topic Re: Avoiding Interest. Some Clarification please. in Credit Cards

Avoiding Interest. Some Clarification please.

OniStringer — Mon, 13 Mar 2023 20:08:16 GMT

Fairly new to making sure I pay in full, avoid interest and truly benefit from CC's after the major part of my rebuild.

Looking at my own card, as of today, for the basis of at least avoiding interest, I would only need to pay the statement balance, by the date due right? Ill provide an image below for reference.

But from what I understand, the statement balance was cut, assuming from Feb-Mar, on the March 9 of $802, so I then would have until April 9 to pay that before interest is accrued on the amount right? Just want to make sure I understand this correct for the future. Thanks for any help.

Re: Avoiding Interest. Some Clarification please.

coldfusion — Mon, 13 Mar 2023 20:34:28 GMT

You need to have payment of 802.54 (the statement balance) posted by April 6th (the actual due date).

Re: Avoiding Interest. Some Clarification please.

TheRedHat — Mon, 13 Mar 2023 20:23:44 GMT

Yes. That would be correct. As long as you pay the statement balance by the due date each month, you will pay $0 in interest.

Re: Avoiding Interest. Some Clarification please.

OniStringer — Mon, 13 Mar 2023 22:00:58 GMT

@coldfusion wrote:
You need to have payment of 802.54 (the statement balance) posted by April 6th (the actual due date).

Oh duh, i guess that would be right lol Appreciate the clarity though!

Also thanks to @TheRedHat

Re: Avoiding Interest. Some Clarification please.

Anonymous514 — Tue, 14 Mar 2023 07:08:04 GMT

I had a 2$ interest charge from Macy's this month despite paying in full I too suck at this kind of thing lmao.

Re: Avoiding Interest. Some Clarification please.

coldfusion — Tue, 14 Mar 2023 14:56:03 GMT

@Anonymous514 wrote:
I had a 2$ interest charge from Macy's this month despite paying in full I too suck at this kind of thing lmao.

That might have been trailing interest. Did you carry a balance at all recently?

Re: Avoiding Interest. Some Clarification please.

SouthJamaica — Tue, 14 Mar 2023 15:00:34 GMT

@OniStringer wrote:
Fairly new to making sure I pay in full, avoid interest and truly benefit from CC's after the major part of my rebuild.

Looking at my own card, as of today, for the basis of at least avoiding interest, I would only need to pay the statement balance, by the date due right? Ill provide an image below for reference.
But from what I understand, the statement balance was cut, assuming from Feb-Mar, on the March 9 of $802, so I then would have until April 9 to pay that before interest is accrued on the amount right? Just want to make sure I understand this correct for the future. Thanks for any help.

No you have until April 6th to pay it.

Re: Avoiding Interest. Some Clarification please.

GTS — Tue, 14 Mar 2023 15:44:07 GMT

@OniStringer

Also something to consider is if you have cashback and you use it as a statement credit it doesn't count towards the statement due. For example if the statement balance was $200 and u used $50 cashback towards your bill you still owe $200. That cashback is only applied to new purchases.

Re: Avoiding Interest. Some Clarification please.

Anonymous — Tue, 14 Mar 2023 16:23:17 GMT

@GTS wrote:
@OniStringer
Also something to consider is if you have cashback and you use it as a statement credit it doesn't count towards the statement due. For example if the statement balance was $200 and u used $50 cashback towards your bill you still owe $200. That cashback is only applied to new purchases.

I don't think that is quite true. Generally, the cashback can't be used as minimum payment, so you would have to pay that, but you owe $150 (- whatever min payment you make)

Re: Avoiding Interest. Some Clarification please.

Remedios — Tue, 14 Mar 2023 17:29:00 GMT

It really depends on a lender

As an example, Disco allows cash back to be used as "payment", so in that example if cash back is used in the amount of minimum payment or more, monthly obligation is satisfied (you'd still have interest if cash back didnt cover entire statement balance).

Amex expects minimum payment in addition to any cash back redeemed for statement credit. If minimum payment is $35.00 and you have $35.00 in cash back, you still need to pay. With them, redemptions reduce statement balance and/or balances on current charges but at least minimum payment must be made regardless of how much cash back is redeemed.

Unless one is certain on lender policies, don't mess with redemptions without making payments.

Re: Avoiding Interest. Some Clarification please.

OniStringer — Wed, 15 Mar 2023 19:54:19 GMT

@Anonymous wrote:
@GTS wrote:
@OniStringer
Also something to consider is if you have cashback and you use it as a statement credit it doesn't count towards the statement due. For example if the statement balance was $200 and u used $50 cashback towards your bill you still owe $200. That cashback is only applied to new purchases.
I don't think that is quite true. Generally, the cashback can't be used as minimum payment, so you would have to pay that, but you owe $150 (- whatever min payment you make)

I honestly never even thought to think of any of this. Good info to consider in the future when I run into these scenarios.

Thank you!

Re: Avoiding Interest. Some Clarification please.

CreditMarathoner — Wed, 15 Mar 2023 20:41:57 GMT

On cashback redemptions, you'd have to read the terms of service for your particular card to be clear, but in general a redemption doesn't count as a minimum payment if you still have a balance after redeeming. If you're able to redeem the full balance of the card, so it has a $0 balance after redemption, you would not have to make the minimum payment in that case.

For example, on my BoA Customized Cash Rewards, the program rules read:

Redemption for statement credits
• Cash Rewards redeemed for a statement credit to your Card will post to your account within three business days of the date of redemption.
• Statement credits will generally be applied to your existing balance with the highest priced Annual Percentage Rate (APR).
• If you receive a statement credit, you are still responsible for paying your Minimum Payment Due shown on each monthly billing statement you receive from Us.

So, in this case, redemptions would be applied to the highest APR balance first (so, your regular purchase or cash advances if any, before any low-APR balance transfers etc.), but it would not count as your minimum payment.

On a lot of cards, online you can see not only your statement balance, but the statement balance that remains after payments or credits. This is handy if you have a balance you want to redeem rewards toward. After redeeming, you can see what remains of your statement balance, and pay that remainder if you want to avoid interest.