Credit card principal question.

Credit cards are the archetype of revolving credit, where the user can pay anywhere between the minimum and the whole shebang.

As mentioned earlier in the thread, they changed the laws about ten years ago so the minimum payments are bigger than they used to be, and the statements are more clear about where the customer's money is going and what they can do to stay out of debt... if they choose.
 
I was talking to a friend of mine about why to avoid credit card debt. I was explaining credit card debt vs say, an auto loan. I told her most credit cards charge 20-30%+ interest and that my auto loan is only 2%, explaining principals, interest, etc.

Something I always wondered, can you pay towards the principal of a credit card debt, such as instead of making the min payment, pay several hundred dollars? She'd asked me that and I honestly told her I have no idea, but it was definitely some food for thought. I avoid credit cards like the plaque, as to only keep them for things that require credit cards.
Yes, of course, you can pay any amount above the min payment thereby reducing the principle. Credit cards are evil, as is any loan to buy things you cant afford. Credit card can be used as a tool if you pay them in full every month.
I earn roughly $500 to $700 in cash back every year by using 2% to 5% cash back cards. I dont pay interest, they pay me. I let the money add up and then buy myself a treat, last treat was my Mac mini Desktop.
I now have another bunch of unused cash back money, not sure what to do with it yet. :eek:)
 
Yes, of course, you can pay any amount above the min payment thereby reducing the principle. Credit cards are evil, as is any loan to buy things you cant afford. Credit card can be used as a tool if you pay them in full every month.
I earn roughly $500 to $700 in cash back every year by using 2% to 5% cash back cards. I dont pay interest, they pay me. I let the money add up and then buy myself a treat, last treat was my Mac mini Desktop.
I now have another bunch of unused cash back money, not sure what to do with it yet. :eek:)
Nice! (y)
 
I use cc so I don't have to carry cash. I never purchase anything I don't have the cash to cover. So I pay my cc every month. I feel that is what cc are supposed to be for, not to buy things you don't have the cash to cover.

Of course when I was younger I didn't do it that way and learned a hard lesson. Cut my cards in my thirty's and lived without them until I felt I could be responsible. Lesson learned.
 
I'm what is called a free loader. I pay for most things by credit card and then having used their money for days to weeks, always pay the whole balance by the payment due date. They never get to charge me interest.
Me too. I keep four credit cards in my wallet. I requested their closing dates to be on the 7, 14, 21, and 28 days of the month. I use each card immediately after their respective dates, then stop and move to the next card when the next date arrives.

So this gives me the maximum float on each card. It takes another 20+ days for each card to close, and then we pay it in full just within the 30 day grace period before any interest accrues. I get about 50 free days on each one. Get cash back on em', too!

We scienced this out pretty good over 25 years ago.
 
You can, and you SHOULD. Otherwise, if all you do is make minimum payments, you'll be making those payments all the way to the grave.
+1. The cv statements are structured this way. They give two timeframes for payoff, with accrued interest.
 
This is what I do. They’re all out to get you so why not get them first?
What they are doing with the "cash back" programs is buying information from you, tracking purchases for targeted advertising and possibly other purposes. That's all well and good for people who want to do that. I'm not willing to sell that information though so use cash whenever possible. (I receive no targeted advertising at all so this approach has been successful to some extent.) I don't care about my credit rating.
 
Don't all credit card companies capture and have access to this information anyway, whether they give you cash back or not?
Undoubtedly. I avoid using credit cards unless it's necessary. I have just a single credit card obtained about 40 years ago and have not applied for another since.
 
What they are doing with the "cash back" programs is buying information from you, tracking purchases for targeted advertising and possibly other purposes. That's all well and good for people who want to do that. I'm not willing to sell that information though so use cash whenever possible. (I receive no targeted advertising at all so this approach has been successful to some extent.) I don't care about my credit rating.
I'm not that easily influenced so I don't care if they have my buying habits. It's basically a discount to cash. Thanks for the subsidy.
 
Me too. I keep four credit cards in my wallet. I requested their closing dates to be on the 7, 14, 21, and 28 days of the month. I use each card immediately after their respective dates, then stop and move to the next card when the next date arrives.

So this gives me the maximum float on each card. It takes another 20+ days for each card to close, and then we pay it in full just within the 30 day grace period before any interest accrues. I get about 50 free days on each one. Get cash back on em', too!

We scienced this out pretty good over 25 years ago.

Day-ham. That's thinking things through. :geek:
 
I put about $120K per year through my personal Amex gold card which has an option to pay over time but it always gets paid in full every month. I put another $300K through a business VISA that gets paid in full every month. No interest charges and lots of points.
 
At the moment, all my money is only stored on a bank card, because recently I was robbed and all my cash was taken. Since then, I have all the money I have only on the card so that there will be no more such incidents. Moreover, even though I am an American, I like German banks. I like them because you can negotiate a loan there at a minimum interest rate. So they also give me an application that allows me to monitor my bank account. And you don't have to pay for it, can you imagine!? Isn't that cool?
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My parents negotiate interest rate when they put most of their money in CD (prior to 2010 when they enter the rental market at the bottom), typically the largest national banks won't negotiate with small fries like us, but smaller, foreign owned banks will when you have only a small amount like 200k with them. FDIC max limit.
 
I put about $120K per year through my personal Amex gold card which has an option to pay over time but it always gets paid in full every month. I put another $300K through a business VISA that gets paid in full every month. No interest charges and lots of points.
Forget the points....get the cash back. 2% cash back x 120.000. = 2400 cashback per year. 2% cash back x 300,000 = 6,000 cash back per year.
 
We aren't rich or wealthy by US standards, but we always pay off our credit cards when they are due save for one instance where I made a payment error. Nothing wrong with using them if you pay off on time.
 
We put everything on our cards, paid in full every two weeks. Earns us enough points for two free flights anywhere in the world every year, or eight flights per year to NYC.
 
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