Hacker News Reader

Comment by neogodless | Hacker News Reader

What is the "middle option" between paying the minimum and paying the full balance that is more optimal?

If you pay the full balance on the due date, you get the interest-free loan. It's not exactly one month, but it's from purchase date until due date, which is something like 25-55 days.

View on HN

The middle option they are discussing is between never buying anything you don’t currently have the money for (what the parent commenter claimed), and buying more than you will be able to afford by the time the payment is due.

You can pay your rent bill on August 1st, even if you don’t have the money for it until your paycheck on the 12th, and then once you get your paycheck, you can allocate the money appropriately so that you can pay off the bill at the end of the month worry-free.

I'm not sure I understand the comments on here about autopaying the full balance leaving interest on the table. AFAIK, all my autopay options pay pretty close to the due date. I'm pretty sure if I tried to time it closer on my own I'd have some late payments which would be far more than the fraction of a percent interest I might incrementally earn. Even with higher interest rates, micro-optimization doesn't make sense for most people.

I think the confusion is between "full balance" and "statement balance." The statement balance will generally be lower than the full balance, since the due date is typically weeks after the statement closes.

Ah this helps! Yes I pay my full statement balance on the due date (in most cases.)

I think you're probably right. I pay/autopay the statement balance by the due date but I don't send the CC company money that isn't actually due yet even though it's already on the card.

Exactly; it's effectively the same thing but with a rolling one-month interest-free float.

Reply on news.ycombinator.com