Know Your Credit Score

This is kind of an advertisement I will concede this, but it's mostly about me, me, me.

Last month I saw this commercial for a credit monitoring website called creditkarma.com. Unlike freecreditscore.com, I didn't have to give them my credit card number. At creditkarma.com, I was able get a free credit report. As allowed by law you are allowed to get a report from all three agencies every year. Along with the report, I have access to my credit score. The credit score part also has a credit simulator that you can play with to see what will happen to your credit score using several scenarios both good and bad. It's fun and accurate.

Last year when I good my 3 reports, it said that I had a negative mark on the report and that this mark is scheduled for deletion in July. This July, the mark was removed as promise and now my credit report is fulled with accounts in good standing and no negative reports. Prior to this I had made 72 monthly payments in a row and haven't missed a payment on any of my accounts since inception and I still had a bed credit score. Once this mark was removed, my score jumped to good and today when up another 12 points.

The last couple of months I had been getting loan offers and pre-approved credit card applications in the mail. I have the stack in front of me. Today I was given a new credit card. It comes with 14 months no interest, 5% cash back on all purchases. The APR is going 10.95% starting in November 2014. What this will do to my credit score is increase the amount of credit I have and reduce my credit utilization.

One of the scenarios in the credit simulator is paying off your credit card balances. My utilization was at 52%, but dropped today to 45% because I made a large paydown on one of my credit cards. So with another 3200 in credit, my utilization will drop to 17%. I have 5k in total credit, and only owe 766. I will be paying off the rest of one card this month, and the utiliatzion will drop even further.

My next step is to take my bank up on their offer for a personal loan. The weakest are of my credit score is in the types of loans. Creditors can see that I can make minimum monthly payments on credit cards, but have no experience with installment loans. Car payments, house payment and personal loans. With this loan, I will pay off any remaining credit card balances even though the interest rate will be higher than the 14.99% on my cards. I am only getting this loan to add to my credit mix as this will strengthen my credit.

What can I do with an interest free 3200 loan for 14 months. Casino chips through POS purchase and not cash advance? 100 ounces of silver? 2 ounces of Gold? Open up a stock trading account online? Anything but another piece of crap I don't need and has no value.

If you don't know your credit score or would like your free credit report as promised by the government, then you should check this site out. I can't say it will help people who just don't care, but it helped me.

Annualcreditreport.com - The official site to get access to all three credit reports. Transunion, Equifax, Experian.
Creditkarma.com - Free credit score, credit monitoring service with tools and credit score simulator.

Take control of your debt before it's too late.

Quote: wroberson

Take control of your debt before it's too late.

Better still, don't get into debt.
Credit cards are the work of the devil
I got rid of my all mine over 20 years ago, best move I ever made.
It stops me making impulse purchases of crap I don't need.
I've managed with just a debit card and find it's perfectly adequate.
Shopping on line, making bookings, a debit card works for all the every day normal things.

I suppose credit cards are OK if you pay them off every month, but how many do?
Not that the credit companies want you to pay the full amount.
Minimum payments is what they want with compound interest stacking up
Credit cards can soon lead to a cycle of debt that some people are trapped in for decades.

Rant over.

I've been through the cycle a few times. The 1st one was all travel expenses. I was doing awesome getting 7-9 cards paid off every year then my car was stolen. I eventually got nailed with a wage garnishment and then fired. 7 years later, and I was back on track.

1 year later I was in trouble again. This time about 1500 from online poker. The file is sealed but lets just say I was falsely arrested and imprisoned for 30 days and in those 30 days, they City crushed my car. I had made one payment on it. So I stopped working for 5 years while my lawyer handled the civil complaint and arbitration. In the end I nearly got a 6 figure settlement. 2 out of 3 arbitrators ruled in my favor and 1 did not. So I missed the 100k mark. This was the "bad mark" that came off my credit report in July. Defaulting and write off for credit card. I never heard about the car. Maybe the City handled it.

I am back on track.

It's kind of hard to rent a car or reserve a hotel with them. Most rental companies will let you use a debit card to hold your reservation, but when you reach the counter, you have to go through a credit check. This is what I've been using my credit cards on and why I was happy for the (2) 400.00 limit cards. Just enough to hold a rental car and a hotel.

