Why pay dues early?

[sjdisneywedding]

For those Members not enrolled in the Automatic Payment Program via monthly direct debit, payment is due in full BY THE PAYMENT DUE DATE, AND CONSIDERED PAST DUE THE EARLIER OF CHECK-IN AT ANY OF THE DISNEY VACATION CLUB RESORTS, or after the Past Due After date.

This blurb that was posted said that if you CHECK IN between 1/15 and 2/14 and have not yet paid your dues, THEN they are considered PAST due automatically.

So, you don't pay by Jan 15th. You check in to SSR on 1/19. DVC can immediately assess late fees and determine you to be PAST DUE on 1/19, since you checked in to a DVC resort on that date.

If you don't go to WDW between 1/15 and 2/14, then they would not be considered PAST due until 2/15.

I didnt say they couldnt assess fees, I am saying i have never heard of them actually assessing a fee

thats my experience, if you know of someone who has then thats your experience

 

[sjdisneywedding]

Actually, you might try reading the dues statement because that is exactly what it says, it is not contradictory, and I know the answer, which was provided.

your the one typing it for others, I already know what it says,

if you are going to TRY to provide info to others you should be a bit more clear

 

[sjdisneywedding]

Thank you. At least someone else is able to understand what the statement says.

not an issue of understanding it, its an issue of you relaying that info to others

 

[Caskbill]

You could have a monthly payment set up and still pay it off with your Disney Rewards Visa card.

That's not correct. You can only use a credit card if paying your entire yearly dues in full.

If you want to set up an automatic monthly payment, it can only be by direct bank draft.

 

[Caskbill]

No monthly for me - I want my Visa Rewards points! I just want to pay on my next statement, which begins a couple days after my Jan. stay.

I'm just wondering if one can make more in interest having the total dues in the bank and paying monthly as opposed to making a large payment and getting 1% back on the credit card. Anyone ever try to figure that out?

Interesting questions which got me thinking. Here's what I came up with.

To keep it simple, suppose Bob and Tom both have dues of $1200 ($100/month)

Also, both have the full $1200 in the bank in a saving account that draws 3% interest. (That's 0.25% monthly)

On Jan 15th, Bob pays in full using his Credit Card and gets $12 Disney Reward dollars.

Tom has $100 deducted from his savings account.

Month 2, Bob's full $1200 sat in his account for a month and he gets $3 interest, so his total so far is $3 cash and $12 in reward dollars. He pays the credit card in full (if he doesn't he'd be paying high credit card interest rates which would totally negate any purpose in getting reward dollars)

Tom had $1100 in his account for the month and receives $2.75 in interest. He then pays another $100

Month 3. Bob's money is gone and gets no more interest for the remainder of the year. Tom's $1000 balance for the month got him another $2.50 in interest.

Month 4. Similar, Tom's savings balance for this month was $900 and he gets another $2.25 in interest.

Carry this all the way through the year, and at the end, Tom has received a total of $16.50 in interest compared to Bob's $3.00 in interest and $12.00 in reward credits.

The final kicker: Taxes. Bob pays income taxes on $3.00 while Tom pays on $16.50. So depending on your tax bracket, you are ahead one way or the other. A 25% tax bracket for example would mean Bob paid $0.75 in tax so his net result is $12.00 in rewards credits and $2.25 in interest, equals $14.25.

Tom pays $4.13 in tax, leaving a net result of $12.37, so in this particular scenario Bob got more out of it by $1.88

This is predicated on a saving account that pays only 3% interest. If the savings account paid 4% interest, then using the exact same numbers as above, and same tax rate, Tom wins by $1.50

Just crunching numbers for fun. This is pretty much a wash no matter which way you go. If someone has lots and lots of points, then in their case it may be worth it to do the calculations but I suspect someone with thousands of points is in more than a 25% tax bracket.

