credit card ?
 

i had credit card with a 0% interest rate. when the rate ended, i tranferred the balance to another 0% interest card until it is paid off.

the first card jumped the rate to 14%, and wouldn't reduce it "at this time" when i asked. it has a zero balance, and they did increase the credit line. there have been no late payments or over limit fees.

i've quit using it because of the interest rate. but my question is: somewhere along the way i read that your credit score looks a lot better if you have a lot of available credit, and it looks better to NOT cancel a high credit line card.

does this make sense? should i keep the card just to make my credit report look better? i'd just as soon cancel it, as i don't intend to use it and don't need it.

so... should i toss it or keep it??

Keep it! Don't use it :)

So you are saying that I should have kept the master card i finally just paid off and then not use it? OOPS i closed the account!

if you have read some of my other recent posts, my credit card advise may not be so good, lol. having said that, many people bump credit debt from one card to another. i have done it. i know a guy who refinanced his house with credit cards and saved money. he kept transferring the balance like you.

your credit report will show that you had a favorable account history with the card you paid off if you cancel the account or not. it would probably be good to open accounts with others and pay them off to establish a "deeper" history.

if you keep the card you may be subject to annual charges to keep the account as i have. i pay to keep one card i do not even use because i forget to cancel it every year. then i feel i need to get my $30 worth so i do not cancel it.

there may be a time when your debt to income ratio becomes an issue to a lender. if you happen to accumulate some debt and need more, the credit line, even though it is unused, allows you to potentially exceed your "recommended debt load". you may be turned down for a loan by keeping the card in this case, but that is a far fetched scenario i suppose.

I have great credit. I have only one card in my pocket.
All the other cards I have had went into the garbage without notifying the companies. They keep all the records and I get the credit benefits. Why should I reduce my credit status just to make their paperwork easier?

I was told just the opposite-that lending institutions look at all of your available credit when determining a loan.
So say you have 1 or 2 cards with large amounts available. A bank will look at the fact that they're just sitting there waiting to be used;especially if there's been no activity for a while.

They will use that in determining loan amounts because what they loan is based on your debt/asset ratio & ability to repay. If you have a couple of cards with $7000 available on each and you were to charge them to the max- your ability to pay your bills would be less likely. So they take all available credit into account when determining your ability to repay your debt.

That's what our bank said about 4 yrs ago-so unless it's changed along the line it makes sense.

btw, cutting them up but not notifying the credit card company keeps whatever available credit showing as an open account on your credit report.
I know that first hand because I had to call each place before we got a loan and have some cards & companies remove me even though I hadn't used their cards/services for years. Some I had actually forgot about once I cut up the cards!! :o

Have you checked your credit report? You can do this once a year for free now, just google free credit check. Just be sure you are on the free site and don't pay for anything.
I would cut it up if you have no need for it.

Hi Beeman,

When googled, I clicked on www.FreeCreditReport.com

Have you done this? Has anyone done this? I just wanted to know how fast this was/ e-mailed results? Was it in plain english that you could figure out?

Or perhaps there's another site?

marvella, the answer I gave was based on an article that Suze Orman had recently on Yahoo Finance. The fact that you have the card and with the unused available credit is suppose to indicate that you are sound..

NOT freecreditreport.com

Go to https://www.annualcreditreport.com/cra/index.jsp for the one where you can access your reports for free, no strings attached, from all the big credit agencies. This is the one the US government was plugging.

Don't have a credit card unless you can pay it off each month. Then if the interest rate is 30% who cares? I can't tell you the interest rate on mine. But we rack up free hotel room points each month which allows us to have comfortable vacations/family visits.

I will do my darnedest to never carry a balance since I learned that the hard way with a $600 balance that grew due to the interest when I was about 20 years old. Minimums will kill you.

And manage your credit so you are comfortable and do not worry about others reviewing it. You will always be able to explain what you are doing to them should the need arise. Get rid of the card if you'd like to.

Charleen,

You are allowed one free credit report from each of three credit reporting agencies each year.

