Comfort level with Credit Card Balance

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khangaroo
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Comfort level with Credit Card Balance

Post by khangaroo » Fri Aug 03, 2018 3:37 pm

Just wondering what's everyone's comfort level is with their credit card balance.

I used to pay off my credit card balance every month but have been focusing on saving for a down payment for a duplex therefore my credit card isn't getting paid in full each month. I haven't had to pay CC interest for years now and don't expect to since I pay more each month than my monthly carry-over balance. I align myself with Dave Ramsey therefore I'm debt-adverse but not a zealot like he is.

My goal is to not pay any interest and/or keep the balance below $1k. I mainly use 1 CC other than an Amazon CC for misc. purchases.

What is your relationship with your credit card balance or do you just pay it off each month?

livesoft
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Re: Comfort level with Credit Card Balance

Post by livesoft » Fri Aug 03, 2018 3:43 pm

Unless my interest rate is 0%, I pay it off every month. If my interest rate is 0%, then I pay the required monthly minimum until the last month possible, then I pay it off.
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oldcomputerguy
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Re: Comfort level with Credit Card Balance

Post by oldcomputerguy » Fri Aug 03, 2018 3:45 pm

khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.
Zero comfort level. Any outstanding balance at all on any of my credit cards makes me itch. I check the card balances daily, and pay them off two to three times a week. Excessive, perhaps, but that's just me.
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Re: Comfort level with Credit Card Balance

Post by Jack FFR1846 » Fri Aug 03, 2018 3:45 pm

I pay the statement balance due every month always. You do know, I hope, that if you pay 1 cent less than the statement balance due, you'll pay interest for the month that went by on the entire amount and continue paying on the unpaid amount until you do.
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delamer
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Re: Comfort level with Credit Card Balance

Post by delamer » Fri Aug 03, 2018 3:49 pm

You can’t both not be paying off your credit card each and not paying interest (unless you have a 0% interest rate).

What do you mean by your “monthly carry-over balance?”

If we didn’t already have the cash in the bank to buy an item, we wouldn’t put it on a credit card.

Credit cards are for convenience and reward points.

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Blister
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Re: Comfort level with Credit Card Balance

Post by Blister » Fri Aug 03, 2018 4:00 pm

You can’t both not be paying off your credit card each and not paying interest (unless you have a 0% interest rate).

What do you mean by your “monthly carry-over balance?”




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tesuzuki2002
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Re: Comfort level with Credit Card Balance

Post by tesuzuki2002 » Fri Aug 03, 2018 4:03 pm

khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.

I used to pay off my credit card balance every month but have been focusing on saving for a down payment for a duplex therefore my credit card isn't getting paid in full each month. I haven't had to pay CC interest for years now and don't expect to since I pay more each month than my monthly carry-over balance. I align myself with Dave Ramsey therefore I'm debt-adverse but not a zealot like he is.

My goal is to not pay any interest and/or keep the balance below $1k. I mainly use 1 CC other than an Amazon CC for misc. purchases.

What is your relationship with your credit card balance or do you just pay it off each month?
as long as you have the cash on hand to pay off the balance in the event of some sort of emergency... it really isn't an issue.

If you have an accident or other that causes income decline and you can't cover the expense.. the interest adds up real quick...

spammagnet
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Re: Comfort level with Credit Card Balance

Post by spammagnet » Fri Aug 03, 2018 4:06 pm

khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.

I used to pay off my credit card balance every month but have been focusing on saving for a down payment for a duplex therefore my credit card isn't getting paid in full each month. I haven't had to pay CC interest for years now and don't expect to since I pay more each month than my monthly carry-over balance. I align myself with Dave Ramsey therefore I'm debt-adverse but not a zealot like he is.

My goal is to not pay any interest and/or keep the balance below $1k. I mainly use 1 CC other than an Amazon CC for misc. purchases.

What is your relationship with your credit card balance or do you just pay it off each month?
Unless it's 0 interest, don't carry a balance. Since you do have a balance, look for a $0/0% purchase or balance transfer card. They do exist. You have to pay it in full at some point, anyway, though. By that time, though, it's 17+% interest.

