Obsessing towards zero balance on credit card.

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123
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Re: Obsessing towards zero balance on credit card.

Post by 123 »

If you're uncomfortable being on the "hook" for a credit card balance you can pretty much eliminate that issue and still collect your reward points for purchases why not just carry a credit balance on the account?

Figure out what your likely maximum use is per month and send in a payment. You can turn it into a prepaid account. When the bill comes each month just pay the amount spent to bring the reserve back up.
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Re: Obsessing towards zero balance on credit card.

Post by dolphinsaremammals »

123 wrote:If you're uncomfortable being on the "hook" for a credit card balance you can pretty much eliminate that issue and still collect your reward points for purchases why not just carry a credit balance on the account?

Figure out what your likely maximum use is per month and send in a payment. You can turn it into a prepaid account. When the bill comes each month just pay the amount spent to bring the reserve back up.
I don't believe this is allowed. Some time back credit cards seem to have stopped allowing people to pay more than the balance owed. A nuisance change, as I used to pay ahead. Probably something to do with money laundering or some such nonsense.
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Re: Obsessing towards zero balance on credit card.

Post by Confused »

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NotWhoYouThink
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Re: Obsessing towards zero balance on credit card.

Post by NotWhoYouThink »

What again is the point of this? Fun and entertainment?
I use credit cards to delay payment as long as possible. I switch between 2 cards, using whichever one is farthest from the statement closing date. I schedule online payments on or maybe 1 day before the due date. That means the money doesn't have to hit the almost-no-interest checking account until the latest possible date.
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Re: Obsessing towards zero balance on credit card.

Post by inbox788 »

dolphinsaremammals wrote:
123 wrote:If you're uncomfortable being on the "hook" for a credit card balance you can pretty much eliminate that issue and still collect your reward points for purchases why not just carry a credit balance on the account?

Figure out what your likely maximum use is per month and send in a payment. You can turn it into a prepaid account. When the bill comes each month just pay the amount spent to bring the reserve back up.
I don't believe this is allowed. Some time back credit cards seem to have stopped allowing people to pay more than the balance owed. A nuisance change, as I used to pay ahead. Probably something to do with money laundering or some such nonsense.
I've done his for ages with several cards and it hasn't been a problem. It all started years ago when I want receiving bills on time or at all. After many calls to customer service to cancel fees and interest charges, both they and I got tired of it. It was simple to make a weekly $10 auto payment, and at the very least, I avoided any late payment charges, so I've been doing this for all my credit card accounts. Whenever I remember, maybe once or twice a month, I'll make an estimated payment to fully pay off balance and even some expenditures for the coming weeks. If interest rates on savings account were 5%, I might try to float a balance, but near zero percent, I'll give up a few pennies. Now, the only problem is carrying a credit balance too long, more than a couple months, and they'll send me a check for the credit, which sometimes messes up my estimates. Fortunately thanks to online banking apps, I can deposit the check by just taking a picture.
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Re: Obsessing towards zero balance on credit card.

Post by mptfan »

Confused wrote:After every credit card purchase, I wait two or three days and then go online and transfer that amount from my checking account. So there's a balance on it for a couple of days. I never get a bill in the mail because the balance is always zero by the time the end of the billing cycle rolls around, and I don't even know when that is. If I swipe my credit card, I have no idea when that money is due to be paid so I pay it as soon as it posts online.
On average, how many credit card purchases do you make in a month?
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Re: Obsessing towards zero balance on credit card.

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mptfan
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Re: Obsessing towards zero balance on credit card.

Post by mptfan »

Wow. I just checked...in the last 6 months I averaged 43 credit card purchases per month.
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Re: Obsessing towards zero balance on credit card.

Post by Toons »

I charge almost everything to my cashback credit card.
Once a week I just pay off the balance,easy. :happy
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Re: Obsessing towards zero balance on credit card.

Post by dolphinsaremammals »

inbox788 wrote:
dolphinsaremammals wrote:
123 wrote:If you're uncomfortable being on the "hook" for a credit card balance you can pretty much eliminate that issue and still collect your reward points for purchases why not just carry a credit balance on the account?

