Credit Cards - Intrest, Fees, and Bullshit

[D_Eclipse9916]

Just ironic that for having money and paying things on time, but not "living the dream" of OMG LOANS EVERYWHERE, I can't get a basic, simple, low-limit credit card.

I have said this multiple times to people I know, I was refused a credit card of of $500 a month only a year ago.......

Credit restrictions have changed, your really screwed unless you have a credit history. I kept getting refused because I have never had any sort of credit balance. BTW- NOTHING that you make monthly payments such as credit cards, cell phone bills, utilities matter, only if you carry a balance or dont pay them. I learned that the hard way. Reread that sentence 5x if your not aware...Was a definite failure point for me as I never have had a line of credit or loan.

Guess what though? In the end, just stick by your guns, save up a healthy down payment, and even for a mortgage, shop around (a lot), and youll find what you need. After visiting tons of mortgage places, I finally found my own bank that ive been using for years gave me a fixed 30-year for 3.75% with no co-sign. I had almost gotten to the point where I was going to buy a car to get credit :lol:

For someone who doesnt fly, does anyone know a very good credit card? I dont care about APR, just benefits. Once my credit recovers from being hit by 20 million mortgage companies looking at my credit (my electric company said I had a score of 276 :lol: when it was a 728 2 months ago before the house) I want a better card than I have now.

[HAULN-SS]

Shopping around for a loan shouldn't affect your credit score, unless you did it over a long period of time. It dings you more to have the occasional credit check run, than a whole bunch in a row while you're looking for a loan.

Btw, you guys should carry some amount of a balance on your credit cards, if you're trying to build credit, and have the cards open anyway. If you have a 10k credit card, and no balance on it, financial companies look at that as a risk, because you could potentially get a loan on top of "accidentally" running up another 10k in debt, and then end up sinking.

[Jewels]

For someone who doesnt fly, does anyone know a very good credit card? I dont care about APR, just benefits. Once my credit recovers from being hit by 20 million mortgage companies looking at my credit (my electric company said I had a score of 276 :lol: when it was a 728 2 months ago before the house) I want a better card than I have now.

For the record, if your credit gets pulled by the same type of credit check ie: mortgage shopping, within 30 days, it only counts as 1 hit. Now anything outside of the 30 days will count as additional hits.

[D_Eclipse9916]

It did, do not know what to tell you. :dunno: In fact for my mortgage company right before we closed, I had to print out and sign all these documents with recognition of all the credit checks that were performed.

To be fair though, I had "no credit" so those hits may have counted a lot more against me than with someone that had previous credit history.

[Ryan T]

Maybe it's just me, but I don't care for credit cards. The only time I use them is when they are 0%. I got a 0% for 18 month card to pay for the wedding, paid it off before the interest free time came due. Then cancel the card. If I have another big purchase I want to make (like a gun safe soon) I'll get another 0% interest for 12 or 15 months, buy the safe, pay it off, and cancel it. For everything else I just use a debit card.

i've had the same cards for about a decade and don't carry any real balance, so I'm curious - does this tactic affect your credit score? because it sounds like a pretty sweet idea.

It certaintly doesn't hurt your credit. This allows me to carry a balance on a card (something lenders like to see) and also keeps me from ever having to pay interest. I've used this tactic for a couple years now and always paid it off before it was due. My credit has always stayed somewhere around the ~775 mark and we had no trouble getting the loan for our house, so I guess it works. I've always kept enough in the bank to pay off the 0% cards if I need to or something happens, but I'd rather pay no interest and keep that extra cash in the bank as a safety net.

[ScottyB]

if you guys are interested in tracking/checking your credit score i've been very happy with creditkarma.com.

its free, very easy to use, and some has some nice metrics to track not only your credit score but also tools to see how future loans/expenses will affect it.

[V1GiLaNtE]

I picked up the Discover card to build credit by using it to buy gas.. I have it set up to automatically deduct the balance when the bills due from my checking account.. Rereading some of the statements above would it be better to go back and change this so that I pay say 80% of the balance while it's interest free to keep some balance on the card?

[ScottyB]

Rereading some of the statements above would it be better to go back and change this so that I pay say 80% of the balance while it's interest free to keep some balance on the card?

wouldn't hurt, as long as you remember to change the settings once it goes back to standard interest rates.

[Apoc]

Btw, you guys should carry some amount of a balance on your credit cards, if you're trying to build credit

False. While credit availability is a huge factor in determining risk, carrying a balance and paying interest DOES NOTHING to improve your credit score.

Credit cards hit your credit reports as a snapshot in time. If your bill closes with a $500 balance, that is what's reported on your credit. If you pay it all off and your next month you have a new $300 balance, that is what is reported. They don't know or don't care whether you only paid $200 and carried the balance or paid it all off and had new charges. All they care about is that you had activity and your debt amount isn't climbing steadily.

If you're concerned about being dinged for too much credit availability, ask for a lower limit on your credit card. Paying interest does absolutely zilch except cost you money.

[HAULN-SS]

Putting it in bold doesnt make it true. I didnt say anything about credit score, I said building credit. What I am really talking about there is ability to get a loan. If you go into a place and you have a ton of available credit, you are going to have a harder time than if the lending institution thinks you are managing your debt properly, and dont have much room to fuck up.

[Apoc]

Putting it in bold doesnt make it true. I didnt say anything about credit score, I said building credit. What I am really talking about there is ability to get a loan. If you go into a place and you have a ton of available credit, you are going to have a harder time than if the lending institution thinks you are managing your debt properly, and dont have much room to fuck up.

It being true makes it true. Credit score/history determines your ability to get a loan. While technically carrying a balance can help reduce your risk, you're paying for that in interest. The "room to fuck up" is better controlled by setting a lower limit (free), not by carrying a balance (not-free). IOW, it's a stupid fucking idea and the bold was meant to inform others not to take your advice.

