Lord knows it's tempting having at least 2 thousand dollars worth of plastic in your wallet. My parents...(although now they have paid everything off) were 26k in Credit Card debt, as a responsible young person, my limit is one thousand dollars in debt and have made a promise to pay my bills on time and at least double the minimum payment & I hope this self-control will build my credit in the long run and make my life easier as I age. Just wondering how's your credit doing? Any big debts? and what's your way of controlling your spending? (i.e. keeping cards at home, canceling them, or only applying for one or two cards)
I have no debts other than my monthly credit card bill which I pay off in full. Two things I do- 1) Put as high a percentage of my pay into my 401(k) as possible. And I do it by direct deposit, so that I can't spend it before it is deposited. 2) Make a commitment to pay off the card completely every month. As far as cards, I just carry 2 of them. The others I don't even activate, but I dont cancel them so that at least I still have the credit available.
I'm 23...and have NO DEPTS. I don't have a CC. I use a DC, everywhere I go. My paychecks go right ot my account.
My dad is brilliant. He got me a CC when I was only 15. He told me to put small things on it from time to time. For example taking a girl on a date. Later things like tuition, books, etc, would go on the card. Of course my parents would pay for everything (a luxury few have and I am grateful for) on time. Now I have perfect credit with a ridiculous limit. Banks beg me to ask for their loans. I will do the same for my children someday. These days good credit is like going to college, you need it on your resume.
Revolving credit card debt is Satan's lair. I wiped all of mine out a few years ago. Now all I carry is an American Express gold card. A debt free life is the only way to go.
Not good enough man. Why pay THE MAN 5 - 20% on all of your purchases? You wouldn't volunteer to pay a higher tax rate, would you? Carrying a balance is just throwing money away. Here a couple better rules to live by, and the sooner you can get here, the less you will be spinning your wheels financially. 1. Never buy something that you couldn't afford to buy in cash. 2. Pay off your credit cards in full each month. 3. Don't use credit to buy anything that depreciates. The only acceptable debt is a house loan. If that means that you can't buy a new car, then drive a beater. If you can't save up enough to buy the new car, then how are you going to ever save any money now that you have new car payments (or worse lease payments) AND new car priced insurance payments? I know you see a lot of people out there living the life, but over half of them do it by mortgaging their futures. They have car notes, home equity loans, student loans, and are making minimum payments on all of them. My ex-boss told me this once: Run your life like a business. If you haven't increased your net worth over the previous year by the end of the year, you just wasted a year of your life and did all that work for nothing.
If you really want to build your credit, open up some credit card accounts and then cut the cards up. Once the credit card companies see you're not using the cards they will start raising your limits trying to get you to use your card which will in turn up your credit score because more companies are trusting you with money. Listen to most on this board, if you have no credit card debt KEEP IT THAT WAY!
I only used 2 grand last month to buy a used car. Other than student loans(which is the norm), I can take care of that easily. Everything else goes thru debit.
I've told my story here lots of times. I was buried in CC debt back in 2001 when I was changing jobs every 6 months trying to find something I didn't COMPLETELY LOATHE. In 2002, I finally found a job that I could put up with and went on CCCS to pay off all my debt. Finally got it paid off in 2003 by being VERY aggressive about it. Now, I have 1 CC with a 2K limit and I pay it off in full every month, no questions asked. I've had it for 4 years and I've never paid a penny in finance charges. What sucks is that, although my credit rating is getting better and better every day, I'm still paying for those mistakes I made 6 years ago. I was able to buy a house with no problems, but the interest rate I got on my car was higher than Michael Corleone would have given me. I've since refinanced and got a better interest rate, but I was turned down by one of the refi companies because of my credit. How long does it take for crap to fall off your report? 7 years?
It takes seven years, thats correct. I'm surprised that they didnt cut you a break since its been so long since you were in debt.
There seems to be a common assumption here that all debt is bad. Not all debt is bad. I'm in huge debt... for my mortgage, of which I make consistent payments and frequently pre-pay the next month's principle. But a mortgage is good debt. Good debt actually improves your credit score. If you don't get credit cards and don't get a mortgage, you won't be in debt, but you also won't be building a strong credit history. Getting financing for something later in life may be difficult for you. It's very important to build a strong credit history. My credit cards I keep in relatively small debt. The'll be anywhere from $500 to $2000 at any given time, but I pay them off quickly and never default on payments. I don't let them spiral out of control. I have a car payment for a car we purchased a year ago and we are on schedule to have that car payed off next year. Going into debt to buy a car, and then paying if off in two years is good debt.
I've been told by many people who work in the credit industry that if you consistently pay off your credit card every month it's actually not as good for your credit rating unless you've had credit problems before. If you have a clean credit report, then holding a little balance each month actually helps your credit rating. Also the higher the limit on your credit cards, the higher your rating will be.
I've heard that but I've also heard that they don't like it when you carry a balance over because they think you're living beyond your means. It's so hard to know what's good and what's bad for your credit because creditors are so different. I've heard that it's not good to have open cards that you don't use and that you should either use them or go ahead and close them out. Is this true?
the suggestion they gave me was to carry over like 10 or 20 bux, just keep it at a low figure to build up your rating. in terms of open cards, I've been told quite often that it's better to keep the high limit cards and ditch the low limit ones as your average avilable credit factors into your credit score. However if the lower limit credit card has been with you for a while, you might want to consider keeping it.
I say this is untrue from a friend's experience. She got help from a a single accountant/credit counselor and not a company who had her use the DOLP method (whatever that is) to pay her credit card debt off. She had 6 credit cards and over $12,000 in debt. The accountant told her to pay them off and after each one is paid off cut it up but leave the account open so they continue to raise your credit limits. This showed that the creditors trusted her with large amounts of money and after just a year it raised her credit score over 100 points. She is now debt free, except for student loans which her employer is paying off, and just bought a house last year.
How is a car loan good debt? cars go down in value... Also 2 x minimum payment on credit cards is not enough, you will still get in trouble, just pay the whole thing off each month and dont buy things that you cant afford that month.
I only keep ONE credit card that has a $4,500 credit limit. I pay the balance off every month. I HATE debts so will avoid them as much i can as possible until life hits me (marriage, kids, mortgage and etc)
