Question on CC debt terminology

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investingdad
Posts: 1786
Joined: Fri Mar 15, 2013 10:41 pm

Question on CC debt terminology

Post by investingdad »

This may be a silly question, but I'm going to ask anyway.

Many online calculators for loans and retirement planning and such ask how much credit card debt you have and your monthly CC payment.

Is it reasonable to say the "how much" refers to the unpaid balance you carry from month to month? And the monthly payment is how much you typically apply to that unpaid balance?

I think neither are applicable to us since we pay our CC bill in full each month. So while our payment is usually several thousand dollars, this is because we pay everything with our credit card and then pay in full.

So even though our monthly CC bill is quite high, I think I'm correct to say for the purpose of these calculators, are monthly payment and balance are both zero since we're using it as a vehicle to facilitate paying our expenses.
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neurosphere
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Joined: Sun Jan 17, 2010 1:55 pm

Re: Question on CC debt terminology

Post by neurosphere »

If you otherwise account for the spending in the budget/calculator, and pay off the credit card each month, you don't have credit card debt to account for.

I suspect when asking for CC debt, the debt represents previous spending that was not yet paid for. Last years' spending has become this year's budget item. :D
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".
fabdog
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Location: Williamsburg VA

Re: Question on CC debt terminology

Post by fabdog »

as long as you are accounting for those expenses in the other buckets (food, entertainment, auto, etc) then it should be fine to list balances and payments as zero

Mike
snailderby
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Re: Question on CC debt terminology

Post by snailderby »

investingdad wrote: Wed Aug 05, 2020 8:42 am Many online calculators for loans and retirement planning and such ask how much credit card debt you have and your monthly CC payment.

Is it reasonable to say the "how much" refers to the unpaid balance you carry from month to month? And the monthly payment is how much you typically apply to that unpaid balance?
The reference to your "monthly CC payment" could refer to your monthly credit card payment, applied to any balance, whether or not you pay off your statement in full. But what's the context of the original reference? Can you give us a link to one of these online calculators that asks about your "monthly CC payment"?
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