Silk McCue
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Re: Comfort level with Credit Card Balance

Post by Silk McCue » Fri Aug 03, 2018 4:09 pm

Excluding strategic use of 0% cards we haven’t carried a balance nor paid interest on a credit card in over 30 years. We charge most everything we can and pay in full at the end of the month by automatic draft on the due date. Our current USAA car pays us 2.5% on every purchase. It makes no sense to pay interest in order to save for a duplex. You should either cut your spending or save less.

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stlrick
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Re: Comfort level with Credit Card Balance

Post by stlrick » Fri Aug 03, 2018 4:22 pm

There is a little confusion here because some of us don't know what you mean by "carry-over balance." Once each month, the credit card statement closes, and you have a statement balance, usually due within 2-3 weeks. If you pay that balance in full, anytime before it is due, you pay no interest. I always pay the statement balance before the due date and have not paid interest a single time in at least 20 years. After the statement closes, you start accumulating charges for the next monthly statement, so if you check your credit card online and have not yet paid your statement balance, your "current balance" will be more than the "statement balance." Is that what you mean by "carry-over balance?" I pay no attention at all to these new charges until they become due on the next statement.

Topic Author
khangaroo
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Re: Comfort level with Credit Card Balance

Post by khangaroo » Fri Aug 03, 2018 4:44 pm

stlrick wrote:
Fri Aug 03, 2018 4:22 pm
There is a little confusion here because some of us don't know what you mean by "carry-over balance." Once each month, the credit card statement closes, and you have a statement balance, usually due within 2-3 weeks. If you pay that balance in full, anytime before it is due, you pay no interest. I always pay the statement balance before the due date and have not paid interest a single time in at least 20 years. After the statement closes, you start accumulating charges for the next monthly statement, so if you check your credit card online and have not yet paid your statement balance, your "current balance" will be more than the "statement balance." Is that what you mean by "carry-over balance?" I pay no attention at all to these new charges until they become due on the next statement.
Sorry for the confusion, but yes this is what I mean. I pay more than the "statement balance" of the previous month therefore do not incur any interest costs.

Thanks everyone for your responses!

daveydoo
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Re: Comfort level with Credit Card Balance

Post by daveydoo » Fri Aug 03, 2018 4:49 pm

khangaroo wrote:
Fri Aug 03, 2018 3:37 pm

What is your relationship with your credit card balance or do you just pay it off each month?
I have no relationship of this nature :D . Credit card balance is for crazy people. That it comprises 40% of US card-holders notwithstanding, never, ever carry a balance.

On the flip side, I seem to have no trouble buying on credit for 30 days so if it's really 0% interest, I'm not sure why I feel so superior...
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

delamer
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Re: Comfort level with Credit Card Balance

Post by delamer » Fri Aug 03, 2018 5:09 pm

khangaroo wrote:
Fri Aug 03, 2018 4:44 pm
stlrick wrote:
Fri Aug 03, 2018 4:22 pm
There is a little confusion here because some of us don't know what you mean by "carry-over balance." Once each month, the credit card statement closes, and you have a statement balance, usually due within 2-3 weeks. If you pay that balance in full, anytime before it is due, you pay no interest. I always pay the statement balance before the due date and have not paid interest a single time in at least 20 years. After the statement closes, you start accumulating charges for the next monthly statement, so if you check your credit card online and have not yet paid your statement balance, your "current balance" will be more than the "statement balance." Is that what you mean by "carry-over balance?" I pay no attention at all to these new charges until they become due on the next statement.
Sorry for the confusion, but yes this is what I mean. I pay more than the "statement balance" of the previous month therefore do not incur any interest costs.

Thanks everyone for your responses!
Why do you pay more than the statement balance?

spammagnet
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Re: Comfort level with Credit Card Balance

Post by spammagnet » Fri Aug 03, 2018 5:29 pm

khangaroo wrote:
Fri Aug 03, 2018 4:44 pm
Sorry for the confusion, but yes this is what I mean. I pay more than the "statement balance" of the previous month therefore do not incur any interest costs.
Why pay more than the statement balance? Paying the statement balance in full avoids interest, as long as the previous balance was $0 or you paid the statement balance in the previous month, too.

