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CLIT
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interest charge defeats the purpose of a cash back
#25059768 - 03/13/18 05:24 AM (6 years, 17 days ago) |
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I just paid off my debts though I shouldn't have debts because this is a cash back card and having debts incurs interests, which sucks. I buy using credit but pay it all off when the bill comes as if it were debit but slacked off in paying it all off right away.
when does an interest charge occur, every 60 days or every bill?
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outrageousgriot
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Re: interest charge defeats the purpose of a cash back [Re: CLIT] 1
#25059789 - 03/13/18 05:44 AM (6 years, 16 days ago) |
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My understanding is that if an entire billing cycle's balance isn't paid off, then whatever balance remains from the unpaid billing cycle will be used to calculate the interest charge which will be due in the next billing cycle.
That means come time for the next billing cycle, you will owe whatever balance was leftover from the prior billing cycle, its interest, and the new balance racked up from that billing cycle.
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badchad
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Re: interest charge defeats the purpose of a cash back [Re: CLIT]
#25059824 - 03/13/18 06:05 AM (6 years, 16 days ago) |
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You're charged interest on any balance that carries over at the end of a billing cycle. You need to pay the balance in its entirety each and every month (not just the minimum payment).
I've had a cash back card more than a decade now, and I've made thousands of dollars in cashback. It's only worth it if you don't carry a balance, as the interest rate far exceeds the reward rate.
-------------------- ...the whole experience is (and is as) a profound piece of knowledge. It is an indellible experience; it is forever known. I have known myself in a way I doubt I would have ever occurred except as it did. Smith, P. Bull. Menninger Clinic (1959) 23:20-27; p. 27. ...most subjects find the experience valuable, some find it frightening, and many say that is it uniquely lovely. Osmond, H. Annals, NY Acad Science (1957) 66:418-434; p.436
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occollegeboi
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Re: interest charge defeats the purpose of a cash back [Re: badchad]
#25064685 - 03/15/18 04:40 AM (6 years, 15 days ago) |
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Interest accrues on a daily basis. That is why a minimum payment on a credit card may go up and down depending on how many days are in a month.
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ashfiken
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Re: interest charge defeats the purpose of a cash back [Re: occollegeboi]
#25068020 - 03/16/18 07:18 AM (6 years, 13 days ago) |
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What if paying an interest bearing cc off you pay an amount one day like 300, and then bc of moving money around thru banks and such make a separate payment for the remaining amount say 400$? Will they charge you interest and make you come out of pocket again for those 3 days interest(likely a weekend) after which the second payment posts? Getting my minuscule last bit of debt paid/consolidated and ran into this thought Cheers
-------------------- hmm... "I'm naked and fearless... And my fear is naked." "life isn't worth living without the threat of death" "I got my plans in a ziploc bag, let's see how unproductive we can be" "nobody lives their lives fully except for bull fighters" My Trade List
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badchad
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Re: interest charge defeats the purpose of a cash back [Re: occollegeboi]
#25068274 - 03/16/18 09:37 AM (6 years, 13 days ago) |
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Quote:
occollegeboi said: Interest accrues on a daily basis. That is why a minimum payment on a credit card may go up and down depending on how many days are in a month.
No they don't.
If I charge $100 on my credit card on the first of the month, at the end of the month I will only owe $100.
-------------------- ...the whole experience is (and is as) a profound piece of knowledge. It is an indellible experience; it is forever known. I have known myself in a way I doubt I would have ever occurred except as it did. Smith, P. Bull. Menninger Clinic (1959) 23:20-27; p. 27. ...most subjects find the experience valuable, some find it frightening, and many say that is it uniquely lovely. Osmond, H. Annals, NY Acad Science (1957) 66:418-434; p.436
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occollegeboi
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Re: interest charge defeats the purpose of a cash back [Re: badchad]
#25072002 - 03/17/18 09:30 PM (6 years, 12 days ago) |
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Quote:
badchad said:
Quote:
occollegeboi said: Interest accrues on a daily basis. That is why a minimum payment on a credit card may go up and down depending on how many days are in a month.
No they don't.
If I charge $100 on my credit card on the first of the month, at the end of the month I will only owe $100.
Of course I was talking about if you already have an outstanding balance on the card. Say you have a $0 balance. You charge $100 and nothing more on march 1st. If you pay the whole $100 at the end of the month there is no interest. But let's say you only pay the minimum ($25.) or even more than the minimum but less than the total balance. Anything not paid will have interest accrued on a DAILY basis starting on the very first day of the new billing cycle. If you have an outstanding balance, it's better to make a payment at the beginning of the month rather than the end of the month because less interest has accrued. What you should do, if you have an outstanding balance, is, pay the minimum at the very beginning of the month. Any money you're left over with after you pay your other bills, put it towards the credit card before the end of the billing cycle so that your next billing cycle's minimum payment will reflect everything you paid MORE than the minimum on. Remember, you don't start paying the principle until AFTER you have paid the minimum. If you only pay the minimum, you are basically paying all interest until the final years of payments. Now of course for this example, a $100 balance is tiny and can be paid off in a few months or even right away. But it starts to get complex when you have like, more than $1,000 in outstanding credit card debt where it is going to take you some time to pay it off. This is how a mortgage is set up as well. Where you basically are paying nothing but interest for the first several years and don't really start paying the principle until way later. The only people who benefit from people paying less than the full balance are the bankers. If you are paying just the minimum then you are a slave, which I don't mean in a bad way. It was set up this way by the people who created it. Credit cards are how the mob went legit.
