|
Post by JSUSoutherner on Jul 1, 2020 7:46:05 GMT -6
So since the Covid hit I've pretty much been on a personal finance learning binge. I'm curious what people think of credit cards given that there's so many different philosophies on them. You have the Dave Ramsey crowd who would burn you at the stake for having one and you have the travel crowd who looks at you dumb for not getting points for everything you buy.
While it seemed to me initially that these two philosophies are very different their core principal is exactly the same: Paying interest is bad and should be avoided at all costs and you should maximize the value of your money buy only paying for what you need.
Seems to be well-thought arguments for both sides of the equation but it seems to me that the common denominator just boils down to discipline.
|
|
|
Post by pubdaze on Jul 1, 2020 15:07:13 GMT -6
Discipline. You nailed it. Find what card/cards work for your situation, be disciplined and carry on.
|
|
|
Post by troysux on Jul 1, 2020 17:16:26 GMT -6
I have a card that gives me reward points and I pay it in full every month.
Sent from my iPhone using Tapatalk
|
|
|
Post by Dixon Hall on Jul 2, 2020 10:29:20 GMT -6
I use Amex, pay in full every month and get tons of Amazon points.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jul 5, 2020 7:18:12 GMT -6
I am not disciplined enough to use a credit card. Especially after introductory rates when they're suddenly at 24.99%.
|
|
|
Post by King_Gamecock on Aug 27, 2020 8:42:35 GMT -6
So since the Covid hit I've pretty much been on a personal finance learning binge. I'm curious what people think of credit cards given that there's so many different philosophies on them. You have the Dave Ramsey crowd who would burn you at the stake for having one and you have the travel crowd who looks at you dumb for not getting points for everything you buy. While it seemed to me initially that these two philosophies are very different their core principal is exactly the same: Paying interest is bad and should be avoided at all costs and you should maximize the value of your money buy only paying for what you need. Seems to be well-thought arguments for both sides of the equation but it seems to me that the common denominator just boils down to discipline. My credit was so bad that some places wouldn't take my cash. It wasn't credit cards per say... it was the difficulty of income to cost of living that was my problem. I didn't live outside my means, other than the fact that living required more than I had. Even with a 40k income, rent on a 2 bedroom apartment in Alabama + car insurance + health insurance + food and utilities is a wash at best. I struggled to survive for years. I took a crap credit card in 2004. It was bad. High interest rate and low limit. I mean, one pay check worth of credit limit and a $50 annual fee... but I took it so I could try to rebuild. I paid it on time every time. I used it to buy things I had cash for and then paid it off. My limit got raised. I still paid it but didn't max it. I used it for netflix and such. My credit improved. I got another card. and another... used them for recurring charges and paid them off. My rating improved. I got a better offer... and another. I think I have a half-dozen now. I use a few for recurring charges and charge on a couple to keep them active... then pay them off. When I take a vacation I use my Quicksilver because it has a nice high credit limit and good perks. My beacon isn't the best in the world now... it is close to 750, so it is not bad... but I did it with credit cards and paying them on time - every time. 740-ish is solidly "Good" credit. I have been carrying a bit of a balance on my Quick Silver for a while, but I can pay it off as soon as I have time to transfer the money back to the USA. That should push me over 750, the rarified air of "excellent." Credit cards are useful and great tools for improving credit, but it takes discipline and work. The best thing is not to get into the situation I was in previously. My credit got trashed... at the same time, I am evidence that it can be rehabilitated. With a 750+ beacon score and a nice amount of cash on hand, I should be able to go into a car dealership and buy what I want and get prime financing. 20% down should get me a house without much question. Just be smart. I still have that crap credit card. It started with a $200 limit. Now it is in the thousands and 16 years old. I still pay the annual fee in order to keep my credit report showing an account that old.
