Do you actually pay off credit card float?
Newbie here with a question. I've read all the official help documentation and searched the forum, but I haven't found a straightforward answer to this question ...
Do YNABers actually pay off the credit card float? Or do you leave the float in your checking account playing happily with your other money until the statement due date, content in the knowledge that you *could* pay the credit card to zero at any moment?
If you have the money on hand to pay the credit card balance down to zero at any moment in time, you are not on the credit card float.
Say I have only $500 available to pay my credit card today. And the balance is $500, but then I charge an additional $10 knowing that I will get paid in 2 days and the credit card payment of $510 won't be due for 4 days. In that situation I am on the credit card float - relying on tomorrow's paycheck to cover today's charges. It is entirely possible to live your entire life on the credit card float and never pay a single penny in interest. But if one thing goes wrong - say a government shut down that delays your paycheck by a month, all of a sudden, you don't have the cash available to pay your credit card balances and you start accruing interest.Reply
Lavender Filly said:
I’m curious whether you actually pay off the float or just keep the money on hand.
Of course it's your choice but I can't think of any benefit (to oneself, the banks would love it) to paying your card in full. Some people are so debt averse that they pay their card off multiple times per month. I, like dakinemaui , have my cards automated to pay the statement balance every month.Reply
I understand. Here is a more precise iteration of my question: Given the principal "do not purchase on credit something you do not have dollars for today," what is your real-world credit card management practice? Do you pay the balance on the statement in full on the due date? Or, have you effectively advanced payment such that on the due date you are paying off charges incurred after the due date until present? Or, are you engaged in some other practice I have not considered?Reply