I got my first report from Equifax. It took a matter of minutes, and you can print it off your computer. My plan is to wait 4 months and get a second report from Trans Union, and in another 4 months from Experian. Repeat next year. That way I can keep an eye on my credit rating, and pick up on any transactions that aren't really mine - like with identity theft.

The following website is supposed to be the official contact site:
http://www.annualcreditreport.com You can also mail the official printed form which is available from the website.

do you really need it?
 

Go to www.daveramsey.com to get his take on credit. He was a millionire in his 30's. Lost it all. Is a debt-free millionaire again now. He helps people get their finances in order. His take on it is, do not use credit cards at all. Dunn and Bradstreet says you will spend 12 - 18% more on your purchases on average even if you pay them off every month because a card does not require the same emotional committment as forking over the cash at the time of purchase. (...still true of a debit card by the way). In fact, for food, people spend 60% more with a card than with cash. His take on credit is that it is a product people are selling you and it is a myth that you really need it at all. I have personally purchased a house without a "credit score" at a very good interest rate. If you write a letter that you will not be using credit, have paid your utilities on time, and have a good employment record, you look GREAT to a bank because there is nothing competing for their money. Maybe not all of them... but a manual underwriter will LOVE you without a FICO score.
Also, he believes that if you want to get ahead financially, you should do what wealthy people do (as much as you can). 75% of the 400 richest people in america (none of whom inherited wealth) were asked what is the most important thing to do with money. 75% of them said do not go into debt. It takes sacrifice to not use credit, but most of us on this board are interested in self-sufficiency. For me buying only what I can afford in cash (and I am an averege Josephine in terms of income, believe me) is a part of that equation. Just a little different take on things. Check it out. www.daveramsey.com
Cindyc

Here's the free one: http://www.annualcreditreport.com

Hope this helps! :)

Your credit score is a very strange mathmatical formula that they won't share. But, if you pay off your credit cards, you don't have any more credit.. They only rate you when you are paying them and carrying credit. The way to excellent credit is 2-3 credit cards with "reasonable" limits and a 50% balance. Never pay late, etc. That shows that you can pay your extended credit well and that you do not "max" your cards, showing personal restraint. Hope this helps....

But, the best method is CASH.... Borrowing other peoples money isn't cheap.. :(

see what i mean? i'm still confused.

ky guest- you make a lot of sense and i was ready to call them and cancel it tomorrow. but then phalanx comes along and says what i've been reading.

as you can see, i haven't always had good credit, and i am still learning. it was actually not all that hard to get it fixed, once i put my mind to it. now it's great credit, but i want to make sure i am using it the best possible way.

completely debt free would be wonderful, and hopefully i'll be there before i retire. unfortunately it's near impossible to have a home without incurring some debt. for those of us that started out as poor as jobs turkey anyway. never really had any money to try and manage for most of my life. parents were a horrid example as well.

but hey, it can be fixed!!

marvella, another thing I thought about-it might be sort of arbitrary according to the lending institution and location too. What would seem 'normal' as far as open accounts with high available limits in NY may cause a rural TN or GA banker to do a double take.
Our loan was through one of those rural lenders where the communities average household income was $24,000 so I imagine the thought of someone having $14,000+ available might have made him nervous! :D

And again, this was 4 yrs ago which was also before the new bankruptcy laws and other rules that have come about regarding credit.

maybe on consumer loans but not on mortgages these days

Almost all lending institutions just use a score. You are A, B, or C paper. It's not personal, it's just your number. I've tried reasoning with banks and such but it's no good. These days, banks are consolodating left and right. Your debt will probably be sold to another lender at some point. They only want "marketable" loans.

In home loans, it's about loan protection. With a score of 650, they can make the loan FHA, probably. That's protection for them. Also, at 650, they can get underwriting protection for them.

Same thing with credit cards. They are merging daily. Won't be long until there are only 3-4 companies... just like banks,,,,,

I wouldn't toss it or cancel your card unless you are paying an annual fee for the credit.

Stick it in your sock drawer and forget it's there. In the meantime, it just helps build your credit, while costing you nothing. The interest may be 14% now, but they may contact you with a much more attractive offer sometime down the line when they see you are serious about not using it.

It's especially helpful to your credit score if it is an older account, because part of the scoring is on age of your account...the older the better.

