Community Chat

[Porcelain]

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@skatting44 wrote:

1)  Do you spend  even though you don't have the cash by putting all bills on credit cards.

2) Do you spend the amount you have saved or expect to be paid for working ?

3) Do you pay for most things on credit cards and then pay the balance off at end of month ?

4) Do you spend  by using credit cards and don't care if you ever pay off the balance ?

5) What happens when the  spending party stops ?

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This sounds like a bunch of leading questions you would ask a college student. And it seems designed to prompt a raft of financial lectures--if anyone gives an incorrect answer. And there are clearly correct and incorrect answers here.

[Carmie]

@gertrudecloset   Credit card companies never a cancel your card for  paying off the balance each month.  They love those customers.  If you can afford to pay off your balances, you are probabaly spending more money and charging monthly.

The CC companies charge the retailer a percentage of he purichase evey time you your card.   CC companies make money from each transaction you make on your card.  The fees are subtracted from the money the retailer gets.

For instance...you'll charge $40 for a hat. The retailer might only get $37 and the CC company keeps $3.

If you use a debit card, it works the same way, except the charge fees are lower.

CC companies will cancel your card if you don't use them enough.  It cost them money  to issue that card and keep your account and you are not bringing them any funds.

[gertrudecloset]

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@Desertdi wrote:

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@gertrudecloset wrote:

Won't these "paid off credit cards each month" soon be cancelled?  I mean the companies aren't making any money off of your spending habits (if you Pay it off each month).  They make money by charging you interest and carrying a balance.  Charge cards are better for closing your balance at the end of every month.  Credit Card issuers expect you to carry a balance (at some point) in order to make money.  Yes, they will close your account if they don't make any money off of you via interest and the APR.

Everyone knows this.

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@gertrudecloset    The merchant also pays a fee to Visa/MC, etc. for the privilege of accepting credit cards at their place of business.   Cards are not revoked because you pay in full monthly.

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I understand.  However what the interest rate is much more than the processing fee.  The processing fees on storefront end is baked into the cost of the products you're buying (sometimes).  It has happened to me but it was a store card.  Working corporate and always in Annie Sez.

I recall paying that off every month with my overtime money! 

[gertrudecloset]

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@lkat wrote:

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@kaydee50 wrote:

@gertrudecloset   Completely false.  I've had my Citibank Mastercard for 20+ years and have always paid it in full.  They have never threatened me with closing the card.  I believe the cards get their money from the vendors that pay them.  That's why some places will give a credit for paying in cash.  The store does not want to pay the credit card company's fee.

And I don't understand the difference between a "charge" card and a "credit" card????

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I agree with this.  I have multiple credit cards that I've had for many years and have never carried a balance or paid a penny in interest.  I have had cards that were cancelled or had the limit lowered due to lack of activity, not due to paying off the balance.  That is fine with me.  It has happened with a few store cards that I got mainly because of the better coupons/deals they offer if you have their card.  If I stop shopping at the store, the card usually will end up getting cancelled after a few years of non-activity.

I also wonder about what one means about charge vs credit card unless they're talking about a store credit card vs a major credit card.

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Yes, I know about activity.  It's called Credit Utilization.  Also debt to income ratio is factored in.  I have had family members open up home center cards to never use them and go in and find they have been closed and they must reapply @lkat 

[Trinity11]

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@gertrudecloset wrote:

Won't these "paid off credit cards each month" soon be cancelled?  I mean the companies aren't making any money off of your spending habits (if you Pay it off each month).  They make money by charging you interest and carrying a balance.  Charge cards are better for closing your balance at the end of every month.  Credit Card issuers expect you to carry a balance (at some point) in order to make money.  Yes, they will close your account if they don't make any money off of you via interest and the APR.

Everyone knows this.

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@gertrudecloset Not true. We have had many credit cards over the years that don't make a dime from us. The Rewards from our American Express Card are free because we carry no balance from month to month.

No one ever closed our accounts and we pay 0 to have them.

[gertrudecloset]

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@aroc3435 wrote:

@kaydee50 American Express is a charge card.  You must pay off the total balance of items/services you purchased each month in full.  No "credit line to pay over time" is offered.

Hope this helps to clarify the difference.

aroc3435

Washington, DC 

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That's why I aksed if a Charge Card would be better for those using credit cards?  Diner's Club, and a few others that not as well known and accepted as Amex are the type you pay off each month.  That's what I have and Amex Green Card.  Had it for years!

[Carmie]

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@aroc3435 wrote:

@kaydee50 American Express is a charge card.  You must pay off the total balance of items/services you purchased each month in full.  No "credit line to pay over time" is offered.

Hope this helps to clarify the difference.

aroc3435

Washington, DC 

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I have an American Express card.  I am not required to pay the full balance each month.

[kaydee50]

@aroc3435  According to DH who has had an Amex card for 40+ years that is no longer true.  It was at one time but I believe now a balance can be carried on the card.  

[IamMrsG]

I learned something today -- Until reading this thread, I had never heard of a charge card.  I had to Google for the difference between it and a credit card.  Y'all made me look.  

BTW, my standard answer to an intrusive question is, "Why do you ask?" 

[gertrudecloset]

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@Carmie wrote:

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@aroc3435 wrote:

@kaydee50 American Express is a charge card.  You must pay off the total balance of items/services you purchased each month in full.  No "credit line to pay over time" is offered.

Hope this helps to clarify the difference.

aroc3435

Washington, DC 

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I have an American Express card.  I am not required to pay the full balance each month.

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They do issue "credit cards too"  However, the traditional Amex is a charge card.  I have one (green card) @Carmie