 

[JsMom2]

Sort of related - when we got our first mortgage our mortgage lender explained the following to us:

Your mortgage is due on the first - we don't assess any late penalties until the 15th. However if it is paid after the first it is considered late. Now a few days late isn't reported to credit bureaus etc. but that information is tracked internally. If at a later time we wanted to refinance with the same company or take out a home equity loan - the fact that someone had paid late (after the first) could have a negative effect on the interest rate.

She said that most folks do pay late. They feel that the date after which late fees are charged is the due date so most folks pay their mortgage after the first but before the 15th.

She said that one common issue that comes up is that a person put less than 20% down so they are paying PMI. They reach a point where they feel that the PMI should be dropped, but mortgage lenders can use the fact that you paid consistently late as an excuse to keep PMI on a loan.

So I now always treat the "due date" as the date a payment is due no matter what it is for, and not the "late fees will be charged are date".

That's GREAT info, thanks for sharing!

That's not correct. You can only use a credit card if paying your entire yearly dues in full.

If you want to set up an automatic monthly payment, it can only be by direct bank draft.

I believe what Wilderness Dad was saying is that you can setup the automatic payment, use your points right after Christmas without worrying about a big dues payment coming due, and then pay off the balance with your visa card whenever it's convenient.

I signed up for the automatic payments because it gives me more flexibility.

 

[dianeschlicht]

Interesting questions which got me thinking. Here's what I came up with.

To keep it simple, suppose Bob and Tom both have dues of $1200 ($100/month)

Also, both have the full $1200 in the bank in a saving account that draws 3% interest. (That's 0.25% monthly)

On Jan 15th, Bob pays in full using his Credit Card and gets $12 Disney Reward dollars.

Tom has $100 deducted from his savings account.

Month 2, Bob's full $1200 sat in his account for a month and he gets $3 interest, so his total so far is $3 cash and $12 in reward dollars. He pays the credit card in full (if he doesn't he'd be paying high credit card interest rates which would totally negate any purpose in getting reward dollars)

Tom had $1100 in his account for the month and receives $2.75 in interest. He then pays another $100

Month 3. Bob's money is gone and gets no more interest for the remainder of the year. Tom's $1000 balance for the month got him another $2.50 in interest.

Month 4. Similar, Tom's savings balance for this month was $900 and he gets another $2.25 in interest.

Carry this all the way through the year, and at the end, Tom has received a total of $16.50 in interest compared to Bob's $3.00 in interest and $12.00 in reward credits.

The final kicker: Taxes. Bob pays income taxes on $3.00 while Tom pays on $16.50. So depending on your tax bracket, you are ahead one way or the other. A 25% tax bracket for example would mean Bob paid $0.75 in tax so his net result is $12.00 in rewards credits and $2.25 in interest, equals $14.25.

Tom pays $4.13 in tax, leaving a net result of $12.37, so in this particular scenario Bob got more out of it by $1.88

This is predicated on a saving account that pays only 3% interest. If the savings account paid 4% interest, then using the exact same numbers as above, and same tax rate, Tom wins by $1.50

Just crunching numbers for fun. This is pretty much a wash no matter which way you go. If someone has lots and lots of points, then in their case it may be worth it to do the calculations but I suspect someone with thousands of points is in more than a 25% tax bracket.

LOL, and the only other information you need is "boxers or briefs".

 

[Muushka]

My problem with the automatic deduction from our checking account for dues is that it gives someone access to our checking account.
We only have one company (our ISP) that is allowed to do that, and we had to have them for 10 years prior to allowing them to deduct to establish that trust!

 

[White_Sox_Fan]

. . . . He pays the credit card in full (if he doesn't he'd be paying high credit card interest rates which would totally negate any purpose in getting reward dollars)

I'm curious how many people pay with their CC to get the rewards but then carry a balance and pay the interest.

My problem with the automatic deduction from our checking account for dues is that it gives someone access to our checking account.
We only have one company (our ISP) that is allowed to do that, and we had to have them for 10 years prior to allowing them to deduct to establish that trust!