Common credit wisdom tells you to never cancel a card. The available balance, along with all of your other available balances is your effective credit limit and they prefer the utilization to be below 30%.

I have a card I considered canceling awhile back because it is my only "fee" card. When I called to cancel, they agreed to waive the monthly fee, so I stuck it in my sock drawer. About six months later they sent me an offer for a loan for less than 3% for the life of the loan as long as I follow the rules and am never late or over limit. Can't beat that with a stick! A secured car loan just cost me 9% through my community bank.

"...says you will spend 12 - 18% more on your purchases on average even if you pay them off every month because a card does not require the same emotional committment as forking over the cash at the time of purchase..."

I think this depends on the individual. I have one credit card I use so I don't have to carry around a lot of cash. Use it perhaps 2-3 times a month for large purchases. Paid off every month via next day available mail. To me, emotionally, using a credit card is the equivalent of handing over cash - something I don't like to do even to start with.

Month-to-month credit card balances and second mortgages/home equity loans, IMHO, are an almost sure-fired way to dig yourself deeper into a hole. I know someone who constantly maxes out their home equity value through frequent (pretty well annual) refinancing. Problem is when they get to retirement age their greatest investment, their home, will have no additional value to them. Heck, it may be a negative if the housing market slumps at that time.

By the way, on the back of your credit card I strongly recommend you scratch off the pin number. Write it down somewhere, such as the area code on a known local telephone number. If the card is stolen they will not have the pin to go with it.

I never liked signing the back of the card. Someone told me to write in
"See ID" in that space. I did and it works. Now when they flip the card over, they see the message that insists they see ID. I always carry ID so that isn't a problem.

credit is great but it can get you in soooo much trouble. Go cash when you can... Our bank told us that we had too much of an option to charge high amounts so we cancelled large cards. Smart. It costs less to pay cash, in many ways.

a long rant against card companies, and tough ?'s.
 

Yes, the banks want you to have credit cards. The question is why? Here are a couple of statistics from which you can draw your own conclusions. Sears makes more money anually on the sales of credit than they do on the sales of their merchandise. Credit card issuers (BANKS) sent out 4 BILLION offers of credit last year. Naturally, we all believe we need credit because the number one teaching curriculum employed in our public schools (offered to them for free) about how to handle money is funded by VISA. Ken, so glad you are an exception to the Dunn and Bradstreet study. Great Job! For the rest of us though, that means that even at 0% interest we are losing 12 - 18% more money through what we spend by having one than we would if we just paid cash. When deciding about credit cards, remember that 63% of bankrupcy filers last year blamed credit card bills for their financial demise (USA TODAY). Now congress has passed new bankrupcy laws making it more difficult to file for bankrupcy protection against the card issuers.
Here's a related question. What if instead of paying those payments to the bank, you paid them to yourself in a good growth stock mutual fund? Most people don't realize that it takes less than $40.00 per month invested from age 25 to age 65 to become a millionaire at retirement. The only thing I have used credit for recently is a house. Still, I have PERSONALLY gotten a very good mortgage (TWICE) without credit cards or car payments. One was FHA and one was a conventional loan. In both cases, I got a market rate OR LOWER interest rate. Credit cards do help you build "credit" but the bigger question is, what do you really NEED credit for? Dunn and Bradsteet, 63% of last year's bankruptcy filers, 75% of the richest (1rst generation rich) people in America, and Dave Ramsey all say that CREDIT comes at the expense of SAVINGS and of your over all financial health. For most people, you have to choose between the two. PLEASE check out www.daveramsey.com.

hoo boy!.... :baby04: :baby04: :baby04: :stars: :nerd:

maybe i should call the local bank that holds my mortgage and ask them.

i don't really need any credit for anything right now. i just want it to be a-1 if i ever do in the future. they are a lot nicer to you when your credit is good.:-)

I'm by no means a financial expert so take this with a grain of salt. I have had credit cards for years and years but the key is: 1. using great restraint, and 2. paying them off each month in full so as not to incur any finance charges. Not to say I didn't have a finance charge a couple of times because I did after losing track of the time and paying late. Boy that really burns me to pay them anything, but that's how they make their money so you can't blame them.

