diet site - Page 3

11-07-2002, 05:40 AM

Quote:

Originally posted by blowmeetheclown
D - I think you need to tell your "credit advisor" to go to hell. That's a load.

All I said is that my credit will go up faster with a balance on the card. And I use it enough that the stuff I bought at the beginning of the month is always paid off by the end of the month. If I don't keep making small payments on it, I'd hit my limit way too quickly.

That Guy · 11-07-2002, 08:07 AM

Quote:

Originally posted by sycamore
Have you bought a car or other items on installments before? I dunno if you're married or not either.
To a degree, but if you pay those balances off the minute you get the bill, it doesn't help you much. 1) You're not making the CC company any money and 2) It doesn't show that you're responsible enough to pay on installments.

Nope - I'm a single guy that's never had any type of financial responsibility before. I've been financially responsible, but I never burdened myself with spending more than I had (ala karyn), nor have I subscribed to the notion that one must "create" credit ratings for themselves. I also paid close attention to the problem that Tony presented -- don't over extend yourself. I found a house at half the amount I was approved for. I wanted something I knew I could afford for a while if I happen to lose my job, or that would be attractive in a rental market (though now I'm thinking it's a little too nice to let some frat-boys live in -- I guess I'll have to be extremely picky (I never said that) if the situation ever arises).

1). I'm glad I'm not making the credit card companies any money. They don't deserve it. The only way they should make their money is from the 3%+ they charge retailers to use their systems.
2). It shows that I'm respnsible enough to know my spending limitations, though. How does making payments on something you may purchase outright prove financial responsibility?

That Guy · 11-07-2002, 08:09 AM

Quote:

Originally posted by dave

All I said is that my credit will go up faster with a balance on the card. And I use it enough that the stuff I bought at the beginning of the month is always paid off by the end of the month. If I don't keep making small payments on it, I'd hit my limit way too quickly.

Just out of curiosity, what APR and what kind of balance are you talking?

11-07-2002, 08:39 AM

That was my first card, when I had no credit. It's 18% APR, the limit is $1,000 and I try to keep $500 freed up on it (so $500 balance).

I still have not paid a cent of interest, but my advisor tells me that my credit is going up.

I have taken a loan which I could pay off right now but don't want to. I borrowed $1,700 from my credit union to purchase Jenni's iMac. I make payments of $156 each month, which means my interest rate is somewhere around 16% (if I just calculated that properly). At the end of a year, I will have paid them an extra $172 and my credit will have gone up a fair bit.

You do whatever works for you; I'll do what works for me. I used to be completely anti-credit card, but when I can manage my money the way I do, I consider having one to be a benefit. I still never spend money I don't have and I'm building credit. If you don't consider that important, great. I do consider that important, and that's why I work this the way I do.

russotto · 11-07-2002, 09:24 AM

You don't need to carry a balance to have good credit. The mortgage I took out recently was the first installment loan I ever got, and I always pay my credit card bills within the grace period (well, unless the suckers are going to give me free money, see above).

Nic Name · 11-07-2002, 10:45 AM

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Tobiasly · 11-07-2002, 10:55 AM

Quote:

Originally posted by dave
I still have not paid a cent of interest, but my advisor tells me that my credit is going up.

Paying a CC off within the grace period, which you're obviously doing if you've never paid interest, is not considered carrying a balance. So you're basically doing the same thing that blowmee is doing.

That Guy · 11-08-2002, 08:02 AM

Quote:

Originally posted by dave
All I said is that my credit will go up faster with a balance on the card. And I use it enough that the stuff I bought at the beginning of the month is always paid off by the end of the month. If I don't keep making small payments on it, I'd hit my limit way too quickly.

Do you get a yearly credit report, as these "credit advisors" strongly recommend? Are you verifying that the money you're throwing away now will help you make money later?

11-08-2002, 08:05 AM

Quote:

Originally posted by blowmeetheclown
Are you verifying that the money you're throwing away now will help you make money later?

Are you bothering to read what I write?

Quote:

I still have not paid a cent of interest, but my advisor tells me that my credit is going up.

[ edit - typo ]

Griff · 11-08-2002, 08:14 AM

Dave, I think Tob is right you're missusing the phrase "carry a balance". If you zero out your card during the grace period you are not carrying anything over, you're just using your card as we suggest.

11-08-2002, 09:07 AM

And that's fine. I have been told, very clearly, by a number of sources, that carrying a balance will improve credit ratings more quickly than not carrying a balance. I've been trying to carry a balance, but if it's not working, well, I dunno. Maybe my credit is now going up faster because of the loan I mentioned before - on which I am making payments every month.

Perhaps I will apply for a better credit card from my credit union and let it carry a bit of a balance, so I can make payments on it and make my credit go up quicker.

blowmee says it shouldn't work that way; he's right. But it doesn't matter, because it does work that way. And the better credit you have, the lower interest rates you pay in the future. I am not independently wealthy, and I do plan to own a home, which means I will need to borrow money. Let's examine the difference between 5.5% and 5% on a $200,000 mortgage over 30 years, shall we?

