credit cards (2 Viewers)

[waterfowl]

online banking has an option where you can choose a date to pay someone. so i assume you can choose a day to pay back your credit card. is it useful to buy something on credit, come home and 'pay' it off straight away by putting in a deferred payment date, meaning you'll make for example 40days interest on money you've already spent, or is it pointless?

This doesn't make much sense. If you defer a payment, you haven't payed anything off; also you don't make interest on a credit card, you pay interest. Therefore it is pointless - why would you want to waste more money paying off interest when you don't have to?

 

[LeftrightOut]

online banking has an option where you can choose a date to pay someone. so i assume you can choose a day to pay back your credit card. is it useful to buy something on credit, come home and 'pay' it off straight away by putting in a deferred payment date, meaning you'll make for example 40days interest on money you've already spent, or is it pointless?

You'd be silly to do that. Not the shifting of payments but the auto payment setup. The problem is that if you don't have money in your bank account and a company tries to pull money down you will see the banks start rubbing their hands together and smiling because you are about to give them a big fat wad of cash in dishonoring and overdraft fees.

Since you are dealing with relatively small amount of money to start with playing the interest game is not worth it. Now once you are in the workforce and making a bundle (and buying stuff for work) it might be worthwhile. Let's say I have citibank cash account and a Platinum card with 55 days interest free. Now lets say I am going out and splurge 20k on something, if I pay cash I might get a discount or I might not. If I buy credit I would get 20k points, and around 1 month to enjoy the interest on 20k. So we'd have about (5.4%/12) .45% interest on that 20k which would give me around $90 for the effort. Now if the discount I would receive for paying cash is more than $90 + points then paying cash would be better, if however this was purchased for work and I will get reimbursed I would be getting $90+points for pretty much free so it would be worth it.

It is a bit more complicated than that but the above should give you an idea if it's worth your while or not from a purely financial gain perspective.

You could use the cards to shift your purchasing capacity a few weeks. Say for example you need to buy something life saving TODAY but don't get paid until next week. Although this can be dangerous and is where a lot of people get caught out (oh i'll pay it later, and they forget).

 

[iambored]

thanks, i suppose it's not worth it then, if you make 90 on 20k, you'd make a cent or 2 on a small amount of money

as for the auto payment setup in general, what if you do have money in you bank account, then it wouldn't be a problem? like auto pay from a bank account you never use, besides for deposits for cc purchases and withdrawls to pay off the cc.

 

[LeftrightOut]

as for the auto payment setup in general, what if you do have money in you bank account, then it wouldn't be a problem? like auto pay from a bank account you never use, besides for deposits for cc purchases and withdrawls to pay off the cc.

It would not be a problem if you know you will always have money in the account. However things often change and sometimes you might be a bit short in which case you will get hit with fees for trying to spend money you don't have. It is your money so really it shouldn't be hard for you to figure out when you get your CC bill that the payment is due on a particular date and pay by bpay a few days before it. One more thing with auto payments, you might not get the same date due on every one of your bills, in which case you might end up paying after the due date without even knowing.

Try not to automate so many things in your life, you lose control that way and it can make you complacent and lazy. A CC bill that hits once a month really isn't that much of a headache to think about

Businesses and banks like the auto paying setups people have because it means they have a direct line into your finances and whenever the payment is not done on time they get to charge you fees fees fees, and that's free money for them and headaches for you.

 

[Steven12]

why dont people just use the bank saving card to purchase items, its not like u can go over the limit .

 

[LeftrightOut]

why dont people just use the bank saving card to purchase items, its not like u can go over the limit .

Because:
-I can't order things through the Internet using my bank saving card.
-I don't get points and free stuff for using my bank saving card.
-It's easier to dispute a charge on a credit card than it is on a savings account.
-I don't get a concierge service on my savings account.


In other news, Citibank Online cash manager account is now at 5.5% pa

 

[waterfowl]

why dont people just use the bank saving card to purchase items, its not like u can go over the limit .

As LeftrightOut said; can't buy stuff over the internet with savings card.
Also; can't pay for unexpected bills (eg dentist) with savings card;
when I spend money from savings, no portion gets donated to World Vision;
and, I don't get credit rating when I use savings card.

 

[iambored]

In other news, Citibank Online cash manager account is now at 5.5% pa

lol you might have talked me into it after all this time, it's weighing on my mind

 

[waterfowl]

In other news, Citibank Online cash manager account is now at 5.5% pa

ING only went up to 5.40%....what's with that?

 

[LeftrightOut]

ING only went up to 5.40%....what's with that?

Citibank has been on 5.4% for over a year now, I am waiting for them to jump again in a few weeks. If you are just chasing % Bankwest had a 6% intro rate for a while. Currently easystreet are at 5.65% at the moment, but you don't get a nice eftpos/ATM card with their accounts.