July 20, 2012 | In: Trivia
Can You Get Interest On Your Credit Card?
No – I didn’t make a mistake while typing the title of this post – I really meant “get” and not “pay”. In my last post, I revealed that (most) banks do not charge an cash advance fees if your credit card is in a credit position. Now that this was explained, do banks give you interest on your money if your credit is in a credit position?
For example, let’s assume that you owed $1,000 on your credit card, and just before traveling on a vacation for a month, you made a payment of $10,000 (you mistakenly added a 0) and thus now the credit card company owes you $9,000. Now, after returning from your vacation, should you expect a few dollars of interest credited to your credit card?
The short answer to this question is No. Never ever expect to get interest on your credit card and always expect to pay interest on your credit card (if, God forbids, you couldn’t afford to pay your full balance on time). Now you might think how come? Well, here are a couple of reasons:
- Credit card companies are not banks (although the two are often confused with each other since banks are the ones issuing credit cards).
- Even if the above is true (which is not), this is not a savings account, or a preferred checking account – the terms that Visa, MasterCard, or the likes send you either explicitly state that they are not required to pay you any interest on your money under any condition or do not mention the interest on credit issue at all.
Now the question is, should you get interest on your credit card if the credit card company owes you money? I don’t think so – as stated above, credit card companies are not banks, and if you feel that your credit card is suddenly in a credit position, then all you need to do is to withdraw money from it (no – you wont’ be charged a cash advance fee) and put them in another account that pays you interest. In any case, interest these days is so low that it’s not even worth thinking about.
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