5.5% with no money down over 30 years comes out to 360 payments of $1,135.58 - for a total of $408,808.08.

5.0% with no money down over 30 years comes out to 360 payments of $1,073.64 - for a total of $386,511.57.

The difference in the two is $22,296.51 - enough to buy a pretty decent car.

Suppose, then, that you put that extra money ($61.94 a month) into investments (stock market). We'll pretend that you only invested the saved monies at the end of the year - for the sake of simplicity. Suppose that, over time, your investment averages 20% each year - not at all unheard of in stocks and probably about average. At the end of that 30 year period, said monies would be worth approximately $877,725.65.

I fail to see how turning $65 a month into almost a million dollars over thirty years is a bad thing.

That Guy · 11-08-2002, 10:56 AM

Can you back the claim that you will pay lower interest rates later by carrying balances on your credit card?
I still don't see how you are able to carry a balance, yet not pay any interest. Even if you charge something for a dime and don't pay the credit bill, you will be charged interest. I don't know of many cards that offer 0% interest beyond a certain introduction period.

11-08-2002, 12:18 PM

I have already stated how this works; re-read above.

Yes, I can honestly say that I'll get lower interest rates in the future by building credit now. That is how it works.

If you have good credit, lenders are more eager to loan you their money. For people that have really great credit, they really want to lend you money - because they're gonna make money on it! It's a good investment to them! So they want you to choose them - and they offer lower interest rates. We call them "bidding wars" here in the defense industry. Mr. Lender A wants to be the lowest bidder (interest-wise), because he wants to get your money (because you have a superb history of borrowing money and paying it back with interest, meaning that he is going to make money on you), so he offers a used auto loan at 8%. Mr. Lender B wants your money too, so he offers a rate of 7.5%. Mr. Lender C really wants your money, so they offer 6%. You take their offer back to Mr. Lender A & Mr. Lender B and say "I can get 6% here, what can you offer me?" Continues on until you both are happy.

As I've demonstrated above, even half of a percentage point on a mortgage can save you real dollars, which you can put to work and make even more money.

Credit, investing, buying... it's all a big game, and you'll do really well for yourself if you know how to play it.

warch · 11-08-2002, 12:38 PM

The best advice is to pay off your card each month. Dont carry a balance over. Your credit rating will take care of itself. They really really want to sell you stuff. Honest. For two low income yahoos, we have ridiculous credit lines. They're begging us to play. Daily.

Buying our house has been an amazing investment. The mortage lender, as usual, said we were approved for way more than we knew we could handle. We stayed in the price range we calculated and have done well. We had our home reappraised to rid us of mortgage insurance fees as it has almost doubled in value over the past 5 years.

We recently made the nerve racking decision to get a home equity loan. Lots of competitive options. As owners of a fixer upper, we decided to take advantage of a temporary city revitalization grant and build a new garage- the city picks up 25% of the cost if we live here 7 yrs, which is no problem. The loan is marketed with the same intensity as a credit card, the interest, the slipperiness of payments, only your house is the gamble. We are making payments far above the minimum looking at it as a strictly timed loan, rather than the convenient revolving credit, begging us to please spend!

That Guy · 11-08-2002, 12:48 PM

Right on, warch!
If you play their game, you end up just the same as everyone else, especially now that the Fed has lowered interest rates again. I know people with horrible credit that have refinanced with lower rates than I originally got. I would do the same, but I don't plan to be in the house for more than two more years.
Pay now play later?

11-07-2002, 08:39 AM	#34
dave Guest Posts: n/a	That was my first card, when I had <b>no</b> credit. It's 18% APR, the limit is $1,000 and I try to keep $500 freed up on it (so $500 balance). I still have not paid a cent of interest, but my advisor tells me that my credit is going up. I have taken a loan which I could pay off right now but don't want to. I borrowed $1,700 from my credit union to purchase Jenni's iMac. I make payments of $156 each month, which means my interest rate is somewhere around 16% (if I just calculated that properly). At the end of a year, I will have paid them an extra $172 and my credit will have gone up a fair bit. You do whatever works for you; I'll do what works for me. I used to be completely anti-credit card, but when I can manage my money the way I do, I consider having one to be a benefit. I still never spend money I don't have and I'm building credit. If you don't consider that important, great. I <b>do</b> consider that important, and that's why I work this the way I do.

