+ Coolwave35 Posted January 7 Share Posted January 7 15 minutes ago, Vegas_Millennial said: Thanks for the advice. I'm ahead of the game on my retirement contributiins, having contributed 30%-50% of my gross salary every year in my 20s, and over 25% of my gross salary every year in my 30s, all to Roth's. Most of my debt is low interest 2%-3% mortgage and temporary credit card offers, so I had been just piling my salary into Roth's instead of paying down debt. Now that I have some debt at over 8% interest, I want to aggressively pay off that 8%+ debt before I go back to funding my Roth's again. That’s pretty amazing man, well done. Shoedog112 and + Vegas_Millennial 1 1 Link to comment Share on other sites More sharing options...
Luv2play Posted January 7 Share Posted January 7 3 hours ago, Bokomaru said: What’s annoying about the article posted on this thread is that it doesn’t make clear that the debt numbers quoted are debt on which interest is being paid. Don’t assume. There’s a lot of sloppy journalism in the world. Newsflash: when we charge something to a credit card debt, that *is* debt, even if it’s being paid off in full each month. As an aside, @Vegas_Millennial I urge you, if your loans are low or no interest, to consider starting up your Roth or 401k contributions again. The tax loss incurred (now or in the future) could well outweigh the interest payments on the debt. I read the article fully and only saw in the corrections at the end they are talking about debt being balances kept at the end of each month. So charges on your card that are paid off completely each month don’t figure as credit card debt. The good articles on this subject will specify what percentage of consumers pay off their balances each month and therefore incur no interest each month. The standard rates on most cards here in Canada are over 20 percent so there is a great incentive not to incur charges that can’t be paid off monthly. 20 years ago when interest rates were higher than today, the standard rates on credit cards were around 9 percent. Then they went to 13 percent. Then to 19 percent. All this while interest rates generally were going down to very low levels. Credit cards are the worst form of debt to carry other than pay day loans or debts to loan sharks. Ironically these latter types of debt are carried by the poorest in society. Bokomaru and + Charlie 1 1 Link to comment Share on other sites More sharing options...
Shoedog112 Posted January 7 Share Posted January 7 (edited) 4 hours ago, chitownguy said: Having zero balances on your credit cards or paying them in full each month will not hurt your credit score. It can actually increase your score. One of the factors used in computing your score is your credit card use percentage. Total debt on all your cards divided by the total credit limit on all cards. A high percentage will lower your score. Having no balance or paying them off lowers your use percentage. Thanks for the explanation. Makes sense. When you refer to the term “debt”, are you referring to “total charges”, or “debt, as in balance”? My average annual charges are between $30,000-$32,000 a year. I use my rewards card for almost everything. My credit limit is $35,000. Monthly balance I have been leaving about $1000 a month? Edited January 7 by Shoedog112 Link to comment Share on other sites More sharing options...
Luv2play Posted January 7 Share Posted January 7 1 minute ago, Shoedog112 said: Thanks for the explanation. Makes sense. When you refer to the term “debt”, are you referring to “total charges”, or “debt, as in balance”? My average annual charges are between $30,000-$32,000 a year. I use my rewards card for almost everything. My credit limit is $35,000. Monthly balance I have been leaving about $1000 a month? As I pointed out above we should be talking about balances at the end of each month, not monthly charges. If you leave $1000 on your card regularly each month you are racking up interest expenses. If you can you should pay off the entire amount of your monthly charges at the end of each month. marylander1940 and Shoedog112 1 1 Link to comment Share on other sites More sharing options...
+ BobPS Posted January 8 Share Posted January 8 (edited) I have an American Express cash preferred credit card among others. I use the Amex card to purchase virtually all my groceries and liquor wine etc. at grocery stores because I get 6% back.Yearly, the savings add up to well over the $95 a year I pay for the card. I pay it in full every month. Edited January 8 by BobPS Clarification Link to comment Share on other sites More sharing options...
+ jessmapex Posted January 8 Share Posted January 8 (edited) I have zero debts. I use credit cards to accumulate miles or cash back. Autopay pays off full balance every month. My credit score went down because i had no loans. So when i purchased my last car, I financed half of it despite having the cash. Paid it off just to demonstrate to the credit agencies i am able take on a loan and pay it back. That added 5-10 points to my credit score. Edited January 8 by jessmapex Shoedog112 and + Charlie 1 1 Link to comment Share on other sites More sharing options...
chitownguy Posted January 8 Share Posted January 8 17 hours ago, Shoedog112 said: Thanks for the explanation. Makes sense. When you refer to the term “debt”, are you referring to “total charges”, or “debt, as in balance”? My average annual charges are between $30,000-$32,000 a year. I use my rewards card for almost everything. My credit limit is $35,000. Monthly balance I have been leaving about $1000 a month? I am referring to the total current balance on yours cards at the time your score is calculated. Credit companies usually report your current balance and credit limit to the credit bureaus once a month on the closing date of your account. + Charlie 1 Link to comment Share on other sites More sharing options...
