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Multiple Credit Card Payments vs Autopay… I'm Nuts

Home Personal Finance and Budgeting Multiple Credit Card Payments vs Autopay… I'm Nuts

  • Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3018
    Joined: 01/21/2016

    Autopay here. One less thing to worry about.

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #155857 Reply
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3050
    Joined: 01/08/2016

    I must admit I don’t understand this mentality at all. Beyond any points/cash back, the whole convenience of having a credit card is being able to pay just once a month. How does it matter if your account carries a balance if you pay it off in full once a month when due? Provided one is not overspending and thus unable to pay off. I hate debt as much as the next person, but I don’t really consider my credit card balance as debt since I’ve never not paid the balance in full.

    Click to expand…

    Just because you don’t understand the mentality doesn’t make it invalid, or crazy as another member said. I’m all for point counterpoint discussions, but being dismissive isn’t the vibe I’ve seen in this forum so far. I’m fairly new here, so maybe I’m just overly optimistic in hoping this forum is different.

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    That was me. I know craigy can take it. It’s also a variation of nuts in the title. What would you call it?

    Different than……….r/crazy? Yes…

    #155859 Reply
    Liked by Craigy
    Avatar GPGP 
    Participant
    Status: Physician
    Posts: 121
    Joined: 05/02/2017

    I autopay full statement balance. However, from a behavioral finance perspective, I want to move to zeroing our the balance weekly. Taking advantage of a float is really an subtle incentive to spend more.

    #155861 Reply
    Liked by Craigy
    TechCash TechCash 
    Participant
    Status: Other Professional
    Posts: 13
    Joined: 09/07/2018

    I must admit I don’t understand this mentality at all. Beyond any points/cash back, the whole convenience of having a credit card is being able to pay just once a month. How does it matter if your account carries a balance if you pay it off in full once a month when due? Provided one is not overspending and thus unable to pay off. I hate debt as much as the next person, but I don’t really consider my credit card balance as debt since I’ve never not paid the balance in full.

    Click to expand…

    Just because you don’t understand the mentality doesn’t make it invalid, or crazy as another member said. I’m all for point counterpoint discussions, but being dismissive isn’t the vibe I’ve seen in this forum so far. I’m fairly new here, so maybe I’m just overly optimistic in hoping this forum is different.

    Click to expand…

    That was me. I know craigy can take it. It’s also a variation of nuts in the title. What would you call it?

    Different than……….r/crazy? Yes…

    Click to expand…

    I really wish I did not just check out the r/crazy subreddit…

    #155863 Reply
    Liked by Peds
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2060
    Joined: 08/01/2016

    My 3 active cards have pay by date around the 25th of each month. I get the statements around the 10th.

    One day I sit down and download all transactions in Quicken and check it against the statement. If something is not right I look for the receipts or go to Amazon / Paypal sites. If everything looks satisfactory I pay all the 3 cards manually via my bank’s BillPay. Never Autopay.

    The only time I pay well in advance is if I will be out of the country between the 10th and 25th.

    #155878 Reply
    Liked by Craigy
    DMFA DMFA 
    Moderator
    Status: Physician
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    Joined: 06/24/2016

    The anti-credit card people’s trope is only justified if someone spends more than they would if it were only debit and cash. Obv the interest never comes into play on a paid balance.

    This is very unlikely to apply to those who post regularly in finance forums, but automating the payment – even if it’s the full balance – if might take someone’s eye off the ball enough to lead to more being spent. It also keeps my wife’s Amazon spending down knowing that I’m checking the bill…

    "I like money." - Frito Pendejo (Idiocracy)

    [Not a financial professional (yet), lawyer, or employee of The White Coat Investor]

    #155893 Reply
    Liked by Craigy
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 1480
    Joined: 09/18/2018