Well, I thought the website(s) information would be of interest to a few. It's early and Christmas is around the corner. If you can get the score up to 700, you might be able to trade you high interest card a 0% card and save the interest.

Blocks of silver are great gifts.

Make sure that when you get a "credit score" from any of these agencies that is is one of the FICO models. Those are the only ones that matter. There are many different FICO models, for anything from credit card debt to mortgage to auto to car insurance to utility bill; each is weighted for a particular type of obligation, including general (I think that is FICO 4). If you are not paying for it then it is most likely a custom score invented by the people who are giving you the data, because Trans Union, Experian, and Equifax all charge for the score. The REPORT is free, but the score costs money (because they pay for the analytics).

Any time someone runs your credit you are entitled to know what score they got, if they got one. When shopping for a car, the dealership is required to give it to you, whether or not you bought a car from them (if you gave them an application and they ran your credit). They are not required to share the actual report, but there is nothing stopping them from reviewing it with you if you request. They are not permitted to give you a copy of the report (because TU, EXP, and EFX all charge for the report; giving a copy to the consumer is theft of services).

I do this stuff for a living. Good credit is essential. Credit and information are power. Don't doubt it, ever.

Quote: Jeepster

I suppose credit cards are OK if you pay them off every month, but how many do?

*Waves hand, shouts "Me!"*

It takes only two things: discipline and money.

I believe the score the site gives people is the "transunion vantage" score.
FICO wants a 10 day free trial and 14.95 a month if you don't cancel.

I did a little looking around the biggest hit will be credit utilization + High Balance as 45% of score compared to 38% of the score for the Transunion score. The main reason when they look at your balance. 15% TU and 30% for FICO.

As long as you can keep it below 30% utilization you should be in the green zone.

Most of the time I make over minimum payments and once in a while I pay off the entire balance.
I'm still paying for a trip to Yellowstone for New Years, The Rental Car and gas I had in Vegas March, and the Airfare, Rental car for my upcoming trip.

I've been working to have them both paid out when I leave, but my mom died 20 days ago, (no offense for the living in mom's basement comment) elsewhere, it's now 1/2 my house. Anyway I now have more expenses. The utilities and taxes are covered for about year as per the set up, I'm just waiting for the court to close the estate so I can get the "money" I was listed as beneficiary. 50% sister 50% me.

My sister tried to get a loan on the house but she was declined. I may have turned down the offer to be co-maker had she asked.

Kind of off track, but the information is here for anyone interested.
I love having credit and a good credit score.

I am now in a position where I can handle a minor inconvenience or slight emergency.

EDIT: I think I used my debt card to buy airfare and pay the rental car. I'd have to check my records.

Quote: Jeepster

I suppose credit cards are OK if you pay them off every month, but how many do?

You absolutely must make yourself do it, it is pointless to keep cash in reserve and have credit card balances. These balances wipe out the return on your investments at a ratio of 1 to 10, meaning a small cc balance ruins a large investment account.

If, for some reason, you need to pay cash for some things, this is reversible by then letting the balances run up in that emergency.

Of course a great number of people can no longer pay off the balances but *have* to make payments. That's a terrible position to put yourself in. IMO the great irony is that so many of us when starting out think that is supposed to be the norm. The great tragedy is that there is nothing to be gained except a temporary, very temporary, ability to spend beyond your means.

Quote: odiousgambit

You absolutely must make yourself do it, it is pointless to keep cash in reserve and have credit card balances. These balances wipe out the return on your investments at a ratio of 1 to 10, meaning a small cc balance ruins a large investment account.

If, for some reason, you need to pay cash for some things, this is reversible by then letting the balances run up in that emergency.

Of course a great number of people can no longer pay off the balances but *have* to make payments. That's a terrible position to put yourself in. IMO the great irony is that so many of us when starting out think that is supposed to be the norm. The great tragedy is that there is nothing to be gained except a temporary, very temporary, ability to spend beyond your means.

Credit is a tool, just like cash is. Use it the way it is supposed to be used and there is no problem. From one perspective, that of paying the least, then it is absolutely best to pay off the cards. From another, that of keeping cash reserves, it sometimes makes sense to carry a balance, as long as it doesn't get out of hand. Stay alert, monitor your usage, shut down the cards if the balance gets high. If it is creeping up, it will continue to creep up if you don't change your habits.

