When you use a credit card to make a payment, your recipient still gets paid on time, while you defer the actual outflow of your cash until your card bill is due. This lets you gain up to two months of extended payment terms.
How does it work?
The deferment period is depending on 2 factors:-
1. The billing cycle of your credit card
2. The grace period given by your credit card/bank issuer to remit the payment.
For instance, if your credit card billing cycle starts on 01/12/2022 and ends on 30/12/2022. The credit card issuer/bank will give you an additional 15-25 days to make payments prior to incurring any charges to your credit card. In this case, you will have until 15-20/01/2023 to remit the payment before the credit issuer imposes charges to your credit card for late payment. These provide you with a window of 30-55 days to free up your cash flow.