|
|
|
Post by JSUSoutherner on Aug 27, 2020 19:00:54 GMT -6
So since the Covid hit I've pretty much been on a personal finance learning binge. I'm curious what people think of credit cards given that there's so many different philosophies on them. You have the Dave Ramsey crowd who would burn you at the stake for having one and you have the travel crowd who looks at you dumb for not getting points for everything you buy. While it seemed to me initially that these two philosophies are very different their core principal is exactly the same: Paying interest is bad and should be avoided at all costs and you should maximize the value of your money buy only paying for what you need. Seems to be well-thought arguments for both sides of the equation but it seems to me that the common denominator just boils down to discipline. My credit was so bad that some places wouldn't take my cash. It wasn't credit cards per say... it was the difficulty of income to cost of living that was my problem. I didn't live outside my means, other than the fact that living required more than I had. Even with a 40k income, rent on a 2 bedroom apartment in Alabama + car insurance + health insurance + food and utilities is a wash at best. I struggled to survive for years. I took a crap credit card in 2004. It was bad. High interest rate and low limit. I mean, one pay check worth of credit limit and a $50 annual fee... but I took it so I could try to rebuild. I paid it on time every time. I used it to buy things I had cash for and then paid it off. My limit got raised. I still paid it but didn't max it. I used it for netflix and such. My credit improved. I got another card. and another... used them for recurring charges and paid them off. My rating improved. I got a better offer... and another. I think I have a half-dozen now. I use a few for recurring charges and charge on a couple to keep them active... then pay them off. When I take a vacation I use my Quicksilver because it has a nice high credit limit and good perks. My beacon isn't the best in the world now... it is close to 750, so it is not bad... but I did it with credit cards and paying them on time - every time. 740-ish is solidly "Good" credit. I have been carrying a bit of a balance on my Quick Silver for a while, but I can pay it off as soon as I have time to transfer the money back to the USA. That should push me over 750, the rarified air of "excellent." Credit cards are useful and great tools for improving credit, but it takes discipline and work. The best thing is not to get into the situation I was in previously. My credit got trashed... at the same time, I am evidence that it can be rehabilitated. With a 750+ beacon score and a nice amount of cash on hand, I should be able to go into a car dealership and buy what I want and get prime financing. 20% down should get me a house without much question. Just be smart. I still have that crap credit card. It started with a $200 limit. Now it is in the thousands and 16 years old. I still pay the annual fee in order to keep my credit report showing an account that old. Yeah I'm hoping to be able to save a bunch of travel points. I actually got an Amex gold card last week. Proceeded to immediately max it out (it was a purchase I've been planning and I have the cash for it, I just wanted to hit the intro bonus) I bet Amex is thrilled with me right now lol.
|
|
|
Post by Whup Em All on Sept 3, 2020 19:36:27 GMT -6
Discipline is everything.
If you don't trust yourself to keep your overall/all-card balance in check, then don't get a credit card. Good luck building your credit up that way, but it can be done.
If you can be disciplined, then it's a great way to build and maintain a good enough credit score that you can get good rates and financing on the purchases that matter -- car(s) and house(s). Several solid examples in this thread already.
If you can't be disciplined, it's an equally great way to destroy your chances of getting much better than a 19% interest rate on a car (which won't keep pace with the car's depreciation, leaving you permanently underwater and unable to re-finance without putting down another down payment) and, if you're lucky enough to get a home loan at all, it'll wind up costing you tens of thousands more in interest, crippling your long-term financial viability.
DISCIPLINE.
It works for football, too.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Sept 5, 2020 13:51:58 GMT -6
I ended up getting a $200 secured card that I just buy gas with and pay it off at the end of the week. I ended up getting $15 in cash back in a couple of weeks.
|
|
|
Post by Whup Em All on Sept 7, 2020 11:40:18 GMT -6
One more thing... if you're "building" credit using credit cards, it's best to leave a balance on the card each month. Doesn't have to be a big one... maybe $20 or so.
Some cards only report to credit bureaus when you have an active balance. If you pay it off completely each time, you may miss out on this benefit.
Also, the credit score reflects (in part) available credit. So if you have a $200 limit with a balance of $150, then you only have $50 "available credit."
If you pay it off completely, they may or may not report the $200 available.
But if you leave the small $20 balance, your available credit is reported as $180, resulting in a higher credit score.