    I use 3 cards at one bank set on autopay.
    These are low utility cards. One is used by my wife to pay bills for her mom. Hey, when the wife decides to pay me back in the checking account is her choice. Honestly, I am lucky if she does.
    The other two have one or two bills like ATT or water.
    Why do I keep them? Chase sent me a notice, closed-no activity when they hit the expiration date. I always use the same branch manager regardless where he is.
    He called, new cards in the mail. By the way, you haven’t used them in five years. For cards 20 years old with various 5 figure balances, I set up small activities to avoid the hassles.
    The main card I pay manually on the due date. Only the statement balance. That balance is my red light and bell.
    Plus or minus $200, I skim it for names for something to stick out. If it’s greater than that, I grab the paper copy and understand. Four tires, dentist or doctor, trip or whatever. I know monthly spending greater than the run rate. This is 2x travel miles, then I claim only available travel expenditures. The balance is my spending anchor, review, claim credit and pay. To me the utility of spending levels greatly outweighs any emotional value of zero. Manual payment forces me to look at it. I have missed it. Pay it, call and they waive the late fee. Next bill call and they waive the interest. It’s a pain, but it’s my punishment for forgetting and missing a day.
    Having four long standing cards, a banker and the travel miles and knowing each month when you miss your ru rate has served me well. That monthly balance and manual payment is the discipline.

    #155895 Reply
    Liked by nachos31, Craigy
    Avatar octopus85 
    Participant
    Status: Resident
    Posts: 141
    Joined: 08/13/2017

    Not just crazy, but literally throwing away money…

     

    Being able to float a month’s worth of expenses must make me at least $100 in interest (from the money that sits in my savings account, instead).

     

    You’re willing to pay ~$100 for the satisfaction of seeing a zero-dollar balance?

    #155896 Reply
    Liked by Kamban, Zaphod, Craigy
    Avatar Bmac 
    Participant
    Status: Physician
    Posts: 280
    Joined: 10/21/2017

    My 3 active cards have pay by date around the 25th of each month. I get the statements around the 10th.

    One day I sit down and download all transactions in Quicken and check it against the statement. If something is not right I look for the receipts or go to Amazon / Paypal sites. If everything looks satisfactory I pay all the 3 cards manually via my bak’s BillPay. Never Autopay.

    The only time I pay well in advance is if I will be out of the country between the 10th and 25th.

    Click to expand…

    With the exception that our three cards don’t all close at the same time, this is essentially what I do. Reconcile in Quicken then manually pay via online checking. I use autopay for some services, such as mobile phone, but with the multiple transaction expense of a credit card statement, I’m more comfortable reviewing each charge before paying. It won’t hurt my feelings if this is considered nuts or crazy. ?

    #155897 Reply
    Liked by Craigy
    Avatar mapplebum 
    Participant
    Status: Spouse
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    Joined: 04/17/2018
    Earnest refinancing bonus

    Not only do I pay manually, every month I log all spending / expenses in a PHYSICAL NOTEBOOK. I have just about every month since 2012.

     

    First of the month I pay it off in full. Logging in means I scroll through to make sure the charges at least make sense. Find out of hubby’s been buying lunch again…little things.

    #155898 Reply
    Liked by Kamban, Craigy
    Avatar emfool 
    Participant
    Status: Physician
    Posts: 1
    Joined: 03/11/2018

    I always set all my cards on autopay, but I have been in the habit of paying them off manually as soon as I get the monthly bill. I recently got a Bank of America travel card for the bonus, as soon as I met the spending requirement I manually paid the bill of just over $3000.

    It turns out BOA drafted the $3000 AGAIN from my checking account on the due date because I had set up autodraft, even though the card had no balance. Since I run my checking account balance low, this caused it to be overdrawn, and I am getting overdraft fees and I bounced a check. I have never bounced a check in my life because I am always extremely careful to keep the balance at plenty enough to pay all my bills. Of course I have money to replenish, but it is taking 2-3 business days to transfer. And BOA claims they can’t refund the draft for three business days. It ticks me off that their software would draft my account for $3000 that I don’t owe them. Of course I’ve called them and they are blaming me for setting it up on autodraft and then paying it early. I’ve done this many times with Chase, Amex, etc and I’ve never had this problem, the draft automatically is cancelled once the bill is paid.

    Im hoping my checking bank will waive the overdraft fees once the dust clears. I guess I learned I should keep a bigger pad in my checking account. And not get any more BOA cards.