I've had times in my life where I've carried 0 balances, other times where I've carried more than a couple thousand in debt. If you pay the minimum, you will notice your minimum payment will go up and down each month depending on how many days are in the month. February will experience the lowest since there are only 28 days. I figured this out because I had made a large payment one month, but the next month, my minimum payment went UP. I called to ask why my minimum payment goes up and down and I was told that it is because interest gets accrued on a DAILY basis and that since there were "4 extra days in last month's billing cycle" that is why your minimum payment has "gone up $6."
Edited by occollegeboi (03/17/18 09:45 PM)
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CLIT
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Re: interest charge defeats the purpose of a cash back [Re: badchad]
#25074025 - 03/18/18 07:13 PM (6 years, 11 days ago) |
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Well said. I kinda knew but hesitated and ended up owing some interest charge that wasn't even worth owing since it defeated the purpose of a cash back. What are some of the best cash back rates you've seen? I've seen anywhere from 1% to 5% cash back rates.
Quote:
badchad said: You're charged interest on any balance that carries over at the end of a billing cycle. You need to pay the balance in its entirety each and every month (not just the minimum payment).
I've had a cash back card more than a decade now, and I've made thousands of dollars in cashback. It's only worth it if you don't carry a balance, as the interest rate far exceeds the reward rate.
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occollegeboi
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Re: interest charge defeats the purpose of a cash back [Re: CLIT]
#25076675 - 03/19/18 11:33 PM (6 years, 10 days ago) |
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I think rewards cards are better than cash back cards for people who need to carry a balance for whatever reason life throws at them. I have a Chase Visa Amazon Rewards card. I get cash for Amazon after spending (and paying) on the card. I can use the Amazon rewards even if I have an outstanding balance. Each time I make a payment I get a little money to spend on Amazon. It accumulates over time. The very first time I cashed in on my rewards I got a very nice temperature controlled food dehydrator for when I used to grow mushrooms. $60 value... For free!
Edited by occollegeboi (03/20/18 12:03 AM)
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CLIT
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Re: interest charge defeats the purpose of a cash back [Re: occollegeboi]
#25124600 - 04/08/18 10:56 PM (5 years, 11 months ago) |
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Rewards card "rewards" or "points" I think could only be used for the company that provided it (i.e. Amazon rewards card gets you to spend your rewards ONLY on Amazon). I have the same thing as well. Isn't a cash back card a bit more versatile and can be spent any place (your cash back rewards that is)?
Has anyone here ever opened as much card as possible just to get the rewards or cash back promotions before the deal ends? There's so many of them, it's almost as if I could get any stuff I want just from rewards or cash back alone since I'd be paying for stuff anyway (bills, food, gas, entertainment, etc.) might as well get the cards that pay me back, as long as I pay off the balance ASAP, right?
One card I think will pay you cash back you received for the entire year. Say I got $500 in total rewards for the year, the company would give me that much again by the end of the year. Good deal?
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CLIT
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Re: interest charge defeats the purpose of a cash back [Re: badchad]
#25124602 - 04/08/18 10:57 PM (5 years, 11 months ago) |
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He must be thinking of compounding rates. LOL.
Quote:
badchad said:
Quote:
occollegeboi said: Interest accrues on a daily basis. That is why a minimum payment on a credit card may go up and down depending on how many days are in a month.
No they don't.
If I charge $100 on my credit card on the first of the month, at the end of the month I will only owe $100.
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CLIT
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Re: interest charge defeats the purpose of a cash back [Re: CLIT]
#25150004 - 04/19/18 04:20 AM (5 years, 11 months ago) |
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any suggestion what a good % rate would be (that exists)? I've seen 5% cash back and or rewards. I've seen 1% cash back and another %1 back when paying off the debt. So technically that's just 2% cash back rewards. Might as well sign up for the 5% rewards card.
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badchad
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Re: interest charge defeats the purpose of a cash back [Re: CLIT]
#25150019 - 04/19/18 04:45 AM (5 years, 11 months ago) |
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Make sure to read the specifics. It's likely the 5% is on very specific categories of items or limited in some way. Likewise, make sure the 1% on "paying off debt" can be done without accruing interest.
I have a Chase card that gets unlimited 1.5% back on everything, and a separate chase card that gets 1%, but with rotating categories that give back 5%.
-------------------- ...the whole experience is (and is as) a profound piece of knowledge. It is an indellible experience; it is forever known. I have known myself in a way I doubt I would have ever occurred except as it did. Smith, P. Bull. Menninger Clinic (1959) 23:20-27; p. 27. ...most subjects find the experience valuable, some find it frightening, and many say that is it uniquely lovely. Osmond, H. Annals, NY Acad Science (1957) 66:418-434; p.436
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geokills
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Re: interest charge defeats the purpose of a cash back [Re: CLIT]
#25150409 - 04/19/18 10:23 AM (5 years, 11 months ago) |
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Best cards (in my opinion) are:- Citi DoubleCash Mastercard - This is the 1% back on purchases + 1% back on payments, for a 2% total bonus across the board with no limits and no annual fee. Make sure to have your bonus issued directly to your bank account, by check or in the form of a gift card, as when you credit the bonus toward your statement balance, you are giving up the 1% bonus on the portion of the balance you are paying off with the bonus.
- Citi Costco Visa - 4% back on annual gas purchases up to $7000, 3% back on restaurant and travel, 2% back on Costco purchases, 1% back on everything else. No annual fee although you need to have an active Costco membership.
- Chase Freedom Visa - 5% back in rotating quarterly categories, with the 5% applying only up to the first $1500 spent per quarter on the active category, 1% unlimited bonus after the $1500 and across all other categories, no annual fee. Takes a bit more management to maximize, so write the bonus category on a piece of tape on the back of your card each quarter to help you remember what you're getting the most bonus for.
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