monthly payment on the card -> Insurance 191 paid from CC5 satisfies the insurance expense. So the 146 minimum payment on the CC5 is doing 2 jobs. Let me know if this helps.

Hey you should start a channel this you give good advice.

It’s an expense I have budgeted since I’m on the road a lot.

I pay for it with my existing primary card. It's a set-back, for sure, but the primary card gets paid down faster than everything else so that's where it gets allocated.

@angieconcepcion5662 send me your numbers and let me take a look. askmehowibudget@gmail.com

It's going to be several months before I can take on any more case studies, my inbox is full and I already have a long waitlist. I can tell you, it takes a while to understand. I binge watched Christy Vann's videos (Vanntastic Finance) for 6 weeks before I understood how to do Velocity Banking with ONE credit card, and another 6 weeks before I understood how to do it with several credit cards. You'll get it. In the meantime, you can ask questions here. I make videos based off questions I see in the comments. You might also want to join Christy's Facebook group. There are a lot of helpful people in her forum that can help you along the way. 🙂

Thank you. I did just join the FB group. I was approved for a 50000 HELOC, but after watching your HELOC video, I don't think I'm going to get it. We haven't closed on it yet. If I can get this concept soon, I'm going to try and use this system. It makes great sense, I just have so many credit cards, so just trying to figure out where to start! Also, when I make the extra payments, do I pay the payment as an "other" payment or a payment? Does that makes sense?

@@6155ish the great thing about this is you can make payments WHENEVER you want. If you watch my Money Tracker videos you'll see I make payments every week (because I get paid every week). In the case studies, it would depend on when they get paid.

The short answer is no. And no. The long answer: I stopped all autodrafts. If a card is "slept" it means I'm paying it with the exact amount of a bill that's due. For example someone might do this: Credit Card A is paid the exact amount of child support. (They wait for that amount to come off the balance of their credit card) Then they use Credit Card A to pay child support. Credit Card B is paid the exact amount of car insurance. (They wait for that amount to come off the balance of their credit card) Then they use Credit Card B to pay car insurance. Credit Card C is paid the exact amount of the phone bill. (they wait for that amount to come off the balance of their credit card)Then they use Credit Card C to pay their phone bill. As long as the bill that is matched to the credit card is for the same amount OR more than the credit card's minimum due, then you don't have to pay the credit card minimum due ALSO because the AMOUNT of that miscellaneous bill SATISFIES that payment. It BECAME your payment. (That's why the bill has to be for the exact same amount of the credit card OR more). AND when you're using your PRIMARY card, you don't have to make that minimum payment when it comes due either. BECAUSE... when you're making payments on your primary card each week to cover your groceries and gas, you're typically spending more on groceries and gas in a week than the amount of your credit card minimum payment, right? I know my most expensive card had a minimum due of $305. That $305 was the minimum due payment for the MONTH. I spend more than that on groceries, gas, and my miscellaneous (BUDGETED) items in a WEEK. So that first week back in June when I paid my primary card for the $382.15 I spent on my budgeted groceries, gas, etc I more than met that $305 minimum payment due. (IMPORTANT: just make sure when you're starting out that the minimum will be met by due date. Meaning, if you're starting this strategy on Saturday and you're primary card is due on Sunday, you're going to have to make that minimum payment and go forward from there.) Remember, these are not items that are running up your credit cards. You are only putting on the card what you would have to spend ANYWAY. And you are only putting these items on the card AFTER you paid the card the exact amount you're ABOUT to put on there. By paying bills this way, having your miscellaneous bills pay your multiple credit card minimums and your groceries and gas dollar amount be your payment on your primary card, you have freed up all those former credit card payments as cash flow which you now have available to pay towards your primary card. For me, instead of paying out $1,000 a month on credit card minimum due payments and making ZERO progress, I now have my miscellaneous bills meet those credit card payments and I use that same $1,000 to pay down my primary card. My primary card is always going to be the one with the highest minimum payment. Why? Because I don't want to make that minimum payment! 🙂 I hope that helps. 🙂

Oh okay. Thank you for such a thorough explanation. I understand now. I just have always been on automatic minimum payment so I am not late but with this method as long as I make over the minimum payment sleeping it with a bill the automatic payments are not necessary. I am kind of having a duh moment here lol!!!

