i dont understand why all this complicated strategies on when to open the account. shouldnt it be at near th end of the month?

i say this because of the following situation:

* augst 24th end of statement, you pay all but $1 (thereby carrying a balance).
* buy bonds on the 28th since you carried a balance you get the extra .5%
* the next day, pay off your bonds balance online! leaving but $1

basically thereby treating this card as a debit card (but pay AFTER you charge). always carry $1 balance. but on the day AFTER any purchase, make a payment equal to that amount.

anything wrong w/ this strategy?


edit: ok this might sound cumbersome but not a lot of places take amex. so one would make few but large purchases on this card in theory.

Post updated and revised for clarity.

mshen11, alas your strategy won't work. To carry a balance, you need to have your TOTAL payments in a billing cycle amount to LESS THAN the total balance due as of the previous statement. Paying the day after you charge each time prevents that from happening. MarkM's example in the previous post explains this well.

MarkM, I reread my initial posts, and made several revisions to bring info up to date and fix a few typos. I gather my bit on why one should consider an early-in-month cycle date isn't clear? Here's the relevant excerpt:

"-IF YOU DO want to play the balance-carry bonus game, then you stand conventional “grace period” wisdom on its head. Instead of maximizing this period by buying stuff early in your billing cycle, you want to buy as late as possible during your billing cycle so that your ending balance is high, but your average daily balance is low.

-Consider applying online at or near the first of the month, ESPECIALLY if you want the carry-balance bonuses and want to buy savings bonds. If you buy bonds, or are considering doing so (many of us might want to with this card, especially given FBB's recent policy change), then you’ll want to buy them at the end of the month (for reasons explained on those threads) but have them post to your Amex account at the tail end of your cycle (see the previous reason for why.) OTOH, if you decide to forgo these bonus-carry balances, you might do the same thing that many FBB holders have and apply a few days before the end of the month so that your billing cycle falls on that date monthly."

This wasn't edited materially...would welcome your or any other suggestions on clarifying it further.

i think you guys misunderstood me. let me try again

assuming 24th is the end of your statement. you owe 500$. you pay $499, thereby carrying 1$ balance.

on 26th you buy 5k worth of bonds. you pay it off on the 27th (all of it). you are still carrying the 1$ balance from last month (the original).

anything you buy from that point on you pay off off the full amount, right away (and receive the extra bonus). you always carry that $1.

<<To carry a balance, you need to have your TOTAL payments in a billing cycle amount to LESS THAN the total balance due as of the previous statement>>

that could never happen in your example either. in your example, you carry over $1 on the 26th. on sept 24th you buy 5k worth of bonds.

total payments in billing cycle = 5001$
total balance due previous statement 500$

<<but frankly Dave if you plan on carrying a balance, but minimizing interest, it doesn't seem to me that it really matters when the cycle ends. You charge it, and then you pay almost all of it off right away.>>

MM, so are you agreeing w/ me? your first reply doesnt seem like it but this statement seems like you are.

mshen11 said:

<< MM, so are you agreeing w/ me? your first reply doesnt seem like it but this statement seems like you are. >>

No, I don't -- even in what I originally posted (which I now think was wrong and edited). The fact that "paying off your balance" means a different thing than "having a zero balance" is illustrated by the fact that I (for the moment) use my FBB card almost daily, and I "pay off the balance in full" every month, but my actual BALANCE at any given time (what the interest is calcualted on) has NEVER been much below $1000 since I started using the card.

On the other hand, I'm not sure what I said to Dave is true, maybe he is right. Now I'm starting to think my secnd rule is 180 degrees wrong, you have to make the payment in the NEXT cycle, and since you want to buy bonds at the end of the month, and you want to pay all but $1 off right away ... maybe the last day of the month cycle end is optimal. I don't know, this makes my head hurt too much! But I think I better go back and update what I've already posted today ... sorry about that.

edit:I am removing my "consistent charge level across months" rule since I don't think it is necessary after all.

