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 Posted: Fri Sep 26, 2008 6:18 am Subject: Smart way to use a credit card? |
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I've had a credit card for the last three months and everything is going great - I don't carry a balance and pay everything in full online before there is even a bill. I basically use it as if it was a debit card - never buying anything I don't have the money for right now.
Here's my question...I want to use my card because I rack up points for every dollar spent. In a few months, the 0% interest rate is going to change to 16.9%. I want to have a big cushion of available credit showing on my credit reports so I plan on paying my charges in full before the billing date....so I can keep showing a 0 balance. The thing is...if I do that...they won't be able to charge me any interest. It'll obviously save me money...I wanted to make sure it was a good idea...I'm sure they wouldn't think so 
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debrag_25
Joined: 10 Jan 2007
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| Posted: Fri Sep 26, 2008 6:23 am Subject: reply |
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you've got a good plan there.of course they don't like it.the interest and charges is where they make there money.i like your plan,do not give a hoot what the cc companies are gonna think.
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paulmergel
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| Posted: Fri Sep 26, 2008 7:30 am Subject: |
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Great plan! Keep in mind also that even when the interest rate changes, as long as you keep using the card in the same manner, you will never actually pay any interest on it. For purchases, as long as you pay them off by the due date on the bill, you don't have to pay any interest. Cash advances are different though, and interest starts accruing immediately on them. So basically, even though your interest rate is going to change, as long as you keep paying off your charges each month, you will never pay any interest.
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alias1958
Joined: 31 May 2008
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| Posted: Fri Sep 26, 2008 8:39 am Subject: |
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I didn't know that until I'd had a credit card for a few years. Another reason why BASIC FINANCE should be a required course in high school, along with how to balance a checkbook, how much it costs to run a household, etc.
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smo65d11
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| Posted: Wed Oct 15, 2008 8:18 am Subject: |
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Ok now I get the whole thing about how the interest gets tacked on...so I have another question about my available credit ratio and how they will be affected by how they report...
If I make purchases this month in the amount of $900. My limit is $1000. What I normally would have done is pay that $900 before the closing date of that same billing cycle so that when I get my statement...it says $0. I want to make sure that the percentage of available credit/credit limit stays excellent so I wanted them to report each month that I have a $0 balance.
The question that came up was...if I pay everything before the billing cycle ends...does it appear to other companies who may be looking at my reports that I don't use my card at all? Or is there some way that they can still see that I'm using it but responsibly? Would it be better to let that $900 show on my current statement and then make the payment on time from there? I'm worried that if I do that...it'll drop my ratio and look bad...
I hope that makes sense
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debrag_25
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