The Conservative Cave
Current Events => General Discussion => Topic started by: rich_t on February 15, 2009, 12:37:18 AM
-
I've been drinkin' which got me to thinkin'
In your opinion are credit cards too easy to get?
I have 2 credit cards. One in my name only and one joint card with my wife. Between the two they have just over 42K in available credit.
About a year or so ago I canceled a single card in my name with a 37K credit limit.
How many people are now in financial trouble due to over extended credit card debt?
I realize that some end up in credit card trouble due to job loss, unexpected medical expenses etc...
But how many get in trouble just by using credit cards to buy stuff they can't really afford? This doesn't include car loans, mortages etc... Just that little piece of plactic in your wallet or purse.
I know that I had to file bankruptcy in the late 80s for using credit cards to play keep up with the Jones'
I bought stuff I couldn't afford using credit cards and it caught up with me. I was 25K in debt... That was a lot of money in 1987.
-
I wouldn't think that they are easy to get anymore. just judging from my mail, I get much fewer "free credit card" letters than I did, say, 6 months ago.
I have 5 credit cards, AMEX, Visa, MC, & etc.
they all have a zero balance, or close to it.
-
I wouldn't think that they are easy to get anymore. just judging from my mail, I get much fewer "free credit card" letters than I did, say, 6 months ago.
I have 5 credit cards, AMEX, Visa, MC, & etc.
they all have a zero balance, or close to it.
I still get about 2 offers a week in the mail. Some from the same CC company I already have a card from.
I got tired of calling them and complaining about that.
I too carry a zero balance (or close to it) these days.
-
In the past it was easy to use a credit card for a motel or flight, and then put off paying the balance.
Now I just use debit and it's done and over with.
-
Ditto ^^^^^^^^^^^^^^^^^^
Debit only with a $300 per day limit. Cant do a bunch with it but I wont get hurt much if it's lost or stolen.
-
I still get those stupid offers all the time. Furthermore, as soon as my daughter signed up for college - even though events conspired to send her to college when she was 16 - she started receiving them, also. PRE-APPROVED. Of course, they still check you out before sending a card, but even banks loan far more than can be reasonably repaid.
When we bought our last car, we went to a bank for the loan. The VP looked over our bills and payments, and at only MY income, and was willing to loan me the money despite the fact that our bills made it clear the we'd be down to $100 after bills, every month. I could NOT believe it. :o It's like they don't think people actually buy groceries or clothing.
-
I'm of two minds about it, honestly. I have a huge amount of unused credit, and two cards with balances on them. The immediate and unquestioned availabilty of a large lump sum has proven invaluable a couple of times, one of them very recently. I've done all of it with my eyes wide open and have no beef with the companies, I got what I wanted out of the deal at a price I could afford. It's a "Buyer beware" situation, the fundamental problem is that a lot of the buyers seem to lack any detectable appreciation of the consequences when they indulge in using the cards.
-
There is an opt out forever option.
-
I never get credit card offers in the mail.
I have joint cards with each of my parents, but none in only my name. I find in regular life debit cards work just fine. If there's something like the fridge purchase, I always can find a way to make it work. And I never travel by air or need a rental car, so that's not a problem either.
But in general, I say yes credit cards were at least at one time too easy to get. Hell when I was 18 Discover gave me a card with a $10,000 limit. As my dad says there's too many people "living the champagne life on a beer budget."
-
I have more cards then I need or use,they have been tools at times for 0 interest loans on a well,new furnace and such over the years.
I could probably have a few more if I didn`t throw out all the offers that show up every week.
As far as being too easy to get I would say only as it applies to students that don`t have the means to pay,the assumption is mom and dad will bail them out.
They also should only be offered cards with low limits to prove credit worthiness,maybe $500.00.
-
Ditto ^^^^^^^^^^^^^^^^^^
Debit only with a $300 per day limit. Cant do a bunch with it but I wont get hurt much if it's lost or stolen.
That probably hurts your credit rating. Low balances mean if you use any of them you have a very high available credit to use ratio. If you don't use them at all then they don't count since the divisor is zero and doesn't go into the calculation. Better to get at least one card with a medium high limit (like $5K) and use it sparingly.
But keeping your credit card debt at zero is always the best first step. It is only if you have enough income and discipline that you start making moves to up your score.
-
I never get credit card offers in the mail.
I have joint cards with each of my parents, but none in only my name. I find in regular life debit cards work just fine. If there's something like the fridge purchase, I always can find a way to make it work. And I never travel by air or need a rental car, so that's not a problem either.
But in general, I say yes credit cards were at least at one time too easy to get. Hell when I was 18 Discover gave me a card with a $10,000 limit. As my dad says there's too many people "living the champagne life on a beer budget."
