Credit Card

[PourMyOwn]

On August 12, 2016 at 6:42 PM, A-Jay said:

Not in my world ~

A-Jay (Runs on Dunkin)

That's how you know I'm not a native New Englander...I do like the new dark roast though.

I actually included that because I know a guy who always complains that he "never has any money", but has to make two DD runs a day. What is that, like 25-30 bucks a week? 

[flyfisher]

On August 12, 2016 at 2:38 PM, Choporoz said:

I'm afraid it is a LOT more complicated than that.  The formulas and algorithms used are dependent on a lot of variables.  Some individuals can be penalized for having low balances with relatively high limit(s), also. 

As someone above pointed out, the single most important and consistent variable to your credit rating (that you can 'easily' control) is to not be late with payments or bounce checks (or whatever today's check-less equivalent is.)

I have never heard of this in any of the credit score analysis i used to do, is this a recent change?

 

On August 12, 2016 at 2:26 PM, bigfruits said:

I was told that the best way to build credit is to use 50%-75% of your max limit and pay it off in full monthly.

your credit report has no idea what you charged on your card.  What it does know is at the time the credit card company reports the balances to the reporting agencies is what the current balance is and if there are any payments that are 30+ days late.  Which is something else to think about, a late payment of a few days is no big deal, other than the fees as long as it is current 30 days out.  

[Choporoz]

On 8/13/2016 at 10:22 PM, flyfisher said:

I have never heard of this in any of the credit score analysis i used to do, is this a recent change?

To be honest, I don't know if 'too much available credit' is a factor in credit score analysis. 

I do know, however, that it has affected calculations by my lenders.  I was both denied a new loan and offered low limit on new card until I closed unused/underused accounts.

[flyfisher]

3 hours ago, Choporoz said:

To be honest, I don't know if 'too much available credit' is a factor in credit score analysis. 

I do know, however, that it has affected calculations by my lenders.  I was both denied a new loan and offered low limit on new card until I closed unused/underused accounts.

that is different though.  That is the bank/lender making the decision that you could get into debt over your head based on high credit limits. 

Your credit score/report is used by lenders to determine how much to loan but how they use the report and it's information is different for each bank for the most part.

[fishwizzard]

To add to the "pay it off monthly" advice, look for a card with a cash back offer.  It is never much but it does add up, I get a few hundred a year just making all my daily purchases on the card.  I also forget about it for months at a time and it is allays a pleasant surprise to discover money in there.  I have about $200 in right now building up for a finesse casting setup.  

[gulfcaptain]

On 8/11/2016 at 3:40 PM, Scott F said:

Paying the full amount every month is the best advice but, depending on the amount and your financial situation, it's not always possible. Whichever you choose, the MOST important part is to pay on time.  Late payments knock down your credit score faster than anything. 

I agree with the above statement and almost all the other advice given. A late payment can  cause that 11% interest rate to possibly jump to 29%........almost bet that is in the really small print of the agreement.  

[Fishing Rhino]

When our younger daughter started college, credit card companies were on hand for the orientation days.  They were handing them out like candy.

Our daughter got one and sure enough, she used it beyond her means.  Then the phone calls started.

Since she was rarely home between school and her part time job, we answered the phone.  They'd ask to speak to her, and we'd tell them she wasn't here, could we take a message?

Finally, I told them to stop calling.  They said this was the number she put on her application.  I told them I did not care what she put on her application, it is our phone, not hers and do not call this number again.

Sure enough, we got another call, this time they told us they would have to put it in for collection.  I told them, do what you have to do, but we are not paying for her.  I went into a long diatribe about how they give these kids cards indiscriminately, counting on the parents coming to the rescue of their children.  We would not have been co-signers had she/they requested it.

You gambled.  Your problem, not ours. I ranted on telling them they were worse than predators. 

The phone calls stopped, and our daughter eventually got paid up, without our help.

[Last_Cast]

On 8/9/2016 at 9:36 PM, A-Jay said:

Your credit score although important these days is not nearly as important as keeping your card balance at ZERO for as long as Humanly Possible. "Paying the minimum" is how Banks keep the light on. 

At this stage in your life, use the card as a tool to establish good credit.  Not a way to purchase unnecessary items you can't afford.

Perhaps use the card to purchase what you would normally buy (and can afford) and then pay the balance monthly.

Whoever gave you the card is betting that you will not be able to resist the urge to build up that balance and make them money. 

Good Luck

A-Jay

What he said^

[Siebert Outdoors]

I'm with the other guys.  Pay it off if you have the money now.  Do not get trapped into the run a high bill then you dont have the cash to pay it off.  Only use it for what you can pay off each billing cycle.

[Ratherbfishing]

Credit cards are the devils playground.  If you have to sell your plasma to live, do that but stay away from credit.  It will come back to haunt you for a long long time!  Unless you plan to use it for your income, where does a truck figure into your future?  Before long, you'll be taking out title loans.

[Choporoz]

13 minutes ago, Ratherbfishing said:

Credit cards are the devils playground.  If you have to sell your plasma to live, do that but stay away from credit.  It will come back to haunt you for a long long time!  Unless you plan to use it for your income, where does a truck figure into your future?  Before long, you'll be taking out title loans.

Wow.  Credit can enable people to dig themselves into very deep holes.  But, it is also an extremely valuable tool.  "stay away from credit" isn't very sound advice, IMO.  I have bought homes, numerous vehicles and a host of other things using credit.  Few are the times that it has haunted me for even a short time.  And, I've never taken out a title loan.  Takes a little personal responsibility to manage, but credit is NOT inherently bad.

[Ratherbfishing]

2 hours ago, Choporoz said:

Wow.  Credit can enable people to dig themselves into very deep holes.  But, it is also an extremely valuable tool.  "stay away from credit" isn't very sound advice, IMO.  I have bought homes, numerous vehicles and a host of other things using credit.  Few are the times that it has haunted me for even a short time.  And, I've never taken out a title loan.  Takes a little personal responsibility to manage, but credit is NOT inherently bad.

Perhaps my statement was too broad and sweeping BUT borrowing with no idea how it's going to be paid back IS, imo, a real recipe for disaster.  Credit can be necessary and it can be used as a tool but it can very easily become a pry bar upside the head.