Figure out what your likely maximum use is per month and send in a payment. You can turn it into a prepaid account. When the bill comes each month just pay the amount spent to bring the reserve back up.
I don't believe this is allowed. Some time back credit cards seem to have stopped allowing people to pay more than the balance owed. A nuisance change, as I used to pay ahead. Probably something to do with money laundering or some such nonsense.
I've done his for ages with several cards and it hasn't been a problem. It all started years ago when I want receiving bills on time or at all. After many calls to customer service to cancel fees and interest charges, both they and I got tired of it. It was simple to make a weekly $10 auto payment, and at the very least, I avoided any late payment charges, so I've been doing this for all my credit card accounts. Whenever I remember, maybe once or twice a month, I'll make an estimated payment to fully pay off balance and even some expenditures for the coming weeks. If interest rates on savings account were 5%, I might try to float a balance, but near zero percent, I'll give up a few pennies. Now, the only problem is carrying a credit balance too long, more than a couple months, and they'll send me a check for the credit, which sometimes messes up my estimates. Fortunately thanks to online banking apps, I can deposit the check by just taking a picture.
It seems neither of my two credit cards allow paying ahead. I just assumed this was the fed mucking with financial stuff, but apparently not. Anyone have any idea why a credit card company would not allow this?
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Re: Obsessing towards zero balance on credit card.

Post by virgingorda »

I pay mine off by the due date monthly. But there is something I do check for, and that is to make sure all the charges are legit and not fraudulent, so I do go over the bill carefully, but not more often than when I am about to pay the bill. I have found fraudulent charges before (to a supermarket in another city for example) but not in a while.
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Re: Obsessing towards zero balance on credit card.

Post by Johno »

dolphinsaremammals wrote:
123 wrote:If you're uncomfortable being on the "hook" for a credit card balance you can pretty much eliminate that issue and still collect your reward points for purchases why not just carry a credit balance on the account?

Figure out what your likely maximum use is per month and send in a payment. You can turn it into a prepaid account. When the bill comes each month just pay the amount spent to bring the reserve back up.
I don't believe this is allowed. Some time back credit cards seem to have stopped allowing people to pay more than the balance owed. A nuisance change, as I used to pay ahead. Probably something to do with money laundering or some such nonsense.
I keep the balance on my main card negative, a credit balance, most of the time. But I notice if you end up with a credit balance at the end of the billing period twice in a row, they refund the credit balance by check in the mail.

So, I pay a fair amount of attention to the balance and pay in advance an amount that will result in relatively small debit balance (I owe them) at the end of the billing period. That is, I do that at least in months with significant expenditure, where I might pay a couple or three times in a month. And I always pay in advance for a large expenditures on CC. For example recently, after negotiating price the contractor was still willing to take CC for 50% down payment on central AC installation, so I transferred the amount to the CC company, waited for it to hit, then charged it with the contractor. I don't see a reason to either a) give up the cash back unless in return for a specific discount for doing so or b) have the CC balance bump up $1k's even to the end of the billing period. That can affect your credit score if they happen to take a snapshot in that period, 'high utilization of credit line'.

For my secondary and tertiary cards I usually just pay them when the bill comes (as soon as the bill appears online that is, also paying online from my checking account, though I later receive and keep the paper statements for use as tax records).
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Re: Obsessing towards zero balance on credit card.

Post by MnD »

Auto-pay statement balance in full exactly on the due date.
All card statement and due dates set to the same day of the month.
Charge absolutely everything possible.
This provides a nice monthly accounting of the vast majority of spending almost a month prior to payment due.
I know a month out how income minus spending will close out at the end of the next month.

Our only other bills are mortgage and electric/gas which don't take credit cards (both set to auto-debit), two paper checks a month for the cleaning lady and a few cash ATM's. No fuss no muss and a couple thousand dollars worth of cash back and/or airline tickets annually.

I have no idea why people do the various "systems" described in this thread.
Many seem to negate the core advantages of having and using credit cards in the first place.
Last edited by MnD on Wed Jul 01, 2015 5:15 pm, edited 1 time in total.
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Cindyjrn
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Re: Obsessing towards zero balance on credit card.

Post by Cindyjrn »

Six of one, half dozen of another. Why does it matter? It takes approximately 30 seconds to log on, schedule a payment and click the button. If you can find time to post on this forum, you can probably spare 30 seconds to click another button on the internet.
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Re: Obsessing towards zero balance on credit card.