I mostly get affinity sign and sends -- airlines and hotels with which I have relationships.
-
That probably hurts your credit rating. Low balances mean if you use any of them you have a very high available credit to use ratio. If you don't use them at all then they don't count since the divisor is zero and doesn't go into the calculation. Better to get at least one card with a medium high limit (like $5K) and use it sparingly.
But keeping your credit card debt at zero is always the best first step. It is only if you have enough income and discipline that you start making moves to up your score.
It is a delicate balance isn`t it.
After years of debt from the farm here swore I would never see that happen again so limited my credit to local accounts which were paid when the bill came.
Found out when I went to buy a new vehicle in 1995 that despite that I had zero recorded credit.
The bottom line is responsibility,as old as that sounds sometimes.
-
It is a delicate balance isn`t it.
After years of debt from the farm here swore I would never see that happen again so limited my credit to local accounts which were paid when the bill came.
Found out when I went to buy a new vehicle in 1995 that despite that I had zero recorded credit.
The bottom line is responsibility,as old as that sounds sometimes.
But you do need to know how the game is played. If you are responsible then the rest falls into place. But, as you found out, being overly conservative doesn't work when it comes to credit.
-
Ditto ^^^^^^^^^^^^^^^^^^
Debit only with a $300 per day limit. Cant do a bunch with it but I wont get hurt much if it's lost or stolen.
You are only liable for the 1st $50 on a lost or stolen credit card with most CC companies.
-
I still get those stupid offers all the time. Furthermore, as soon as my daughter signed up for college - even though events conspired to send her to college when she was 16 - she started receiving them, also. PRE-APPROVED. Of course, they still check you out before sending a card, but even banks loan far more than can be reasonably repaid.
When we bought our last car, we went to a bank for the loan. The VP looked over our bills and payments, and at only MY income, and was willing to loan me the money despite the fact that our bills made it clear the we'd be down to $100 after bills, every month. I could NOT believe it. :o It's like they don't think people actually buy groceries or clothing.
I've been thinking for years that some colleges "sell" student info to lenders. Seems like CC offers start showing up very quickly after a kid enrolls these days. I don't believe in that level of coincidence .
-
I never get credit card offers in the mail.
I have joint cards with each of my parents, but none in only my name. I find in regular life debit cards work just fine. If there's something like the fridge purchase, I always can find a way to make it work. And I never travel by air or need a rental car, so that's not a problem either.
But in general, I say yes credit cards were at least at one time too easy to get. Hell when I was 18 Discover gave me a card with a $10,000 limit. As my dad says there's too many people "living the champagne life on a beer budget."
I am glad that you mentioned the car rental issue. It is near impossible to rent a car without a CC these days. Sure you can pay cash, but they want that CC info on file to cover potential losses. Same with many hotel chains.
-
But you do need to know how the game is played. If you are responsible then the rest falls into place. But, as you found out, being overly conservative doesn't work when it comes to credit.
I must have played the game right. I wasn't attempting to work the system, but my FICO score is pretty high.
It was 803 before I co-signed the loan for my son's car. It dropped to 797 when I did that.
-
Credit cards are too easy to get. I only have two that I use and pay off the balance every month. Having my house paid off with no debt is a great feeling.
-
Credit cards are too easy to get. I only have two that I use and pay off the balance every month. Having my house paid off with no debt is a great feeling.
You still owe property taxes... you don't really own your house. They just want you to think you do. :tinfoil2:
</DUmmy>
-
You still owe property taxes... you don't really own your house. They just want you to think you do. :tinfoil2:
</DUmmy>
That is a dicussion worth it's own thread.
:bow:
-
Here you go. (http://www.conservativecave.com/index.php/topic,20506.0)
You thought I was making that up?
-
Here you go. (http://www.conservativecave.com/index.php/topic,20506.0)
You thought I was making that up?
Damn, my own words come back to prove me right.
Does it get any better?
:cheersmate:
-
Damn, my own words come back to prove me right.
Does it get any better?
:cheersmate:
:rofl: Gotcha.
-
I have joint cards with each of my parents, but none in only my name. I find in regular life debit cards work just fine. If there's something like the fridge purchase, I always can find a way to make it work. And I never travel by air or need a rental car, so that's not a problem either.
But in general, I say yes credit cards were at least at one time too easy to get. Hell when I was 18 Discover gave me a card with a $10,000 limit. As my dad says there's too many people "living the champagne life on a beer budget."
The tagging along on another persons CC's (typically a parent), was the classic way to instantly gain near perfect credit scores in the past. They're changing that rule as companies have started offering to do the service for a small fee with strangers, and it started becoming more well known.
