PIF vs carrying balances discussion

[Anonymous]

I use whatever card gets the best rewards for each purchase, and pay all my balances in full every two weeks. Sometimes there is a balance at statement cut that gets reported, sometimes not- but it's always under 10% on any given card and well under that overall.. but I dont really concern myself with what gets reported. UNLESS I have a loan or mortgage coming in the next couple months- If that is the case, I will put all expenses on my largest CL card (my AMEX BCE at 23,300). That allows me to have one card under 9% and the rest reporting 0% to optimize my scores for that time period.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Do you carry a balance or pay in full? Why or why not?

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@Anonymous wrote:

Do you carry a balance or pay in full? Why or why not?

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Cool, question...

IME it depends on HOW the card is being used by the holder....

Was the intention to BORROW money a pay back as a LOAN

or

Was the card being used as a way to CHARGE and simply move around the

day you pay.

That is today, we CHOOSE how we see/view the use of CCs very differently depending on

'training', perspective, pocketbook etc....

For some it's THE way to get items and the 'credit card' bill becomes a THING

For others it's just the convenient tool, to use until payday or prior to a FREE % grace period being over (easy rewards etc)

For others, it's a way of life and a 'few' % is acceptable because of the 'NEED' to se OPM (other peoples money) for a while

basically, as a SHORT TERM loan.....

What bothers me is when ppl use their CCs with ZERO clue or plan towards payback

It's one thing to swipe $500 and decide ...ok that's a BILL to retire within 3-4 months 6 at the MOST IMO...it's quite another

to swipe and just keep living w/o any connection to paying off the balance.

IMO if a person 'chooses' that 4-6 months worth of % is acceptable to 'short term' finance a purchase, cool....anymore than that is

off base IMO and again I'm talking about a real purchase not 'financing' a Denny's meal for 6 months or a pair of pants but if one NEEDS 

a pair of $300 shoes and they are REALLY dead serious about paying it off over 3-4 payments like a flex-pay on HSN ....it's not the end of the world

but swiping for this and that and next thing you know, you have thousands of dollars in  debt w/o a clue what happened is a different ball of wax and how

things happen for often to non PIF folks....

PIF folks can generally afford what they buy whereas balance holders are BORROWING beyond their ability to comfortably pay....otherwise, it makes ZERO sense to pay % just for giggles and poo poo

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Great breakdown and perspecive.

[tacpoly]

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@Closingracer99 wrote:

While you might have an emergency fund it might come out cheaper to not dip into it for X because it is only a minor issue and paying the interest for say 2 months out weighs dipping into it and not spending a dime on interest for if Y happens?  For example lets say you have a medical bill for say $5,000 and you have $5,000 for emergency funds. It would wipe it all out if you chose to use it. But you know you can pay it fully off including interest in say 90 days ( Including the grace period ) so you will be paying 2 months worth of interest. That could be cheaper to do in the long run and keep that fund there for something bigger should you really need it. Yeah I know i am dealing with what ifs but if somebody values keeping that fund and paying interest for 2 months than let them? Not a terrible idea IMHO.

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An emergency fund shouldn't be your only savings; it is money that you can use for emergencies just like the medical bill in your example.  It is money you put aside so you won't need to get into high-interest debt like credit cards, payday loans, etc... In your example, if you can pay off a $5000 credit card bill in a couple of months, then you can rebuild your emergency fund in the same amount of time -- and you wouldn't have to pay interest. 

[Anonymous]

I Have PIF on all my cards after the statement posted, until very lately. I use them like debit, so I never charge more (or anywhere close to) what I have altogether in my bank accounts. My main use for CCs is getting cashback for usual spending. Only recently, I'm carrying a balance on a new card with 0% because several large purchases/payments ended up happening at the same time. I had to dip a bit into my savings for a payment that could not be done with credit. I didn't want to dip further, so I put the other purchases on my card and am carrying a balance while I pay it off in smaller chunks. Once that's done, I won't carry any balances unless something similar happens again (and only within that 0% period).

[Anonymous]

I would rather pay up to $100 in monthly interest than to dip into my savings because I'm going to pay it down anyway. I'm a crappy crappy saver…

My Care Credit overstock and lowes are the only things I'm carrying a balance on. All deferred.

[mjb59463]

I use one card for most of my daily spending. When that balance hits $800 (6k limit), I PIF.

On two of my cards, I'm working down some stupid purchases that I made on them, paying 2-3x the minimum. In close to 9 months, I should be completely debt free (even with interest charges) as I no longer incur spending charges on those cards. Not too worried about that right now, but there was a time when those balances were a lot higher and caused me serious stress.

I get carrying a small balance, and sometimes carrying a larger balance on a lower interest card for a little while Is a viable resort in the case of an unforeseen emergency or a necessary expenditure. Going on vacation or buying that new 4k tv aren't necessary expenditures. Having your water heater, replacing a busted window, or having your central air system working is. Now, an emergency fund could take the brunt of that, but based upon where you are in life and what circumstances have affected your life, it might not. I've certainly had experience with that. However, there should be a plan to pay it off that you solidly adhere to.

Stay away from carrying a balance when you can. If you absolutely have to, it's understandable, just make it a priority to pay it off and stick to your plan to make that debt go away.

To me, it's all in how you manage it.