Best way to manage bills?

[godette]

Hi there everyone...I'm wondering what's the best way to manage non-IP related bills.
I use my credit card to pay for everything so that I can keep the balance in my offset account as high as possible, but some companies charge a surcharge for paying by credit card. The surcharge is usually between 0.5 and 1 per cent.
I'm wondering if it's worth while paying that surcharge just so I can keep the balance in my offset account high. My reasoning is that if I use cash and not credit, my balance drops, and I end up paying 5.7% interest on a larger portion of my loan than if I didn't pay cash and kept my balance high.
But is that correct? Does it make sense that I cough up an average of 0.7% in surcharge fees just to keep the offset balance as high as possible for as long as possible?
Not forgetting these bills I'm paying are not related to the IP at all, they are things like electricity and gas bills for my private home.
Thanks so much for your help.

 

[ozmale42]

I pay everything on my credit card (AMEX preferably but VISA/MC if AMEX not accepted) and have a monthly sweep once I'm paid. My cards are up to 55 days interest free

As for the surcharge, I usually opt to pay the surcharge so as to get the rewards points rather than in consideration of any increase in interest by using funds in my offset account

The out of pocket difference between paying on credit and using the offset account would be the interest you save by leaving the money in the offset account versus the surcharge, which is a flat rate, not a % p.a

If there is a 0.7% surcharge and your mortgage offset account saves 5.7% p.a and the purchase was, say $1,000, you'd pay an extra $7 by credit card and save $8.59 through reduced interest on your home loan if you left the money in the offset account for 55 more days. So you'd be ahead by using credit

Different story if you pay on credit and have to pay the cc bill in say 14 days because you happened to pay the expense towards the end of the credit card billing cycle,

Regards
Pete

 

[MTR]

Hi there everyone...I'm wondering what's the best way to manage non-IP related bills.
I use my credit card to pay for everything so that I can keep the balance in my offset account as high as possible, but some companies charge a surcharge for paying by credit card. The surcharge is usually between 0.5 and 1 per cent.
I'm wondering if it's worth while paying that surcharge just so I can keep the balance in my offset account high. My reasoning is that if I use cash and not credit, my balance drops, and I end up paying 5.7% interest on a larger portion of my loan than if I didn't pay cash and kept my balance high.
But is that correct? Does it make sense that I cough up an average of 0.7% in surcharge fees just to keep the offset balance as high as possible for as long as possible?
Not forgetting these bills I'm paying are not related to the IP at all, they are things like electricity and gas bills for my private home.
Thanks so much for your help.

Just ignore them or throw them in the bin.... Sorry could not resist, this is really what I would love to do.

I just place everything on visa card and pay it out at the end of the month, have been using this system for years, seems to work OK for me.

Cheers, MTR

 

[Rixter]

We pay everything on Credit Card whilst our income sits in personal LOC reducing the balance and interest payable. Also collect reward points on the credit cards.

 

[godette]

Thanks everyone for your replies! I'd completely forgotten about reward points, so yep probably will keep on paying by CC. Booo to surcharge fees

 

[travelbug]

So do you have a designated credit card specifically for IP's so as to keep it separate from personal stuff?

So you pay off the crtedit card out of investment loans/LOC's?
Is this OK tax wise?

I just have one account that all rent goes into and all bills go out of.
But with the amount of bills a CC may be better for me with the amount of reward points too.

 

[Dylan33]

I noticed Virgin are doing a special deal of 0% interest on their CC for balance transfers and 0% on transactions for 9months ( I think ). Also 4 free domestic flights. I was thinking how I could take advantage of this. I'm currently using a offset account with a CC linked to it with the NAB.

Any ideas? Is anyone doing anything like this?

 

[A'PEXi]

What were the other options for the bills other than CC + surcharge? Time is another factor for me, if I can do it online via CC than I would rather do that then having to drive to the PO etc.

 

[travelbug]

I have a designated account (as I mentioned) and I just pay all bills online from this account by transfer). Very easy.

 

[grantwhit]

I noticed Virgin are doing a special deal of 0% interest on their CC for balance transfers and 0% on transactions for 9months ( I think ). Also 4 free domestic flights. I was thinking how I could take advantage of this. I'm currently using a offset account with a CC linked to it with the NAB.

Any ideas? Is anyone doing anything like this?

So can you rack up 10k on your normal cc then transfer the balance across and not have to pay/accrue any interest for the next 9 months? I can find that deal but not the part about the flights.

Also saw HSBC has the same for 6 months but with $0 annual fee. ^^^has $129 annual fee

 

[Dylan33]

Yes. I've recently moved one over to the NAB. 1% for a year on the transfer amount but normal interest on any purchases. When the 1 year is nearly up ill look around for another deal. I'm not using this particular card, I just want to pay it off. The only downside is they make you increase your limit, so if your going for a loan the the larger limit will be taken into consideration. I'm not sure if I can downsize the limit to what's owing now that I have the card with them?

 

[BMan]

the difference is pretty negligible
it would depend on the surcharge and your current interest rate but for the ease of it wacking it on the credit card would probably cost you a max of $10 a year more with about 10k of bills
with a 1% surcharge and a 6% IR with a full 55days interest free
but then theres the extra benefits of rewards points etc.

i currently have a no annual fee credit card and have kept it for that reason but i dont get any reward points etc (ex virgin credit card now westpac ignite)

i know if you have an advantage package for your loan then you dont have to pay an annual fee for your credit card. would all banks do this and keep doing this? if so i might change so i can get rewards points ( i pay it off at the end of each month so IR doesnt bother me)

 

[Kinnon Bell]

Yes. I've recently moved one over to the NAB. 1% for a year on the transfer amount but normal interest on any purchases. When the 1 year is nearly up ill look around for another deal. I'm not using this particular card, I just want to pay it off. The only downside is they make you increase your limit, so if your going for a loan the the larger limit will be taken into consideration. I'm not sure if I can downsize the limit to what's owing now that I have the card with them?

Yes, you can - you can reduce your limit to as low as your balance to the nearest $100, eg the balance on your credit card is $5647 you can reduce your limit to $5700. The only potential hurdle is some card types have minimum limits but there are ways around this.