For some cards, you only have to pay the statement balance minus interim credits and returns.

By paying the statement balance, I've had, in effect, a permanent interest-free loan from my bank for the past 20 years.

runner3081
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Re: Comfort level with Credit Card Balance

Post by runner3081 » Fri Aug 03, 2018 5:29 pm

No comfort with a balance. Paid 100% every month.

If I can't pay for it, I won't buy it.

daveydoo
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Re: Comfort level with Credit Card Balance

Post by daveydoo » Fri Aug 03, 2018 5:43 pm

spammagnet wrote:
Fri Aug 03, 2018 5:29 pm

By paying the statement balance, I've had, in effect, a permanent interest-free loan from my bank for the past 20 years.
This is turning into a perplexing thread. All solvent people pay the statement balance -- what was owed at the close of the statement period. Additional charges accrue after the closing date but you are not immediately responsible for those. There is also the minimum payment -- that is like ten bucks or something. No one should pay the minimum payment. But the only times I have paid more than the statement balance -- i.e., paid for all of last month's plus some of this month's charges -- was when I was close to my credit limit and/or about to travel and I knew there would be a lot of fresh charges hitting the account.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

spammagnet
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Re: Comfort level with Credit Card Balance

Post by spammagnet » Fri Aug 03, 2018 5:50 pm

daveydoo wrote:
Fri Aug 03, 2018 5:43 pm
spammagnet wrote:
Fri Aug 03, 2018 5:29 pm

By paying the statement balance, I've had, in effect, a permanent interest-free loan from my bank for the past 20 years.
This is turning into a perplexing thread. All solvent people pay the statement balance -- what was owed at the close of the statement period. Additional charges accrue after the closing date but you are not immediately responsible for those. There is also the minimum payment -- that is like ten bucks or something. No one should pay the minimum payment. But the only times I have paid more than the statement balance -- i.e., paid for all of last month's plus some of this month's charges -- was when I was close to my credit limit and/or about to travel and I knew there would be a lot of fresh charges hitting the account.
What I meant was that additional expenses accrue between the time the statement balance is determined and when it has to be paid. That being the case, the balance never goes under an average amount (a couple of thousand - we use it for everything.) That's what I meant by "permanent loan". No, I don't pay interest because, like you, I pay the statement balance.

daveydoo
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Re: Comfort level with Credit Card Balance

Post by daveydoo » Fri Aug 03, 2018 5:58 pm

spammagnet wrote:
Fri Aug 03, 2018 5:50 pm
That's what I meant by "permanent loan".
Of course. But the "float" is essentially worthless to the consumer, given what interest rates have been. I mean, we autopay from a bank account paying 0.01% on the smallest balance that we can stand to keep there for this very purpose. An extra 30 days marinating in there ain't much.

This was a solid argument many years ago.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

HornedToad
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Re: Comfort level with Credit Card Balance

Post by HornedToad » Fri Aug 03, 2018 6:01 pm

spammagnet wrote:
Fri Aug 03, 2018 5:50 pm
daveydoo wrote:
Fri Aug 03, 2018 5:43 pm
spammagnet wrote:
Fri Aug 03, 2018 5:29 pm

By paying the statement balance, I've had, in effect, a permanent interest-free loan from my bank for the past 20 years.
This is turning into a perplexing thread. All solvent people pay the statement balance -- what was owed at the close of the statement period. Additional charges accrue after the closing date but you are not immediately responsible for those. There is also the minimum payment -- that is like ten bucks or something. No one should pay the minimum payment. But the only times I have paid more than the statement balance -- i.e., paid for all of last month's plus some of this month's charges -- was when I was close to my credit limit and/or about to travel and I knew there would be a lot of fresh charges hitting the account.
What I meant was that additional expenses accrue between the time the statement balance is determined and when it has to be paid. That being the case, the balance never goes under an average amount (a couple of thousand - we use it for everything.) That's what I meant by "permanent loan". No, I don't pay interest because, like you, I pay the statement balance.
It's irrelevant whether you pay statement balance or amount owed at time of payment. That's just changing the amount of month to float that you are using from the credit card.

