Question
A friend has a Chase Visa card (no points/miles) and is angry that Chase is now imposing a $1 monthly full payment fee. Is this a trend, or related to a specific card, or ... ? She is cancelling the Chase card. She doesn't use plastic much. I suggested Amtrak's Mastercard since she does annually ride Amtrak from one coast to the other.
Sylvia
Answer
I am not aware of this card, but I cannot imagine that a company would charge you $1 to pay off in full every month. I do fully understand that these companies profits really come from the monthly balances then charging interest, but come on folks, this is flat out dirty.
Answer
If anyone tried that with me I'd cancel the card too. I do have a card from Chase, but it's currently carrying a low-rate transfered balance, so I wouldn't have seen such a fee on it.
Answer
Just leave a $1 or .50 balance on the card each month.
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Just leave a $1 or .50 balance on the card each month.
:confused: I'm one of those "pay it off in full" people, so I'm not too savvy when it comes to fees, interest charges, etc. I've alway thought that if you leave any balance--even .50 or $1--that every subsequent charge would then be subject to interest charges until the previous balance was paid. Seems to me that this would then snowball and eventually cost much more than $12.00/year....
The simple solution is to dump the card and take advantage of one of the millions of other great offers out there......or call the card issuer and tell them to drop the fee...or else !
Answer
Never leave a balance if you can help it!
Interest rates may not be calculated with just the $1. Its likely to be calculated based on your average balance that whole month...
Rain
Answer
True. If you leave even a 1c balance on the card, then you lose the float. Basically everything you charge on the card for the rest of the billing cycle gets charged interest, it's not just that you are paying interest on the remaining balance.
I agree with others, unless there is some overwhelming reason to stay with that card, I'd dump it and get one that has no annual fee (and I guess now no payment penalties).
Jeff
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After I suggested to my friend that this forum found the charge unique, she called back. She had been given wrong information; there is no such charge for paying in full. As well, she was told, the computer had made a mistake, and that that happens "all the time" and the bank would just make the adjustment, no problem. I think I would certainly cancel a card where the software makes so many mistakes that customer service thinks it is "all the time."
Sylvia
Answer
FYI, the other problem with leaving a very small balance is that the minimum finance charge is usually 50 cents, maybe even $1 in some cases. So even if you leave a 1c balance, and they didn't use the average daily balance (which they will, or the even more evil 2-cycle average daily balance), the following month it would be 51 cents or $1.01.