Paying credit card off completely

[freeride53]

I use a debit card or cash for my buying needs. While I appreciate the thought of building up my credit, I prefer to save anything I make, and put it my money market. While rates may be declining a little bit, they're still reasonable over CD's. I have been starting to invest more and more in the last few months since the rowing season ended. I really need a job though so I can do more.

[Holland]

^

Utilization is as important as just having a balance. Ideally you should have no more than a 30% utilization rate. Even if you pay your card off every month, it still shows thought the reporting agencies like you have a balance if you continue to use it every month. For keeping the best score you should try and keep this ratio at 30% of available credit

That would be incorrect. Not only does your highest recorded balance matter, it vs your card limit is a contributor to the determination of your credit score:


You'd be much better off if you consistently had a balance of $1000 that you paid off each month than having a $10,000 balance just for one day. Managing your balance amount is important.


+1

http://www.quizzle.com/blog/2013/04/top-10-credit-score-facts-fictions/

To go along with what sleeve said, I target 20% (never racking up more than $1000 on a $5000 limit) just in case I forget to "make room" on the card. You can benefit from tripling your credit limit as possible. Or, paying it off multiple times a month.


Going to Quizzle (by the makers of TurboTax, Quicken... and more importantly, Quicken Loans) can get you a free credit score check every 6 months. It's mostly a way that they can offer you a refinance through Quicken Loans (which has pretty crappy rates and high fees compared to a credit union...) but pretty great as far as explaining how credit scores work and how you can improve yours.

http://lifehacker.com/5815215/quizzle-gives-you-a-free-credit-score-and-credit-report

http://creditcardforum.com/blog/quizzle-review-credit-score-report/

Pretty much why I mentioned from my understanding (very little). This is good to know though, as I would prefer to have a card with much lower interest than my current rates (20+ percent).

I have a $500 limit card that I try to use every month, but I wouldn't put anymore than $100 on. Most times it's in the $10 to $40 range, which seems clearly not high enough.

[e30austin]

Credit cards are great for people who have some self restraint. If you can't practice that, then you shouldn't have one. With that said, your credit will build up over time if you use it and keep it consistently paid off.

[shiftbmw]

Pay it off, then use the card like a debit card and continue to pay it off 100% monthly. In other words, if you don't have the money, don't swipe your card. You will build credit this way and not eff yourself due to interest costs. Credit cards are some of the most expensive money you can borrow.

[Cletonius]

who's got the best rewards card? I use my credit card for basically everything, 100% paid off each month, I feel like I should earn some rewards while doing so.
Recommend me the best one!!

You should earn rewards because they are offered. It's your right as a consumer; take advantage if you are able.

Start by picking the card with the rewards program that pays well for what you want to get; hotels, flights, cash, etc....

Good place to start:

http://www.nerdwallet.com/the-best-credit-cards

After you've applied for your card, setup an Amazon payments account, and maybe get a prepaid debt card. There are multiple ways to do this. Now that you can set a pin on a gift card you can use that as well.

The jist is this: you use the CC to purchase gift cards or prepaid reload cards, which you then use to pay the CC. Sometimes this is called credit card churn. If you can manage it appropriately it's very easy to make out, but you can really screw yourself if you're not careful.
A decent read, kind of an introduction.

http://boardingarea.com/viewfromthewing/2011/10/29/confessions-of-a-once-and-future-credit-card-churner/

I spend maybe 5-6 hours a month dealing with it and manage to rack up a surprising amount of points/cash back.
One of my friends got me started on this a couple years ago. He lost his job and stared doing it himself and after seeing his success I was all in. I'm not as active as he is, but it sure helps out with the bills.

[Jorgen]

who's got the best rewards card? I use my credit card for basically everything, 100% paid off each month, I feel like I should earn some rewards while doing so.
Recommend me the best one!!

Best is strongly dependent on how much you spend and where you spend it. I am a huge fan of my American Express Blue (no fee great rewards) but I believe I am grandfathered into the old rewards program and it may not be as good now. I get 3% back on everything and 5% on gas, grocery and pharmacy stuff after spending $6,500/year before that I it 1.5% and 2.5%. It works for be as I spend everything I can on that card (so far this year I am at $39k spent on that card, I would pay me mortgage on it if they would let me but haven't figured that one out yet.

Search around there are always some sites with good reviews of rewards cards. Also there are often good offers, I got a chase freedom last year and if I spend $500 in the first 3 months on it I got like $250 cash back so I bought my iPad on there paid it off and got the $250 at the end of the 3 months.



Also fair warning Don't be dumb with a CC. When I was in college about 12 years ago I worked like 20 hours a week made not a ton of cash but enough to get by then built up like $6k in CC debt. Luckily I was able to pay it off very soon after college but I was carrying a balance and paying interest that whole time for what some meals I don't remember and cloths I probably donated to salvo? Just do it responsibly.

[Cletonius]

I would pay me mortgage on it if they would let me but haven't figured that one out yet.

Get an amex bluebird; it has bill pay. Use your regular amex card to buy the vanilla reload cards, fund bluebird, pay mortgage while earning rewards points.

You're welcome.

[BlackbirdM3]

I've never had a credit card, a loan, or anything like that. I'm perfectly fine without. I don't care about a so called credit rating, because if I can't pay in full, I can't afford it. That includes a house. I will never buy a house unless I can pay the full amount up front, otherwise you never own the house, you just rent it from the bank, and if you can't pay the rent, you are out. Its just like renting a house from someone else but you have to pay the property tax and all that crap.