Post by Leesbro63 »

I have a friend who is a self proclaimed credit-score guru. He says "the game" is to pay all but $2 on the day BEFORE the card statement posts. This way it does two things: First it shows that you have huge untapped credit (except for the $2) and second it shows that the card is being used. He claims that this is boosts your score faster and higher than just paying the whole thing the day before...which effectively is the same as not using the card at all. Or waiting for the full balance to post, which in many cases is a large percentage of the available credit limit.
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Re: Obsessing towards zero balance on credit card.

Post by southbay »

pay in full once a month, online payment scheduled to 2 days prior to due date. (2 day cushion just to be safe)

no reason to pay early, i'd rather keep my cash until it's due.
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goingup
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Re: Obsessing towards zero balance on credit card.

Post by goingup »

Packet-
Your habit does seem a bit time-consuming. Perhaps you're concerned that your spending could ratchet out of control. Or maybe you're new at having credit cards?

I get a notification from my bank when a new e-bill has arrived. I believe some banks allow you to also set email reminders so the bill doesn't go unpaid. Maybe you can find a system that allows you relax a bit more while still being appropriately vigilant. :D
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Re: Obsessing towards zero balance on credit card.

Post by MnD »

NotWhoYouThink wrote:What again is the point of this? Fun and entertainment?
I think it's a practice to try and emulate the performance of a debit card (where money is taken from bank accounts close to or when spending occurs) while still earning the credit card rewards. There also seems to be a camp that believes that even having a balance on the card (even when balances are paid in full monthly) will result in some sort of terrible credit score consequences.
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Re: Obsessing towards zero balance on credit card.

Post by MnD »

Cindyjrn wrote:Six of one, half dozen of another. Why does it matter? It takes approximately 30 seconds to log on, schedule a payment and click the button.
People lend me a substantial sum of money every single month for 43 days duration on average, continue to do so month after month and in fact pay me to do so. It's like a no-fee revolving pay-day loan with a negative interest rate.
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packet
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Re: Obsessing towards zero balance on credit card.

Post by packet »

Thanks again all.
goingup wrote:Packet-
Your habit does seem a bit time-consuming. Perhaps you're concerned that your spending could ratchet out of control. Or maybe you're new at having credit cards?
I get a notification from my bank when a new e-bill has arrived. I believe some banks allow you to also set email reminders so the bill doesn't go unpaid. Maybe you can find a system that allows you relax a bit more while still being appropriately vigilant. :D
:) not new to credit cards.
Perhaps you're right about the concern... born out of past abuse... :/

As I said above, I'm going to break this habit (and attempt to develop another) and check 1-4 times per month (rather than per week) just to ensure I'm still ahead of the curve and there's no fraudulent charges.
MnD wrote:I think it's a practice to try and emulate the performance of a debit card (where money is taken from bank accounts close to or when spending occurs) while still earning the credit card rewards. There also seems to be a camp that believes that even having a balance on the card (even when balances are paid in full monthly) will result in some sort of terrible credit score consequences.
Exactly. Just funneling expenditures through the card for cash back. Not at all worried about credit scores.

:beerCheers,
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dc81584
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Re: Obsessing towards zero balance on credit card.

Post by dc81584 »

My monthly statement posts on the 7th. I just log on and pay the entire balance that day.
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Re: Obsessing towards zero balance on credit card.

Post by TradingPlaces »

1. Watt until statement is cut,
2. Pay the statement amount shortly after,
3. Relax.

Occasionally, I may pay mid-statement if I make an especially large purchase.

You would be wrong to assume that a zero balance will give you the highest score.
Having a statement-ending balance of between 0% and 10% of the credit limit is likely to give you the highest score, assuming you don't do that on 10 different cards.
Furthermore, having statement-ending balances on two cards might be optimal.
And lastly, having a statement-ending balance is not the same as having a credit card debt. Because of grace period rules and such, if you pay your statement-ending balance fully every time, on time, you won't be subject to credit card debt interest.
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cheese_breath
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Re: Obsessing towards zero balance on credit card.

