Avoiding Interest. Some Clarification please.

[OniStringer]

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@Anonymous wrote:

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@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.

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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)

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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! 

[CreditMarathoner]

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.