Interest and credit cards...

[FutureDocDO]

Does any know if credit card companies will charge interest if I only pay the minimum they require each month? I've only paid the full amount up 'til now but I just charged a big amount on the card that if I don't have to pay in full I'd rather not. I would rather have that money in my high interest ING account making what little money I can . Thanks.

---

Members don't see this ad.

 

[southerndoc]

Ugh, YES. Any balance not paid in full will feel the wrath of interest fees.

 

[heech]

Right, credit card companies are far more devious than that. They will charge interest on any balance you carry on the card, period. Furthermore, keep a close eye on the interest rates your credit card company offers you... it can magically go up by 10-15% points in a single statement if your credit card company decides you're now higher risk, based on the balance you carry on your account. Your only notification will be an easily misplaced letter.

Pay off your credit cards every month.

 

[kate_g]

Does any know if credit card companies will charge interest if I only pay the minimum they require each month?

Heh... That's what credit card companies *do*, that's how they make money. ING is currently giving you 4.15% interest. Unless you have an introductory deal of some kind on your card, it's pretty much guaranteed that your card charges more interest than ING pays. So, you're losing money by keeping it in the ING account instead of paying your balance. Pay the balance as fast as you can, sending in more than one payment a month if you remember to do it, to minimize your cost in interest.

 

[emidesu]

Not only are you paying interest, carrying a balance affects your credit in that they look at your credit limit/balance ratio. This can affect your ability to get private loans.

 

[Stroganoff]

Yeah, 10-22% credit card interest >>> 4.15% ING interest. Credit card balances are the enemy.

Side-topic Rant: A few minutes after I opened my ING Savings last week (I was like 4.15% HELL YEAH!), I saw a ton of ads for Savings accounts for like 4.65%. ING seems pretty nice and non-evil, so I might just stick with 'em.

 

[It'sElectric]

Yeah, 10-22% credit card interest >>> 4.15% ING interest. Credit card balances are the enemy.

Side-topic Rant: A few minutes after I opened my ING Savings last week (I was like 4.15% HELL YEAH!), I saw a ton of ads for Savings accounts for like 4.65%. ING seems pretty nice and non-evil, so I might just stick with 'em.

What savings accounts were those? I've looked around a ton, and any other savings accounts that I've found with comparable rates usually have various fees and minimum requirements. Hence ING is always the better deal, since they have no minimum balance requirements, extra fees, or required transactions each month.

I'd honestly love to hear about any other accounts with better savings accounts!

 

[southerndoc]

Emigrant Direct usually has better rates than ING.

 

[Stroganoff]

Wow, Emigrant Direct's at 4.50% right now with no fees/minimums. I clicked on a Citibank Savings ad, and they're offering 4.75% for e-Savings, but there's a ton of fine print, like having to open a checking account as well...otherwise subject to fees...

 

[Taurus]

http://www.bankrate.com/brm/rate/mmmf_highratehome.asp?params=US,416&product=33&sort=2

Site lists the highest savings rates in the country. I check it pretty religiously.

 

[FutureDocDO]

Looks like I have to pay. Thanks guys/gals.

 

[-Goose-]

Anyone know if those cards with a 6 month 0% introductory rate can *magically* change?

 

[maxhealth]

Anyone know if those cards with a 6 month 0% introductory rate can *magically* change?

I'm sure they can, check the fine print. Generally, however, they won't change unless you're late on a payment. In that case, they'll instantly jump as high as 23%.

 

[Sol Rosenberg]

Anyone know if those cards with a 6 month 0% introductory rate can *magically* change?

I've never heard of any companies changine the teaser rate unless someone was late with a payment or something, but beware of the "6.99% for life," etc cards. All of the ones that I have seen include fine print where the CC company can change the rate at any time for any reason or no reason.

 

[BlazerMed]

Right, credit card companies are far more devious than that. They will charge interest on any balance you carry on the card, period. Furthermore, keep a close eye on the interest rates your credit card company offers you... it can magically go up by 10-15% points in a single statement if your credit card company decides you're now higher risk, based on the balance you carry on your account. Your only notification will be an easily misplaced letter.

Pay off your credit cards every month.

My credit card has instead periodically increased by limit, interest rate has stayed the same. However, I'm about to begin yearly card jumping so I can keep the balance at no interest until I can get it paid off.

 

[heech]

Credit card companies have your worse interest in mind, just remember that.

These guys won't raise your rates if you're already in the teens (interest rate wise), but *if* you're in the single digit interest rate level... just remember from their point of view, you're a losing proposition, and they're looking for any excuse to raise your rates.

- 0% introductory rates are usually only for a fixed amount of time (like 6-months).

- And teaser "lifetime" rates for balance transfers can also be very devious. They might tell you you'll only pay something like 3.95% for the lifetime of any balance transfers... sounds great, right? But as kate_g mentioned, if you read the fine print, they'll count any payments you put in towards this "balance transfer", first. In other words, you'll only have that 3.95% rate if you never use the card again for any other purchases; as soon as you do, the rate will gradually climb until its back to its "normal" rate.

- jumping from promotional rate to promotional rate is a great way of saving money, as long as you don't rely on it for too long (or too much). You don't want to get stuck with a 20% rate by being rejected for the next card you were planning to "jump" into.