I pay the statement balance. Before I used quicken or occasionally I pay the full amount incurred over the statement balance just for simplification of looking at my bank account and not having to mentally subtract upcoming credit card charges for the next statement.

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Pajamas
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Re: Comfort level with Credit Card Balance

Post by Pajamas » Fri Aug 03, 2018 6:02 pm

khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
What is your relationship with your credit card balance or do you just pay it off each month?
Balance paid in full automatically each month by transfer from checking.

I don't understand how you can both not pay off the balance monthly and also not pay interest unless you have an introductory offer. Nor do I understand how carrying a credit card balance is helping you buy a condo unless you are planning to indirectly use expensive credit card debt for the down payment. :confused

UpperNwGuy
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Re: Comfort level with Credit Card Balance

Post by UpperNwGuy » Fri Aug 03, 2018 6:02 pm

My comfort level is a zero balance.

stlrick
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Re: Comfort level with Credit Card Balance

Post by stlrick » Fri Aug 03, 2018 6:09 pm

Some of the differences in approach may reflect the time of the month that people pay bills. If you pay everything at the end of the month (or beginning of the month), then I can see a habit of monthly budgeting by paying the full credit card balance rather than the statement balance. Given how meaningless the float is these days, it doesn't make any difference to pay a balance that isn't "due." I pay bills throughout the month, and pay the credit card statement balance a few days after it closes, which, for different credit cards, occurs at different times of the month.

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TierArtz
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Re: Comfort level with Credit Card Balance

Post by TierArtz » Fri Aug 03, 2018 6:18 pm

None. My sole CC statement is available around the 19th of each month and the statement amount is due on the following 13th. I always pay more than the statement, up to the card balance at the point when I get around to setting up a scheduled payment for the 13th. I may come back and up the amount as the balance climbs. I usually set the amount paid to leave about $1000 in checking. If there is more than that left, I transfer some to savings to get about 0.I5% higher interest. I track the balance of everything in Quicken with known deposits and bills entered 45 days in advance - Easy and entertaining.

BogleBike
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Re: Comfort level with Credit Card Balance

Post by BogleBike » Fri Aug 03, 2018 6:27 pm

Fairly high, because my credit card balances bring advantages.

One balance is introductory year of zero percent interest; I figure I'm gaining whatever that amount earns on investments in the interim. Not completely sure the hassle is worth that small amount, but glad to be doing the experiment.

The other is the card I use for daily (weekly) transactions, which brings rewards (miles) in addition to its signup bonus. Like the other posters, I pay so that there is no interest charged.

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Re: Comfort level with Credit Card Balance

Post by Dottie57 » Fri Aug 03, 2018 6:31 pm

I use a credit card as convenience. I do not spend my money befor I have it and therefore pay it off each month.


No balance.

Rainmaker41
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Re: Comfort level with Credit Card Balance

Post by Rainmaker41 » Fri Aug 03, 2018 6:47 pm

I submit payments for everything owed to credit card issuers, including legitimate pending charges but less cashback simultaneously applied to the balance, on the 15th and last day of the month. It happens that one card's statement closes on the 15th and another on the 27th but that is technically irrelevant because the statement due dates are further away than the next semi-monthly payment submission anyway. I think of this as meaning that short-term debt is balanced against and exceeded by short-term income due from employers.

I also submit additional payments whenever we make purchases of arbitrarily large size so that knowing I "haven't paid for it yet" doesn't annoy me.

J295
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Re: Comfort level with Credit Card Balance

Post by J295 » Fri Aug 03, 2018 6:53 pm

Pay in full monthly

nps
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Re: Comfort level with Credit Card Balance

Post by nps » Fri Aug 03, 2018 7:38 pm

khangaroo wrote:
Fri Aug 03, 2018 4:44 pm
Sorry for the confusion, but yes this is what I mean. I pay more than the "statement balance" of the previous month therefore do not incur any interest costs.
I pay exactly the statement balance every month (not more) and also do not incur any interest costs. BTW this is what is known as paying it off every month. I am not sure if this is what you meant by the term in your original question.

