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How does monthly "pay in full" work exactly?

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Anonymous
Not applicable

Re: How does monthly "pay in full" work exactly?

Using a rewards card as PIF can be very beneficial depending on what rewards you're getting. Obviously even 1% is better than 0%, but depending on what you have available you can get as high as 5-10% as well. The key here is discipline.

 

Without beating you up about it and assuming you learned your lesson when you took a personal loan to cover your CC debt, the key is to only use your CC when you know 100% that you can pay the balance. You're basically using it as a debit card, you just have to wait a day or two for it to transition from 'pending' to 'posted'. When I began using a CC I was ridiculously concerned with it becoming something negative in my life, so I literally would check my bank account before swiping to ensure that I could cover every single swipe. 

 

It was a little exhausting initially, but once I learned that I could trust myself it became less of a burden. I only carry a balance on one 0% card right now to assist with my score (and only money that I could 100% pay this second if absolutely necessary), but every other card gets paid within a couple of days of posting and never comes even remotely close to getting an interest charge.

 

Remember, any time you pay interest it can completely negate any effort you've put in to earning rewards. If you can't be disciplined enough to only spend what you have in your bank account and immediately (or, at least before interest accrues) pay it off, then just save yourself the pain and pay with a debit card.

Message 11 of 19
fig419
Established Member

Re: How does monthly "pay in full" work exactly?

We moved into a new home a few years ago and got caught up in fixing it up so a Lowe's credit card came in the picture, then we went a little oveeboard on the Amazon card with our "last vacation for awhile" (kids are mostly grown), and some medical stuff on another, 20th anniversary gifts on a jewelry card. So that's where we learned how easy it piles up and how much interest was hitting us. That's when we read about Sofi here and got a 3 year loan at a very low percentage.

Our plan is right after payday we take the credit card and use it to buy groceries and then come home and move the amount we spent from our main account to our billing account, then put the card back up until next month. Money we normally spend and put up where we wont touch it.

Message 12 of 19
digitek
Established Contributor

Re: How does monthly "pay in full" work exactly?

Glad to hear you are back on track and have a good plan set up.

 

It can be kind of complicated because there will usually be 4 options when you make a payment: minimum, statement balance, current/account balance, custom amount.  The middle two are both kind of "Pay in Full".

 

Statement Balance is what you owe for the current billing cycle.  If you pay the Statement Balance in full before the due date on the bill then you will never pay a penny of interest.

 

Current or Account Balance is everything you owe on the account, which would include the current Statement Balance that is due and also anything you have charged since then (during the grace period between when the statement/bill cuts and when it is actually due, ~ 25 days).  That would make it so that you are paying charges before they post when that billing cycle ends, which makes it so that you report low util on your credit report.

 

Personally, I pay full Current/Account Balance on every card every 2 weeks, a bi-weekly payday is a good day to use.  No surprises.

Message 13 of 19
Anonymous
Not applicable

Re: How does monthly "pay in full" work exactly?

If you're not planning to apply for anything, setup auto pay to pay full statement balance at or before due date and leave it alone.  If you have an upcoming application for more credit, pay the balance down before statement date the month prior to bring down your utilization.  No need to over think it.
Message 14 of 19
fig419
Established Member

Re: How does monthly "pay in full" work exactly?

We are actually looking to apply for a new cc reward card to use for this purpose as we realized my husband (the one who has the job lol) has no bank cards in his name at all so figure we better get one oe two now before we plan on using credit in a few years when we will be looking to move and but a new home.

Right now his credit is in the 730 range and expected to go up a bit more in a couple weeks. Can he apply for more than one cc at a time? Thinking 2 might look better in the future. ??
Message 15 of 19
Anonymous
Not applicable

Re: How does monthly "pay in full" work exactly?

I think you should just work with what you have now and focus on paying off the personal loan.
Message 16 of 19
Anonymous
Not applicable

Re: How does monthly "pay in full" work exactly?

Would it be a plus to add him as a auth user so it reports to his credit line also? Then you have no more open lines or app for more credit but he gains the good credit they are building.

Message 17 of 19
MrDisco99
Valued Contributor

Re: How does monthly "pay in full" work exactly?

Taking out a personal loan to lower your interest and force you into a structured payment plan is a really smart thing to do when you rack up more debt than you thought you could handle.

It sounds like you're on the right track. If you know you can budget properly and keep the balance down there's nothing wrong with using your cards to earn rewards. Just make sure you don't let it get away from you again. Check your balances often and keep a constant eye on where you stand. Make payments as you can several times per month. Things tend to get out of control when you're not looking.
Message 18 of 19
fig419
Established Member

Re: How does monthly "pay in full" work exactly?

OK, we will do that.  We just got accepted for the Amex Blue Cash Preferred with 6% on groceries and 3% on gas.  We figure we'll do some grocery shopping and fill up the tanks then pay it off the next week then do that bi-monthly when he gets paid.  Thanks for the help and showing us how to do it right!

 

As for making him an AU on one of my cards, we saw that suggestion just a bit late. I could have sworn that we looked into that awhile back and was not able to but I looked yesterday and was able to after all. So we went ahead and did that too.

Message 19 of 19
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