"Mark Freeland" <nNeEwTs[at]sonic.net> wrote in message
news:4456E01E.4748[at]sonic.net...
- quote -

You get notice of the amount in the form of your credit card statement,
weeks in advance.

The only time I ever had a problem is when I initiated a payment program
with Discover. They said it wouldn't take effect for the current statement,
so I paid it, then they took the money anyway.

What was worse for that particular card, the payment amount did not take
into consideration other payments or credits made in the interim. Had it
done so, it would have seen the payment and not drafted my account.

Most other banks do that, except maybe for a fixed payment. I've had
similar setups with several banks over several years and never experienced
another problem. Between having my paychecks direct deposited, buying
everything I can with my credit card, having my credit card direct drafted,
and downloading everything into Money, I have highly-detailed records of my
financial life. I also never have to worry about making payments on time.
--
Chris Cowles
Gainesville, FL

Mark Freeland wrote:

- quote -


I do the same exact thing, i.e. a CitiCard with the 5% rebate, I've set
up to pay $100/mo automatically. I average $500 on that card, a month's
interest on the $400 balance may be $6, but the strategy is strictly to
guarantee no late fee, nor negative credit agency report.
Given late fees of $29 (or $39), negating that risk makes sense to me,
given the short cycles. (e.g. a bill comes in the day I'm flying out for
a week, by the time I see it, it's due too soon to use the pay by
computer feature my bank offers.

JOE

"Mark Freeland" <nNeEwTs[at]sonic.net> writes:
- quote -

The whole point, and it's really quite simple, is that
by automating the $100, at *worst* one will pay some
finance charges. If all goes normally, one pays no
more and no less than if one pays the bill in full
every month and on time.

- quote -

The $100 is a nice, round, even number, easy to remember.
And, yes, it's specifically to guarantee that one never
pays late fees, without committing to having the full
balance (an unknown quantity) automatically sucked from
one's checking account. Nothing more, nothing less.

A simple, free bit of insurance against late fees.

Automating the minimum payment would serve the same
purpose perfectly well. I have no idea what the minimum
payment on any of my cards is. I never look at it
or care about it. Now that I think of it, I suppose
it could be more than a hundred bucks, but that seems
awfully unlikely. [digs up most recent visa statement.
minimum on that card, given the last balance, was $35]

I haven't engaged this plan yet. I've been thinking
about it. And every once in a while, if I know that
a bill is looming but I've not had the chance to go
through it (or dig it out of my pile of crap on my
desk), I'll go to the web and make a similar $100
payment right here, right now, and follow up by paying
in full, usually the same or next day, when I do have
the time to do it right.

- quote -

Poor wording. It minimizes the downside of said screwups.
(ie. a little bit of interest beats the hell out of a
late payment fee).


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<BreadWithSpam[at]fractious.net> wrote in message
news:yobzmi0yxi6.fsf[at]panix2.panix.com...
- quote -

Intent is fine; the concern is with execution.

- quote -

When you do forget, finance charges are calculated not just on the net
remaining (subtracting off the $100), but on the whole amount of the bill.
So why pay the $100 and not merely the minimal amount required? That would
suffice for the only substantial purpose it is serving - eliminating the
risk of late fees.

[There is some reduction in finance charges, because you are only charged
interest on the whole balance for the time the whole amount was owed. By
paying $100, you reduce the balance by $100, and thus reduce the amount of
interest accruing from the time the bank posts the $100 payment. Typically
this only reduces the finance charge by a small fraction of the total.]

Your intent to follow up with the full payment is fine, but then you are
left with the original problem I pointed out - with a 20 (vs. the older 25
or 30) day grace period, and late mailings from the bank, one may have scant
time to recognize the bill when one finally receives it in the mail, write a
check and mail it back in time so that the bank receives and posts it within
the narrow window.

