Credit Card Strut
Woimsah
1,734 Posts
H8 the credit cards -- think they're super evil. However, while I do have good credit, I would like to make it better.
Looking into something that's great on rewards with the lowest possible APR (just in case).
Anyone got something they like that's straight forward (well, as straight forward as a credit card can be?)
Looking into something that's great on rewards with the lowest possible APR (just in case).
Anyone got something they like that's straight forward (well, as straight forward as a credit card can be?)
Comments
not the lowest APR, but at the same time there aren't any hidden penalties
And the vig that the vendor pays to AMEX for each transaction requires the vendor to pass that cost on in the form of higher prices to cash paying customers. So you can rest easy knowing that those benefits are being carried on the backs of the poor.
Not needed dude. Appreciate your political stance, but not asking about that, let's stay the course here.
They had a promo going where it was 0% interest for 15 months on a transfer balance. The only thing you had to pay was a 1% transfer balance fee.
Transferred $5000 into my account and paid $50 and and then $333 a month for 15 months and done.
I know one dude who got one with a $20,000 limit. Took it all on a transfer balance and then put it towards a mortgage costing him $200 to borrow 20 G's for 15 months.
This can be helpful depending on your situation, but be aware that this will lower your credit score, and he's trying to raise his.
sweet...i'm going on a shopping spree after work.
Why isn't it? They deposit the money right into your bank account.
As far as credit rating goes. It didn't effect mine at all. I think you only take a hit if you don't pay the min. monthly payment. Which wasn't that high...
Doesn't it also not help increase your credit score by paying off your monthly balance in full every month? I asked a credit service once why my score didn't seem to be increasing. I was like, I pay off my balance every month on my CC and I had a mortgage which I paid off when I sold my condo which was always in good standing.
One dudes told me. You need to carry balances to increase, not just because you use it. Then dude looks at me and says with a straight face. Banks and CC companies don't like people like you who pay their bills.
I was told by someone at Experian that you need to cary a balance to improve your credit score as well.
Good suggestion if it was 4 years ago, but most of that is gone or so watered down by fees it takes all the fun out of it. And MBNA doesn't even exist anymore (Bank of America bought them out). The 0% no bal xfer fee to a high yield savings acct was a good game.
Ironic you mention that after your prior post, as ALL of the rewards programs are borne by fees charged to merchants - including yours.
I've had several people in the credit business tell me that transferring your balance from one card to another to save fees will lower your credit score every time.
This isn't a transfer to another card. This is a transfer right into your bank account. They offer 2 things. Balance Transfer and what they call a Cheque Cash Advance.
Maybe things work differently here in Canada. I just know I didn't take any hit it seems over the 15 months.
I'm not sure that carrying a balance on a revolving line (i.e. CC's) helps much if it all. AFAIK it's the usage and payment that does it. But credit scoring is one of those things that everyone has a theory about but no one really knows for sure (specifically). On top of that, there are multiple scoring systems, i.e. your FICO is not the be all end all.
A better idea would be to utilize credit cards and pay them off while carrying a non-revolving loan and paying on it (i.e auto or fixed personal loans).
As far as not liking non-balance carrying card users, of course they miss out on finance charges but the banks/cc co's/credit networks still rack up merchant transaction fees so it's not like they're not making money off of you still.
In Canada & Europe they still exist under the MBNA banner.
They still offer the deals here. I still get offers and my friend just signed up on a promo. But I'm guessing regulations up here are much different than down there and they can't get away with screwing people over as easily.
Saved us on the mortgage crisis when the government refused to follow US way of doing business.
Weird ... Canada man...
Amex Plum for business (super clutch but gotta jump through some hoops to demonstrate that you qualify - if you run a business and are buying inventory that you can turn around within 60 days, it basically allows you to purchase on credit and run zero interest for a full two months, or get a percentage back if you pay off the purchase right away. That extra 30 days can REALLY help for cashflow)
Got one more that is a total POS but it's my first CC, and you never want to get rid of that one and shorten the visible length of credit history.
I highly recommend credit.com, it is WAY more informative than the magic pixie dust formulae of Experian and co. Also free.
BUT -
The best thing you can do to really develop credit is to finance a car purchase, even if you don't need it - 10% of your credit score is based on the diversity of your credit, and if it's all cards it hurts you. Student loans are also looked upon very positively by creditors for obvious reasons.
Now THAT'S what I'm talmbout --- good looks!
To clarify, by "if you don't need it", this supposes that you're actually on the market for a car - it would be foolish to buy a car just for your credit score.
Also, for those with kids, when they hit their teens, get them a credit card in their name but just don't ever give them access - make occasional purchases every few months and pay it off promptly - you can do this so that their credit history is longer, but also when they hit 18 their credit score will have been associated with yours for a long time and carry over for some time. I know for me the ONLY thing that is keeping my under an 800 FICO score is that I had my first card only 5 years ago.
