Current Events > Do you typically pay your full credit card balance?

(+) Yeah! (+)

Giant_Aspirin posted...

when you put something on the card you're borrowing that money until you pay your balance. carrying over a balance has absolutely no advantage at all, from a credit score perspective.

Also this.

0% APR cards are attractive for people who need it for a particular purpose. When I was applying to medical school after undergrad, I had to basically come up with several thousand dollars I didn't have for application costs, travel, etc. A 0% APR card was essentially a "free loan" to charge the expense up front and slowly pay it off over 18 months. I could swing $50 extra bucks a month at the time. Paying a few grand up front was harder. This made it so I didn't have to take an extra year off to just apply and not get charged interest.

If you just have a card for the sake of having a card, the 0% APR doesn't really mean anything.
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Statement balance
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Yes, the whole reason I use the credit card is better fraud protection and rewards points. I make all of my normal purchases on the CC and then pay it all off at once. This gives me the benefit of always having cash on hand in-case of emergency. Typically I will pay off the entire balance as opposed to the statement balance, and I pay it off after every paycheck.

Everyone should do it that way tbh, debit cards are useless by comparison.
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ThyCorndog posted...

yeah maybe it's not necessary but what's wrong with paying the full thing? sounds like it's "bad" because you don't really have to. but so what?

You technically improve your credit score faster with some credit utilization over none.

It's one of those things where if I don't suffer any penalties (i.e. no interest charged), I'm going to use it in the way to maximize my score.

I use the term "bad" loosely. Obviously not having debt is good, but it's a superstitious practice. I won't fault them for it, but it's giving up every perk available to you. My credit let me finance my old leased car at 2%.

2% for a used car is absolutely insane. Even with good credit, 4.5-6% is more standard. But I utilize my card to maximize my credit score and not get charged interest.
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MC_BatCommander posted...

Yes, the whole reason I use the credit card is better fraud protection and rewards points. I make all of my normal purchases on the CC and then pay it all off at once. This gives me the benefit of always having cash on hand in-case of emergency. Typically I will pay off the entire balance as opposed to the statement balance, and I pay it off after every paycheck.

Everyone should do it that way tbh, debit cards are useless by comparison.

First part is correct, credit cards are the safest way to purchase goods, online or in person. Banks will hold your money and be more stingy to reimburse you for fraudulent charges.

Your advice that everyone should pay off the full balance is incorrect, as you are draining money for cash emergencies if you are paying hundreds of dollars more than is needed to pay the full balance.
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krazychao5 posted...

Your advice that everyone should pay off the full balance is incorrect, as you are draining money for cash emergencies if you are paying hundreds of dollars more than is needed to pay the full balance.

But then you have a card with no balance, so you can just use that for the emergency. same result.
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lilORANG posted...

But then you have a card with no balance, so you can just use that for the emergency. same result.

Liquid cash is better since not everything accepts a credit card, but in most cases they do so it really only applies to certain exceptions.

I guess one shouldn't say someone is "wrong" for paying off full balance, but it's purely 100% psychological and some small perks are not being utilized as a result.

It's an okay practice, but it's superstitious.
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BlameAnesthesia posted...

Giant_Aspirin posted...

when you put something on the card you're borrowing that money until you pay your balance. carrying over a balance has absolutely no advantage at all, from a credit score perspective.

Also this.

0% APR cards are attractive for people who need it for a particular purpose. When I was applying to medical school after undergrad, I had to basically come up with several thousand dollars I didn't have for application costs, travel, etc. A 0% APR card was essentially a "free loan" to charge the expense up front and slowly pay it off over 18 months. I could swing $50 extra bucks a month at the time. Paying a few grand up front was harder. This made it so I didn't have to take an extra year off to just apply and not get charged interest.

If you just have a card for the sake of having a card, the 0% APR doesn't really mean anything.

Ok sounds good. Yeah I just got a card because I'm 29 and figured I should probably have one. I'm pretty responsible. Have a good amount of savings so I shouldn't ever really get in too much debt. I'm just using it to buy groceries and gas. Then pay it off. Or random purchases. Like maybe buy a switch game on it sometimes instead of on my debit card.
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When I had one, I'd spend on it, and each day transfer funds to it to pay it off completely. I was spending something like 4x my credit limit per month, but because I was never over the limit at any given time (due to also making these payments) it was never a problem. Meanwhile, dem reward pointz...

But nowdays, I figured the rewards weren't worth the fees, and so I've gone back to just a debit card.

Disclaimer: If what I've heard about US banks is true, you probably WILL get in trouble and hit with over-limit fees / interest or whatever if you try what I did, in the US. Banks are a bit nicer here.