I had one CC company who notoriously tried charging me late fees, even tho I'd sent the payment in advance of the due date (close but NOT late). I'd call them and tell them it was paid before the due date and they'd claim they received it late. I told them "Funny - everybody else I pay in advance posts it promptly. I will not be held responsible if your internal operations makes it so it's not posted right away - you could be short handed and it could sit there for 2 weeks before being posted for all I know, but I don't intend to pay for that either." They agreed to void the late fee but suggested I pay the amounts sooner. After getting so angry a couple of times I called them with the same argument and proceeded to tell them to cancel my account, I wasn't going to mess with them when other companies conducted themselves in a more professional manner. They offered to not only void the late fee, but increase my credit line, and another time, they changed me over to a "preferred customer" and changed my status to a platinum card!

After getting your credit in good shape, you'll start getting credit card offers flying in like crazy. You can pick the ones with the lowest rates. And I do NOT keep any card that requires an annual fee. I carried an American Express for a couple years and decided that was ridiculous when just about everyone takes Visa or MC. Talk to your bank about who they might recommend for a CC carrier that offers a decent finance rate.

Make a photocopy of all cards you have (front and back) so that if you ever lose your purse or wallet, you have everything you need to immediately contact the lender companies to put a stop on all activity. They'll issue you replacement cards and most will send within 1 or 2 days.

If you decide to keep that first card, make a small purchase $15-20 on it and then when the bill comes, pay it off immediately. Do that every 3-6 months to keep it active. Good luck getting things in order Marvella!

On a side note, my best friend and her DH decided to remodel their kitchen. They were so excited about it, and we were very happy for them. They'd just paid their house off. We didn't find out until 2-3 months later that they'd charged everything onto credit cards! OH MY!!! Had we known they were thinking about this, we'd have advised them to get a home improvement loan from the bank. They hadn't even thought about doing that. They got stuck with phenominal interest charges through their credit cards. There's often many different courses of action; use your personal bankers for questions you may have.

let me clear something up...

my finances are in order...

i just want to keep it that way.:-)

thanks to all!!!

I just went over to check my 'credit' report out... and they wanted my ss#... figure it's not worth putting it out on the wild west web... too many un nice people out there to begin with, who'd love my ss, my bank acct #, and everything else I own.

And I don't care that much about my credit report anyways... I'd assume I've got perfect credit, as I pay my cards off each month. Never defaulted on a loan. Three late fees in 20 years were forgiven... I've done long term payment plans with the local bankers. A handshake and my word on being able to pay, is all that I've ever needed for obtaining credit at my local bank.

Marvella,
Bare and Phalynx are correct. Keep the credit account, even if you're not using it. Kyguest's experience may happen very rarely, but almost all lenders nowadays only look at your credit score. And your credit score will be higher if you have a low ratio of debt vs. available credit. So having a card with a 0 balance can only help you. Closing an account will take a few points off your score temporarily, but it will recover pretty quickly. So you wouldn't take a huge permanent hit by simply closing an account. Where you get into trouble is when you close a bunch of accounts all at once. But, in the long run, your score will be helped by having available credit that you're not using.