Credit is alchemy.
|
|
|
Post by JSUSoutherner on Sept 8, 2020 8:39:57 GMT -6
One more thing... if you're "building" credit using credit cards, it's best to leave a balance on the card each month. Doesn't have to be a big one... maybe $20 or so. Some cards only report to credit bureaus when you have an active balance. If you pay it off completely each time, you may miss out on this benefit. Also, the credit score reflects (in part) available credit. So if you have a $200 limit with a balance of $150, then you only have $50 "available credit." If you pay it off completely, they may or may not report the $200 available. But if you leave the small $20 balance, your available credit is reported as $180, resulting in a higher credit score. Credit is alchemy. Ok, can I clarify something real quick? You have the date where your billing cycle ends, then from there you have another date where it need to be paid in full. Understand both of these dates. For example, my Visa billing cycle ends on the 1st of each month but I have until the 19th to pay it off. The correct strategy is to have a small balance on the 1st (when the billing cycle ends) then pay it off IN FULL by payment time. Credit utilization is calculated off the balance on billing statement taken at the end of the billing cycle. By not paying off a card in full you are paying interest. Which is bad. Don't pay interest. I just wanted to throw that out there because on my initial read of your post it sounded like you were saying you shouldn't pay your cards off and carry a full-time balance. Which, don't do that.
|
|
|
Post by troysux on Sept 8, 2020 13:40:39 GMT -6
We have gotten a 0% for 18 months card several times over the years to make a big purchase. We have always paid it off in full by the time it is due (or rolled it onto another 0% card).
I pay off my interest bearing card every month. As soon as I get the statement I call in and have a payment drawn from my checking account on the day it is due. And the money actually doesn’t come out usually until two days after the due date.
Sent from my iPhone using Tapatalk
|
|
|
Post by Cleburneslim on Jul 29, 2021 21:11:55 GMT -6
If you wish to raise your limit, use a card heavily , following all the above suggestions, then after a year or so pay it off and stop using it cold. Crecit card companies make money off every purchase, they want you using it often.
When you do this for a long time and stop they want to entice you into using it again. Often the method they usefirst is to raise you limit.
If they dont offer you can call and tell them you need a higher limit for a larger purchase. They really like thati idea. If you have followed the great suggestions from all those above and have shown yourself credit worthy. Honestly i thinkthey want you to overspend and be on the hook each month for a payment with interest. I think they believe a higher limit may achieve that goal.
If you have too many cards with limits they deem high it can effect your credit score and i have had acard drop its limit by thousands.
Credit cards can be very useful if you treat them as whatthey are a short term signature loan.
|
|
|
Post by JSUSoutherner on Jul 29, 2021 22:00:53 GMT -6
If you wish to raise your limit, use a card heavily , following all the above suggestions, then after a year or so pay it off and stop using it cold. Crecit card companies make money off every purchase, they want you using it often. When you do this for a long time and stop they want to entice you into using it again. Often the method they usefirst is to raise you limit. If they dont offer you can call and tell them you need a higher limit for a larger purchase. They really like thati idea. If you have followed the great suggestions from all those above and have shown yourself credit worthy. Honestly i thinkthey want you to overspend and be on the hook each month for a payment with interest. I think they believe a higher limit may achieve that goal. If you have too many cards with limits they deem high it can effect your credit score and i have had acard drop its limit by thousands. Credit cards can be very useful if you treat them as whatthey are a short term signature loan. I tried to raise my Discover limit the other day. I only have a $1750 limit on it since it was a starter card for me. I use it seldomly but I wanted to raise it just so I would have more available credit to lower my usage percentage even more. They rejected it because I don't use the card very often. Discover wouldn't give me an increase from 1750 but the limit on my AmEx is 45 grand. Credit card company logic is wild to me sometimes. It's crazy that two different companies can have vastly different opinions on creditworthiness depending solely on simple usage.
|
|
|
Post by Cleburneslim on Jul 30, 2021 6:36:31 GMT -6
Everytime you use a card they make a min of like 50 cents from the merchant And a percent of purchase. So the more you use it the more they like it the last thing they want is for you to use someone else's. With that said discover does seem to be the more conservative with bumping your limit.
|
|