Like everything, credit and revolving debt doesn't exist in a vacuum. At different times in an economic life it can mean different things. High revolving balances can mean impending bankruptcy, or they can mean impending success. High overall credit utilization can be part of a strategy, or it can mean desperation, or it can indicate unwise risk, or it can indicate an advance on a windfall for strategic reasons.

Be smart. Use your tools the way they are meant to be used. If you do that, you won't have a problem.


Edited to add: odiousgambit, I agree with you. I'm only elaborating. I've been on both sides of this one. The allure of credit cards is strong. Then one day you look up and the balance is $35000, and the only way out is home equity, or bad credit. And that sucks big time.

Quote: Jeepster

Better still, don't get into debt.
Credit cards are the work of the devil
.

Maybe, but try staying at a nice hotel or renting
a car in Vegas without one. Or try to make airline
reservations if they don't take a debit card.

Quote: Mosca

Like everything, credit and revolving debt doesn't exist in a vacuum...I've been on both sides of this one.

Yes. And you always need *some* cash around, no matter what.

My current beef with CC companies is this payoff information some are now providing. My Chase card does this and for example now on a recent statement I am shown to owe $847, with no charges after closing date. It informs me that I can make only the minimum payment for about 3 years and that I will only pay $968 total. 8.24% APR and an assumption you charge no more.

I'm sure I can't catch them in a lie, but I feel confident there is something misleading about this. I don't know what the catch is that I'm forgetting, but somehow this is not a fair representation of what running a balance is like.

Quote: EvenBob

Maybe, but try staying at a nice hotel or renting
a car in Vegas without one.

Well I've never had a problem with hotel bookings or renting a car with a debit card, but then again I've never been to Vegas.
If I were to go, I'd probably take up one the credit card offers that continuously arrive in the post, use it for the trip and then cut it up.

My bank is the worst offender
Even though I've told them countless times I don't want one they never stop trying to force one on me.

Quote: Jeepster

Well I've never had a problem with hotel bookings or renting a car with a debit card, but then again I've never been to Vegas.

If your debit card has a Visa/MC symbol on it, you won't have an issue. The biggest drawback about debit cards with hotels it seems like is that it takes them forever to refund any deposit from what I read on their signs anyway...

Quote: Jeepster

Well I've never had a problem with hotel bookings or renting a car with a debit card.

My brother tried to rent one locally a few
months ago and they wouldn't do it. He
went to another place and they wanted so
much for a cash deposit he told them to
bugger off. They like CC's because the major
names have rental insurance built into the card
and a debit card has zip.

Quote: wroberson

Creditkarma.com - Free credit score, credit monitoring service with tools and credit score simulator.

I used Credit Karma a couple years back (pretty sure after hearing it was legit from a consumer advocate)

It was still relatively new service, but I guess they deleted a lot of free accounts, because when I tried to use it about a year later I no longer could use my old account and password.

Of course, the free is in hope they can sell you something, but I never purchased any service, so maybe that had something to do with it.

Credit Karma is sponsored by the CC companies. They
want you to apply for one of the cards you see plastered
all over their site.

Quote: wroberson

My next step is to take my bank up on their offer for a personal loan. The weakest are of my credit score is in the types of loans. Creditors can see that I can make minimum monthly payments on credit cards, but have no experience with installment loans. Car payments, house payment and personal loans. With this loan, I will pay off any remaining credit card balances even though the interest rate will be higher than the 14.99% on my cards. I am only getting this loan to add to my credit mix as this will strengthen my credit.

What can I do with an interest free 3200 loan for 14 months. Casino chips through POS purchase and not cash advance? 100 ounces of silver? 2 ounces of Gold? Open up a stock trading account online? Anything but another piece of crap I don't need and has no value.

Take control of your debt before it's too late.

Caesars' casinos will waive cash advance fees on CC's if your tier score is 80,000 or higher. But you are still stuck with the CC company's fee and their higher interest rate on cash advances. BUT buying casino chips with your credit cards is NOT a good investment, lol! (Unless you find a great AP play). My local Caesar's won't waive the fee anymore anyway, so it's moot.

I would recommend against getting the personal loan. There is no point to rolling your current CC balances into a higher rate loan. Check to see if the new CC's you were approved for also offer a 0% interest rate on balance transfers. If you can get away with just the 3% balance transfer fee, you might have a good deal.

