Credit card confusion
Dec. 3rd, 2010 06:49 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
johnridleyI'm trying to sort out some rules and rewards and conditions and such on various cards. Mainly, Discover had me confused. I am no longer confused (on this point).
I have a balance transfer balance on the account at 0% interest (which they have extended forever for this particular balance). I charged about $96 on the Discover card back in about July or so, because I thought I'd get cash back, my payments would go towards the highest interest balance (per the reform laws) and I'd never pay interest (since my minimum payment is more than the amount I charged), but I started getting dinged for interest the next month, and up to the current month.
I finally got fed up (at 80 cents a month it took some time to build up steam) and called them and they explained that ONLY the amount over the minimum payment was subject to this rule, so I would have to pay the minimum payment PLUS the new purchase balance every month to avoid paying interest.
Now that I understand the rules I feel like I can use the card when it's prudent; before I figured they had some loophole that meant whenever I touched the card they'd have some reason to start charging interest, so I had resolved to leave the card in the sock drawer until the balance transfer amount was paid off.
For instance, between January and March they're doing 5% cash back on travel which includes hotels and gas, so it'd be silly not to put the hotel at Capricon and car fillups on it, if paid off every month. Apart from that their cash back is only 0.25% until you hit $3000 for the year, so I don't think I'll take that into consideration since I don't plan on spending that much in the next year.
The Paypal debit card that I just got, however, is a flat 1% cash back with no goofy promos or levels or anything to keep track of, so I plan to default to that for any purchase I can.
I feel like I'm slowly figuring this out.
I have a balance transfer balance on the account at 0% interest (which they have extended forever for this particular balance). I charged about $96 on the Discover card back in about July or so, because I thought I'd get cash back, my payments would go towards the highest interest balance (per the reform laws) and I'd never pay interest (since my minimum payment is more than the amount I charged), but I started getting dinged for interest the next month, and up to the current month.
I finally got fed up (at 80 cents a month it took some time to build up steam) and called them and they explained that ONLY the amount over the minimum payment was subject to this rule, so I would have to pay the minimum payment PLUS the new purchase balance every month to avoid paying interest.
Now that I understand the rules I feel like I can use the card when it's prudent; before I figured they had some loophole that meant whenever I touched the card they'd have some reason to start charging interest, so I had resolved to leave the card in the sock drawer until the balance transfer amount was paid off.
For instance, between January and March they're doing 5% cash back on travel which includes hotels and gas, so it'd be silly not to put the hotel at Capricon and car fillups on it, if paid off every month. Apart from that their cash back is only 0.25% until you hit $3000 for the year, so I don't think I'll take that into consideration since I don't plan on spending that much in the next year.
The Paypal debit card that I just got, however, is a flat 1% cash back with no goofy promos or levels or anything to keep track of, so I plan to default to that for any purchase I can.
I feel like I'm slowly figuring this out.
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2010-12-03 06:10 pm (UTC)I'm happy when the monthly cc bill is under 2K.
no subject
Date: 2010-12-05 01:17 pm (UTC)Currently, I use a BA-issued AmEx card that earns miles, (plus one free flight for P - anywhere in the world I happen to go to - when I spend £20K.)
I do most grocery shopping at Tesco - whose loyalty points can convert to BA miles and I use a Hilton Visa for those who do not take AmEx - Hilton points get free nights or can be converted to - you guessed it - BA miles.
In easily measurable terms, this earns me around £7K per year of travel perks - I'm not sure any cashback schemes would do as well.
If I didn't fly, however, I'd probably look at cashbacks, but between us, we spend between £25K and £30K on credit cards per year - and *never* pay interest or charges.
Maybe if they offered a 20% cashback...
no subject
Date: 2010-12-05 05:39 pm (UTC)Discover kind of invented cash back AFAIK, but it's kind of irritating that they run promos throughout the year so you have to keep track of things. Still, 5% cash back when they are running a promo is worth a few minute's time a few times a year, if it applies to things you'd be buying anyway.
The thing I have to watch for is that I am carrying a balance transfer balance on the Discover card. It's at zero percent interest, but since it IS a balance, that means no grace period. I'll only put things on the card that I already have the money for, then transfer the money the day the charges appear on the bill, so I'm only paying interest for 3 or 4 days (until the transfer completes).
It's pretty reasonable as cards go, it's 9.99% on new purchases.
no subject
Date: 2011-01-21 12:57 am (UTC)