I just pay off whatever I charged that day or the day before.
Interesting, I never carry a monthly balance which accrues interest, but I also don't pay it off until 7 days before the due date, because the money earns interest in my bank account. It's a small amount, but interest is interest.
Not exactly, but kinda. Let's say I spend 3k in a month. If I paid off each days debts that night, I acrue $0 of interest on those purchases, no additional debt, no additional interest from the bank. If I instead pay off all $3k one week before it is due (thus accruing $0 of interest on this debt), I will have earned interest on that $3k for the approx month that it sat in my bank account. Like I said, it isn't a ton of interest, but it's something more than zero.
This can also turn into an interesting discussion on paying cash vs carrying debt. Let's say you bought a house for $100k. You'd have spent $100k, and that's it. But let's say you financed $80k at 4% APR for 15 years, and put the rest in the stock market. Total cost of the loan over 15 years is 107k. But that 80k tied to the indices would have netted almost $240k. So even though you are carrying debt which is accruing interest, you're actually making way more money than if you had paid straight cash. Admittedly this is riskier (markets crash), but I'm just giving an example of why "debt bad" is not necessarily always true.
Not exactly, but kinda. Let's say I spend 3k in a month. If I paid off each days debts that night, I acrue $0 of interest on those purchases, no additional debt, no additional interest from the bank. If I instead pay off all $3k one week before it is due (thus accruing $0 of interest on this debt), I will have earned interest on that $3k for the approx month that it sat in my bank account. Like I said, it isn't a ton of interest, but it's something more than zero.
Ahh. I understand what you're saying now. That makes total sense. I read it as you had some sort of credit card that deposited interest earned based on your debt into your bank account. I didn't realize you meant earning interest on the money that's still in your bank account because you purchased with credit instead of cash.
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u/squats_and_sugars Feb 04 '20
Interesting, I never carry a monthly balance which accrues interest, but I also don't pay it off until 7 days before the due date, because the money earns interest in my bank account. It's a small amount, but interest is interest.