Published on October 1st, 2014 | by Chuck109
Small Balance Credit Card Waiver (Lots of Free 99¢ Amazon GCs)
Did you know that some banks will waive your credit card bill if it just has a very small balance on it?
Small Balance Waiver
With many credit cards, if the balance on your statement is small – usually 99 cents or less – the bank will forgive it; it’s too small to ask you to pay. Usually it shows up on the bill as a “credit adjustment” or something similar.
Here’s the data that we’ve found so far on how much will be forgiven:
- Amex – none (however, this seems to vary – some people get $1 waived or even more.)
- Bank of America – none (occassionally, they do waive as much as $4.75)
- Barclay will forgive $.99, not $1
- BBVA Compass will forgive $1 (source)
- Capital One will forgive $1
- Chase – none (As of November 2014, Chase is no longer forgiving small balances; however, some are still reporting success.)
- Citi – none
- Citizens Bank forgives $.99
- Comenity Bank no longer forgives $1.99, unclear if they forgive at all (source)
- Crate & Barrel will forgive $1.50
- Discover – $2, not $2.01 (most report getting this)
- Elan (Fidelity) will forgive $.99 (1)
- FIA – none
- FNBO Omaha Amex – none
- Home Depot card will forgive $.99 (source)
- Kohl’s card will forgive $.99
- M&T will forgive $.99
- Macy’s Amex – none
- PenFed will forgive $1
- PNC – none (won’t forgive $.99)
- Sears Citi will forgive $.99
- Synchrony – none
- Target credit card none
- US Bank – will forgive $1 [Note: they will not forgive the small balance in the month that you are charged $0 for the “annual fee”, but the other 11 months you should get the $1 forgiven.]
- USAA forgives $.99
- Wells Fargo will forgive $1.99
How to Use It
This may not sound so easy to make use of, but consider the fact that Amazon allows gift cards to be bought for as little as 50 cents. So after you go through the pain of setting up all your credit cards in your Amazon account, you can just go one-by-one and buy 99 cent e-gift cards on each credit card once a month.
This is especially worthwhile on no-annual-fee credit cards which you are planning on keeping forever; the two minutes you spend adding the card to your Amazon account will get a lot of usage.
This is best used on sock-drawer credit cards; since there’s no balance on the card, you can just purchase the $.99 Amazon gift card and you’re done. But it’s also possible to make use of this on credit cards which you do regular spend on. You can pay off the bill besides 99 cents, and the small balance will be forgiven. This may be considered a hassle for some, but some of us are anyway paying off our credit card balances early so that our credit utilization ratio goes down (see below).
Effect on Credit Score
We know that 30% of the FICO score is based off your credit utilization ratio. We’ve written that anecdotal evidence suggests that the sweet spot for optimizing your utilization ratio is to have zero utilization on all your credit cards, besides for one card which should have a utilization of something under 10% of the credit limit on that card.
How will this $.99 trick effect your credit score? If you leave a $.99 balance on numerous credit cards, will the $.99 balance show up on your credit report and hinder the above mentioned sweet spot?
No. Based on what I see on my own credit report, I believe that for two reasons this will not hinder your credit score at all.
Firstly, in general the balances always get rounded down to the dollar. So if you have a balance of $532.99, it shows up as a $532 balance. In our case, the $.99 balances are showing up as $0 on my credit report, just as all balances are rounded down to the dollar. I would therefore assume that your utilization ratio remains zero.
Additionally, since the credit card issuer is waiving that small balance, they report it as a balance of $0; the waiver is factored into the balance reported. I see this from the balance reported on my Discover card. As mentioned, Discover waives up to $2. On my credit report the balance is showing up as $0, despite the fact that there was actually a $2 balance. Apparently, since they are waiving the $2, they don’t report that balance at all.
Since there are many credit cards which don’t waive small balances, you can use one of those to be your one card which carries a balance, and all the cards which are carrying $.99 balances will be considered as having a zero balance. We’ll thus be able to retain the optimal utilization formula even while playing this $.99 game.
Discover has the highest threshold – they’ll forgive up to (and including) $2, but not $2.01.
$2.01 is not forgiven
US Bank forgives 99 cents.
I’m pretty sure that they would not forgive $1, but I haven’t tried it.
I only recently got a Barclay card (the Arrival), and I noticed in the pamphlet that came with the card that they’ll bill me for any balance of $1 or more. They didn’t say if less than $1 will be forgiven, or if it will roll into the next bill. I tried it out, and…
the 99 cent balance was forgiven.
Amex, Fia, Citi, BoA, Synchrony
These card issuers don’t seem to forgive anything.
A recent Amex statement
A recent Citi bill with a 9 cent balance.
From a recent FIA Amex statement.
From a recent GE/Synchrony statement
As for Bank of America, I have no personal data since I don’t have any BoA credit cards, but I believe it runs through the same Fia Card Services, same as my FIA Amex mentioned above which did not forgive a $.99 balance. The Frequent Flyer reports likewise that BoA did not forgive a $.50 balance.
We’re obviously not getting rich on this, but it sounds like a cute way to get $5-$10 in Amazon gift cards per month with minimal effort. Please comment below with any additional (current) info, and we’ll update the post to reflect the additional information.
It’s worth noting that some banks might not take kindly to this, so keep in mind the small risk. Doing sporadically should be fine.