Up until recently I had two lines of credit. I cancelled one (my oldest line of credit) due to fraud. I am also now considering cancelling my second, which I have only had for about 6 months. I feel that having a credit card has attributed to debt and living out of my means. I have managed to pay off all of my debt recently and save a little bit and I want to keep it that way. I think I can do better financially with just a debit card and cash. How will this affect me both in the present and in the future as far as credit score and future options for buying a car or house? I have Googled this but have gotten mixed responses. Tell me fellow e30 owners, what is your experience with this?
-
-
I don't have any credit cards, I don't have my own place either though. It is nice to ot have to worry about debt though.1985 M10b18. 70maybewhpoffury. Over engineered S50b30 murica BBQ swap in progress.
Originally posted by DEV0 E30 -
The best way to build and maintain a great credit score is to have a credit card or 2 and use them! Use them and pay them off every month. Carrying a small ballance for a short time is not going to hurt you, just pay it off ASAP.
My self I have 4 CC and all have a small balance's on them at the moment as I have had a lot of time between jobs the last couple of years. I try not to use them when I am laid off and just use cash, and pay them off before Lay off time comes. So my score is bit lower than it used to be because of this, but I should have everything paid off after I get back to work this year for a few monthsThe American Republic will endure until the day Congress discovers that it can bribe the public with the public's money. -Alexis de TocquevilleOriginally posted by Fusion
The Desire to Save Humanity is Always a False Front for the Urge to Rule it- H. L. Mencken
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants.
William Pitt-Comment
-
Don't cancel them. My buddy did that and his credit score went down. General rule is to have two open lines of credit. I have 4 but they are all pretty much at zero. And I totally agree on your ideals of credit cards. FUCK THEM! If your responsible with them ur safe but once you get a little out of control ur stuck under all the interest rates and fees.Comment
-
You want to carry about a 40% balance at most from month to month on any given cc.
Always make your monthly payments, even if it's the minimum. ALWAYS!
They will offer you credit limit increases once you prove yourself to be a good credit risk.
I currently only have my Capital One (had since 2000) and my AMEX Blue cash back. I have about $500 on the C1, and $300 on the AMEX, so I'm doing ok.
I probably should mention that I made a $900 payment on the AMEX today tho... :pComment
-
I have one that rarely gets used. I currently have a balance on it from car repair bills, as well as to cover some living expenses after my roommate moved out 2 months before I did, stretching my budget beyond what I could afford. (an extra $700/month of rent/utilities I had to cover.) I'd recommend keeping one just for situations such as that, then pay them off as quickly as possible. (mine's getting knocked down quickly.)sigpic89 M3Comment
-
OP, You are correct in thinking that using a debit card and cash is the right way to go. Good for you for canceling your cards before it became a problem. As far as you credit is concerned you should be fine. As i understand it, you closed the cards with a zero balance. Is that right? if so, You are golden...Just maintain all the other montly bills you have and keep the Current employment that you have (if any)
since you closed your cards with a zero bal. you have not affected your avail limit/current debt ratio. Also, since you now have no outstanding (credit card) debt, you should have a fairly good debt/income ratio as well.
There is no need to have a credit card regardless of how financially "aware" you think you may be. Take mr. sleeve for example...No job and 4 cards with a balance on each one. If mrsleeve misses a payment or goes over his limit he gets slapped with fees and a high interest rate up to 31.99% Then his minimum payment goes up, he sinks and ends up calling me for help.
In the end, You should never have bought that iced latte, euro grill or expensive dinner if you could not afford to pay cash for it.
Watch this:http://consumerist.com/consumer/clip...ord-252491.php
I'm a certified credit counselor for the state of Mi BTW.
EDIT: holy crap, while i was typing this the tread went way downhill....Dont get a credit card....Payoff what you have and close the card. then live life like your grandparents did.Comment
-
Comment
-
Yes, I am aware...But really...Whats your Fico score good for? If you buy into the whole credit system, Then you need it. But if you are banning credit cards from your life...What good is having a high score?
Wrong, You may think you are doing ok...but in reality. YOU OWE PEOPLE. they have you in their pocket...they take part of your income each and every month. pay them off and put that minimum payment in a saving account!
If you had a savings account you would not have had to charge that stuff...now you are extended again because you have another payment you need to worry about
Yes, Fuck them!Comment
-
^ I have 1 months salary in my savings currently, it's not close to the 3 months, but it sure is nice seeing 4 digit number, rather than a 3 digit.Comment
-
There are two reasons to have credit cards. The first one is that it is extremely unusual to be able to avoid the credit system entirely, therefore the help with the FICO score is valuable. The second one is in the difference between reg. E (debit card) and reg. CC (credit card) transactions. The short version is, unless you're in a card-in-hand or card-visible situation at a major, national store or at an ATM of a major national bank, you're exposing yourself to a lot more risk by using a debit card. This includes restaurants, any place where someone goes away from view with your card - and even POS/ATM units which you don't quite trust.Comment
-
Comment
-
Granted, If you're trying to get rid of credit as a whoel than it doesn't matter. Just don't plan on ever being able to (realistically) purchase a house. I mean hell, even some job's require a credit check these days.
I use credit as a tool. I pay my balance off ever month, and I use one credit card for everything unless they don't accept Amex.
I'm not in any debt at all, and I enjoy the cash back I get from using my card, as well as the mileage, etc. The other benefit is things like doubling and extending warranty's, purchase protection, the ability to dispute purchases with a vendor, etc. Cash is always king, but if cash had a sexier cousin that likes to give blowjobs in the movie theatre, that would be an Amex card. When you really start to direct alot of money onto one reward card, you get alot of benefits out of it.
If you control your credit and don't let it control you, its a great tool. If not, you'll be a slave to it. The only aspect to credit I don't like is the fact that all of my transactions are tracked.
BTW. Lets play a fun game. It's called guess which month I moved to california.Comment
-
Comment