Just "Discovered" the "Small Balance Credit"

[dragoncar]

Last month I charged about a dollar on my Discover card.  On my statement, they gave me a "small balance credit" and I owe nothing.

Apparently, this is a thing, but I never heard of it until now.

I have electronic billing so I'm not sure what their motivation really is -- does a direct debit from my savings account really cost them a whole dollar?

[Zette]

I would read the fine print -- will they now bill you for interest on your purchases the next month?  I've never intentionally carried a balance, but there was one time my payment arrived late due to a major snowstorm, and the next month the bill charged interest over TWO periods of spending.  I'm still irritated about it 20 years later...

[clarkm04]

DW had the same with Discover card two years ago.  Nothing hidden or shady.  They must have parameters for wiping out very small balances. 

I've never tried it again, but appreciated not having to do an electronic payment for .80.

[YoungConsultant]

The cutoff is $1.99.  If your balance is $2.00 or higher you get no credit.

Every month I either pay the balance down to $1.99 (if I used that card for something, I mainly use my Chase Sapphire or Amex Blue Cash these days) or I'll put $1.99 of gasoline in my car.

Basically I just see it as a bit of extra cashback bonus :)

[boarder42]

thats awesome

[Jack]

Oh, that explains it! I was wondering why, after using my accumulated credit to by something from Amazon for about 58 cents (net), that my next statement came in at $0.00.

[Rage]

Several years ago I had an American Express card, and there was some recurring charge that would go on it every month - a subscription of some sort.  I only remember that it was $8 and that was only think I used that AMEX card for ever. 

Every 3 months AMEX would forgive the $8 charge.  The other months I would pay it. 

[horsepoor]

Very clever trick!  I'd just set up my Discover payment, so went back in and adjusted it to see if this works.

[Dicey]

Oh, but it's not "clever". If you legitimately owe the money then pay the dang bill. Paying it short deliberately is just wrong. It's nice that Discover (and possibly others) have figured out that the costs of handling those tiny figures is ridiculous, but it is a nice perk should you ever be in that situation, not something you're entitled to.

[DocCyane]

Oh, but it's not "clever". If you legitimately owe the money then pay the dang bill. Paying it short deliberately is just wrong. It's nice that Discover (and possibly others) have figured out that the costs of handling those tiny figures is ridiculous, but it is a nice perk should you ever be in that situation, not something you're entitled to.

I'm with Diane. That doesn't seem right to me. It's not a way I'd want to save money.

[phildonnia]

I'm resurrecting this thread because I also just "discovered" the small balance credit, and wanted to share.

I have ten or twelve rarely-used credit cards, and got a notice from the bank to use it or it would be cancelled.  I used it to buy a bagel from Panera for $0.89.  And when the bill came, there it was: the "Small Balance Credit".  Over the next few billing cycles, we tried charging various other amounts, and eventually nailed the threshold at $1.99 for our Wells Fargo card.  So, once a month, we used this card to get something small for free.

And then, we accidentally did the same thing on another rarely-used card.  So I looked it up on MrMoMu, and found this thread.

Look, this is way more work than it's worth.  This is not a wealth-building strategy, or even a money-saving strategy.  It's a couple of bucks.  But this is how we roll in Phildonnia. 

We now have a box with our rarely-used cards, separated by $0.99 and $1.99 thresholds, so we can just pick one up whenever we are going out to get a burrito at Taco Bell.  The "used" card then goes into the back of the box, until the statement cutoff date, when it gets moved back to the "available" pile.

This site may be a helpful guide, though it's not completely accurate: https://www.doctorofcredit.com/small-balance-waiver-a-k-a-lots-of-free-99-cent-amazon-gcs/

[Car Jack]

I call it low balance forgiveness and have about 8 cards that I do this with.  3 with $1.99, the rest at 0.99.  Been doing this at the start of the month for maybe 5 years now.  I put the small balance on my amazon gift card balance. 

[PJC74]

This reminds me of the folks at Aldi who go around parking lot stacking carts  from  folks that leave a cart because they are too lazy or want to pay if forward and give a cart to someone else. I just shake my head as I’m waiting for a cart at said person who maneuvering the carts in collecting 50/75 cents and just shake my head like is that really going to make a material effect on your finances , whether you are rich or poor. Just leave the freaking cart so some old lady can grab one for free for crying out loud lol