Creative Floats Are Great But Creating Float Is Better

Luca Rassenti
June 20, 2024

As a business you need great products, services, marketing, etc. but you also need excellent execution and extreme operational efficiency - and that includes the operations around your cash. If you are a business that is NOT being super efficient about the cost (or opportunity cost) of your cash, you are leaving money on the table. 

In finance float is:

Float = firm's available balance – firm's book balance

For example, the available balance in your account would be larger than your book balance if you had written a check to pay a bill that has yet to be cashed and the funds have yet to be withdrawn from your account.

One way you can create a cash float is by using credit card float. Credit card float is the period between when you make a charge on your credit card and when you begin to get charged interest on those purchases (typically the day after your payment due date).  For example, let’s say you make a large purchase on January 1 and no payment to your credit card is due until February 1.  If you make your full payment on February 1 then you will have borrowed money for one month and paid no interest.  If you did have the cash to pay the bill on January 1, you will also be creating a cash float whereby you have excess cash that has technically been spent but is still available in your bank account.

Is there a way to take advantage of this cash float? Yes, cash float can be invested in safe, short-term, liquid investments. With short-term US government bonds currently sitting above 5%1 - there is a significant amount of cash you could earn if you can manufacture this kind of float.  

For example, let's say each month you slowly gain revenue and expenses. At the end of each month your expenses total 100,000 and you pay off all those expenses with your credit card leaving your accumulated cash in the bank and extending to yourself a one month interest free loan. How much money would you make over the course of one year with a 5% return on investment?

You could make an additional $5,000 per year at a 5% interest rate. This could be a significant profit contribution and obviously scales with the size of your business and float (e.g. a business who could float $1M monthly expenses could realize $50,000 in investment income under the same circumstances and assumptions). 

Let’s say you are smart and you use a credit card that also gives you a rebate (think cash back or similar rewards).  What could a credit card rebate add to your float returns?

By creating $100k float each month and investing that float in safe and liquid investments you could earn $5,000 in interest and $18,000 from credit card rebates totaling $23,000. Creating and using float is an excellent example of efficiency in managing idle cash.


1 Source: (as of May 1, 2024)

Information, including hypothetical projections of finances, are provided for informational purposes only and should not be construed as investment, financial, legal, or tax advice. Hypothetical projections discussed may not take into account taxes, commissions, other available investment alternatives, market fluctuations or other factors which may significantly affect potential outcomes.

This material should not be considered an offer or recommendation to buy or sell a security, or a recommendation of any specific investment or strategy. You should consult your own financial, legal, and tax advisors before engaging in any transaction. While information and sources are believed to be accurate, Treasure does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information. For more information about Treasure, please visit

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