 

[Anath]

as long as you dont need hand-holding, Emigrant direct and ING are both awesome. I have both, and I've done pretty "well" vs the measely 0.5% you may get through your banks. I will agree that my emibrant direct has always been higher in interest than my ING acct. My financial planner said that even he couldnt do better than what I was doing/getting as far as my savings.

Be warned, though that if you do need hand-holding (ie, you need everything explained, you want all the fancy bells and whistles, etc), ING has been known to "end the relationship" with you if you basically become high-maintenance. I think they even admit/address this in their FAQ section.

 

[Taurus]

Besides INGDirect and EmigrantDirect, VirtualBank is also pretty good.

 

[Stroganoff]

Found a pretty good short comparison: Online Bank Comparison: ING Direct, VirtualBank, Emigrant Direct, and HSBC Direct

and a comparison summary of their respective terms and disclosures

 

[It'sElectric]

Absolutely awesome information from everyone! Emigrant Direct just sounds a slightly better version of ING. Slightly better interest rate, but same basic format.

Not to be mean, but I honestly can't understand how someone would need their hand held in utilizing one of these online banks (ING, Emigrant Direct). Everything is very clearly explained, and in all honestly, it sounds more convenient than a regular bank. My checking account can be directly linked to my online high interest savings account, and I can make easy transfers online between the 2 accounts. Yes, there is a 2-4 day hold, but if you know that (and plan ahead), it shouldn't be a problem for anyone.

Emigrant Direct it is. Unless of course anyone has a horror story regarding them?

 

[Taurus]

I personally have accounts with Emigrant, ING, and VirtualBank for several years. Emigrant is a fine choice. Right now, they tend to be ahead of the others in terms of giving higher interest. But don't assume that will last forever. When ING first offered online banking, they consistently gave the highest interest rates in the country. That was because they were trying to capture market share. Now, they're the biggest player around and they don't try to give the highest anymore because customers tend to stick with the familiar. The bank giving the highest tends to be the one trying to aggressively recruit new customers. That's fine with me because I have no loyalty to any of these banks. I just move my money to the bank that gives me the highest rate.

An observation is that ING seems to be the most obsessed with online security. They also put a hold on your money longer, which is a pain in the butt. Just be careful about online banking and use some common sense and you'll be ok.

 

[kate_g]

Yes, there is a 2-4 day hold, but if you know that (and plan ahead), it shouldn't be a problem for anyone.

Been a while since I've had a "regular" savings account at a local bank, but I'm pretty sure it's standard practice everywhere to put a hold on new deposits. This isn't to be a pain in your butt, it's to protect the bank. They don't want to let you deposit a bad check and withdraw the money before they find out that the check was bad, so they put in a couple days' cushion. I'm pretty sure my regular checking account does the same thing, for instance - up to 7-10 days for checks issued by other banks.

So, I wouldn't let that fact govern your decision on which bank to go with.

 

[etf]

Been a while since I've had a "regular" savings account at a local bank, but I'm pretty sure it's standard practice everywhere to put a hold on new deposits. This isn't to be a pain in your butt, it's to protect the bank. They don't want to let you deposit a bad check and withdraw the money before they find out that the check was bad, so they put in a couple days' cushion. I'm pretty sure my regular checking account does the same thing, for instance - up to 7-10 days for checks issued by other banks.

So, I wouldn't let that fact govern your decision on which bank to go with.

i have both an ing direct account and hsbc direct. hsbc is my favorite; not only are the interest rates higher, they also give you an ATM card so that you can access your money without having to wait 3 days.

 

[blkprl]

Anyone know if those cards with a 6 month 0% introductory rate can *magically* change?

yes if you are late on another card, the CC company can raise the interest on the zero apr card......it says so in the fine print that we never read

 

[southerndoc]

yes if you are late on another card, the CC company can raise the interest on the zero apr card......it says so in the fine print that we never read

Not only that, but if you're late for any payment -- cable bill, power bill, another credit card, whatever -- then the credit card company can cancel your zero percent APR and implement its penalty rate immediately (often in the 18-25% range).

 

[kate_g]

i have both an ing direct account and hsbc direct. hsbc is my favorite; not only are the interest rates higher, they also give you an ATM card so that you can access your money without having to wait 3 days.

Just the fact that they give you an ATM card doesn't mean that there's no hold on new deposits, though. For instance one of the reasons I disliked WaMu was that they had a pretty lengthy hold on deposits, so you can't take money out (by check, ATM, wireless transfer, or any other means) for like 10 days after you put it in.

Now, the "not having to wait 3 days" point makes sense if what you mean is that a wireless transfer from ING to my checking account takes 3 days, so I have to plan that far in advance if I need to make a withdrawal from savings. This is true. But independent of a hold placed on *new* deposits to the account, which is what I thought It'sElectric was talking about. Looking back at that post, it's possible they did mean the electronic transfer time and I just misunderstood.

 

[Stroganoff]

I finally got the snailmail for Emigrant Direct, but I'm a little confused on the Disclosures:

"Inactive Accounts
If there have been no Account inquiries or transfers using the EmigrantDirect service for an extended period of time, your account may be considered inactive. An inactive account will be escheated to the respective state of your residence in accordance with Applicable Law and Regulations."

So after this vague "extended period of time," I forfeit all my money? (escheated? huh?)