-
I must have played the game right. I wasn't attempting to work the system, but my FICO score is pretty high.
It was 803 before I co-signed the loan for my son's car. It dropped to 797 when I did that.
Sounds about right for someone who pays everything off and has a long credit history. There are a lot of factors that go into the FICO, but paying your debts promptly is the biggest. Length of time of credit history is #2, type of debt #3, ratio of available credit to use is #4. This is approximate.
I think my advice is more for the younglings who are reading this. Jumping cards, for example, to get a good interest rate or to get a free t-shirt is a pretty bad idea. Stick with the same cards, pay them to zero every month and you will find your credit rating is good -- anything above 650 is considered to be pretty good, 700 great, 750, excellent, 800 stratospheric. In today's credit market. In today's market anything below 650 probably won't get a loan or will pay a hefty premium.
My best FICO was 820 but it hovers around 800 these days after I bought my car. The strange thing was it went to 800 and stayed there even after I paid off my care (2 years early).
I wonder what it will do when I pay off my house in 2 years?
-
You all should "opt out" with the credit bureaus to stop getting those unsolicited offers.
Trouble is, I think you have to do it every 4 months.
If you sign up for Lifelock or a service like it, they do it for you.
Opt out doesn't work for companies you do business with. That is why I get affinity cards sign and sends and can't stop them. Almost all other junk snail mail has stopped since I opted out.
I also suggest everyone invest in a good cross-cut shredder. I shred everything that has my name on it.
-
I am in a pretty bad fix, but I am a lot better off than I was last year at this time.
Now I am down to two cards. Both with excessive balances, but with low rates. Comparitivly speaking. It will take forever to get out of last years hole. but I am working on it.
-
I have 5 of them. I use two and pay off the balance entirely every month.
One of the ones I don't use has a ridiculous limit on it...$80000.
Should I close that one? I haven't even used it in 9 years.
If you haven't used it in 9 years it probably isn't helping your credit score, but it may not be hurting it either.
I know my score went up a bit after I closed several CCs that I hadn't used in a long time.
-
You still owe property taxes... you don't really own your house. They just want you to think you do. :tinfoil2:
</DUmmy>
The state of Louisiana has some of the lowest property taxes in the nation. The taxes on my $140k home are $84 per Year; being a senior citizen that amount is frozen and will never go up.
-
I have 5 of them. I use two and pay off the balance entirely every month.
One of the ones I don't use has a ridiculous limit on it...$80000.
Should I close that one? I haven't even used it in 9 years.
Keep it!!! -- if you have a lot of CCs close the YOUNGER ones. This card helps you 2 ways: Your credit history depth (time) is longer and your available-credit to used-credit ratio is low.
The longer you have credit history, the more the score goes up. The less you use of your available credit, your credit score goes up. Canceling this card would probably cost you 20 points or so (guessing).
-
Keep it!!! -- if you have a lot of CCs close the YOUNGER ones. This card helps you 2 ways: Your credit history depth (time) is longer and your available-credit to used-credit ratio is low.
The longer you have credit history, the more the score goes up. The less you use of your available credit, your credit score goes up. Canceling this card would probably cost you 20 points or so (guessing).
How so? It is a card with no recent "history" of paid as agreed.
I am not contesting what you are saying, rather I am asking you to expand a bit.
I've always thought that current "paid as agreed" accounts work better than older no-use accounts. I am basing this on several articles that I have read over the years.
I've already posted my credit score went up after I cancelled credit cards that I had not used for several years.
-
How so? It is a card with no recent "history" of paid as agreed.
I am not contesting what you are saying, rather I am asking you to expand a bit.
I've always thought that current "paid as agreed" accounts work better than older no-use accounts. I am basing this on several articles that I have read over the years.
I've already posted my credit score went up after I cancelled credit cards that I had not used for several years.
What happened is a little odd and no one knows the EXACT scoring method (I suspect even the developers don't). I am just saying the trends that are followed to come up with the FICO score. You are probably right about "paid as agreed" is a little better, but it needs to be balanced against longer history. Likewise a good available-credit-ti-used ratio needs to be balanced against the available-credit-to-income ratio.
80K is a little high but the fact it has been carried as available for so long IMHO helps more than hurts. But I am sure others might have different experiences and advice.
I really study this -- don't ask why -- but is is an art much more than a science.
-
According to lenders that I have worked with....one of the worst things is all the small store cards....like GAP, Banana Republic, Victoria's Secret, Limited, etc.
It's better to have MC, Visa, AmEx or Discover ...even if you have 2 of each "brand" ...than one at every single store.