The best leverage you could do is with an appreciating asset. Buy real estate or use the cards to fund a business. I don't know about securities or metals, but those are more risky investments. Try to build equity. I was just approved for $13,500 in credit at 0% for 12 months, with some nice bonuses (free flights, gifts cards, etc.) Credit cards are great.

Quote: wroberson

Last month I saw this commercial for a credit monitoring website called creditkarma.com. Unlike freecreditscore.com, I didn't have to give them my credit card number. At creditkarma.com, I was able get a free credit report. As allowed by law you are allowed to get a report from all three agencies every year. Along with the report, I have access to my credit score. The credit score part also has a credit simulator that you can play with to see what will happen to your credit score using several scenarios both good and bad. It's fun and accurate.

Just don't get too hung up on the score. A credit score is just one of 5 factors a professional underwriter will use to see if you qualify for a loan. A good sign a crash was coming was how hung up everyone was on their score 2007-8. A few highlights:

Guy applies for a loan, tells me his score of about 520 is "getting better" so he should be approved.

Co-worker from another department asks me what we can do with a person with a 510 or so score. I tell her "nothing." She asks why and I say, "well, if the population of the USA was evenly represented in a room of 100 people then 97 of them would be better credit risks than he was."

Many people applied for car loans, got declined, then told me I "ruined their score" by taking an app they got declined for. I always explained that if the hit for an inquiry would cause you to be declined then your credit was not strong enough to begin with.


"Score Junkies" miss the important things. They miss that most people will be between 640-690; they miss that it is a bell curve and the climb from 690 to 720 is far harder than the clime from 660-690. They play games to bump the score, but miss that when you improve one thing you lose in another. Lower balances are good, but they raise the "un-utilized" amount of available credit.

Age of credit seems to be among the most important things. If you have a card 10 years old it is great. This shows long-term payments and good character. The "junkies" will tell the underwriter how great their credit is because they have a 2 year payment history.

You need a mix of installment debt and revolving. And nobody knows the wildcards that are in the system.

Moral of the story is know the FICO number, but don't live for it.

But the FICO number does affect the rate you pay at most lenders, now that most of them use a tiered system. Try to find a smaller local bank or credit union who will accommodate a smaller amount (like $3200) and not charge an arm and a leg for the business. (Not that there's all that big a difference on $3200 for 14 months.)

I admit I was already on my way up before I saw the Credit Karma stuff, and I'd been aware that the only negative would be removed this July. I have learned a little about credit and increasing my score is a motivator.

I like having credit available.

I went through my Records and my trip in November was paid for using my debt card so I'm not paying any interest.

Rio Hotel was first and free March 26.
Hotel in Zion National Park was 1st on June 9
Rental Car from Budget on June 9
Airfare from SW on June 12
And Airfare from Spirit July 1

I will have 1 card paid off in full by September 18th, October 18th latest.
The other one is maxed and I don't think I'll be paying it off before I leave.

I picked up a few hours of work this weekend and my income will double this week. I may still get that 1K bank and get the other card paid off.

I hope anyone who took a look was happy with what they saw, and anyone who wasn't maybe motivated to do something about. it.

Wow!

I was reading about how to remove negative marks on your credit report and it said it can take up to 10 years for a lender to remove it. It also said, at some point they are required to remove it. Other ways are to dispute the claim on your report as being false. I'm only an expert in this area when it comes to my own personal experiences and don't have the right answers for everyone. The chips fell where they were laying and I guess my timing was good as I didn't have to see the bad mark sit there for years bringing me down.

I find it odd that you are considering taking an higher interest rate bank loan to pay of your credit cards but flying out to Vegas to go gambling.
I hope I'm wrong but I sense that before long you'll have nothing to show for the 1/2 a house you have inherited.

The Bank Loan is different than a credit card. It would be solely used to add to my mix of credit.
I could get a car loan instead and you could say the same thing.

There's more than a house here. The house and checking account were moved to avoid probate, the annuities and investments have to go through probate. There is a payoff in the end here. 50% to me. 50% to my sister. I will still need half the R/E taxes twice a year once the checking account is depleted or until the house is sold.

What you sense has nothing to do with me.

