Credit Card Issuers Do Some Sneaky Stuff, But This is One of the Sneakiest

Two months ago, I accidentally shorted my payment to pay my balance in full by a $1.19, which I found out last month, when I was charged interest of over $4.00.

Logically, from a consumer's standpoint, the interest should have been around $0.17, but I know the credit cards use a full amount balance to calculate interest, so I wasn't surprised.  Nevertheless, I thought adding $5.00 to the full balance on the current bill would resolve any interest that would have accumulated since the bill was sent.

I was wrong.  The new bill, which I received this week had $1 and some change as interest.  The extra $5 went towards new purchases.  I called the credit card issuer, and asked why the $5 wasn't credited to the accumulated interest, and was credited to new purchases.

The rep replied that the total due on the bill is only an estimate, and not the pay off on that actual date.  To get rid of the interest being calculated, I would have to pay off the total amount, including interest, on that specific day.

This I knew, but I had forgotten.  With your monthly payment, the credit card will pay off your most recent purchase first, then work backwards.  Logically, this wouldn't make sense either, since you get a 30 day grace period of regular purchases.  HOWEVER, it seems that grace period is taken away once you start carrying a balance. 

So, my problem was that I used the credit card after new bill was sent, but before my payment posted, so  the extra payment went to the new purchase (although I hadn't received the bill for it, yet), and not to any accumulated interest.

The problem with this is that if you use the credit card regularly and frequently, you will never get rid of the interest payment because you'll be accumulating interest from the day you make the purchase.  

The only way to get the interest to $0 is to call the issuer and ask what the total payoff amount is for that day. 

Which is what I did.  

So, this is another reason to pay off the card in full each month.  And even if you do, double check to make sure you are not even a penny off.  My $1 shortage turned into over $6.00 in interest over 2 months. If I could only get that sort of return in my investments.

TSA is offering cash rewards for ideas to speed up lines at airports.  It's a $15,000 award. Not enough to retire on, but still a nice amount.  And you might be saving taxpayer money.

When you think of it that way, it's a tiny reward, but I'd still take it.  Heck, if I had any good ideas to speed up the line, I'd tell them for free, so for me, this incentive is a bonus.

AOL Article on TSA cash awards for ideas to speed up lines

Saving For Retirement

An old co-worker told me yesterday that I was the one who got her thinking about contributing to our employer sponsored plan at work.

It made me feel good because I believe I have made her options a little easier.

When you contribute to your employer plan, by the time you retire, you should have a sizeable chunk in addition to any retirement plan/social security payments you will get.

There are several great thing about an employer sponsored plan:

• The contributions are taken out of the paycheck before you see it
• Depending whether you have a traditional plan or a roth plan, the money is tax-delayed (meaning you won't pay taxes on it until you withdraw the money), or tax-free when you withdraw
• They are portable - if you separate from your current employer, you can keep it with them, transfer it to your retirement account with your new employer, or transfer it into a bank IRA, or even cash out (not recommended)
• Many times, employers offer matching 

Many employers these days automatically enroll new employees into the employee sponsored plan.  That's good, but many times, it is the minimum amount, and a fund of their choosing.  Take control.

• If not enrolled already, enroll now.
• Try to contribute at least enough to maximum the matching
• Educate yourself on the offerings, and select the best one for you