I've had automatic deductions for 18 years for investments, mortgage and more recently I pay all my bills on line using the same method and have never had a problem. It saves a lot of time and I save on checks, postage, etc.

 

[Muushka]

I'm curious how many people pay with their CC to get the rewards but then carry a balance and pay the interest.

Not me!



I've had automatic deductions for 18 years for investments, mortgage and more recently I pay all my bills on line using the same method and have never had a problem. It saves a lot of time and I save on checks, postage, etc.

It's a trust thing. Probably more of a paranoia thing

 

[casper]

Wow! Thanks Caskbill! That is really interesting information. I just switched to paying monthly because my on-line bank account is giving me 4.5% interest. The way I do my budgeting, the 1,300 for dues (even though this year will only cost me 950) will be sitting in the bank a long time. I budget 100 for dues each month (+ the 13th week). Any extra (including interest) will help as dues increase or if I get addonitus!

Again, thanks for the info. It may only amount to a couple of dollars, but it is MY couple of dollars.

 

[jctwizzer]

Just throwing out MHO after crusing thru this. One, the $ difference between paying lump some and monthly is trivial; making all those calculations something to do in your spare time, but basically irrelevant.
Second, the person beating us to death with the quotes on not being able to check in by after Jan 19th unless you4r dues are paid evidently has never tried it. For ten years we have checked in after the due date but prior to the extended date without having paid our dues at that point, with no comment whatsoever; and will do it again this year. At some point that may change but up till now check in during that period has been no problem. And now your know the rest of the story.

 

[DVCPal]

I talked to member accounting and to member services. They both said that if I have a January vacation and pay my dues in early February (before the grace period ends) I will have NO PROBLEM. I am arriving at BWV on January 20th. I'll let you know what happens.

 

[crisi]

I pay early because the $4 in interest is meaningless in the greater scheme of things, and I am a disorganized forgetful procrasinator. Its simply best for me to pay the bill when I get it - certainly worth $4 in interest in peace of mind and the potential of forgetting later.

 

[Donna]

<Originally Posted by rsinj
Actually, you might try reading the dues statement because that is exactly what it says, it is not contradictory, and I know the answer, which was provided. >

your the one typing it for others, I already know what it says,

if you are going to TRY to provide info to others you should be a bit more clear

Not to mention, a bit nicer.

 

[sjdisneywedding]

I talked to member accounting and to member services. They both said that if I have a January vacation and pay my dues in early February (before the grace period ends) I will have NO PROBLEM. I am arriving at BWV on January 20th. I'll let you know what happens.

yes thats exactly what I have read, experienced, and would figure

 

[DVCPal]

I just checked again with member accounting regarding payments within the grace period. I have a late January trip and I also have a June trip. I already understood that the January trip was not in jeopardy, but wasn't sure if the June trip might be cancelled once I checked in for the January trip (because I will not have paid the dues yet....planning to pay in early February within the grace period). I was assured that NOTHING happens within the grace period, i.e. no automatic cancellations.

 

[gmboy95]

I use the checking account method because nothing is more annoying then receiving a big bill right after christmas....i am usually still in shock from the carnage that is my credit card bill!!!!

 

[crisi]

I just checked again with member accounting regarding payments within the grace period. I have a late January trip and I also have a June trip. I already understood that the January trip was not in jeopardy, but wasn't sure if the June trip might be cancelled once I checked in for the January trip (because I will not have paid the dues yet....planning to pay in early February within the grace period). I was assured that NOTHING happens within the grace period, i.e. no automatic cancellations.

On the other hand, they have printed that they could. So while you've been assured by member accounting that they won't, tomorrow someone higher up in the chain could decide to start enforcing the small print. Since the guy in member accounting will have no authority to make or keep promised that contradict what is in the fine print, you wouldn't have recourse if they did.

I don't think this is LIKELY, but it is possible).