Credit Cards

[thrasher865]

Are these transaction fees paid by the vendors or me?

[athensguy]

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thrasher865 wrote:

Are these transaction fees paid by the vendors or me?

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They are charged to the vendor but you pay for them through higher prices.

[thrasher865]

But no more than I would by paying cash, right?  As long as I'm not duping myself into thinking that cash back is actually a reward for using my card and more an incintive to use it for not useful purpose...

[athensguy]

Nope, though some places do offer a separate cash discount, most don't. The few that do seem to be gas stations, and they don't usually offer a big enough discount to not use the gas card

[haulingthescoreup]

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thrasher865 wrote:

But no more than I would by paying cash, right?  As long as I'm not duping myself into thinking that cash back is actually a reward for using my card and more an incintive to use it for not useful purpose...

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Right. Same price. I remember around 20 years ago, some stores tried offering lower prices for cash or check, but they finally gave up. As erchambers said, all prices are higher to account for CC use.

It's true though that rewards cards can tempt you to buy more than you might otherwise.

[thrasher865]

Sorry guys, just one more question.

I didn't read before hand, but the blue cash interest is computed based on an average daily balance.  Unless my understanding is wrong, doesn't this completely negate any reward to PIF before each statement date?  Should I PIF every time I make a major purchase to avoid my interest offsetting any benefit from my cash back rewards?

[haulingthescoreup]

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thrasher865 wrote:

Sorry guys, just one more question.

I didn't read before hand, but the blue cash interest is computed based on an average daily balance.  Unless my understanding is wrong, doesn't this completely negate any reward to PIF before each statement date?  Should I PIF every time I make a major purchase to avoid my interest offsetting any benefit from my cash back rewards?

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Not sure if I'm reading you right, but any monthly interest is separate from the rewards. For the rewards, they keep the cumulative total of all your charges, less any returns, etc., and do the cash back from that. Any interest is going to be charged on unpaid balance. (Sorry if I didn't read clearly.)

[thrasher865]

What I'm saying is if I build up a balance paying bills over the course of a month, since the card uses average daily balance to compute interest, wouldn't I be paying a lot of interest monthly regardless of whether or not I pay in full before the statement date?  Or is my understanding of average daily balance practice just way off?

edit: oops, forgot about grace periods...  So the grace period is 20 days for purchases as long as previous balance is paid in full each month.....   Does this mean that as long as I pay off any charges from purchases within 20 days of the purchase, I will never pay interest on these items?  So does that also mean that any purchases I make on the first 10 days of the billing cycle, if not paid until the week before that statement is issued, will factor into the average daily balance for the time period after these 20 days expire?

Ok I just confused myself, so I probably confused you.  Say I bought a TV on the very first day of the billing cycle...   Now I don't PIF until like 3 days before the statement date.  Does that mean for the 7 days between the end of the 20 day grace period for the TV purchase and the time I PIF, my ADB used to compute the interest for the month would be   [ (price of tv * 7)/30 ] * [ APR / 365 ]? 

I think that even if this is how it works it will never cost me enough money for me to worry about or type a full page long post asking you guys....      Oh well, what can i say?  I'm really bored sittin at work waiting for the clock to strike 5

[edit 2]   Just FYI it says method for computing balance for purchases is Average Daily Balance (Including New Purchases).  But I still have 20 days to pay off purchases with absolutely no interest charges, correct?  Assuming the previous month was paid in full?  Sorry for all the questions, I'm just looking to max out my money.  Being in college, I'm already on a tight budget, so I can't afford to just throw money at a CCC.

Message Edited by thrasher865 on 05-22-2008 12:51 PM

Message Edited by thrasher865 on 05-22-2008 12:55 PM

[cheddar]

As long as you pay the new balance on the statement by the due date, and do this every single time, then you will never pay any finance charges.

If you carry a balance from one month to the next (i.e., do NOT pay the "new balance" on the statement in full by the due date), then you no longer have a grace period, and your average daily balance will include new purchases as noted in the info you quoted above.

This is why rewards cards really only make sense for those who always PIF anyway.  Make sense?

Message Edited by cheddar on 05-22-2008 01:15 PM

[thrasher865]

Thanks, I understand this card is definitely a PIFer.  I was just making sure that I wouldnt acrue any finance charges no matter what as long as I PIF once a month.