I also had all of my cards on auto pay, I am still afraid of missing a payment so what I am going to do is make an expense payment to my card but auto pay before expense is to go cover that minimum, then set auto pay for that expense when it is due. I just think it would be confusing I may forget to get them paid on time if I don't autopay.

@@donna4535 I agree with you. I have not stopped auto but I do cancel the upcoming auto payment if I am making a payment for that month at that is for more than the minimum payment due.

Ooh! Excellent question! I don't know the answer to that. I'll have to research it. If anyone has an answer, please share! I'll do a video, I just need to learn how and try it out.

You can't.

@tiffanyhall23NC I do believe this can work for you! Do you know why they lowered the limit on 3 of your cards?

@@askmehowibudget I am assuming because I was carrying high balances. it doesnt take much for chase which was the latest that dropped my balance. that one hurt. lol

@@tiffanyhall23NC I'd call and find out exactly why they lowered the limit and what it would take to reinstate it. It may as simple as getting the right person on the phone at the right time to correct it.

@@askmehowibudget I called chase, they said balance too high on my cards. So i took a hit on my credit score for a no go. Oh well. i can get it back up.

You can do it! Get on track once you come back from trip and after the holiday season is over. My numbers are very similar to yours, and I'm slowly getting it together. I'm still learning how to "sleep" certain cards. Stay encouraged!

I keep $100 in my checking account. Other than that, no. If there were a situation where I had to get cash fast, and I couldn't wait until payday, I'm fortunate that I have family members who would float me what I need in an emergency situation. And they also know I absolutely would rather would walk naked down the frozen food section of my local grocery store, shooting firecrackers out my tail end, then ask them for help. So they KNOW if I'm asking, I really, REALLY need it. 🙂

@@askmehowibudget thanks for the amusing reply,

@@donna4535 lol you got me pre-coffee. 🤣

I myself keep 40-100 (in 20s) in my wallet in case of emergency. If I need more I just balance pull it from my LOC.

Actual payday for this video was Friday, October 6th.

@@askmehowibudget ok then this is where I get confused on my end since I get paid every 2 weeks and my wife gets paid on the 15th and 30th.. you have mortgage and utils due on the 2nd and 4th. did you just pay them late on the 6th?

We have a mortgage and utility buffer. We decided to move to a family farm so my husband’s grandparents wouldn’t have to go into a nursing home. We have 4 individual households contributing towards the mortgage and utilities. We each contribute 30% of our net income to the family fund. Family members are paying anywhere from $420 to $1,200 for their individual space and utilities. My husband and I are the only ones paying based off an average income since our income varies. Everyone else contributes based on their fixed retirement income. So with all of us contributing, there’s a surplus and we use that for capital improvements and a buffer in case anyone loses income. We don’t have a fixed schedule for when our shares have to be deposited, just so long as they clear before the end of the month. That’s why I’m holding back $300 a week. If my husband is out of work for whatever reason (he’s a contractor), we have yet another bit of a buffer.

In 10 years! Now go find another parade to rain on. 😘

@sharon4094 what does 10 years have to do with anything? I'm also not raining on anything. I'm giving advice that would work vs this velocity B.S. that does nothing

​@@gofigure84 I didn't write that to you. Interesting 🤔

@@WeAreNotGoingBackEver you didn't write what to me? Your reply to my and the only reply to my comment was: "In 10 years! Now go find another parade to rain on." So you still haven't answered what 10 years ment and further raised doubts about your grasp on reality.

Video isn’t for you, it’s for folks in debt.

The best way to get out of debt is to maximize income, slash all expenses down to the bare essentials and attack the highest rate loan first. Or, if you prefer, use the snowball method. Velocity banking is a needlessly complicated strategy which can (at best) save a few bucks. At worst, it will sap your brainpower and motivation with too many moving parts.@@tony72gut

You clearly make good money.

With 700k in the bank just LOSING money acting like you know how finances should be done is embarrassing.

"In the bank" is another way of saying "in possession". Velocity banking is a scam. @@seraph...4473