[HAULN-SS]

Whatever you say. I bought a house when I was 22 and have bought at least 10 cars in my life. Please ignore any posting i make about knowing how to get a loan.

[D_Eclipse9916]

Putting it in bold doesnt make it true. I didnt say anything about credit score, I said building credit. What I am really talking about there is ability to get a loan. If you go into a place and you have a ton of available credit, you are going to have a harder time than if the lending institution thinks you are managing your debt properly, and dont have much room to fuck up.

It being true makes it true. Credit score/history determines your ability to get a loan. While technically carrying a balance can help reduce your risk, you're paying for that in interest. The "room to fuck up" is better controlled by setting a lower limit (free), not by carrying a balance (not-free). IOW, it's a stupid fucking idea and the bold was meant to inform others not to take your advice.

Apoc, interesting, cause I had a credit card since I was 16, but since I never carried a balance, I never accrued any credit. I was told by multiple banks that this did not build credit, that I HAD to carry a balance for it to build any credit history. Unless 3 banks in a row were lying to me. But I saw all the reports, all of em had 1 account open for 8 years (my credit card). They wouldnt even give me a credit card for more than $500 a month......

That said, I refuse to pay interest, so I never did, and I managed to get a mortgage anyway after a lot of haggling... So for those wondering, it can still be done with little credit history...

[WRXtranceformed]

If you get a credit check at any one point in time, you're probably not going to have a $0 balance on the card unless you just paid the bill. I don't think it necessarily means you have to carry a balance and pay interest on it month to month in order to build credit. I was under the impression that if you used a credit card and paid it in time, or carried a balance that wasn't too close to the limit that it helped your credit.

[Apoc]

Whatever you say. I bought a house when I was 22 and have bought at least 10 cars in my life. Please ignore any posting i make about knowing how to get a loan.

:cookie: I've had two houses, a half dozen cars and a degree in Finance. My e-penis is way bigger.

You seem unable to grasp I'm not disputing you know how to get a loan, just that you aren't doing it as cost effectively as possible.

Apoc, interesting, cause I had a credit card since I was 16, but since I never carried a balance, I never accrued any credit. I was told by multiple banks that this did not build credit, that I HAD to carry a balance for it to build any credit history. Unless 3 banks in a row were lying to me. But I saw all the reports, all of em had 1 account open for 8 years (my credit card). They wouldnt even give me a credit card for more than $500 a month......

Was the balance always zero or did you pay it off every month? If your snapshot (billing cycle) always closed with a zero balance, then it would appear you weren't using your card to them. Note having a balance on close and carrying it over to next month (and paying interest) are two very different things. Lenders also like to perpetuate this myth because they make money when you carry a balance. :wink:

FWIW, I started out with a $500 student card when I was 18, have never paid a single dollar in interest and now have a credit score of ~810 with $50k in credit availability. You absolutely do not have to carry a balance to build credit.

[D_Eclipse9916]

Was the balance always zero or did you pay it off every month? If your snapshot (billing cycle) always closed with a zero balance, then it would appear you weren't using your card to them. Note having a balance on close and carrying it over to next month (and paying interest) are two very different things. Lenders also like to perpetuate this myth because they make money when you carry a balance. :wink:

FWIW, I started out with a $500 student card, have never paid a single dollar in interest and now have a credit score of ~810 with $50k in credit availability.

I paid it off at the end of every month, I know the difference :wink: . Do not know why it didnt help my credit but helped yours, I really did not study much about "credit" because I never cared which was shortsighted. I refuse to buy anything that I can not pay in cash. A mortgage it does not make sense (nor realistic most of the time) as you get huge tax deduction from it. Adjust for inflation and a low mortgage rate almost works for you.

I am not saying you are wrong, I am just saying my experience. I use my credit card for everything, including .88 cent slurpees in high school as I track how much I spend on certain expenditures such as food, entertainment etc. So its never been a problem having a balance, just I pay it off every month, and according to my loan officers that was a bad move. They may be wrong as well if you know specifically how the credit companies build it over what they know (or are telling me), but I am trying to portray, that those dont built credit, and that really...you can get past not having much credit history if you have a decent down payment and shop around.

[Mike]

i can borrow one million, my peen is like 14ft long, i have six houses, four wives, and you all drive miatas.

what now? i'm out.

[Evan]

You most definitely do not have to carry a balance to build credit.
In fact, paying off a balance shows you as much lower risk to a lender and will be positive for your credit score.

I have never carried a balance on any card in my life. My credit score is 819 (currently refinancing, ran it last night)


and DJ, if you had a credit card at 16, it was not your own, you had your name on your parents account. banks do not give credit card accounts to minors. so this card would not show on your credit history.

[.RJ]

so this card would not show on your credit history.

They do. It took me 3 months to get one off of my credit report.

[Jewels]

You most definitely do not have to carry a balance to build credit.
In fact, paying off a balance shows you as much lower risk to a lender and will be positive for your credit score.

I have never carried a balance on any card in my life. My credit score is 819 (currently refinancing, ran it last night)


and DJ, if you had a credit card at 16, it was not your own, you had your name on your parents account. banks do not give credit card accounts to minors. so this card would not show on your credit history.

Agreed, Rex and I are in a similar situation, since they just ran Rex's credit for the car, and we don't carry balances, well except on our Best Buy card with 0% financing. But since buying a house, selling a house and buying another house, we've been blessed to have our credit run in the last year or so, and its always right around 800. Mine being a smidge lower and Rex's being higher. Of course, Rex bought a mini van at 14, because some knucklehead pulled the wrong SSN. Instant favorable credit history. Sometimes it pays to have the same name as your dad, and grandfather.