Even if they aren't used...they will take down the credit scores because they are all over the place and most of them will increase the limit frequently which is the biggest problem with them.
Also, the cards need to be used. Paying them off each time they come in, gives a good payment history, but does not necessarily up the credit score. It's better to keep a very small balance, so the interest doesn't knock your socks off, but timely payments is the best thing for improving credit scores.
-
According to lenders that I have worked with....one of the worst things is all the small store cards....like GAP, Banana Republic, Victoria's Secret, Limited, etc.
It's better to have MC, Visa, AmEx or Discover ...even if you have 2 of each "brand" ...than one at every single store.
Even if they aren't used...they will take down the credit scores because they are all over the place and most of them will increase the limit frequently which is the biggest problem with them.
Also, the cards need to be used. Paying them off each time they come in, gives a good payment history, but does not necessarily up the credit score. It's better to keep a very small balance, so the interest doesn't knock your socks off, but timely payments is the best thing for improving credit scores.
The "small cards" are called "revolving accounts" and are, indeed, the least help -- even Sears. And that goes towards "available credit" vs "income" ratio -- as I stated upthread.
Yes, you should use your Visa, AMX and MC cards -- even a bit (gas, groceries, whatever) -- but pay them down to zero every month. It is the use that matters. Carrying a balance does you no good and puts unnecessary interest money into the CC's hands.
-
I've quit using mine about a year ago, and just use a debit card....keeps my spending habits under control, plus all my spending is printed out on one statement, instead of having to keep track of several, for the lovely IRS.
On the other hand...my credit score has dropped....because of it. :censored: I need to start using a couple of cards, if nothing else to buy a tank of gas a month.
-
You are only liable for the 1st $50 on a lost or stolen credit card with most CC companies.
Even less with some bank cards that offer zero liability.
Of course the phone solicitors trying to sell you protection will tell you otherwise...
Years ago a guy was trying to sell my dad a package that would limit him to a $50 liability on each card...of course, he already had that for free!
-
I've quit using mine about a year ago, and just use a debit card....keeps my spending habits under control, plus all my spending is printed out on one statement, instead of having to keep track of several, for the lovely IRS.
On the other hand...my credit score has dropped....because of it. :censored: I need to start using a couple of cards, if nothing else to buy a tank of gas a month.
You need to prove you can USE credit well, not avoid it.
-
I only use debit. I have a credit card that I keep in case of emergency. But have not had any emergencies lately that I did not have the cash to cover.
I really don't care what my credit score is.
-
I only use debit. I have a credit card that I keep in case of emergency. But have not had any emergencies lately that I did not have the cash to cover.
I really don't care what my credit score is.
You will, my dear,you will.
Use your Credit card, but us it SPARINGLY -- a $10 or $12 grocery run -- NO MORE and then pay it down. You get rare chances to learn from others and build credit up properly. That debit card does you well, but it does not help your credit rating.
Your ability to buy your first car will significantly be based on how you use your credit now. A few years of sparing use of your credit card with a complete paydown every month will do wonders. It could mean literally thousands of dollars. And with auto mfg's being in the doldrums for probably the next 2 or 3 years, your patience will be rewarded. You, who vouchsafed your credit will be handsomely rewarded.
Your decisions now will affect you for the decades to come. I wish I would have had me to advise me when I was your age. Please, please, don't make my mistakes of not understanding what credit is and how it works. It meant 10 years to me before I was able to buy my house. Don't waste a decade when you have so many here to help you.
-
You will, my dear,you will.
Use your Credit card, but us it SPARINGLY -- a $10 or $12 grocery run -- NO MORE and then pay it down. You get rare chances to learn from others and build credit up properly. That debit card does you well, but it does not help your credit rating.
Your ability to buy your first car will significantly be based on how you use your credit now. A few years of sparing use of your credit card with a complete paydown every month will do wonders. It could mean literally thousands of dollars. And with auto mfg's being in the doldrums for probably the next 2 or 3 years, your patience will be rewarded. You, who vouchsafed your credit will be handsomely rewarded.
Your decisions now will affect you for the decades to come. I wish I would have had me to advise me when I was your age. Please, please, don't make my mistakes of not understanding what credit is and how it works. It meant 10 years to me before I was able to buy my house. Don't waste a decade when you have so many here to help you.
I had a feeling that would stir you up a bit. :-)
I have bought a few cars both with loans and cash. For years I drove new & almost new cars owned by car dealerships as part of my compensation or because I had to take them home to repair and paint on the weekend. That was fun and I would change cars monthly, weekly and sometimes daily! It drove my neighbors nuts. :lmao:
I'm just thankful that I have not needed any commercial loans for several years, and I think I will keep it that way.