11-07-2002, 10:45 AM	#36
Nic Name retired Join Date: Dec 2001 Location: Toronto, Canada Posts: 1,930	PayPal me now or pay me later ... Some might like this new affinity Visa/ebay/PayPal card: Attached Images

11-08-2002, 08:14 AM	#40
Griff still says videotape Join Date: Feb 2001 Posts: 26,813	Dave, I think Tob is right you're missusing the phrase "carry a balance". If you zero out your card during the grace period you are not carrying anything over, you're just using your card as we suggest. __________________ If you would only recognize that life is hard, things would be so much easier for you. - Louis D. Brandeis

11-08-2002, 09:07 AM	#41
dave Guest Posts: n/a	And <b>that's fine</b>. I have been told, very clearly, by a number of sources, that carrying a balance will improve credit ratings more quickly than not carrying a balance. I've been trying to carry a balance, but if it's not working, well, I dunno. Maybe my credit is now going up faster because of the loan I mentioned before - on which I am making payments every month. Perhaps I will apply for a better credit card from my credit union and let it carry a bit of a balance, so I can make payments on it and make my credit go up quicker. blowmee says it shouldn't work that way; he's right. But it doesn't matter, because it <b>does</b> work that way. And the better credit you have, <b>the lower interest rates you pay in the future</b>. I am <b>not</b> independently wealthy, and I <b>do</b> plan to own a home, which means I <b>will</b> need to borrow money. Let's examine the difference between 5.5% and 5% on a $200,000 mortgage over 30 years, shall we? 5.5% with no money down over 30 years comes out to 360 payments of $1,135.58 - for a total of <b>$408,808.08</b>. 5.0% with no money down over 30 years comes out to 360 payments of $1,073.64 - for a total of <b>$386,511.57</b>. The difference in the two is <b>$22,296.51</b> - enough to buy a pretty decent car. Suppose, then, that you put that extra money ($61.94 a month) into investments (stock market). We'll pretend that you only invested the saved monies at the end of the year - for the sake of simplicity. Suppose that, over time, your investment averages 20% each year - not at all unheard of in stocks and probably about average. At the end of that 30 year period, said monies would be worth approximately <b>$877,725.65</b>. I fail to see how turning $65 a month into almost a million dollars over thirty years is a bad thing.

11-08-2002, 12:18 PM	#43
dave Guest Posts: n/a	I have already stated how this works; re-read above. Yes, I <b>can</b> honestly say that I'll get lower interest rates in the future by building credit now. That is how it works. If you have good credit, lenders are more eager to loan you their money. For people that have really great credit, they <b>really</b> want to lend you money - because they're gonna make money on it! It's a good investment to them! So they want you to choose them - and they offer lower interest rates. We call them "bidding wars" here in the defense industry. Mr. Lender A wants to be the lowest bidder (interest-wise), because he <b>wants</b> to get your money (because you have a superb history of borrowing money and paying it back with interest, meaning that he is going to make money on you), so he offers a used auto loan at 8%. Mr. Lender B wants your money too, so he offers a rate of 7.5%. Mr. Lender C really wants your money, so they offer 6%. You take their offer back to Mr. Lender A & Mr. Lender B and say "I can get 6% here, what can you offer me?" Continues on until you both are happy. As I've demonstrated above, even half of a percentage point on a mortgage can save you <b>real dollars</b>, which you can put to work and make even more money. Credit, investing, buying... it's all a big game, and you'll do really well for yourself if you know how to play it.

11-07-2002, 09:24 AM	#35
russotto Professor Join Date: Jan 2001 Posts: 1,788	You don't need to carry a balance to have good credit. The mortgage I took out recently was the first installment loan I ever got, and I always pay my credit card bills within the grace period (well, unless the suckers are going to give me free money, see above).

11-08-2002, 10:56 AM	#42
That Guy He who reads, sometimes writes. Join Date: Sep 2001 Location: at the keyboard Posts: 791	Can you back the claim that you will pay lower interest rates later by carrying balances on your credit card? I still don't see how you are able to carry a balance, yet not pay any interest. Even if you charge something for a dime and don't pay the credit bill, you will be charged interest. I don't know of many cards that offer 0% interest beyond a certain introduction period.

11-08-2002, 12:38 PM	#44
warch lurkin old school Join Date: Oct 2001 Location: Minnesota Posts: 2,796	The best advice is to pay off your card each month. Dont carry a balance over. Your credit rating will take care of itself. They really really want to sell you stuff. Honest. For two low income yahoos, we have ridiculous credit lines. They're begging us to play. Daily. Buying our house has been an amazing investment. The mortage lender, as usual, said we were approved for way more than we knew we could handle. We stayed in the price range we calculated and have done well. We had our home reappraised to rid us of mortgage insurance fees as it has almost doubled in value over the past 5 years. We recently made the nerve racking decision to get a home equity loan. Lots of competitive options. As owners of a fixer upper, we decided to take advantage of a temporary city revitalization grant and build a new garage- the city picks up 25% of the cost if we live here 7 yrs, which is no problem. The loan is marketed with the same intensity as a credit card, the interest, the slipperiness of payments, only your house is the gamble. We are making payments far above the minimum looking at it as a strictly timed loan, rather than the convenient revolving credit, begging us to please spend!

11-08-2002, 12:48 PM	#45
That Guy He who reads, sometimes writes. Join Date: Sep 2001 Location: at the keyboard Posts: 791	Right on, warch! If you play their game, you end up just the same as everyone else, especially now that the Fed has lowered interest rates again. I know people with horrible credit that have refinanced with lower rates than I originally got. I would do the same, but I don't plan to be in the house for more than two more years. Pay now play later?

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