Credit Cards

Locked: Are All Of You Paying Ridiculous Fees With VISA?

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  • Feb 17th, 2019 11:33 pm
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Deal Fanatic
Jan 18, 2003
5759 posts
1554 upvotes
Mississauga
MusicBox wrote: Why is everybody so petrified of carrying a balance to next month and pay interest on it?

Lets see. If I carry a balance of 1,000 dollars to next month at 20% that would be $200 in a year. Divide that $200 ÷ by 12 months = about 18% or $18 dollars. Okay its a little stiff I will admit but if its an emergency carryover its not that bad as long as you dont make it a habit every month.

I do have a LOC unsecure BTW with BMO. Im going to ask how I can link that to my BMO mastercard.
cuz it can snowball and you're spending money that isn't yours... unless it's an emergency, ppl are usually just charging unnecessary things...

and 20% interest is terrible... look for other options aka loc
Deal Fanatic
Nov 22, 2015
5704 posts
5118 upvotes
MusicBox wrote: Why is everybody so petrified of carrying a balance to next month and pay interest on it?

Lets see. If I carry a balance of 1,000 dollars to next month at 20% that would be $200 in a year. Divide that $200 ÷ by 12 months = about 18% or $18 dollars. Okay its a little stiff I will admit but if its an emergency carryover its not that bad as long as you dont make it a habit every month.

I do have a LOC unsecure BTW with BMO. Im going to ask how I can link that to my BMO mastercard.
Not scared of interest.... there's just no good reason to pay credit card interest unless it's a last resort and you've maxed out all other avenues. Using your example of $1000, why would I even consider paying $18 a month in interest on a credit card when I could do the same thing on my PLC for just $4 a month?
Sr. Member
User avatar
Dec 18, 2008
938 posts
73 upvotes
Wasn't the OP the one complaining about the "fees"?

Why do most people on RFD not carry balances? To avoid paying "fees".
Deal Addict
Jan 14, 2011
1151 posts
340 upvotes
MusicBox wrote: Why is everybody so petrified of carrying a balance to next month and pay interest on it?

Lets see. If I carry a balance of 1,000 dollars to next month at 20% that would be $200 in a year. Divide that $200 ÷ by 12 months = about 18% or $18 dollars. Okay its a little stiff I will admit but if its an emergency carryover its not that bad as long as you dont make it a habit every month.

I do have a LOC unsecure BTW with BMO. Im going to ask how I can link that to my BMO mastercard.
People who think it's OK to carry a balance on a CC should never own a CC period. Fortunately for CC Companies and bankruptcy trustees etc. there is no shortage of people being stupid.
Deal Addict
May 17, 2012
2379 posts
1100 upvotes
ontario
KMKM wrote: People who think it's OK to carry a balance on a CC should never own a CC period. Fortunately for CC Companies and bankruptcy trustees etc. there is no shortage of people being stupid.
As a mastercard shareholder... SHHHH.
Deal Addict
Nov 25, 2014
1739 posts
952 upvotes
Newton Brook, ON
MusicBox wrote: Why is everybody so petrified of carrying a balance to next month and pay interest on it?

Lets see. If I carry a balance of 1,000 dollars to next month at 20% that would be $200 in a year. Divide that $200 ÷ by 12 months = about 18% or $18 dollars. Okay its a little stiff I will admit but if its an emergency carryover its not that bad as long as you dont make it a habit every month.

I do have a LOC unsecure BTW with BMO. Im going to ask how I can link that to my BMO mastercard.
Well, you're the one who started a thread about "ridiculous fees" and throwing your card away, over a 5% increase. Why shouldn't we be all the more offended by a 13% or 20% increase? To anyone who's currently accustomed to paying 0% (most of us), that's what your situation would be.
You need someone with an umbrella not a fork
Banned
Jul 18, 2016
2014 posts
781 upvotes
KMKM wrote: People who think it's OK to carry a balance on a CC should never own a CC period. Fortunately for CC Companies and bankruptcy trustees etc. there is no shortage of people being stupid.
People who make blanket, judgemental statements like this, aren't any smarter.

I am carrying roughly 42K of credit card debt at an average interest rate of 8%, thanks to several balance transfer offers. I do this so that I can keep a large portion of my business revenue invested in my growing business. With a variable income like mine, qualifying for a line of credit at a better interest rate and for that amount, is a very challenging thing to do.

