"Rolling the debt"?

Hamster

Hamster

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LaraC said:
I didn't even know it is possible to that. Points to a serious flaw in the system.
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If true. They are going to be seriously screwed when it gets fixed. Also, R4k interest on R110K CC debt? Isn't it closer to R7k pm?

And then while you have people like this out there you have banks like FNB that "reward" you for using credit.
 
DominionZA

DominionZA

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Surely you can't draw all if though as a portion of it is the interest payment?

'scuse dumb question. Never done this so don't know. Just curious.
 
R

Replay

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Mike Smit said:
Surely you can't draw all if though as a portion of it is the interest payment?

'scuse dumb question. Never done this so don't know. Just curious.
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She probably does a transfer to her cheque account
 
H

HavocXphere

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Mike Smit said:
Surely you can't draw all if though as a portion of it is the interest payment?

'scuse dumb question. Never done this so don't know. Just curious.
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It should work unless you've hit the cap on the card.

i.e. The total balance owing will effectively creep up...and if the card is max'd that is going to cramp their style. Beyond that it should work.

Also depends on the card provider...e.g. I know mine doesn't cut off after the supposed limit is reached. (According to a colleague with same card anyway).
 
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TJ99

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LaraC said:
I didn't even know it is possible to that. Points to a serious flaw in the system.
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It's not a flaw, it's exactly how it's supposed to work. The instant you transfer money in, your balance becomes zero. You can then immediately buy or withdraw as before.

Mike Smit said:
Surely you can't draw all if though as a portion of it is the interest payment?

'scuse dumb question. Never done this so don't know. Just curious.
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Yes, the interest is "kept" by the bank. If you have a limit of say 50 000, you withdraw 20 000, now your remaining limit is R30k and you need to pay R20k to get back to your full limit. Say they add R5000 interest, now you have to pay R25000 to get back to your full limit. So yes you are only paying off the interest, but it doesn't compound.

Of course, having R110 000 outstanding on your credit card is blerrie madness, I'd never even have my limit anywhere near that, even though FNB keeps begging me to increase it.
 
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phiber

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Hamster said:
If true. They are going to be seriously screwed when it gets fixed. Also, R4k interest on R110K CC debt? Isn't it closer to R7k pm?

And then while you have people like this out there you have banks like FNB that "reward" you for using credit.
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You aren't rewarded for using credit, you are rewarded for using electronic payments, i.e. not using cash.

Cash is very expensive to handle and move around, electronic payments much cheaper for the banks.
 
Hamster

Hamster

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phiber said:
You aren't rewarded for using credit, you are rewarded for using electronic payments, i.e. not using cash.

Cash is very expensive to handle and move around, electronic payments much cheaper for the banks.
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You earn more eBucks by using your budget facility for starters...
 
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C

creeper

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If I'm not mistaken, if you transfer money out of your credit card, you start paying interest on the amount transferred. The same happens when you have a petrol card linked to your credit card. Also. The interest free period also doesn't apply

In other words. The friend is paying interest on his salary

Edit. If the friend doesn't spend anything on his credit card, it will cost about R10k a month over 12 months to pay it off. Assuming 18% interest
 
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ld13

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creeper said:
If I'm not mistaken, if you transfer money out of your credit card, you start paying interest on the amount transferred.
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Yep. My better half used to withdraw cash from her CC to pay some stuff. She also did EFTs from the CC in the past. I put a stop to all of that. She was unaware that they hit her with interest from day one. Standard bank hit her with her last 'Cash withdrawal interest' this month - a whopping R0.01. :D

Unfortunately I had to implement a similar strategy for her with regards to 'rolling' her debit. I push through 'payments' on the card to lessen the interest hit she it taking on the debt. She eg. owes R4000. During the month we eg. pay in R3500 or whatnot. That R3500 gets used again, sure, but the interest only gets charged on the 'outstanding' R500 and not the full R4000 if we were to have used the R3500 cash directly and not via the CC. This is not optimal, I know, but it is how things need to be for now.
 
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TJ99

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ld13 said:
Yep. My better half used to withdraw cash from her CC to pay some stuff. She also did EFTs from the CC in the past. I put a stop to all of that. She was unaware that they hit her with interest from day one. Standard bank hit her with her last 'Cash withdrawal interest' this month - a whopping R0.01. :D

Unfortunately I had to implement a similar strategy for her with regards to 'rolling' her debit. I push through 'payments' on the card to lessen the interest hit she it taking on the debt. She eg. owes R4000. During the month we eg. pay in R3500 or whatnot. That R3500 gets used again, sure, but the interest only gets charged on the 'outstanding' R500 and not the full R4000 if we were to have used the R3500 cash directly and not via the CC. This is not optimal, I know, but it is how things need to be for now.
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Further complicated by the fact that the opdest debts are paid off first. So that 500 is the first 500 that gets deducted from the debt. If you "roll" the right amount and never do transfers, you can end up never paying any interest.
 
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