* A pile of cash in a bank account.
* A pile of cash which is used for buying index funds.
Even with a credit-card it is useful to have a pool of cash for short-term emergencies, such as job-loss, car-crash, or roof repairs. On that basis I keep £15,000 in an online bank account. The interest rate is terrible, but that's the price I'm willing to pay to make sure I can get cash to hand if I need to in very short term.
After that the real investment goes to index funds. Every month I allocate £300 to buying more shares. (In the past I used that money for peer-to-peer lending with zopa.com, I didn't lose money but I started to get concerned about the time it took to get money out. So I've ceased offering loans there.)
Index funds are pretty fun, and traditionally less risky than buying shares arbitrarily in individual companies. Still there is a risk. If your fund is small enough you're probably able to use an ISA, or similar, I forget what the max per year is, but it is pretty low.
ObRandom: I'm also overpaying my mortgage with the intention I'll own my house within the next 2-3 years.