I am very sorry if you consider this stupid.
Deal Expert
User avatar
Aug 18, 2005
19936 posts
4520 upvotes
Burlington-Hamilton
BiegeToyota wrote: Seriously? 60%???

Where's Wynne?
I'm sure Wynne would raise this if she could. The higher interest rates result in greater taxable profits for bank and other lending institutions. Those Lieberals just love more and more sweet sweet tax income for the government to feed those public sector unionized pensions.
Last edited by Jucius Maximus on Mar 25th, 2018 7:54 pm, edited 1 time in total.
Deal Addict
May 17, 2012
2379 posts
1100 upvotes
ontario
bewiseman wrote: I am carrying roughly 42K of credit card debt at an average interest rate of 8%, thanks to several balance transfer offers. I do this so that I can keep a large portion of my business revenue invested in my growing business. With a variable income like mine, qualifying for a line of credit at a better interest rate and for that amount, is a very challenging thing to do.
big difference between 8% and 19.99% or whatever number the OP is complaining about as well as consumer debt (bad) and what you are describing (good).

good luck with your business, hope it grows and you can get rid of that debt pronto.
Banned
Jul 18, 2016
2014 posts
781 upvotes
esoxhntr wrote: big difference between 8% and 19.99% or whatever number the OP is complaining about as well as consumer debt (bad) and what you are describing (good).

good luck with your business, hope it grows and you can get rid of that debt pronto.
I was primarily responding to the blanket statement about ALL credit card balances being stupid.

In my case, some of it is at 0%, some at 1%, some at 4% , some at 12%, and about 6K at 19.99%. I don't care too much about the 19.99%. I view the debt as a whole, and so long as that whole averages out at a reasonable rate, I am comfortable. I am currently paying it down at a rate of $2500/month.
Deal Guru
User avatar
May 8, 2009
13941 posts
11568 upvotes
Leask
Everyone's situation is different, and I think it's important to not judge others on the forum. We can offer advice, and others can choose to take or flush it.

I carried a balance of $5k at 10% interest for a while. Took me a while to figure out those balance transfer promo's to flush that high interest debt faster. I was also paying down a car loan. Since my debt ratio was high, I couldn't get approved for a uLOC (they even turned me down for a HELOC).

Why did I not pay 22%? I guess I was lucky. I had haggled down the interest rate on my (then) spender card on sunny days. Not the best safety net but still better than the interest rates new cards ship with.

Now I'm not scared of even 100%+ interest. Won't carry a balance, even on a rainy day. Got myself loaded with safety nets. Got a uLOC, got linked accounts, churn credit cards and cellphones, and do what I gotta do. All this without consolidating the mortgage.

TD will increase interest on cards where minimum payment is missed. For those who can't make minimum payments on time, best to not use CC's or at least setup pre-auth payments.
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Deal Addict
Nov 25, 2014
1739 posts
952 upvotes
Newton Brook, ON
esoxhntr wrote: big difference between 8% and 19.99% or whatever number the OP is complaining about as well as consumer debt (bad) and what you are describing (good).

good luck with your business, hope it grows and you can get rid of that debt pronto.
Fun fact: Carrying a balance at 20% for 1 month on a 1% cashback card is exactly equivalent to borrowing at 8% for 1 month.
You need someone with an umbrella not a fork
[OP]
Banned
User avatar
Dec 15, 2017
1847 posts
595 upvotes
Toronto
nmclean wrote: Fun fact: Carrying a balance at 20% for 1 month on a 1% cashback card is exactly equivalent to borrowing at 8% for 1 month.
How so? Explain to me as if Im carrying $3,000 dollars.
Deal Addict
Nov 25, 2014
1739 posts
952 upvotes
Newton Brook, ON
MusicBox wrote: How so? Explain to me as if Im carrying $3,000 dollars.
The difference between 8 and 20 is 12%, divided by 12 months is 1%, the same as you earned in cashback. Or if you want to look at the actual numbers...

8%: Borrow $3000, pay 3000 x 8% ÷ 12 = $20
20%: Purchase $3000, earn 3000 x 1% = $30 cashback, pay 3000 x 20% ÷ 12 = $50, minus cashback = $20

Of course this is assuming the purchase is only carried for 1 month. In the second month you're still paying interest, but you only earned the cashback once. And I'm ignoring the fact that you have to wait to actually get your cashback.