Quote: Mosca

But the FICO number does affect the rate you pay at most lenders, now that most of them use a tiered system. Try to find a smaller local bank or credit union who will accommodate a smaller amount (like $3200) and not charge an arm and a leg for the business. (Not that there's all that big a difference on $3200 for 14 months.)

If you just follow good credit practices you will be in the tier anyways. The dirty little secret is the bank may be using a different FICO formula that you see, or/and are using automated underwriting systems to set the tiers. No bank is going to use just the FICO you see to set their tiers, they know the system can be gamed.

Quote: wroberson

What you sense has nothing to do with me.

Maybe, but why are you putting financial details on-line along with your name, age, facebook details, email and the state you live in.
It wouldn't take a professional fraudster very long to fill in the gaps
You've given enough info about your financial history, present situation, personal data and your inheritance to make you a target for something bad to happen.

Quote: AZDuffman

Quote: Mosca

But the FICO number does affect the rate you pay at most lenders, now that most of them use a tiered system. Try to find a smaller local bank or credit union who will accommodate a smaller amount (like $3200) and not charge an arm and a leg for the business. (Not that there's all that big a difference on $3200 for 14 months.)

If you just follow good credit practices you will be in the tier anyways. The dirty little secret is the bank may be using a different FICO formula that you see, or/and are using automated underwriting systems to set the tiers. No bank is going to use just the FICO you see to set their tiers, they know the system can be gamed.

Agreed. I couldn't tell you the number of times I've turned the disclosure to the customer and had them say that they got a different score at home.

My wife is a credit score junkie. She checks it all the
time. She applied for something last year and the
woman told her she had never seen a score as high
as my wife's, and didn't even know they went that high.
Its in the really high 700's, I don't even know anymore.

She's had the same bank for over 30 years and on every
payment of any kind has never been late, let alone missed
one. She gets offers every day in the mail and has a PhD
in managing her accounts. I swear, she could charge a
new Cadillac if she wanted to, her credit is that good.

Quote: Jeepster

Maybe, but why are you putting financial details on-line along with your name, age, facebook details, email and the state you live in.
It wouldn't take a professional fraudster very long to fill in the gaps
You've given enough info about your financial history, present situation, personal data and your inheritance to make you a target for something bad to happen.

Have have more to worry about should my ATM or credit card fall out of my wallet than posting personal information online. I have more to fear from the police overlooking the fact I don't have a tattoo than posting personal information online. As for the name, age, and where I live, there are things called aliases. I'd rather have the court call me by name than call "Duchebag69" up to the stand.

Oddly enough I am ordered to Jury Duty on the 23rd. There's a court house 2 miles from here and they send me 30 miles out. So instead of a nice 23.00 check, the expenses will cancel most of it out. I must show up as the last time I forgot and missed the service. Usually I'm on standby and only have to call.

When I got my new card, I got my FICO score. It's 717. I then transferred all my balances to 0%. The new card caused my utilization to credit ratio to drop from 45% to 16% and will increase my overall credit score. This will save me 65 bucks in interest after the 3% transfer fee, if I take the entire 14 months to pay off the $789.00 balance. The balance transfer also saves me 40 bucks a month for the next 14 months because my minimum payment will 35 bucks instead of 25x3.

If I had waited until after Christmas to share this information, the odds are everyone's credit utilization would be high enough to lower scores. With 3 months left until Shopping Season, I strongly recommend people get their credit scores and spend the next two months trying to increase them. Knowing your score will give you a good idea whether or not a "hard pull" on your credit is worth it. 1-2 hard pulls per year is okay and will not lower your score.

Once you have a good score, get a 0% card and transfer balances all the cash advance fees and interest will stop. If this can be done before Christmas, any left over balance can be used to pay for Christmas at 0% for X number of months. When you get the 0% and transfer, it can be a good thing to close one of your newer cards. If you close an account that's 4-5 years old, this will hurt your credit in time. Good marks from closed accounts stay with you for 10 years, while bad marks will be there for 7.

I will be canceling an account that's 9 months old. It's a fingerhut catalog card. The interest is a stunning 25%. I started with 400, as anyone can get one of these, and within 6 months, they increased it to 1000. In 6 months I will get a credit increase from my Visa and MC. The interest is a nice 14.9% and 14.95%. All three cards offer cash back ranging from 5% to 1%. Cash back is another good thing to look for in a card.

My intentions was to provide good information and to help people improve their credit scores.
My own personal example shows how it can be done.

