4 ms·

You don't have to pay immediately to avoid interest. They aggregate all your bills within a given 30-day billing period, then you have 30 days from that date to

You don't have to pay immediately to avoid interest. They aggregate all your bills within a given 30-day billing period, then you have 30 days from that date to pay. Interest only begins to get accrued after that last deadline. If you wanted to, you could have the credit card companies float you a purchase for almost 60 days without interest if you timed your charge and the payment right.

jjav 5y ago
> float you a purchase for almost 60 days Indeed! For very large payments I try to time them for the day after the close of the cycle, so I get those ~60 days of free deferral.
anyfoo 5y ago
Thanks, I understand that. Paying "immediately" was partly hyperbole, partly that I wouldn't forget about it when I started out. I've gotten accustomed to it now.
- zacharycohn 5y ago
  I have met many people who actually don't understand it and think interest starts accruing the moment you swipe! Important to be accurate.
- dataflow 5y ago
  Btw, for people who aren't living paycheck-to-paycheck, the interest accrual isn't the real issue to worry about. Imagine: if you spend $300 in a month, and miss your payment by a whole month once in a while, even at a crazy 20% APR, you'll have to pay $5. Unless you only have a few dollars to your name, it's probably not going to suddenly break you. The real issue, I think, is the impact on your credit history for missing a payment entirely, i.e. not paying the minimum amount due. Even if it's $1, you need to pay all of it. That's the real penalty to worry about.
  - jjav 5y ago
    > if you spend $300 in a month, and miss your payment by a whole month once in a while, even at a crazy 20% APR, you'll have to pay $5 Careful with this though. The interest rules are very complex. One would think you pay the interest + penalty + balance in full and that's that, but no. Once the account goes into "charging interest" mode, it keeps charging interest on subsequent months even if you pay in full as long as there is a balance on the day of the cycle close (which if you're using the card, there always will be!) The way out of that trap is, if you ever have a late payment, stop using that card entirely and pre-pay the entire balance (including charges not billed yet) before the close of the cycle. The goal is to get a statement with $0 balance. That will reset the account state to normal.
    - dataflow 5y ago
      Wow. I knew that balance transfers had similarly terrible rules, but I hadn't realized that normal usage can end up like this too. That's so... predatory. How is this even legal? If you pay everything in full such that your balance is $0 on a given day, what are they even charging interest on at the end of the billing cycle? The grace period just goes away for the whole billing period?
      - jjav 5y ago
        > such that your balance is $0 on a given day I'm not sure about that one. Maybe getting the balance to zero on any given day (not just cycle closing day) is enough to reset the account? I don't know. But I know they'll keep charging interest every month even if you pay in full every month, once the account goes into that state due to a single delayed payment. Looks like it's called residual interest? https://www.thepennyhoarder.com/debt/residual-interest/ https://www.thepennyhoarder.com/debt/residual-interest/
  - conductr 5y ago
    The not paycheck to paycheck people I know, myself included, charge everything they can and put the credit card on auto pay for full balance. So in my case at least, your $300 is more like $10,000 monthly. I’d be pretty mad if something happened and I owed $100+ of interest but like you said, not as mad as having the late payment show up on my credit history Should mention I make ~$300 a month in cash back by doing this and that’s my main motivation. I actually hate the idea of cash back as I realize it just adds cost to the system but I’m just one dude and the world has spoken on the matter so I may as well get what I can out of it.

jjav 5y ago

> float you a purchase for almost 60 days Indeed! For very large payments I try to time them for the day after the close of the cycle, so I get those ~60 days of free deferral.

anyfoo 5y ago

Thanks, I understand that. Paying "immediately" was partly hyperbole, partly that I wouldn't forget about it when I started out. I've gotten accustomed to it now.

zacharycohn 5y ago
I have met many people who actually don't understand it and think interest starts accruing the moment you swipe! Important to be accurate.
dataflow 5y ago
Btw, for people who aren't living paycheck-to-paycheck, the interest accrual isn't the real issue to worry about. Imagine: if you spend $300 in a month, and miss your payment by a whole month once in a while, even at a crazy 20% APR, you'll have to pay $5. Unless you only have a few dollars to your name, it's probably not going to suddenly break you. The real issue, I think, is the impact on your credit history for missing a payment entirely, i.e. not paying the minimum amount due. Even if it's $1, you need to pay all of it. That's the real penalty to worry about.
- jjav 5y ago
  > if you spend $300 in a month, and miss your payment by a whole month once in a while, even at a crazy 20% APR, you'll have to pay $5 Careful with this though. The interest rules are very complex. One would think you pay the interest + penalty + balance in full and that's that, but no. Once the account goes into "charging interest" mode, it keeps charging interest on subsequent months even if you pay in full as long as there is a balance on the day of the cycle close (which if you're using the card, there always will be!) The way out of that trap is, if you ever have a late payment, stop using that card entirely and pre-pay the entire balance (including charges not billed yet) before the close of the cycle. The goal is to get a statement with $0 balance. That will reset the account state to normal.
  - dataflow 5y ago
    Wow. I knew that balance transfers had similarly terrible rules, but I hadn't realized that normal usage can end up like this too. That's so... predatory. How is this even legal? If you pay everything in full such that your balance is $0 on a given day, what are they even charging interest on at the end of the billing cycle? The grace period just goes away for the whole billing period?
    - jjav 5y ago
      > such that your balance is $0 on a given day I'm not sure about that one. Maybe getting the balance to zero on any given day (not just cycle closing day) is enough to reset the account? I don't know. But I know they'll keep charging interest every month even if you pay in full every month, once the account goes into that state due to a single delayed payment. Looks like it's called residual interest? https://www.thepennyhoarder.com/debt/residual-interest/ https://www.thepennyhoarder.com/debt/residual-interest/
- conductr 5y ago
  The not paycheck to paycheck people I know, myself included, charge everything they can and put the credit card on auto pay for full balance. So in my case at least, your $300 is more like $10,000 monthly. I’d be pretty mad if something happened and I owed $100+ of interest but like you said, not as mad as having the late payment show up on my credit history Should mention I make ~$300 a month in cash back by doing this and that’s my main motivation. I actually hate the idea of cash back as I realize it just adds cost to the system but I’m just one dude and the world has spoken on the matter so I may as well get what I can out of it.