Post by cheese_breath »

I save all my cc receipts and wait until I receive my monthly statement. It's approximately 3-4 weeks from the time I receive the statement until payment is due. During that time I verify the statement against the receipts and pay the entire amount billed through the cc's website on the Internet. Even if there's a dispute I still pay it to avoid interest charges in case the dispute doesn't go my way. If it goes my way the extra payment will be credited against my next month's bill.
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Re: Obsessing towards zero balance on credit card.

Post by Barefootgirl »

If you have a card with a time limited promotion, for cash back for example, it could be worthwhile to pay balances immediately to free up the credit line for additional purchases.

In these days of no interest payments, there is little to no other gaming to be done that I can see.
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cheese_breath
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Re: Obsessing towards zero balance on credit card.

Post by cheese_breath »

Erwin007 wrote:
easye418 wrote:
DSInvestor wrote:I pay the statement balance in full once a month.
My two paychecks are accounted for, my wive's are the wild cards:
How many wives do you have? I haven't explored this idea as a means to financial independence yet, but am definitely open to the possibility... :D
I've never understood this. Wouldn't more wives mean more expenses? :confused
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Re: Obsessing towards zero balance on credit card.

Post by midareff »

All cards are cash back and set to auto-pay in full. Why bother with anything else?
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Re: Obsessing towards zero balance on credit card.

Post by The Wizard »

Cindyjrn wrote:Six of one, half dozen of another. Why does it matter? It takes approximately 30 seconds to log on, schedule a payment and click the button. If you can find time to post on this forum, you can probably spare 30 seconds to click another button on the internet.
I usually pay my CC balances during commercial breaks in the nightly news or Jeopardy...
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mevertsen
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Re: Obsessing towards zero balance on credit card.

Post by mevertsen »

I am trying to get my credit card paid down due to prior bad habits. I have it set for auto pay just prior to the due date. If there is a major purchase, I have that budgeted into the paycheck or out of savings and make a payment to cover the charge immediately.

I do check my balance of all of my accounts frequently to check for fraud.
takeshi
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Re: Obsessing towards zero balance on credit card.

Post by takeshi »

packet wrote:So here're my questions for those of you who pay in full each month:
How often do you check and pay your credit card(s) in full each month?
What's your method?
I check more often, not to look at the balance but just to keep an eye on transactions and check for fraud, but I only pay once for each account. I pay by the due date. This is done twice a month as I'm paid semimonthly.

What are you attempting to accomplish? If you're only obsessed over the balance then you have to do what works for you. However, if credit scoring is a concern, accounts generally only report once a month. Paying the balance down prior to the report date is all it would take to accomplish that.
sharpjm wrote:Do you have OCD? I am not joking.
Being obsessed is not the same thing as OCD despite how much OCD is misused these days.
surfstar wrote:Auto-pay in full on due date.

You're actually using "credit" this way.
There are many ways to use credit and different people have different goals and priorities. That's how you maximize float but if one has other priorities then one might use a different approach.
midareff wrote:All cards are cash back and set to auto-pay in full. Why bother with anything else?
One size does not fit all. Each needs to do what works for the individual. I can't speak for you -- you have to answer the question for yourself. For me, I don't want or need autopay. However, many do find it useful.
Last edited by takeshi on Thu Jul 02, 2015 10:06 am, edited 4 times in total.
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Re: Obsessing towards zero balance on credit card.

Post by Broken Man 1999 »

midareff wrote:All cards are cash back and set to auto-pay in full. Why bother with anything else?
Same here, almost. Sometimes we run a balance on Best Buy or Home Depot under some term of "no payments 0% interest" offering. And, Pay Pal runs the same type offering at some of the online merchants I use for medical supplies. So, if there is no interest being charged, I'll accept extended payments.

With the exception of those listed above, all other credit cards are paid in full automatically each month. And, credit cards pay most of my bills automatically, as well.

If a bill can be paid without fees with a credit card, that is the way I pay. Though, with small business owners
I pay with a check even if they accept credit cards.

I receive an email on virtually every purchase made, plus statement alerts, payment date approaching, and payment received, etc. Same with many of the bills I pay with credit cards.

While I think multiple payments on a card just to achieve a "zero" balance each month is a bit extreme, people should ignore the noise and pay their bills the way that gives them the most comfort.

Everyone is different. And that's OK. Makes life interesting.

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protagonist
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Re: Obsessing towards zero balance on credit card.

