Credit Tips: Paying Only the Minimum on a Credit Card

Posted On: May 1, 2006

Author: diddlydudette
Posted: Fri Feb 10, 2006 11:50 am
Post subject: Just wondered if anyone did this w/their new cash back card

I wished I’d thought of it and did this. I may do on the remainder of time left on card at 0%.

When you first got your cash back card, I think a lot have 1 year at 0% interest. Did you just pay minimum and instead of paying off each month and then put the money that you would have used into one of these high paying interest accounts?

Then you’d be making money not only with card but with interest by putting that money in bank and then when end of 0% interest, go ahead and take out of savings and pay off card. I guess that takes some discipline. I’m going to start doing that. My card’s 0% isn’t over until Sept.

Author: Ira
Posted: Fri Feb 10, 2006 12:53 pm
Post subject:

Yes of course. Any time I get a o% balance transfer offer I write a check to myself for the credit limit less $200.00 and deposit the funds in an interest bearing account. As you said, I pay the minimum each month and at the end of the free period I withdraw the principal from the interest bearing account and pay off the card. I made just under $900.00 in 2004 and over $1,300.00 in interest last year doing this.

There have been a number of people posting here who have done the same thing. It’s free money! The one thing you MUST be aware of is you can only do this with a card that has a zero balance. If there’s any purchase balance you would never be able to pay it off since banks will allocate any payment you make to the lowest interest segment of your balance first.

Author: maddybeagle
Posted: Fri Feb 10, 2006 12:55 pm
Post subject:

I dont quite follow what you are saying? Sure, lots of folks take the bt money and put in a money market account, etc. and pay the min. payment every month (or a little bit more than min.). The offers that allow 0% on purchases and bt’s, are few.

Author: diddlydudette
Posted: Fri Feb 10, 2006 1:58 pm
Post subject:
maddy, what I meant…I’m not good at explaining sometimes….is that when I received my new Chase Cash Plus card it came with 0% interest for first year. As long as I just pay the minimum, I had no interest. I use the card for everything…groceries, gas, any and all purchases. I wa paying off each month and they I got to thinking. Why? Especially since I had no interest and didn’t really need to pay off card each month. I could put what I would be paying the card off each month instead in like a ING or Emigrant acct and then at end of Chases’s 0% promo, go ahead and take money out of bank and pay it off.

I know y’all have been smart of this for years. Sorry, I’m a little slow. I guess I need to really start reading each and every post on this board more than I do huh?

Author: stevejk
Posted: Fri Feb 10, 2006 3:40 pm
Post subject: Re: Just wondered if anyone did this w/their new cash back c

diddlydudette wrote:
When you first got your cash back card, I think a lot have 1 year at 0% interest. Did you just pay minimum and instead of paying off each month and then put the money that you would have used into one of these high paying interest accounts?

That’s what I plan to do with my new Chase Rewards Plus card. The suggestion I was given was to set up autopay on the Chase website to automatically pay the minimum from my Emigrant Direct account. That way, I move the full amount of purchases for the month to ED and it accumulates interest until the due date for the minimum. Then after the 11th month, configure the auto pay to pay the full amount. On the due date of the end of the 12th month, it will pay off the outstanding balance. I’ll pocket the ~4% from the money kept in the account, plus the 1%-5% cash/rewards back.