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Interest on this amount

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Rackham94
Established Contributor

Interest on this amount

If I schedule a payment of 304.12 on a balance of 304.13 would there be any interest charges on 0.01? 

 

Want to leave a balance so it can report.

Message 1 of 17
16 REPLIES 16
tinuviel
Moderator Emeritus

Re: Interest on this amount

All you'd need to do is pay all but  $1 of your account balance, let the statement cut and then pay the remaining $1. You won't have any interest unless the charges are from the previous billing cycle.


Current Scores: EQ 775 (03/04/2014), EX 756 (03/01/2014), TU 760 (03/01/2014)
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Message 2 of 17
LS2982
Mega Contributor

Re: Interest on this amount


@tinuviel wrote:

All you'd need to do is pay all but  $1 of your account balance, let the statement cut and then pay the remaining $1. You won't have any interest unless the charges are from the previous billing cycle.


This is correct, I would definitely leave at least $1.




EQ FICO 548 3/3/16
Message 3 of 17
HiLine
Blogger

Re: Interest on this amount

Assuming the credit card issuer doesn't cancel the bill, you'll get charged interest only if you don't pay off the 1 penny balance by the end of the grace period, assuming you have no balance carried over from the previous statement. And if you get charged interest, the amount will be about 0.000005 dollar per day.   (actually more like 15 cents per day - thanks to Walt_K for correcting me)

 

Don't get yourself into a debt spiral.

Message 4 of 17
b_seeker
Frequent Contributor

Re: Interest on this amount


@HiLine wrote:

Assuming the credit card issuer doesn't cancel the bill, you'll get charged interest only if you don't pay off the 1 penny balance by the end of the grace period, assuming you have no balance carried over from the previous statement. And if you get charged interest, the amount will be about 0.000005 dollar per day. 

 

Don't get yourself into a debt spiral.


Note that some issuers have have a clause that states a minimum interest charged. For example, I'm pretty sure I was reading Citi's T&C and it said it is a 50 cent minimum if interest is charged.



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Message 5 of 17
boomhower
Valued Contributor

Re: Interest on this amount

I've noticed from my reports the CRA's tend to round down, I'd leave at least a dollar.  

Message 6 of 17
longtimelurker
Epic Contributor

Re: Interest on this amount

And, to reinforce what the others have said in case there is a misunderstanding: the balance is reported when the statement cuts (or at the end of the month for a few issuers) so that is where you might want the $1 balance for scoring reasons.   You do NOT want to leave a balance after the due date, that doesn't help with anything FICO and does incur unnecessary interest charges (albeit in this case fairly small)

 

As an aside, I am frequently surprised at just how much scores change with meaningless small report differences.  My EQ was 747 May 11, 772 today, the only difference (apart from 3 weeks of time) being that I have 5 balances reporting the first time, total utilization 0.2%, and now just one, with a total utilization of 0.01%  Does that REALLY make me a better risk!

Message 7 of 17
SnackTrader
Valued Contributor

Re: Interest on this amount

+1 Let a balance report but pay in full before the due date.

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Last App: June 27, 2015
Message 8 of 17
Simply827
Established Contributor

Re: Interest on this amount

This is slightly off topic but still related.

 

How do I avoid paying interest? Must I pay the statement balance or the current balance?

 

For instance..I paid statement balance of $200. I make another $100 of purchases before statement cuts. Do I owe interest on the $100 or am I good as long as I pay it off by the next due date. In order to avoid interest, do I have to pay at least the statement balance of $200 or must I PIF the $300?


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Message 9 of 17
enharu
Super Contributor

Re: Interest on this amount


@Simply827 wrote:

This is slightly off topic but still related.

 

How do I avoid paying interest? Must I pay the statement balance or the current balance?

 

For instance..I paid statement balance of $200. I make another $100 of purchases before statement cuts. Do I owe interest on the $100 or am I good as long as I pay it off by the next due date. In order to avoid interest, do I have to pay at least the statement balance of $200 or must I PIF the $300?


For most cases, statement balance.

 

However, refer to your card T&C. Different lenders & cards have different grace periods, which can range from 0 to 45 days.

For cards that have no grace period (i.e. Premier One), you owe interests starting from the day that charge is posted.

 

 

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Message 10 of 17
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