EDIT: a final note. I also suggest that you set up your account for online payment. This is free. You also to get an email when payment is due, and when payment is posted. This will save you postage, time and maybe gas as you don't have to get to the nearest post office. It also adds a few theoretical days to your grace period because you can pay 2 days before due date instead of mailing a check or money order a week in advance. The online services just makes things easier and more organized.

Good luck with yours and Merry Christmas...

CreditKarma.com is showing I am being penalized because I have a 0% utilization of my credit cards. What percentage of utilization would I need to maintain to maximize my credit score? I have some cards I can do 0% interest rate for a year, would it make sense to put 10% of my available credit on one of those?

I have no idea of my credit score, and don't need to know it... I don't intend to use credit in the near future, and certainly won't be playing the game to try and improve a score that I only need if I'm taking on large amounts of debt.

Quote: EvenBob

My wife is a credit score junkie. She checks it all the
time. She applied for something last year and the
woman told her she had never seen a score as high
as my wife's, and didn't even know they went that high.
Its in the really high 700's, I don't even know anymore.

They usually go to 850, it is rare to see them over 800. Though when I worked at USAA we saw more in that range than anywhere else. At one point, a few months prior to the Panic of 2008, they had a new car loan where you needed a 770 or so to get the best rate, no exceptions even for a 769. Good members were very upset, that is a mega-high number. When you get above 740 or so any further increase is mostly meaningless. I still wonder how much business they lost over upset people.

We all buy stuff on credit(not necessarily a card or a loan). Light bill, gas bill, water bill.

Quote: DRich

CreditKarma.com is showing I am being penalized because I have a 0% utilization of my credit cards. What percentage of utilization would I need to maintain to maximize my credit score? I have some cards I can do 0% interest rate for a year, would it make sense to put 10% of my available credit on one of those?

No more than 30% will increase your score. You must have not been using the credit card for some time. All you have to do is pay off the bill 3 days before the date the payment is due and then make a small purchase, like 25 bucks 3 days after the new billing cycle starts.

So if your due date is the 22nd, pay the bill on the 18th and spend 25 bucks on the 25th. What happens is that you get reported for use of credit that month and points for making on time payment. I don't like suggesting people spend money on a credit card, and I'm not about to tell someone they should spend 25% of their total credit just to boost their score.

What you want is low utilization and to make a payment every month. I have 94 payments in a row without missing one.

The creditkarma site updates your score every week. There's a date someone that will let you know when your profile will be updated.

My credit score has leveled at 731.

I have several offers.

1. Chase 0% until March 2015. 18.99% int after. 200 cash back after a 500 spend.
2. Southwest 15.24%. 2 r/t tickets after 2000 spend.
3. Total Reward 22% and upgrade to platinum.

I like one and two. Three's int rate too high. Free rooms are cool.

Quote: wroberson

My credit score has leveled at 731.

I have several offers.

1. Chase 0% until March 2015. 18.99% int after. 200 cash back after a 500 spend.
2. Southwest 15.24%. 2 r/t tickets after 2000 spend.
3. Total Reward 22% and upgrade to platinum.

I like one and two. Three's int rate too high. Free rooms are cool.

The first and second offers are very good. Southwest used to be a $1000 spend requirement. You can actually get more than two round-trip tickets depending on where you fly. Is the first card the Chase Freedom?

Total Rewards card is not worth it. ANY interest rate is too high.

I disagree, TR card IS worth it. There is no annual fee, they give you 10,000 points after you spend some money, upgrade to platinum, and you earn rewards. Just because the interest rate is high does not mean that you have to pay any interest.

FWIW, a few years ago I had bad credit due to young and stupidness. I found another forum creditboards.com and it has helped me fix me credit and get scores over 700. It is a great forum, check it out if you care about credit stuff.

TR card works for me. No fee and I pay it off every month. I use it as a gas card (2%) and all my CET spending (5%).

I got a credit increase and on a card and my score went up to 738. The increased score reflects lower utilization.

Thanks for the input. I have until January 13 to respond. Will need a win next week in Vegas so I can also pay down the card I have maxed out at 0%.

I only brought this up again as it's the buying season and there's still time to have a 0% Christmas either by getting a 0% card to shop with or one to transfer balances to after shopping. Can even save 5%.

