What is the Hybrid Method?

The hybrid method allows you delay any direct expenses being spent using the line of credit. Ideally, we want to make sure that our average daily balance stays low so that our average daily interest stays low. (Here’s an article explaining the concept of Average Daily Interest)

The idea behind the hybrid method is that we can use a credit card to handle most living expenses instead of directly drawing the funds out of the line of credit for expenses. By using a credit card for daily expenses, and paying it in full every month, you’ve basically used all of that money at 0%.  Remember, the moment you draw funds out of the line of credit, your interest charges go up. We want to avoid this.

Preferably, you would use a card that gives you some kind of rewards points, either cash, travel, or membership credits. If you pay your card in full every month, those rewards cost you literally nothing.