Also note, having one or the other is pretty much essential here. No one bothers with cash anymore, and some shops are starting to refuse cash over a certain value. Also, in the case of debit cards, they're $5 per year, or possibly even free, depending on the type; with almost no other fees (there's something like a 20c fee for using a different bank's ATM, that's pretty much it). The ones that you can actually use online / etc as if they were credit cards cost the $5; ones you can only use at ATMs or POS terminals are free.
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DragonGirlYuki posted...

KamenRiderBlade posted...

I pay the full balance.

I hate having debt.

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i keep my own budget and pay back what i put on the card that month.

if i have a 0% apr card i allow myself to "move" some items to a future months budget.

i dont like paying interest.
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DarkTransient posted...

When I had one, I'd spend on it, and each day transfer funds to it to pay it off completely. I was spending something like 4x my credit limit per month, but because I was never over the limit at any given time (due to also making these payments) it was never a problem. Meanwhile, dem reward pointz...

But nowdays, I figured the rewards weren't worth the fees, and so I've gone back to just a debit card.

Disclaimer: If what I've heard about US banks is true, you probably WILL get in trouble and hit with over-limit fees / interest or whatever if you try what I did, in the US. Banks are a bit nicer here.

Also note, having one or the other is pretty much essential here. No one bothers with cash anymore, and some shops are starting to refuse cash over a certain value. Also, in the case of debit cards, they're $5 per year, or possibly even free, depending on the type; with almost no other fees (there's something like a 20c fee for using a different bank's ATM, that's pretty much it). The ones that you can actually use online / etc as if they were credit cards cost the $5; ones you can only use at ATMs or POS terminals are free.

A lot of places will waive the fee if you call/ask. If not, you can always downgrade the card. There's always the fraud protection/extra step in between your liquid assets by using credit over debit.
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BlameAnesthesia posted...

DarkTransient posted...

When I had one, I'd spend on it, and each day transfer funds to it to pay it off completely. I was spending something like 4x my credit limit per month, but because I was never over the limit at any given time (due to also making these payments) it was never a problem. Meanwhile, dem reward pointz...

But nowdays, I figured the rewards weren't worth the fees, and so I've gone back to just a debit card.

Disclaimer: If what I've heard about US banks is true, you probably WILL get in trouble and hit with over-limit fees / interest or whatever if you try what I did, in the US. Banks are a bit nicer here.

Also note, having one or the other is pretty much essential here. No one bothers with cash anymore, and some shops are starting to refuse cash over a certain value. Also, in the case of debit cards, they're $5 per year, or possibly even free, depending on the type; with almost no other fees (there's something like a 20c fee for using a different bank's ATM, that's pretty much it). The ones that you can actually use online / etc as if they were credit cards cost the $5; ones you can only use at ATMs or POS terminals are free.

A lot of places will waive the fee if you call/ask. If not, you can always downgrade the card. There's always the fraud protection/extra step in between your liquid assets by using credit over debit.

Debit cards get the same fraud protection as credit cards here. There really isn't any difference in practice, except for fees, reward points, and whether you're spending against money you've got in your account or a line of credit.
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DarkTransient posted...

Debit cards get the same fraud protection as credit cards here. There really isn't any difference in practice, except for fees, reward points, and whether you're spending against money you've got in your account or a line of credit.

Oh that's interesting. I'm pretty sure here too, it's just more of a hassle of a process because the amount disputed is frozen until it's resolved, whereas with a credit card it's more.....ephemeral? I guess?
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DarkTransient posted...

Debit cards get the same fraud protection as credit cards here. There really isn't any difference in practice, except for fees, reward points, and whether you're spending against money you've got in your account or a line of credit.

Where do you live though?

Credit cards and basic debt cards are all free in the US and only higher tier credit cards cost money.

Plus credit cards here have TONS of benefits even on the free ones like a free extended year of warranty, price match protection, accidental damage protection for 90 days, return protection for 90 days, free shipping benefits, and deals/offers like Amex Offers and Discover Offers, which are quite insane sometimes.
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Vol2tex posted...

Alkaloid posted...

Statement

Full balance will never be paid until I either cancel the card or die

Why?

1) less work on my end
2) I'm not in danger of going over my limit if I keep a balance
3) I'm not being charged interest for the amount in excess of the statement until next month

Therefore I will only pay the debt in full when I no longer use the card (cancellation or death, whichever comes first)
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PIITB415 posted...

DragonGirlYuki posted...

KamenRiderBlade posted...

I pay the full balance.

I hate having debt.

even tho i know it's not always the best move financially
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