Quote: wroberson

I got a credit increase and on a card and my score went up to 738. The increased score reflects lower utilization.

Thanks for the input. I have until January 13 to respond. Will need a win next week in Vegas so I can also pay down the card I have maxed out at 0%.

I only brought this up again as it's the buying season and there's still time to have a 0% Christmas either by getting a 0% card to shop with or one to transfer balances to after shopping. Can even save 5%.

Look dude, you're treading on thin ice.

"Will need a win next week in Vegas so I can also pay down the card I have maxed out at 0%."

Sounds like the classic gambler's lament. While entering casino, "Man, I hope I break even today, I really need the money!"

Does that raise red flags for anyone else? Or is running a CC balance just a normal thing these days?

If you have an outstanding credit card balance, you should not be gambling.

I realize the balance is at 0% for the moment. But given that it's maxed out, that's a serious liability. Pay it down now, while you can, before the double-digit interest rate kicks in.

I love credit cards for the rewards and the convenience, but if you can't discipline yourself enough to pay them off every month and avoid interest, you should not be using them. You will pay more in interest and fees then you will ever get back in rewards and bonuses.

If you are in the unfortunate financial situation where running a credit card balance is a life-or-death situation because you can't buy food or pay the rent, then you shouldn't be gambling. And if you aren't in that situation, you should not ever run a credit card balance.

Lastly, I will leave you with an amazing SNL skit featuring Steve Martin: Don't Buy Stuff You Can't Afford.

Unfortunately I can't find the full video, but here's the full transcript.

I'm hurt. You don't know me well enough to pass such judgement. So it's a blanket statement to cover all. I bought a car with the card. I have never used a credit card for cash. My monthly payment is 79.00. So much better than having a 379.00 monthly payment plus another 1500 per year insurance. I only pay 242 per year.

You are entitled to the opinion and I'll defend to the death your right to say it.

I was approved for all 3 cards. I'm thrilled. This is good for my security.

Fine. I'll pay it down today and go to Vegas next week with no bankroll. EDIT

Quote: wroberson

I'm hurt. You don't know me well enough to pass such judgement. So it's a blanket statement to cover all. I bought a car with the card. I have never used a credit card for cash. My monthly payment is 79.00. So much better than having a 379.00 monthly payment plus another 1500 per year insurance. I only pay 242 per year.

You are entitled to the opinion and I'll defend to the death your right to say it.

I was approved for all 3 cards. I'm thrilled. This is good for my security.

Fine. I'll pay it down today and go to Vegas next week with no bankroll. EDIT

If you are a good card counter it's more to your benefit to take the money to Vegas, win at blackjack, and THEN pay off your credit card.

Yeah. I would only use the credit for gold and silver bars. That would get me my free rt tickets. You know the rest of the story.

I cant figure out why with a 720+ score you are getting rates that high on cards. My Citibank card is currently 6.49% and hasnt changed in a long time. Naturally it is based on prime+, but still you should be getting better than 18.99 and 22%.

Quote: wroberson

I'm hurt. You don't know me well enough to pass such judgement. So it's a blanket statement to cover all. I bought a car with the card. I have never used a credit card for cash. My monthly payment is 79.00. So much better than having a 379.00 monthly payment plus another 1500 per year insurance. I only pay 242 per year.

You are entitled to the opinion and I'll defend to the death your right to say it.

I was approved for all 3 cards. I'm thrilled. This is good for my security.

You're right, I don't know you, and perhaps I was a little quick to pass judgement.

But my post was more of a general blanket statement for everyone, and I just used your story as an example. In my opinion, credit cards are a valuable tool that are abused heavily by the American public to over-consume, and get themselves into unmanageable debt. Your post just raised all kinds of red flags.

Quote: wroberson

Fine. I'll pay it down today and go to Vegas next week with no bankroll. EDIT

I will stand firm on my point that engaging in casino gambling while you have a credit card balance is wildly irresponsible. You will not convince me this is untrue, but I also respect your right to hold any opinion.

Quote: teddys

If you are a good card counter it's more to your benefit to take the money to Vegas, win at blackjack, and THEN pay off your credit card.

I was going to mention that in my post, but I refrained as most people on this board are not competent APs. Theoretically, you are correct. But it is a slippery slope, especially considering variance and the possibility of a losing streak, even for a skilled player.