I'm 100% debt free and I don't plan on changing that. No car loans, student loans, credit cards, mortgages, nothing, and I'm damn proud of it. No, I don't have a lot of $, but I do a good job of managing it. I have no clue what my credit rating is, and I don't care either. I pay my bills on time, that is all I care about. ( I don't have a lot of bills to pay either.)

Credit is what screwed the economy up in the first place. All the banks were willing to give credit to just about anyone, then when things started to go south, the banks called in the credit and people couldn't afford to pay it. The banks failed, the people failed and we have the meltdown that we have today. Despite what it seems, the world doesn't run on borrowed money. Someone needs to pay at some point.

Will

[Jorgen]

Get an amex bluebird; it has bill pay. Use your regular amex card to buy the vanilla reload cards, fund bluebird, pay mortgage while earning rewards points.

You're welcome.

You are wise beyond yours years.

[Cletonius]

You are wise beyond yours years.

I do what I can.

Just Google "credit card churn" and spend some time reading on FW and SD. There's tons of ways to scam the CC companies.

[Todd Black 88]

I've never had a credit card, a loan, or anything like that. I'm perfectly fine without. I don't care about a so called credit rating, because if I can't pay in full, I can't afford it. That includes a house. I will never buy a house unless I can pay the full amount up front, otherwise you never own the house, you just rent it from the bank, and if you can't pay the rent, you are out. Its just like renting a house from someone else but you have to pay the property tax and all that crap.

Will

This is entirely dependent on where you live, and what income you earn.

In the city I live in, the median house (detached sfh), is north of $900,000. You would need to save $45,000 per year, for the next 20 years to do it, all while netting a minimum income of $90,000 per year.(rents are $2300-2800 in my area, plus...life expenses) But, as we all know, the price will not stay at $900,000 in 20 years. It will probably be upwards of $1.25 million, based on recent trends. So now, 20 years later, you need to come up with another $350,000. Losing battle.

Example....me.

I bought my first townhouse in 2001 for $220,000. I sold it in the fall of 2004 for $398,000. I payed a mortgage, with property taxes, of approximately $1700 per month, for about 40 months. That's a total investment of $68,000. Rent on my neighbours town house was $1550 per month, so $60,200 over the same length of time. A difference between owning and renting the identicle townhouse, of $7800. The big difference is I got all my mortgage back and walked away with over $175,000 in my pocket, of which I bought a house in Feb of 2005 for $635,000. I basically lived free. This house will go on the market either fall this year or spring next year for between $1milion to 1.1 million. I have invested about $275,000 in taxes and mortgage/renos, in the house that I will get back, plus another $150,000. Rents in my nieghbourhood are $2800-3400.

All in, with the sale, I will walk out with $600,000, and will have lived for free. Had I rented in the same places i lived, I would be out $60 k from the townhouse, and about $250,000 from the house. That's a big difference between renting and owning over 12 years.

Again, this is city and market dependent, but this is why I bought and did not rent. Renting is a loss, ou pay someone else's bills. Why?

[Thizzelle]

pay off. I pay mine off every month, fuck paying them interest.

[z31maniac]

I've never had a credit card, a loan, or anything like that. I'm perfectly fine without. I don't care about a so called credit rating, because if I can't pay in full, I can't afford it. That includes a house. I will never buy a house unless I can pay the full amount up front, otherwise you never own the house, you just rent it from the bank, and if you can't pay the rent, you are out. Its just like renting a house from someone else but you have to pay the property tax and all that crap.

I'm 100% debt free and I don't plan on changing that. No car loans, student loans, credit cards, mortgages, nothing, and I'm damn proud of it. No, I don't have a lot of $, but I do a good job of managing it. I have no clue what my credit rating is, and I don't care either. I pay my bills on time, that is all I care about. ( I don't have a lot of bills to pay either.)

Credit is what screwed the economy up in the first place. All the banks were willing to give credit to just about anyone, then when things started to go south, the banks called in the credit and people couldn't afford to pay it. The banks failed, the people failed and we have the meltdown that we have today. Despite what it seems, the world doesn't run on borrowed money. Someone needs to pay at some point.

Will

Irresponsible use is what screwed it up.

Not to mention, if you can't pay your rent, you'll still get thrown out just like you would with a mortgage.

I hope most people completely ignore your post and understand that credit can be a powerful tool for growth if used responsibly.

[evandael]

real estate tangent

i'm sure you were wise about your home purchases, as well as the areas in which you lived. it's great to hear. but you had a bit of fortune on your side.


many honest, smart people have lost their shirts in real estate.

[Todd Black 88]

That's why I said market dependent. This was not an investment on my part, I needed a roof over my head.

Also, you need to pay rent anyways right? If I just payed rent, I would have been out $300k in the last 12 years anyways. The difference is negligible, between a mortgage and rent, if the value of the property stayed the same over the life of a morgtgage. Mortgages go down over the term , relative to income earned, and rents go up due to inflation. Even if it(the home)stayed, or dropped 50% in value, at the end of your mortgage you have something of value......rent and you have.....nothing.....unless the minimal difference in rent payment and mortgage payment at the beginning of the term,(at the end of the term, your rent will be higher then the mortgage payment due to inflation) was invested and made you a profit, which is more risky IMO.

They aren't making anymore land, and the population is growing exponentially. They need to live somewhere.