Thelatin Posted January 8 Share Posted January 8 I gave a card to one of my long term providers for “emergencies”. Amazing how his definition of an emergency is different than mine lol. He always pays it off on his own, but not great for my credit score. I like to keep it up at 850, which he doesn’t understand. + Vegas_Millennial, + FrankR and marylander1940 2 1 Link to comment Share on other sites More sharing options...
Shoedog112 Posted January 9 Share Posted January 9 On 1/7/2024 at 7:44 PM, jessmapex said: I have zero debts. I use credit cards to accumulate miles or cash back. Autopay pays off full balance every month. My credit score went down because i had no loans. So when i purchased my last car, I financed half of it despite having the cash. Paid it off just to demonstrate to the credit agencies i am able take on a loan and pay it back. That added 5-10 points to my credit score. I’m thinking of doing the same thing when I purchase a new car in a few months. Did you pay the balance off immediately, or follow the payment plan? Link to comment Share on other sites More sharing options...
+ jessmapex Posted January 9 Share Posted January 9 26 minutes ago, Shoedog112 said: Did you pay the balance off immediately, or follow the payment plan? I followed the payment plan. marylander1940 1 Link to comment Share on other sites More sharing options...
Peter Eater Posted January 9 Share Posted January 9 On 1/7/2024 at 12:47 PM, Luv2play said: Ironically these latter types of debt are carried by the poorest in society. Agreed, although I think the situation is less “ironic” than intentional. The poor have the fewest options, so they’re ripe for exploitation. The payday loan industry was designed to exploit - and should be banned. It’s usury! Luv2play and mike carey 1 1 Link to comment Share on other sites More sharing options...
+ augustus Posted January 10 Share Posted January 10 Here's a recent article from CNBC about credit card debt. What is amazing is the average interest rate charged. 22.77% ! 43% of Americans with credit card debt say it's due to emergency expenses—here's how much it's costing them WWW.CNBC.COM Nearly half of Americans are using their credit cards as an emergency fund, even though it costs them in interest. + Charlie, + Pensant and marylander1940 3 Link to comment Share on other sites More sharing options...
handiacefailure Posted January 13 Share Posted January 13 Zero debt here. But charge every purchase I can for the awards/points. I have been able to maintain Delta thanks to AmEx and have a lot of miles and points. But I pay the balance in ful (and try to pay the balance before the due date so it closes with a zero balance for credit reporting) and use my credit cards as a convenience not necessity. marylander1940, Beancounter, + The Big Guy and 1 other 1 3 Link to comment Share on other sites More sharing options...
TonyDown Posted January 13 Share Posted January 13 I read an article linked on Yahoo Finance today that Citi was planning to cut thousands of jobs. The article reported Citi had a loss. My initial reaction was how could that be possible with the high interest they charge on credit cards. Thus this thread caught my interest. The average credit card debt reported in the article did not seem too astounding compared to all of the credit card debt horror stories one hears about. So, I wonder if the median debt metric is quite a bit higher than the average. That said, I pay off my credit card balances every week. My car I bought used at Enterprise, with cash. I basically keep no debt. + Charlie, handiacefailure and marylander1940 3 Link to comment Share on other sites More sharing options...
Luv2play Posted January 14 Share Posted January 14 On 1/10/2024 at 1:53 PM, augustus said: Here's a recent article from CNBC about credit card debt. What is amazing is the average interest rate charged. 22.77% ! 43% of Americans with credit card debt say it's due to emergency expenses—here's how much it's costing them WWW.CNBC.COM Nearly half of Americans are using their credit cards as an emergency fund, even though it costs them in interest. I don’t find the average rate of 22 percent out of line. That’s what I said in my post above. That’s here in Canada but I would expect the US would be much the same. I’m talking about Mastercard Visa etc the mainstream card companies. Link to comment Share on other sites More sharing options...