"A shorter [20 day] grace period can mean that, by the time you receive the
bill, you're already racking up interest charges. In this case, you may
need to check your account by telephone or on-line and pay your estimate of
the bill before the statement arrives each month." (That's an estimate of
the whole bill, not
$100.)http://www.credit.com/slp/chapter4/Grace_Period.jsp

- quote -

When you do miss the followup payment (or it posts past the due date),
finance charges accrue not only for all the charges you made that month, but
with the two cycle balance method, for all the charges you paid the previous
month. Your partial payments do not reduce the risk of this happening -
that $100 payment does not eliminate finance charges - only the followup
payment, within the grace period, does.

- quote -

How does a partial payment of $100 reduce (minimize) the chance that a
followup payment is "screwed up"?

- quote -

If you miss the followup payment (or it posts late), then you too are
floating balances; with the two cycle balance method, you are floating a
greater balance than you expect.

--
Mark Freeland
nNeEwTs[at]sonic.net

Mark Freeland <nNeEwTs[at]sonic.net> writes:

- quote -

The intention is to pay the full bill on time every month,
in two pieces - $100 automatically and the difference by
hand.

That way, the bill is paid in full, and, in the event that
the part that gets done by hand gets screwed up - who knows -
perhaps I'm on vacation, or the mail gets lost or I forget
to review the bill in time - the $100 automatic payment is
simply free insurance against me screwing up.

- quote -

This has nothing to do with partial payments and two cycles.

It has to do with splitting up my monthly credit card payment
into $100 automatic and the rest by hand - to mimimize the
chance that the latter will get screwed up.

If folks are floating balances on their cards, they have
other problems aside from what I, at least, am describing above.

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Rich Carreiro <rlcarr[at]animato.arlington.ma.us> writes:

- quote -

Well, I suppose the finance charges on $100 aren't particularly
hefty in retrospect :-), but saving the late fee is non-trivial.

And remember, it never hurts to ask if you miss a payment-in-full
by only a day or two and it's the first time you've done so. I've
managed to get finance charges and late fee reversed. Of course,
that was years ago and the card issuers may be more hard-nosed
these days.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

BreadWithSpam[at]fractious.net writes:

- quote -

That's exactly what I've done. It's saved me from a late fee
and hefty finance charge a couple of times when I've been lame
and let the credit card bill get buried, forgotten, under a
pile of mail.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

BreadWithSpam[at]fractious.net wrote:
- quote -

If you don't pay the *full* bill on time, you'll still have finance
charges, though this technique will at least save you from late fees.

Suppose you purchased two items - one for $100 and one for $1. Pay $100
and you'll be charged interest on $101 until the time your $100 payment
reaches the bank and is posted (and then you'll continue to be charged
interest on $1 until your followup payment comes in). So once you let
any finance charges in, you wind up paying interest on the whole amount,
even though you've met the grace period for most of the bill.

I believe that these days most banks use the "two-cycle balance" method
of computing finance charges ("interest"), which makes the charges add
up even faster.
http://www.abbysguide.com/credit-car...e-charges.html
http://www.bankrate.com/brm/green/cc/basics3-2a.asp
--
Mark Freeland
nNeEwTs[at]sonic.net

eastwardbound2003[at]yahoo.com wrote:
- quote -

this thread also has a student version. They give you student cards without any
credit history.

--
Manage your book collection online at http://www.parchayi.net/bookshelf

Mark Freeland <nNeEwTs[at]sonic.net> writes:

- quote -

I've been thinking about setting up and automatic payment of
a fixed amount - something over any likely minimum but also
fixed and low - maybe $100 - just to make absolutely certain
that accounts are always at least paid on time.

- quote -

No finance charge if you pay the difference separately. Set
your automatic payment at $100 and you don't ever worry about
at least being paid on time - and pay the difference by hand
when you get your bill and have time to review it in detail.


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Chris Cowles wrote:
- quote -

Here's where my paranoia kicks in. I'll set up automatic payments for a
fixed amount (like a mortgage payment), but I am not willing to give a
creditor carte blanche to pull an arbitrary amount from my account.
(Paying anything less than the full amount, which varies from month to
month, leaves you owing finance charges.)