DaveHanson said:

<< Consider applying online at or near the first of the month, ESPECIALLY if you want the carry-balance bonuses and want to buy savings bonds. If you buy bonds, or are considering doing so (many of us might want to with this card, especially given FBB's recent policy change), then you’ll want to buy them at the end of the month (for reasons explained on those threads) but have them post to your Amex account at the tail end of your cycle (see the previous reason for why.) OTOH, if you decide to forgo these bonus-carry balances, you might do the same thing that many FBB holders have and apply a few days before the end of the month so that your billing cycle falls on that date monthly."
>>


Let me try to understand this by giving an example.

From above you are envisioning something like the following :
Statement date of the 3rd. Those months when buy bonds do on the 26th(buy earlier if February), should post to account on the 29th or so, cycle ends on the 2nd. This would end the billing cycle with a high balance to max the cashback reward, minimize bond interest, and minimize credit card interest b/c the large bond purchase only sits there for a few days(since one would then make a payment for almost the entire balance on the 4th or whatever)
PS Be careful not to return many items during the rest of the month or the balance could be Paid Off accidentally

ok. i just called again. this CR sounded very knoweldgeable and was insistent. she admitted this card was a catch22 and you never come out ahead - all of our strategies would not work. hmmpf.

im more inclined to believe the interpretation agreed upon by this forum over the CRs. but how do we know we are right if every time one calls, one get a different answer?

MarkM, I started a reply before our faculty meeting (which just ended), and I think my reply to you is obselete now with your edit...lmk if you've anything you want me to address.

taylor, thanks for the input. Anyone else feel free to chime in--since taylor's right that when two posters are on the same wavelength, they might not be the best judge.

xoneinax, exactly right I think, right down the point about returning too much. FBBSUKS is correct also.

mshen11, I wouldn't even bother talking to the CSRs about this matter. There's a 95% chance they won't even understand what your asking, and another huge probability they won't know the answer even if they can follow you.

I agree with taylor's last post...the best way to figure this out is by judging the data we receive over the next month. I am entirely unsuprised that even his attempt to getting written instructions was futile.


FOLLOWUP: Upon reflection, I'm thinking that the ideal date for a cycle end might be around the 26th or so, ASSUMING someone's buying bonds at least sometimes and is NOT SURE whether they want to carry balances or not. Here's why: I have a choice of which billing cycle to stick the bonds in, without significantly extending the waiting period needed before redeeming the bonds. Example with a 26th statement date: I want Septmeber bonds to appear on the current statement, I buy the bonds on 9/22. OTOH, I want them to be on the Sept/Oct date, I buy them 9/27. Either way, I keep my options open with very little forgone interest expense.

DaveHanson said:

<< FOLLOWUP: Upon reflection, I'm thinking that the ideal date for a cycle end might be around the 26th or so, ASSUMING someone's buying bonds at least sometimes and is NOT SURE whether they want to carry balances or not. Here's why: I have a choice of which billing cycle to stick the bonds in, without significantly extending the waiting period needed before redeeming the bonds. Example with a 26th statement date: I want Septmeber bonds to appear on the current statement, I buy the bonds on 9/22. OTOH, I want them to be on the Sept/Oct date, I buy them 9/27. Either way, I keep my options open with very little forgone interest expense. >>

LOL, that is exactly what I've been thinking, for the very same reasons (most flexibility), though I didn't want to express it publicly and risk muddying the waters more than I already have The closest I came is when I corrected my first post of today, I wrote vaguely "a cycle end near the end of the month" instead of "the first of the month." But now that you have said it on your own, I might as well concur

I too think this makes the most sense... I actually got pretty close to this scenario (without knowing what I was doing) as my billing cycle closes on the 27th plus or minus one day. I won't be able to purchase bonds at the beginning of my cycle for some months, but I can plan around it.

Keep in mind that a 26th cycle date makes sense ONLY if you AREN'T SURE what you want to do later.

If you KNOW you'll be buying bonds and carrying balances even after the initial 6 months, I'd probably still have a early-month date, per my original post.


You are correct xoneinax.