Post by protagonist »

If you choose to have your entire bill paid in full via autopay every month when it is due, you never have to deal with it and never have to worry about paying fees.

Just make sure you keep enough money in your account to cover the payments and, at your leisure, check your paper (or online) statements for errors. I always choose to receive paper statements because it forces me to remember to check them.

I use my Fidelity brokerage account as my main bank account. That way, if I ever DID screw up and not have enough cash in the account to cover the bills, all I would wind up owing is margin interest, which by comparison is trivial.

Stress is the enemy of joy. The less you have to deal with niggling issues like bill paying, the happier you become.

(CAVEAT....This may not be a good policy for those who tend to overspend on their credit cards and need to more carefully monitor their spending habits).
Last edited by protagonist on Thu Jul 02, 2015 10:20 am, edited 2 times in total.
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Re: Obsessing towards zero balance on credit card.

Post by stoptothink »

OP isn't the only one who does this. I pay it off completely at least every other week. Did so this morning because a large car repair bill just posted, even though it is on the new billing cycle and we wouldn't have to actually pay it until mid-August. I have a totally irrational fear of debt.
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Re: Obsessing towards zero balance on credit card.

Post by JW-Retired »

UncleBen wrote:Very old school.

Get paper statement out of mailbox.
Write a check for balance.
Put a stamp on the envelope, drop it in the mailbox.
This, plus a quick scan of the statement for suspicious charges, takes DW or myself like 5 minutes once a month. I just don't believe any on-line procedure could be more efficient than that.

I guess if you just auto-pay everything without ever looking at it you could save some time. However, we find fraudulent charges occasionally so that wouldn't be a good idea.
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protagonist
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Re: Obsessing towards zero balance on credit card.

Post by protagonist »

JW Nearly Retired wrote:
I guess if you just auto-pay everything without ever looking at it you could save some time. However, we find fraudulent charges occasionally so that wouldn't be a good idea.
JW
Autopay does not obviate getting paper statements or fighting fraudulent charges. It just obviates having to write and mail checks.
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Re: Obsessing towards zero balance on credit card.

Post by The Planner »

I use my credit card for most purchases as it provides great air miles. As soon as I make a purchase I immediately log into the mobile banking app and clear the bill. I've never considered that to be compulsive, just a good habit.
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Re: Obsessing towards zero balance on credit card.

Post by Johno »

MnD wrote:
NotWhoYouThink wrote:What again is the point of this? Fun and entertainment?
There also seems to be a camp that believes that even having a balance on the card (even when balances are paid in full monthly) will result in some sort of terrible credit score consequences.
Not 'terrible', but you can test it with Credit Karma. If you have a high balance even paying in full end of month, your score will go down, albeit not tremendously. Thus as stated I often pay my main card more than once a month, again for example $10k payment to a contractor, they wouldn't discount further for cash: why give up the CC cash back by paying with check? And having that large an amount hanging out on CC balance even intra-month would at least slightly depress credit score, so why do that either when it's two minutes to electronically pay in advance?

On secondary card I review the statement when it appears online and pay it manually, 3rd card ('special qtrly 5% offers' we use only occasionally) and 4th card (basically in a drawer, just one monthly autocharge to keep it alive) are on autopay.
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Re: Obsessing towards zero balance on credit card.

Post by dolphinsaremammals »

cheese_breath wrote:
Erwin007 wrote:
easye418 wrote:
DSInvestor wrote:I pay the statement balance in full once a month.
My two paychecks are accounted for, my wive's are the wild cards:
How many wives do you have? I haven't explored this idea as a means to financial independence yet, but am definitely open to the possibility... :D
I've never understood this. Wouldn't more wives mean more expenses? :confused
I think the plan is the wives work and he sits at home eating bonbons.
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Re: Obsessing towards zero balance on credit card.

Post by cheese_breath »

dolphinsaremammals wrote:
cheese_breath wrote:
Erwin007 wrote:
easye418 wrote:
DSInvestor wrote:I pay the statement balance in full once a month.
My two paychecks are accounted for, my wive's are the wild cards:
How many wives do you have? I haven't explored this idea as a means to financial independence yet, but am definitely open to the possibility... :D
I've never understood this. Wouldn't more wives mean more expenses? :confused
I think the plan is the wives work and he sits at home eating bonbons.
So I've been doing it wrong all these years. :(
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Re: Obsessing towards zero balance on credit card.

