How Amex calculates interest..

[lobo76]

Personally I manage my mortgage such that I am always 2 weeks to a month in advance. Interest. Is charged daily and added to the mortgage at the end of the month. Therefore, I most effectively minimise my interest by making my mortgage payment on the first day of the month, regardless of when it is due. Minimum balance as long as possible. In this way if I need money to pay something else I can delay my mortgage payment if required because I'll still be under the schedule balance. oh and I do not use direct debits as they remove my flexibility.

Unfortunately I am a contractor who has a reliance on timesheet signoff of a manager then 2(!) companies afterward handling timesheet and payroll stuff. 3 weak links means I can never be 100% sure if I'll get my pay on time. Makes planning difficult.

 

[medhead]

Unfortunately I am a contractor who has a reliance on timesheet signoff of a manager then 2(!) companies afterward handling timesheet and payroll stuff. 3 weak links means I can never be 100% sure if I'll get my pay on time. Makes planning difficult.

Which makes managing your payments all that more important. Well worth using the offset account, but also combine it with being in advance on the payments. Not something that can be done overnight, but slowly work on it and eventually you will have the flexibility available when one of the weak links fail.

Just a suggestion.


Sent from the Throne

 

[burmans]

Unfortunately I am a contractor who has a reliance on timesheet signoff of a manager then 2(!) companies afterward handling timesheet and payroll stuff. 3 weak links means I can never be 100% sure if I'll get my pay on time. Makes planning difficult.

I'm not sure how tight you are with your mortgage and debt payments but ideally if you are ahead of payments and have the ability to redraw (or an offset account) then redraw to pay the monthly payment in full.

There are two main principles here
1. Credit card interest is (a) exorbitant and (b) your closing balance of previous statement needs to be paid in full each month
2. While money is much better going to your credit card if you are in debt you get no advantage in sending it there early if not (i.e. park it in an offset account until required)

This stuff is hardly a secret incidentally (read the T&C's) yet clearly the fact that so many people don't manage this well implies it it is not well understood.

 

[lobo76]

Which makes managing your payments all that more important. Well worth using the offset account, but also combine it with being in advance on the payments. Not something that can be done overnight, but slowly work on it and eventually you will have the flexibility available when one of the weak links fail.

Just a suggestion.


Sent from the Throne

Yup, it's how I used to be... unfortunately 11 months of unemployment sapped all my savings and a new job with sketchy payrun times is making it difficult to get back into a rhythm of having money in the right place at the right time to minimize interest.

There's definitely a gap in my understanding and since I've never missed a full balance payment before it's all new to me!

So, one more question.
I owed $3k last month.
I paid $2k on the due date.
Paid the remaining $1k 2 days after due date
Got slugged with a $105 interest fee.
Got that fee rolled back
Have $3k currently owing (due 26th)

Should I pay the current $3k ASAP or am I ok to let that ride til the due date? :/

 

[Pukka]

Well if it's not a scam why do they readily give you a refund? I called my account manager today as I hadn't paid it off in full last month then paid it off in full this month, told him there was a $500 + interest charge & yet again they credited it back to me. I'm a bit over Amex just got a Centurion again but I'm not impressed with the changes to the reward points.

 

[Pukka]

Oh & sent from the toilet by the way Lol

 

[wxxnxs]

Yup, it's how I used to be... unfortunately 11 months of unemployment sapped all my savings and a new job with sketchy payrun times is making it difficult to get back into a rhythm of having money in the right place at the right time to minimize interest.

There's definitely a gap in my understanding and since I've never missed a full balance payment before it's all new to me!

So, one more question.
I owed $3k last month.
I paid $2k on the due date.
Paid the remaining $1k 2 days after due date
Got slugged with a $105 interest fee.
Got that fee rolled back
Have $3k currently owing (due 26th)

Should I pay the current $3k ASAP or am I ok to let that ride til the due date? :/

You need to pay the current $3K asap (better immediately) to gain interest free days again. If you do not, you will get charged interests on full amount as well as on going transactions until you pay the full balance off.

 

[Daggs01]

**Interest on any credit card is calculated daily and charged monthly.

You are better off making weekly payments as the balance is reduced more frequently thus resulting in less interest. **


Sorry have to add the disclaimer: Please note this is general advice only and not intended to be relied or acted upon.

Sent from my GT-I9300T using AustFreqFly

 

[lobo76]

@wxxnxs - Yup... I've paid it off now.

**Interest on any credit card is calculated daily and charged monthly.

You are better off making weekly payments as the balance is reduced more frequently thus resulting in less interest. **


Sorry have to add the disclaimer: Please note this is general advice only and not intended to be relied or acted upon.

Sent from my GT-I9300T using AustFreqFly

I guess we're more talking about maximizing the interest free days and the way interest is charged if you don't follow the rules for the free credit days..

 

[wxxnxs]

@wxxnxs - Yup... I've paid it off now.




I guess we're more talking about maximizing the interest free days and the way interest is charged if you don't follow the rules for the free credit days..

Correct, that's should be the way we use credit card. BTW, did you pay a little bit extra to cover the accrual interests? I'm pretty sure you will still see some interest charges on your next statement if you haven't done so.

 

[lobo76]

Correct, that's should be the way we use credit card. BTW, did you pay a little bit extra to cover the accrual interests? I'm pretty sure you will still see some interest charges on your next statement if you haven't done so.

Yea I paid it in full and had the interest credit from the previous month so no interest on this statement at all and now I'll never deviate from paying it off in full on the due date. I'm actually probably going to cancel the card soon. The "free" flight is not much use now for a few reasons, the points earn and other reductions make it not very worthwhile now...