Funancials
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Re: Comfort level with Credit Card Balance

Post by Funancials » Fri Aug 03, 2018 7:43 pm

Credit cards are a great tool for spending, but a horrible tool for borrowing. Therefore, I will never put something on a credit card that I cannot payoff immediately.

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rosylenm
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Re: Comfort level with Credit Card Balance

Post by rosylenm » Fri Aug 03, 2018 9:15 pm

oldcomputerguy wrote:
Fri Aug 03, 2018 3:45 pm
khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.
Zero comfort level. Any outstanding balance at all on any of my credit cards makes me itch. I check the card balances daily, and pay them off two to three times a week. Excessive, perhaps, but that's just me.
Same here. As soon as a charge posts, I pay it. I like to see zero balances on my credit card accounts.

I cringe a little when I see my husband’s cc balances. He waits for paper bills and pays with paper checks.

kodachrome
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Re: Comfort level with Credit Card Balance

Post by kodachrome » Fri Aug 03, 2018 9:49 pm

Credit cards are a very simple tool for a short-term borrowing, especially when I think of rolling-over the balance for next month any reasons. There are certain situations that the budget got overrun and I do not have enough cash paying it off.
In exchange, the interest rate is so high like 15%+.
My comfort level of the balance is…a certain amount that I can pay it off within 2~3 months.

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Re: Comfort level with Credit Card Balance

Post by ThePrince » Fri Aug 03, 2018 10:01 pm

runner3081 wrote:
Fri Aug 03, 2018 5:29 pm
No comfort with a balance. Paid 100% every month.

If I can't pay for it, I won't buy it.
+1

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munemaker
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Re: Comfort level with Credit Card Balance

Post by munemaker » Fri Aug 03, 2018 10:19 pm

rosylenm wrote:
Fri Aug 03, 2018 9:15 pm

I cringe a little when I see my husband’s cc balances. He waits for paper bills and pays with paper checks.
Yikes! :oops:

Nissanzx1
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Re: Comfort level with Credit Card Balance

Post by Nissanzx1 » Fri Aug 03, 2018 10:51 pm

Credit cards, car loans, and whole life insurance are all middle class traps. Meaning you will stay firmly in the middle class if you fool with them. If that's cool with you, go for it.

Sounds like your spending might be veering out of control. Are you working a detailed budget?

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HomerJ
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Re: Comfort level with Credit Card Balance

Post by HomerJ » Fri Aug 03, 2018 11:02 pm

Zero. Pay it in full every month.
The J stands for Jay

bltn
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Re: Comfort level with Credit Card Balance

Post by bltn » Sat Aug 04, 2018 12:09 am

I also spend only what I can pay monthly. I don t borrow money with unpaid credit card bills. If I weren't getting 2% back on all cc purchases except for gasoline, for which I get a 5% rebate, I would use a debit card rather than a credit card for the convenience.
You re not saving money by accumulating cash and a cc balance , regardless of the interest rate.

bluelight
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Re: Comfort level with Credit Card Balance

Post by bluelight » Sat Aug 04, 2018 12:12 am

We use our rewards card for everything, so every 2 weeks on payday I pay off what ever balance there is. That way I don't have one big payment due once a month.

Bmac
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Re: Comfort level with Credit Card Balance

Post by Bmac » Sat Aug 04, 2018 12:34 am

rosylenm wrote:
Fri Aug 03, 2018 9:15 pm
oldcomputerguy wrote:
Fri Aug 03, 2018 3:45 pm
khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.
Zero comfort level. Any outstanding balance at all on any of my credit cards makes me itch. I check the card balances daily, and pay them off two to three times a week. Excessive, perhaps, but that's just me.
Same here. As soon as a charge posts, I pay it. I like to see zero balances on my credit card accounts.