Even the most savvy investors will say that buying investments on margin is a huge risk, and to be avoided by the rank-and-file investor.

I totally agree with A&E.

Do CC companies make enough $$ from what they charge the merchants for accepting payments to make it worth their while even if everyone paid their balance in full every single month? If that's the case, then they gotta love the people that carry over their balances accruing interest every month, that is just gravy $$$.

Quote: AcesAndEights

I will stand firm on my point that engaging in casino gambling while you have a credit card balance is wildly irresponsible. You will not convince me this is untrue, but I also respect your right to hold any opinion.

I disagree completely.

What if I was planning on purchasing a car and was offered a 0% interest credit card for 18 months. I put the $30,000 car on my credit card and take $30,000 out of my bank and buy a fixed interest 18 month CD with it. I still have $110,000 cash in the bank. I decide to take a vacation and go to Las Vegas with a $5,000 bankroll.

I would argue that buying the CD and carrying a $30,000 0% interest debt is a smart move.

Quote: DRich

I disagree completely.

What if I was planning on purchasing a car and was offered a 0% interest credit card for 18 months. I put the $30,000 car on my credit card and take $30,000 out of my bank and buy a fixed interest 18 month CD with it. I still have $110,000 cash in the bank. I decide to take a vacation and go to Las Vegas with a $5,000 bankroll.

I would argue that buying the CD and carrying a $30,000 0% interest debt is a smart move.

Then you're probably in a better financial situation than most that carry balances on their cards. If you have $110k cash, why would you have it in a bank account that offers very little in interest? Only reason I can think of is its liquidity and accessibility. I have a $20k CD and I know that it surely isn't paying but about 1%, which sucks, but it is better than 0% or what the banks offer in a savings account.

And just as I submitted this I get this from my Rooms to Go GE credit card folks(there is no balance):

With Payment Deferred Interest
No Interest if Paid In Full Within Promotional Period

Under this promotion, no interest charges will be assessed if the promotional purchase balance, including any related optional credit insurance/debt cancellation charges, is paid in full within the promotional period. If the promotional purchase balance is not paid in full by the end of the promotional period, interest will be imposed from the date of purchase at an APR of 24.99%.

Minimum monthly payments are required. Making only the minimum payments required by your monthly statement may not pay off the promotion within the promotional period. Regular account terms apply to non-promotional purchases and, after promotion ends, to promotional purchases..

What a deal!

Quote: Alan

Then you're probably in a better financial situation than most that carry balances on their cards.

Absolutely. My point was that AcesandEights said it was irresponsible to gamble while having a credit card balance. I think his statement was just too broad and wouldn't be true for everybody.

Quote: DRich

I disagree completely.

What if I was planning on purchasing a car and was offered a 0% interest credit card for 18 months. I put the $30,000 car on my credit card and take $30,000 out of my bank and buy a fixed interest 18 month CD with it. I still have $110,000 cash in the bank. I decide to take a vacation and go to Las Vegas with a $5,000 bankroll.

I would argue that buying the CD and carrying a $30,000 0% interest debt is a smart move.

Many dealerships allow only two or maybe three thousand dollars on a credit card for automobile purchases. This goes against Visa rules and maybe the rules of other cards but the dealers won't budge. Try it next time you buy.

Quote: AcesAndEights

Even the most savvy investors will say that buying investments on margin is a huge risk, and to be avoided by the rank-and-file investor.

A word about that.

Investing on margin is largely a problem because the system is still all about margin calls. In other words, if your purchases start going down in value, and "their" loan isn't looking so good, they can demand cash to fix it. It makes no sense to try to sell the stock to raise that cash, of course.

People get sucked in because it can go quite well for a while. There are quite a few horror stories out there, people losing their houses and such.

So I think you can say a margin investor is at huge risk unless he has the cash he needs set aside ... but if he does, why use margin? Now he just pays interest for nothing. I understand the interest is significant, too.

Quote: 1BB

Many dealerships allow only two or maybe three thousand dollars on a credit card for automobile purchases. This goes against Visa rules and maybe the rules of other cards but the dealers won't budge. Try it next time you buy.

Yes, that is true with many but not all. Last month my colleague purchased a car by phone on his personal Amex card and the car was delivered the next day. It is currently on display in a casino as a promotional giveaway.