Ways you can end up paying interest on a credit card if you pay the full amount back in due time6 C96 kbon’n 1.te,Vini
If you are a financially responsible person, you know how a credit card works, you pay back the loans in full before the due date, you don't take out money form the ATM or otherwise do something that gets taxed, etc.
Are there any ways that you could still end up paying interest?
I guess stuff like human weakness like forgetting to make the payments when due, or getting addicted to shopping, etc. Having an emergency is another. But if you are disciplined and you have an emergency basket saved up, is there any other way that "banks can get you", so to speak?
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"I've always considered credit cards to be a financial product for (mostly) poor people". Well, you're wrong. – RonJohn 21 hours ago
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1@RonJohn: I'm wrong? Just 'cause you say so? At least I added a wall of text explaining my reasoning... – Pips 7 hours ago
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I got "caught" by one company that would send the bill with the outstanding amount, which I would pay immediately. The next month I would get another bill for the interest that accrued in the 3 days between me receiving the bill and the payment being processed. – OverlordAlex 4 hours ago
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It's demonstrated why you're wrong in the comments to my answer. – RonJohn 3 hours ago
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Banks can only "get you" if you don't read your agreements or don't understand them; but they have to disclose everything to you up front. – Andy 2 mins ago
3 Answers
Some credit cards will charge an annual fee. If you qualify for a card with no annual fee, don't get cash advances, and pay in full each month, you won't be charged any interest. I think I've been charged a month's interest twice in the last five years, both times because I spaced out and missed the billing due date. The main things are to really know how much income you'll have each month, not buying things you can't afford, have money saved to pay for emergency expenses, and to stay on top of your record keeping.
But if you are disciplined and you have an emergency basket saved up, is there any other way that "banks can get you", so to speak?
Annual fees.
But the only people who should be paying annual fees on their cards are those who have special needs and benefit from those fees.
The rest of us benefit from "slightly deferred payments" and fraud protection, while leeching off the people who do pay interest.
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4The kid's 529 acct, funded only with the card cash-back, and market returns, has just passed $47,000 in total (i.e. current bal plus withdrawals for paid tuition). Major leech, I am. Never paid a dime of interest or annual fee on this card. – JoeTaxpayer♦ 20 hours ago
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3If there are ways that "banks can get you", they haven't found me. I've had credit cards for nearly 50 years and I haven't paid a penny in interest or annual fees while collecting $500 to $1,000 a year in cash-back. Signed, Leech Number Two – Bob Baerker 20 hours ago
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4@JoeTaxpayer They still love you for all the merchant fees they've collected. – Hart CO 19 hours ago
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1@HartCO but they haven't "gotten" Joe, they've "gotten" the merchants. – RonJohn 19 hours ago
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@RonJohn Yeah they didn't get him, but they love him. – Hart CO 18 hours ago
The places where you use your credit card have to pay a fee (usually a couple of percent) to accept payment through it. This sometimes leads to places giving you a better deal if paying by cash (eg if it's a car) or generally causes the prices in shops to be higher to take this fee into consideration
While this doesn't answer your headline question, it does sort of show how the banks are getting to you
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They're not "getting me". I'm paying for the convenience of not having to carry so much cash everywhere. – RonJohn 2 hours ago