Marvella
The way I understand "Most" credit cards work is-------If your credit is good and you are not a late payer---They will offer you a Real Good interest rate if you have a balance at a higher rate---------EXAMPLE---Lets say you have a $4000 balance at 6.9 percent------they might offer you a 3.9 percent or better, like your 0%-----they do this to get you to charge more on your card or transfer a balance from another card, but the way they do and this is in the fine print----when you make a payment--most of the payment is applied to the LOWEST interest rated loan first----they apply just enough to your older(6.9 in this example) to pay the interest--small if any amount on the $4000. So if it takes you 2 years to pay off the "Special interest Rate" Loan you added----then for 2 years they collect the 6.9% interest on the $4000 balance. Having 3 cards has helped me several times--I use one card to buy things like off of E-bay then pay it off Every month---The other two cards are like Loans for a Truck and I bought and a Sawmill--The interest rate was Alot Better than the local Bank would give me on a used vehicle-----I get alot of special rate offers(checks), So if I was interested in buying something--I might take a lower interest rate check and pay off the other credit card, but as soon as this is done(before checks expire)---I take the low interest checks from the card that was payed off and purchase something at a rate cheaper than the Bank----- but I messed up recently----I had real low rates on both cards, but I decided to transfer one card balance to the other card at only 1 percent cheaper rate and it would make it where I only had one payment. The card I payed off----stopped sending special rate checks--------My daughter wanted to use my Free card to put all her higher interest loans on-----I had some 3.9% checks Fixed rate on the card I had payed off(transfered), But The "Time/Date" on the checks had expired so I call the company---The best they could Do was 11.9%------------The lady was nice enough to tell me they couldn't give me a special rate----Reason---Because I had a 0 balance-----Meaning I had no loan with them at a higher rate. So having two cards can help if you keep a balance on both cards. Let me say this------If you have a Low interest rate on a credit card(cheaper than the bank) using the card to purchase would be fine---------IF YOU WILL MAKE A LARGE PAYMENT each month-----like if it was financed with the bank---paying the minumin will cost you a fortune in the long run. My min. payment this coming month is $215---I will pay $800-----I know that is alot, but I figure if I had my $17,000 used truck and my $12,000 used sawmill financed at the bank it would cost me close to that in payments per month--Even though the Min. payment drops each month I still pay the same payment---This way the principal drops real fast----Last month I owed 11+ thousand, This month 10+ thousand, nest month---Just under 10,000---------Hey its better than the Bank in my case. I might let my daughter put a small loan on the Credit card that is payed off(11.9%) (she has a small loan on one at (19%)for a while to see if they would start sending me a Special interest checks(3.9 or 2.9%) again. It would help her and could help me if I run short on building This Cabin I am building out of pocket and need a little extra cash. Randy

I had 50,000 available and about 5,000 on a card when I got a bank loan.I asked about dumping some cards,they told me just leave it alone,everything looked real good as it was.Shocked to see I have about 13 active cards,only used 1 cc,1 gas card.Used Sears card to buy a washer many years ago to establish credit,that things still active.

But debt free,thats even better :D

FWIW.

BooBoo

If you have debt on the card then your income to them. Once you payoff a card you nothing but overhead and debt.

Banks done care about you, you either make them money or cost them money.

a 500 score will get ya an fha loan. a 650 score? you for sure won't be paying mortgage insurance like you have to on fha

texican,
i think you can still contact them by phone for a free copy. they would mail it. but don't hold me to that

Hi~

DH just recieved an offer for ATT Universal Card (MC) 0% for 12mo and 12.something after that......

hmm....

I hold an ATT Univ Card with a WHOPPING 18%apr

I called that day and asked why he could get a new account with that rate and I, as a faithful customer since 1998, am still laying 18.9%.....the answer may shock you........
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"UM cause maybe you didnt ask?
:grump: WHAT?

guess who just got her rate dropped WAY down?!

Rachel

contact a credit bureau and ask for your printout.

they have to give you one per year for free.

that is the only way to know for sure.

We see ours commonly. It says nothing about what rates of interest each creditor charges, only how much credit is open, how much you pay each month, your paymetns history, and your current debt.

I have several credit cards. I buy all my gas with credit cards, pay at the pump. This way I am not standing in line waiting to pay while someone else is getting a few bucks worth of gas, some smokes and a couple of lottery tickets. In out and gone, with a recipt printed at the pump. That is the way to go for me. Pay at the end of the month with a check, no waiting. Some cards offer perks like cents per gallon off, or a % cash back.As long as one keeps the balances paid there is no problem. :clap:

Very good. This is what we do as well. No balance, no interest payments.

Also if you get into itemizing your taxes [where you can really start getting some money back] it does help to have all your expenses documented on 12 statements.

good luck!

surprised to see this back.:-)

i use my debit card like that. wish it gave me some points of some kind.

end of the story is i called the CC company again, there's no annual fee. so i took bare's (and others) advice and just laid it up in the sock drawer.


if some worst case scenario happens, at least it'll be an emergency line of credit with no waiting. can't hurt.