I need help, I just need the best advice. I have a credit card I am trying to pay off and debts and wondering if it will be better to put as much as I can onto my credit card and have debits coming off the card and get reward points OR keep paying small amounts of credit card and debits from bank account.
I Need Help - Credit Card or Cash to Pay Bills/Direct Debits
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You can save on interest by putting your bills through a credit card and paying them off however this requires discipline. This is because a credit card will give you a certain number of days interest free. Any payment to the card will come off the oldest debt which is likely generating an interest cost to you, while your new bills may have the advantage of being interest free for a short period.
Should you have to pay a credit card surcharge to put the bill through your credit card it may not offset any saving or reward points value and can perhaps even be disadvantageous. It really depends largely on the scale of your debt, the amount of bills you can churn through your card over the course of a month, and any surcharges the billers might charge to use credit.
i once forgot to pay the last statement and paid 1 day late in full …
i got charged interest for purchases backdated to actual purchase date (60 days or less) and suspended the interest free period for current statement not due till a month later, while still continuing to accrue interest charges for every outstanding dollars on card.is this usual / a norm for all CC ?
unfortunately.. yep
Yup. First-In-Last-Out. They take repayments basically on your most recent statement first - so if you miss one, you have to clear it completely.
If you’re currently paying interest on your card due to existing debt, it would be silly to put more charges on that will accrue interest immediately without any interest free period.
Clear your card debt as quickly as you can and pay your bills through your bank account. Then when your card debt is paid off, start putting your bills onto your card and pay your card off in full every statement period.
Pay off the card and close the card, if you can't afford to pay a credit card off fully after every statement you're going to be digging yourself a bigger hole.
Dishonours, late payments and any sort of arrears in your credit account will reflect badly with the bank but also your credit score
Agree with just focus on clearing debt asap without trying to invest or save some small dollars here and there at the same time. Won't work. Pick one do it seriously and quickly.
And avoid ozb for a while this won't help you clearing debt much
Interest rates on your credit card will be ludicrous.
If you are willing to change some habits to pay off your debts then you can do the following:
Assuming you are not living beyond your means and can pay down your debts as well as living expenses
1. Can pay off debt in 6 months: Transfer the balance to a 0 interest credit card with no transfer fee and pay it down before the date expires (typically 6 months).
2. If you can’t pay off the debt in 6 months but can in 24 months: transfer to 0 interest card with a percentage up front transfer fee
See here for cards: https://www.finder.com.au/no-interest-credit-cards
3. Can’t pay debt in 24 months: talk to your bank about options.I have a credit card I am trying to pay off and debts and wondering if it will be better to put as much as I can onto my credit card and have debits coming off the card and get reward points OR keep paying small amounts of credit card and debits from bank account.
Don't put any more on your credit card. Credit cards are only good if you repay it within the interest-free period. If you already have a balance on that card you're paying down, you don't GET ANY interest-free period because most banks use a "First In Last Out" policy - i.e. your repayments go towards paying off your most recent expenses on the card, leaving the older debt, that's incurring interest, still remaining.
Pay off your credit card IN FULL. Then start using it for bills if you want.
Credit card rewards should not be factored into your equation as you are paying interest for those rewards, so focus on paying off your card first.
If you are financially disciplined, which you are not, you can take advantage of credit card balance transfer free/lowered interest periods. But you might end up maxing both cards and plunge yourself further into debt. - so proceed with caution and be committed to cut up the old card and focus on paying down the new card with lower rates.
- DO NOT PUT ANY FURTHER CHARGES ON THE CARD,
- DO NOT THINK OF KEEPING THE OLD CARD FOR A RAINY DAYOnly think of using credit card and maximizing reward points when you are financially able to settle the balance of the debt monthly. (not just minimum repayment and a bit)
Be sure to check if there is any credit card surcharges when paying bills.
If there isn’t (which is rarely the case) then I’d say go nuts.