     

     

    #155818 Reply
    Avatar AlexxT 
    Participant
    Status: Physician
    Posts: 897
    Joined: 01/13/2016
    Because the biggest problem, is when a CC## gets stolen, I have to change those autopays, but it’s easy with the WORD document.

    Click to expand…

    if a card gets stolen, just freeze the card from the app on your phone.  Then call them, and they will send you a new card.  I believe that the autopay will automatically resume on the replacement card.

    #155905 Reply
    Liked by Zaphod
    DMFA DMFA 
    Moderator
    Status: Physician
    Posts: 2115
    Joined: 06/24/2016

    Not just crazy, but literally throwing away money…

     

    Being able to float a month’s worth of expenses must make me at least $100 in interest (from the money that sits in my savings account, instead).

     

    You’re willing to pay ~$100 for the satisfaction of seeing a zero-dollar balance?

    Click to expand…

    …how does savings play into this? Who is paying out of their savings?

    $100/month on the amount of what you’d spend on credit? Huh? Say you have $10,000 in credit card expenses per month. You’d need to have an interest rate of 12% to earn $100 on that – I want that account. Say you earn 2% APR, the amount in question would be $60,000 to earn $100/month…and if you’re spending $720K in a CC in a year, I don’t think you’d care about either $100 in savings interest or checking your credit card.

    Honestly, I think you might have made the mistake of thinking that a 1% savings account pays 1% of the balance per month instead of 0.083% (1% APR ÷ 12 months).

    And, even then, that only shifts the paradigm by a month anyway, which isn’t much – similar to running anything through the fv equation and changing payment timing from before to after the period.

    "I like money." - Frito Pendejo (Idiocracy)

    [Not a financial professional (yet), lawyer, or employee of The White Coat Investor]

    #155908 Reply
    Avatar octopus85 
    Participant
    Status: Resident
    Posts: 141
    Joined: 08/13/2017

    Not just crazy, but literally throwing away money…

     

    Being able to float a month’s worth of expenses must make me at least $100 in interest (from the money that sits in my savings account, instead).

     

    You’re willing to pay ~$100 for the satisfaction of seeing a zero-dollar balance?

    Click to expand…

    …how does savings play into this? Who is paying out of their savings?

    $100/month on the amount of what you’d spend on credit? Huh? Say you have $10,000 in credit card expenses per month. You’d need to have an interest rate of 12% to earn $100 on that – I want that account. Say you earn 2% APR, the amount in question would be $60,000 to earn $100/month…and if you’re spending $720K in a CC in a year, I don’t think you’d care about either $100 in savings interest or checking your credit card.

    Honestly, I think you might have made the mistake of thinking that a 1% savings account pays 1% of the balance per month instead of 0.083% (1% APR ÷ 12 months).

    And, even then, that only shifts the paradigm by a month anyway, which isn’t much – similar to running anything through the fv equation and changing payment timing from before to after the period.

    Click to expand…

    Maybe I’ve got this confused in my head, but…

    Say for example I spend $5k/mo on credit card (putting all my expenses on it to get rewards).

    Say on average each month’s expenses get floated by 30 days.

    And say I pay the CC bill (in full) out of cash that ordinarily sits in an Ally account (making ~2% interest).

     

    5k * 0.02/12 = $8/mo, or $100/yr.

     

    I mean, sure, the full $5k balance doesn’t get floated 30 days (but expenses at the start of the period get floated more than 30 days). But my point was that this probably ends up being a non-trivial amount of money.

    #155945 Reply
    Liked by Craigy
    Craigy Craigy 
    Participant
    Status: Spouse
    Posts: 1771
    Joined: 09/16/2016

    Not only do I pay manually, every month I log all spending / expenses in a PHYSICAL NOTEBOOK. I have just about every month since 2012.

     

    First of the month I pay it off in full. Logging in means I scroll through to make sure the charges at least make sense. Find out of hubby’s been buying lunch again…little things.

    Click to expand…

    And I thought I was nuts.   😆  😉

    At least open an excel file??  Then you can at least make some meaningful data out of it.

    Those lunches really do add up.  Glad my wife’s employer still feeds them for free.

    LEVEL 1 WCI FORUM MEMBER.

    #155953 Reply
    Liked by Peds

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