Post by MnD »

Johno wrote:If you have a high balance even paying in full end of month, your score will go down, albeit not tremendously. Thus as stated I often pay my main card more than once a month, again for example $10k payment to a contractor, they wouldn't discount further for cash: why give up the CC cash back by paying with check? And having that large an amount hanging out on CC balance even intra-month would at least slightly depress credit score, so why do that either when it's two minutes to electronically pay in advance?
This (minor fluctuations in credit score) is another thing I don't worry about along with within-statement period credit card balances.
There's no prizes that I'm aware of for having say an 810 credit score versus an 805. And I'm pretty sure that if you make a habit of making very large purchases on credit cards the models are going to adjust for that. Having a full 43 days on average to deal with those occasional whopper purchases is one of the really _great_ things about credit cards IMO.
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Re: Obsessing towards zero balance on credit card.

Post by Alskar »

packet wrote:So here're my questions for those of you who pay in full each month:
How often do you check and pay your credit card(s) in full each month?
What's your method?
All of my credit cards are setup to pay the entire balance automatically once per month on the due date via an ACH withdrawal from my reward checking account. This maximizes the average balance in my reward checking account which maximizes the interest I earn on funds held in this account. I do not obsess about having a zero balance, but I do seem a bit obsessive about checking my reward checking account to make certain I meet the requirements to get the 1.75% APY interest each month.
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Re: Obsessing towards zero balance on credit card.

Post by easye418 »

Erwin007 wrote:
easye418 wrote:
DSInvestor wrote:I pay the statement balance in full once a month.
My two paychecks are accounted for, my wive's are the wild cards:
How many wives do you have? I haven't explored this idea as a means to financial independence yet, but am definitely open to the possibility... :D

I have set our three credit cards (Discover, AmEx, and Visa) on autopay for the statement balance, although this took some doing with the stupid way that Bank of America had the account settings set up to make this happen. I check the statements every couple of weeks for fraudulent charges, or to see what my wife (singular!!) is up to.
Ha, you got me.
Johno
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Re: Obsessing towards zero balance on credit card.

Post by Johno »

MnD wrote:
Johno wrote:If you have a high balance even paying in full end of month, your score will go down, albeit not tremendously. Thus as stated I often pay my main card more than once a month, again for example $10k payment to a contractor, they wouldn't discount further for cash: why give up the CC cash back by paying with check? And having that large an amount hanging out on CC balance even intra-month would at least slightly depress credit score, so why do that either when it's two minutes to electronically pay in advance?
1. This (minor fluctuations in credit score) is another thing I don't worry about along with within-statement period credit card balances.

2. And I'm pretty sure that if you make a habit of making very large purchases on credit cards the models are going to adjust for that.
1. That's fine, since this is AFAIK the only issue besides very slight 'float' advantage at today's interest rates to pay later than earlier. The reason is to capture cash back on big purchases, if they are going to happen anyway and no discount for cash, without dinging the score. If you don't care about the score, and assuming the purchase is within the credit line, there's no reason to pay in advance.

2. Not that I can tell (pretty often having done this, used to do it all the time for kids' college tuition before schools started charging 'convenience fees' for credit card charges in excess of the cash back, in which case obviously one should just pay by check or electronic debit) nor any evidence or reference to that I've ever heard of. But if you have any actual evidence to support your statement it would be informative to see it.
IPer
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Re: Obsessing towards zero balance on credit card.

Post by IPer »

I caught myself doing this back when I was using a card I could make as many payments per month on I wanted to. The current card
I am using restricts it to 3 payments per month online, I can call in and schedule payments otherwise. So now I am just paying it
once or twice, just before the due date a lump sum generally equal to the statement balance, and then if there is more usage between that
day and the due date another payment usually bringing the balance to zero. As for checking all the time I like to check the credit card accounts
that do not have email notification for every transaction, though It is fairly automated using Quicken, so if I see any activity I don't recognize
I can make sure if it is fraud it gets taken care of in a timely manner.
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easye418
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Re: Obsessing towards zero balance on credit card.

Post by easye418 »

The only thing I obsess about is getting to 0 debt.