It turns out the difference between your BMO card (12.99%) and TD card (24.99%) is also 12% now, so if you buy groceries on TD and pay it back in a month, both cards are theoretically the same for you too. And if you pay it back in less than a month, TD is cheaper.

Not that I'm recommending this though. Your best option would be to get your TD card settled so you can make purchases interest-free again, and actually keep some cashback instead of breaking even on interest.
You need someone with an umbrella not a fork
Banned
Jul 18, 2016
2014 posts
781 upvotes
nmclean wrote: Fun fact: Carrying a balance at 20% for 1 month on a 1% cashback card is exactly equivalent to borrowing at 8% for 1 month.
True ( sort of, but not really ), but it makes much more sense to transfer that balance to an 8% card without cash back, and then continue to use the cash back card to collect your 1%. Your idea forces you to continue spending MONTHLY the same amount that you owe, so that you can use the cash back to pay off the monthly interest bill. This isn't a very wise idea!
Deal Addict
Nov 25, 2014
1739 posts
952 upvotes
Newton Brook, ON
bewiseman wrote: True ( sort of, but not really ), but it makes much more sense to transfer that balance to an 8% card without cash back, and then continue to use the cash back card to collect your 1%. Your idea forces you to continue spending MONTHLY the same amount that you owe, so that you can use the cash back to pay off the monthly interest bill. This isn't a very wise idea!
Well like I said above I'm not actually recommending it. I'm showing that the "big difference" isn't always necessarily big. Just another point against making blanket statements.

What you're saying here is basically what I suggested to OP last week: Settle the cashback card, get a LOC, then make purchases with the cashback card and pay the bill with the LOC when necessary.

But let's imagine two separate people who each only have 1 card. Jimmy has 8% with no rewards and Bob has 20% with 1% cashback, and they both need to borrow a large amount that they won't be able to pay off by the statement due date. If it takes them both a month to pay off, they're both doing as well as each other. If it takes them both 3 weeks, Bob is actually doing better in the end.

Some other food for thought is cards where you get welcome bonus cashback and a BT promo rate at the same time. One case where I've proved it works is the Amex SimplyCash which gives you 2% BT and 5% cashback for the first 6 months. It turns out that as long as you BT about half the amount of your monthly spend, you end up netting almost 3% on gas/grocery/restaurants, which is hard to beat with a no fee card, even after paying 19.99% on a lot of it. This wouldn't even occur to someone blindly devoted to the conventional wisdom of "never carry consumer debt" and "never put purchases on a BT card".
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Deal Addict
Feb 10, 2013
4140 posts
771 upvotes
Richmond
I'd say after the Target fiasco, there are probably suppliers who will gladly pay the fee just so they don't end up being the ones holding the bag.

Oh I thought you meant the interchange fees. Cash advance for a week on an 0 balance credit card is cheaper than going to money mart. Since money mart charges you 600% annually, You are better off borrowing from the credit card, And quite often they are willing to offer you a loan @ 0.99 or 0%. Check the credit card forums for the mbna transfer thread. You are barking up the wrong tree. Go bark at the payday loan sharks instead.
Deal Addict
Nov 8, 2017
1498 posts
829 upvotes
There are CC's that offer LOC like interest rates such as Amex Essential (8.99%) or the MBNA Platinum(9.99%). Both are no AF as well. Most ULOC are not that much lower than the before mentioned CC. Just that a ULOC has no fees to use the $
[OP]
Banned
User avatar
Dec 15, 2017
1847 posts
595 upvotes
Toronto
superfresh89 wrote: I've never paid a dollar of interest on a credit card in my life. Doesn't matter what the rate is.
This is my new policy now. Paid off my VISA and don't use it only when I have to (where they don't accept MasterCard). They are not making a red cent from me ever again. Not a smart business move because if they would be at 10% interest I would carry balances over, now I'm not.
Newbie
Feb 4, 2014
60 posts
42 upvotes
Montréal
User455957 wrote: TD is kinda like a bank for subprime lending to people that really can't get credit. Usually interest rates will go up for people who miss payments or have shitty credit
LOL

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