Chacun a son gout.
--
Mark Freeland
nNeEwTs[at]sonic.net

"Mark Freeland" <nNeEwTs[at]sonic.net> wrote in message
news:4456c47c$0$96966$742ec2ed[at]news.sonic.net...
- quote -

Many banks will let you set up an automatic draft from your checking
account for either the balance, the minimum, of some specified amount. I
have mine set up that way and never worry about it.
--
Chris Cowles
Gainesville, FL

"Ralph Cleary" <ralcle[at]invalid.net> wrote in message
news:44564f8f.1329921[at]news.individual.net...
- quote -

There has been a widespread switch to 20 days to pay, from date of closing
(and then the banks take a couple of days to mail, so you are really left
with only a few days to pay). In particular, the Chase card recommended
gives a
"Grace period for repayment of purchase balances: At least 20 days."

This is one good reason to have online banking - so that you can make
payments quickly, electronically, and you don't miss your "20" day window.
Still, you have to set up the electronic payment 2-4 days before it is due.

--
Mark Freeland
nNeEwTs[at]sonic.net

Ralph Cleary wrote:

- quote -

Your other advice is good, but your remarks about Citibank are
unsubstantiated. My wife and I use the card for the 5% and never had an
issue. In fact, being a bit obsessive, I've used the card at CVS to get
5% rebate on $500 worth of Home Depot gift cards that I was going to
spend that weekend. $25 rebate for the effort. Never had a non-credit at
any grocery store/gas station/ drug store.
JOE

"nospam" <nospam[at]atall.xatt.net> wrote:

- quote -

Nope, based on my experience, Citibank will cheat you out of
the 5% rebate. They will claim, for example, that a given
gas station is shown in their records as a convenience store,
or a station that sells only to businesses.

Chase has been honest, so try that one:

http://tinyurl.com/l55lm

Still, lacking good credit already, that option may fail. If turned down,
go with gas cards and small department stores first. They will usually
give you credit and hold your purchases to smaller amounts. Pay them
off quickly, and you will build a credit history you can use for better
cards.

Then, use American Express as the next 'big' card, since again you
can pay them quickly with only a yearly fee incurred. Once you have
credit, you can qualify for cards with no yearly fee.

Most cards will give you 25 days to pay without incurring penalties or
interest, so you can use the cards in place of cash. ALWAYS pay
the cards off within those 25 days! Do not get caught in the credit
trap whereby you end up paying much more for a given purchase than
you could have with good habits.

Good luck!

A credit card can be your master or your slave. If you use it wisely,
it can be a handy tool that simplifies your life. If you use it
unwisely, it will control your life. Your choice.

Dave

"joetaxpayer" wrote:

- quote -

And 1% on everything else up to a total of $300 in rebates per calendar
year.

eastwardbound2003[at]yahoo.com wrote:

- quote -

http://personal.fidelity.com/product...lus.shtml.cvsr

This card will give you 2% cash into a 529 account. No annual fee for
the card.

There is also a Citibank card which offers 5% back on only gas/drug
store/ groceries.

Between those two cards you can absolutely maximize the money back
you'll get. As others suggested, pay in full every month. There is no
greater financial evil than getting caught in the credit card financing
trap of 15-20% interest and finding that you're making the minimum
payments. Buy only what you will be able to pay back in full each month.

JOE

Are you the fellow/lady in the military?

I'd get a Mastercard through USAA Federal Savings Bank. Has
a cash back program. No annual fees.

Do's: Always pay off your monthly balance. This will ensure
you have no credit card debt, so to speak, and so have no
interest to pay. I don't care who it is, the interest on
credit card debt is ridiculous. Credit card debt, with
foolish home buying decisions, appears to be a leading
contributor to people going into bankruptcy. Read the fine
print of the credit card contract. It's verbose, but start
getting acquainted with the vocabularly.

Don't's: Do not get a card with an annual fee.

<eastwardbound2003[at]yahoo.com> wrote
- quote -

I have no credit history right now. What would be the best credit
company to apply for and what type of card? What are the best rates?
What are the Do's and Don'ts for credit cards?

Capitol One? Is that any good? What are these cash back incentives?



East-