"After X amount of checks, we will be here. After X months, we will be here.... After X years, I will be dead and my spoiled children will inherit all of my hard earned money."
feh
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Re: Obsessing towards zero balance on credit card.

Post by feh »

packet wrote: So here're my questions for those of you who pay in full each month:
How often do you check and pay your credit card(s) in full each month?
What's your method?
I see charges daily (via mint.com).

Payment is once a month, on the due date, via automatic ACH.
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Re: Obsessing towards zero balance on credit card.

Post by astrohip »

Wow, some of these replies are amazing. Paying each purchase within days, paying off several times a month, etc. Holy. Cow!

A quick look in Quicken shows I made 1402 transactions on my credit cards in 2014. Just shy of 120 a month, all together. They are all auto-paid via direct draft (bank-ACH), on the due date. I check them weekly online for unusual activity, other than that they are ignored.

Anything else would seem OCD-ish to me. But hey, YMMV. :happy
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Re: Obsessing towards zero balance on credit card.

Post by White Coat Investor »

packet wrote:After reading through the thread on obsessive saving and paying off our credit card ... for the second time in a few days. I realized that I'm obsessing over a zero balance on the card... :/

It's just become habit, I check it at least 2 or three times per week. Each time, I add up the current balance plus pending transactions, then open my checking and submit a payment to bring the balance to zero. After realizing my obsession, I also realized that we pretty much never have a zero balance! It's a 1.5% back on everything card, so we use it for absolutely everything we possibly can.

So here're my questions for those of you who pay in full each month:
How often do you check and pay your credit card(s) in full each month?
What's your method?

I have ours set to automatically grab a minimum payment from our checking account (in case I ever miss)... but now I'm going to go check and see if there's an option to just pay in full. Then we'll see how bad I am about "not peeking" ... :)

:beerCheers,
packet
We've put all expenses on a 2% (Fidelity Amex) or 5% (PenFed for gas) cash rewards credit card for years. It is set up so the entire balance is paid automatically on the due date. Why in the world would anyone ever pay prior to that? There is no benefit to you.

[OT comments removed by admin LadyGeek]
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Re: Obsessing towards zero balance on credit card.

Post by White Coat Investor »

stoptothink wrote:OP isn't the only one who does this. I pay it off completely at least every other week. Did so this morning because a large car repair bill just posted, even though it is on the new billing cycle and we wouldn't have to actually pay it until mid-August. I have a totally irrational fear of debt.
[OT comment removed by admin LadyGeek] Seriously, if you do this, stop using credit cards. Just get a debit card.
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Re: Obsessing towards zero balance on credit card.

Post by White Coat Investor »

123 wrote:If you're uncomfortable being on the "hook" for a credit card balance you can pretty much eliminate that issue and still collect your reward points for purchases why not just carry a credit balance on the account?

Figure out what your likely maximum use is per month and send in a payment. You can turn it into a prepaid account. When the bill comes each month just pay the amount spent to bring the reserve back up.
Why not just put the money in YOUR bank account that the credit card is paid out of once a month? Then YOU earn the interest on it.

This whole thread is so weird. I couldn't believe there was one person making multiple credit card payments a month, but it seems this is a rather widespread phenomenon. If credit bothers you that much, quit using it. Life is too short to have to spend your time on financial chores like that.
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Re: Obsessing towards zero balance on credit card.

Post by White Coat Investor »

Broken Man 1999 wrote:
midareff wrote:All cards are cash back and set to auto-pay in full. Why bother with anything else?
I receive an email on virtually every purchase made, plus statement alerts, payment date approaching, and payment received, etc. Same with many of the bills I pay with credit cards.

While I think multiple payments on a card just to achieve a "zero" balance each month is a bit extreme, people should ignore the noise and pay their bills the way that gives them the most comfort.

Everyone is different. And that's OK. Makes life interesting.

Broken Man 1999
Why would you want emails for every purchase? I just looked at last month's budget/spending record. There were over 100 individual credit card transactions. Why would I want an extra 100 emails? I don't even take receipts any more for anything I'm not getting reimbursed for. Who wants to keep track of them? If someone nails me once a year for $10 more than I should be paying, well, seems a fair price to pay not to have to open 1200 emails and keep track of 1200 receipts.
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