Credit Cards

Credit accounts issued by banks.

How banks make money from them:

• A small percentage of each transaction (paid by the merchant) goes to the card network and bank
• High interest rates on carried balances
• Balance transfer fees

Benefits to consumers:

• Points or cash-back reward systems
• Generous fraud protection

**How credit card behavior settings work in Roo: The behavior setting assigned to the credit card determines how it will behave within your budget and the app.

• Payback Mode — the default for credit cards. Roo automatically sets aside money in the Payback Pouch as you spend, so the cash to pay the statement is ready.
• Off Budget — the card is tracked for net worth only, and you manage its payments yourself.
• On Budget - rare cases when you want your credit card to act like a checking account. See Use credit card like checking Roo’s recommended approach is to keep every card in Payback Mode and pay it in full each month so you never pay interest — see Credit Card Strategy for the full picture and how to get there from a carried balance. The bottom line: Credit cards are powerful tools that can help (cash rewards, credit building, fraud protection) or hurt (high-interest debt). If you’re carrying a balance, consider using the Debt Payback Plan to create a prioritized payoff plan. Seek guidance from a financial professional for your specific situation.