I cringe a little when I see my husband’s cc balances. He waits for paper bills and pays with paper checks.
I’m not sure I understand the point of paying charges as soon as they post in an effort to have a zero balance. It seems counterintuitive to the whole convenience aspect of having a credit card in the first place. With the exception of the paper bill and check (I receive and pay bill electronically), your husband’s approach is what most on this site seem to do. If you pay after each charge posts, why not just use a debit card instead? I also don’t see the reason to pay more than the billed statement balance due that a few other posters have suggested.

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rosylenm
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Re: Comfort level with Credit Card Balance

Post by rosylenm » Sat Aug 04, 2018 1:06 am

Bmac wrote:
Sat Aug 04, 2018 12:34 am
rosylenm wrote:
Fri Aug 03, 2018 9:15 pm
oldcomputerguy wrote:
Fri Aug 03, 2018 3:45 pm
khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.
Zero comfort level. Any outstanding balance at all on any of my credit cards makes me itch. I check the card balances daily, and pay them off two to three times a week. Excessive, perhaps, but that's just me.
Same here. As soon as a charge posts, I pay it. I like to see zero balances on my credit card accounts.

I cringe a little when I see my husband’s cc balances. He waits for paper bills and pays with paper checks.
I’m not sure I understand the point of paying charges as soon as they post in an effort to have a zero balance. It seems counterintuitive to the whole convenience aspect of having a credit card in the first place. With the exception of the paper bill and check (I receive and pay bill electronically), your husband’s approach is what most on this site seem to do. If you pay after each charge posts, why not just use a debit card instead? I also don’t see the reason to pay more than the billed statement balance due that a few other posters have suggested.
Everyone’s tolerance for debt is different and I get no cash back/points for using a debit card. Six of one, half dozen....

MikeG62
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Re: Comfort level with Credit Card Balance

Post by MikeG62 » Sat Aug 04, 2018 7:20 am

Very comfortable as I pay all statement balances in full on the statement due date (using auto pay). We charge almost everything to CC's too, for the rewards and simplicity they provide.
Real Knowledge Comes Only From Experience

Paul78
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Re: Comfort level with Credit Card Balance

Post by Paul78 » Sat Aug 04, 2018 9:35 am

livesoft wrote:
Fri Aug 03, 2018 3:43 pm
Unless my interest rate is 0%, I pay it off every month. If my interest rate is 0%, then I pay the required monthly minimum until the last month possible, then I pay it off.
This. If I have a 0% for 12 month offer I will take it and use it but otherwise I always pay in full every month. Even a low credit card interest rate is still what 6%h (most of mine are in high teens/low 20's I think)? That is a lot of money to just give away.

If is different if you can't afford to pay it off but in your case it sounds like you are just prioritizing putting the money elsewhere.

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whodidntante
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Re: Comfort level with Credit Card Balance

Post by whodidntante » Sat Aug 04, 2018 9:47 am

I'm currently floating 20k on credit cards but I've never paid credit card interest.

lostdog
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Re: Comfort level with Credit Card Balance

Post by lostdog » Sat Aug 04, 2018 7:09 pm

I pay it off every month. I do not ever carry a balance.
VTWAX and chill.

hulburt1
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Re: Comfort level with Credit Card Balance

Post by hulburt1 » Sat Aug 04, 2018 8:42 pm

I'm 65 and have never paid interest on a card

drawpoker
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Re: Comfort level with Credit Card Balance

Post by drawpoker » Sat Aug 04, 2018 9:38 pm

Obviously, the responses here are going to vary widely. Mostly because of the age groups here, working or retired, goals to be attained.

Am age 69 and determined to attain goal of delaying social security until age 70. Big Part of being successful so far in getting close to this is due directly to the proliferation of 0% introductory interest rates on credit cards in recent years.

Am talking about the really good ones - 0% for not just a year but 18 months :D :D And I haven't had to employ any "balance transfer" fees either to accomplish this feat. Thanks to this raging bull market, every time I had to sell shares to pay off the balance when the 0% teaser ended, I made the money back within a few months.