Luv2play Posted January 14 Share Posted January 14 19 hours ago, TonyDown said: I read an article linked on Yahoo Finance today that Citi was planning to cut thousands of jobs. The article reported Citi had a loss. My initial reaction was how could that be possible with the high interest they charge on credit cards. Thus this thread caught my interest. The average credit card debt reported in the article did not seem too astounding compared to all of the credit card debt horror stories one hears about. So, I wonder if the median debt metric is quite a bit higher than the average. That said, I pay off my credit card balances every week. My car I bought used at Enterprise, with cash. I basically keep no debt. Every week??? Link to comment Share on other sites More sharing options...
Shoedog112 Posted January 14 Share Posted January 14 Is interest calculated on the month end balance that posts at the billing cycle, or your daily balance during the month? Link to comment Share on other sites More sharing options...
mike carey Posted January 14 Share Posted January 14 45 minutes ago, Shoedog112 said: Is interest calculated on the month end balance that posts at the billing cycle, or your daily balance during the month? Different cards may apply interest in different ways, but my understanding of the method that applies in general to cards in Australia is that the due date, which is at the end of the interest-free period, is the decision point. If you do not pay the balance by then, interest is charged on the amount owing from the date that each charge was debited to your account, so that could be up to 55 days' interest on amounts owing. Interest after that date is then charged on the daily outstanding balance, including any new charges incurred, until the debt is paid down. Luv2play and Shoedog112 1 1 Link to comment Share on other sites More sharing options...
chitownguy Posted January 14 Share Posted January 14 (edited) 12 hours ago, Shoedog112 said: Is interest calculated on the month end balance that posts at the billing cycle, or your daily balance during the month? Most credit cards use an average daily balance method to calculate the interest. The total balance on the card for each day in the billing period is divided by the number of days in the billing period. This is the average daily balance that the interest rate is applied to calculate interest charged that month. Edited January 14 by chitownguy + Charlie 1 Link to comment Share on other sites More sharing options...
Shoedog112 Posted January 14 Share Posted January 14 6 minutes ago, chitownguy said: Most credit cards use an average daily balance method to calculate the interest. The total balance on the card for each day in the billing period is divided by the number of days in the billing period. This is the average daily balance that the interest rate is applied to calculate interest charged that month. Thank you, that makes sense. So even if you pay the balance off by the due date, there will still be interest incurred because there was a balance carried during the billing period? Link to comment Share on other sites More sharing options...
chitownguy Posted January 14 Share Posted January 14 (edited) 1 hour ago, Shoedog112 said: Thank you, that makes sense. So even if you pay the balance off by the due date, there will still be interest incurred because there was a balance carried during the billing period? If the beginning balance on the current month's statement is zero or you paid the prior month balance in full by the due date, no interest would be charged for the current month. Edited January 14 by chitownguy + Charlie and Shoedog112 2 Link to comment Share on other sites More sharing options...
spidir Posted January 14 Share Posted January 14 I'm grateful to those that loaned me money to meet my needs or desires. Those instances decreased over time as I accumulated wealth. I wish that I could borrow time as easily as money. 🤑 + Charlie, + Vegas_Millennial, + The Big Guy and 2 others 3 1 1 Link to comment Share on other sites More sharing options...
+ sniper Posted January 21 Share Posted January 21 On 1/6/2024 at 12:22 PM, Charlie said: I used to often find that someone wouldn't accept an Amex card as payment, so I always ask before presenting a card, but it has been a long time since anyone has turned down my offer of my Amex card for anything. I think the other credit cards have jacked up their merchant fees and the gap is smaller than it was in years past. + Charlie 1 Link to comment Share on other sites More sharing options...
+ tassojunior Posted January 21 Share Posted January 21 I churn ff card bonuses (all paid off immediately) 7 million airline points and 3 million hotel points. ("worth" $131K- nice hobby in cards). I have a drawer full of closed cards and maybe 2 dozen open. Credit score very high because of low balance-to-credit line %. 0 debt, paid mortgage. huge equity, smaller savings, nice income and retirement....................low bills until the medical bills start as older. Then healthcare will take all unless I'm lucky enough to die first. But for now FF credit cards let me travel well. + Coolwave35 and + Vegas_Millennial 1 1 Link to comment Share on other sites More sharing options...
+ BenjaminNicholas Posted January 23 Share Posted January 23 Zero cc debt with $300k+ of open credit. I played the churn game for years and have now settled into a handful of cards that give me the benefits I use most. I'll only keep a balance going if the card offers me 0%. Otherwise, it's paid off monthly. + Vegas_Millennial, thomas and Jarrod_Uncut 1 2 Link to comment Share on other sites More sharing options...
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