Right now, am working on a approx. $5,000 balance on a PNC Core Card which is good for 0% up through Sept 2019. It will probably reach $9,000 by Dec. 31.
Comfort level? Well, shoot, if you asked me that and I was age 29 instead of 69, yes, I would tell you I am literally you know what SH #&!@# Bricks to have such a high cc balance. Not sleeping at nite! But it's a different day now.

As long as you are Not paying interest charges, balance transfer fees, or any other kind of expenses associated with credit cards, the Sky's the Limit :wink: As long as you have a disciplined, long range, workable plan for paying off balances.

(Guess you could say that this is one of the very few good things about growing into an OldFart - years and years of building a very high credit score in the 800's results in getting all these 0% cc offers in the mailbox :moneybag :P :D )

ThePrince
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Re: Comfort level with Credit Card Balance

Post by ThePrince » Sat Aug 04, 2018 9:44 pm

Nissanzx1 wrote:
Fri Aug 03, 2018 10:51 pm
Credit cards, car loans, and whole life insurance are all middle class traps. Meaning you will stay firmly in the middle class if you fool with them. If that's cool with you, go for it.

Sounds like your spending might be veering out of control. Are you working a detailed budget?
+1

nyclon
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Re: Comfort level with Credit Card Balance

Post by nyclon » Sat Aug 04, 2018 9:47 pm

khangaroo wrote:
Fri Aug 03, 2018 3:37 pm
Just wondering what's everyone's comfort level is with their credit card balance.

I used to pay off my credit card balance every month but have been focusing on saving for a down payment for a duplex therefore my credit card isn't getting paid in full each month. I haven't had to pay CC interest for years now and don't expect to since I pay more each month than my monthly carry-over balance. I align myself with Dave Ramsey therefore I'm debt-adverse but not a zealot like he is.

My goal is to not pay any interest and/or keep the balance below $1k. I mainly use 1 CC other than an Amazon CC for misc. purchases.

What is your relationship with your credit card balance or do you just pay it off each month?
Comfort level is based on whether I can pay the balance in full each month. If I've got the cash, what's there to be afraid of? I use credit cards to get the cash back incentives, since those incentives we are all "paying" for already in merchant payment processing fees - so if you pay cash or debit, you're sort of overpaying.

I once ran monthly balances in the range of $200,000 each month for a business. Paid in full each month.

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AerialWombat
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Re: Comfort level with Credit Card Balance

Post by AerialWombat » Sat Aug 04, 2018 11:47 pm

As somebody that once had over $250k in credit card and personal (unsecured) line of credit debt and wound up in bankruptcy, I have zero comfort with carrying a balance. I use my cards for all personal and business expenses, in order to obtain cash back rewards and travel points, but I pay my balances in full every Monday.
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DetroitRick
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Re: Comfort level with Credit Card Balance

Post by DetroitRick » Sun Aug 05, 2018 8:55 am

I'm not debt averse, within reason, and if it serves a purpose (for leverage or bridging short-term needs). I run almost all expenses through cards, which can mean modestly high balances at times. Those balances don't bother me at all. I manage this by monitoring spending, so I have no fear of excessive balances.

My only aversion is to card interest rates themselves, so all is paid off monthly right now (and almost always has been). Standard purchase rates on our cards range from 14% to 22%, and I'm not willing to pay that level and probably never would be except as a last resort (and, worst case, my margin account rates are just under 9% anyway- bad, but better than 14%). Promo rates would be fine with me, and I'd be willing to carry a balance then, if I had a real need for the short-term money.

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Sandtrap
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Re: Comfort level with Credit Card Balance

Post by Sandtrap » Sun Aug 05, 2018 9:31 am

delamer wrote:
Fri Aug 03, 2018 3:49 pm
You can’t both not be paying off your credit card each and not paying interest (unless you have a 0% interest rate).

What do you mean by your “monthly carry-over balance?”

If we didn’t already have the cash in the bank to buy an item, we wouldn’t put it on a credit card.

Credit cards are for convenience and reward points.
+1
Credit cards are a "debt hook" temptation to many.
Pay off the entire balance when due monthly.
j
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