As loony as the calculations of these scores are, this is all necessary, esp. when it comes to the big things like starting a business or buying a car/home - being up near 800 will save thousands if not tens of thousands in the long term.
It's crazy how fast all this has changed - four years ago pretty much all the card issuers were spamming with 0 APR for 12 months, 10k credit limit, to anyone with a score over 750, and even folks with no credit history would get good offers. Now if you're starting anew they give you a $400 limit and often charge a fee.
its not simply carrying a balance or having a loan. as an example to illustrate.
Person A has a 50K Credit Limit (max borrowed allowed) but only has about 1K in debt. Person A pays the 1K off every month but racks up 1K every month.
Person B has a 3K Credit Limit, but has 2800 hundo of debt. Person B pays more than minimum required but hovers around a carrying the 2800 month to month.
Person C has a 10K limit with 5K in debt. Makes more than minimum payments and carries a 5K balance roughly month to month.
In the eyes of the credit score algorithms, Person C is better than Person A who are both better than Person B.
Why? Person C has a good debt to credit ratio which is apparently a hughe important factor in credit risk and personal debt management.
Person B is constantly near the maximum debt allowed. This is not good.
Person A may have the highest limit, which would most likely suggest good credit, but never carries a balance - therefore supplying insufficient information about Person A's debt management.
While Person A should not be adversely affected by this, I would imagine if A and C started off w/ the same 700 FICO scores across the board, C's credit rating might actually improve over time versus A. B may drop in scores over time, but not plummet. Of course this is merely 1 aspect of how credit affects scores, the actual algorithms to determine FICO scores is even more ridiculously complicated and include many many other variables. But the counter intuitive point is that having a high credit limit but never utilizing it is not necessarily a good thing. Having a high limit, paying it off monthly, but always racking back up to max limit every month is also not that good. But there is a window where the debt:limit ratio is helpful, even though this means you're most likely throwing money away on interest payments somewhere along the line.
Oh? I thought it was rather counter-intuitive.
Two people approach you for a loan, they both want 500K.
You pull their credit reports. Person A has a million dollars of credit, but a zero balance on it.
Person B has a million dollars of credit but carries 500K revolving debt balance.
Who you gonna lend to?
What if the guidelines were based strictly off FICO scores and no other extenuating circumstances? (job, income, cash on hand/assets/etc).
Intuitively, Person A right? They have a million dollars of credit they can use with absolutely zero debt.
This is an extreme example, but I've seen many similar (albeit w/ smaller dollar values) caseswhere Person B has a higher credit score and Person A would not qualify immediately for the loan.
Does that still make sense?
But the circumstances do not evidence that person A has any money or income. If person B is paying on their loan then that is an indication of income. You may not want someone with $500,000 debt, but maintaining and paying on a balance is better than a zero balance. Ideally, you want to have a card that you use, but pay in full each month. Then you enjoy al the benefits without paying the interest rate.
For example. miles are rewarded at a fraction of what you could buy those miles for using the card. The card issuer rewards the miles at a discount because they want you to use the card and then carry a higher balance that you must pay interest on. If you use hte card but pay the balance each month, than you enjoy the discounted miles at the expense of those that subsidize your cheap miles with their higher interest payments.
In the example i outlined above, assume incomes are equal, assets are equal etc. There are no implications that one person has an income while the other doesnt.
Like i said - i've seen this situation with less extreme #s where the individual carrying an average balance (which can be racking up 50% of their allowable credit limit each month and paying it off) had a higher score than another who maintained a zero balance and never spent "on credit".
I took the position of lending money as opposed to applying for a new card because credit card companies want yo monies,that's true, so to remove that bias i took the approach that its an issue of making a loan, from a bank for a mortgage as an example, to pull it away from the possiblity that a decision would be made in the instance of attempting to profit from exorbitant interest rates.
Lending institutions dont create the algorithms by which credit scores are determined. However, decisions are ultimately run by FICO scores. If i had the option of lending either of the above individuals money, I would choose the person who doesnt alread carry a balance or "owe money" to other parties which would increase the risk I will not have the principal amount of the loan returned to me + interest, however I've encountered situations similar to Mr. A and Mr. B outlined above wherein Mr. A actually has a higher income and greater assets but a lower FICO score than Mr. B, making Mr. A not qualify for the loan (or not qualify in accordance with underwriting guidelines, although some exceptions can be made with enough evidence, but often times even with the exceptions Mr. A might have a higher interest rate simply because of a lower FICO score)
These situations usually are because lines are drawn separating scores. i.e. 740+ you get whatever you want. 700-739, you can get almost everything you want + some of what the 740+ guys get, but at an added cost, even though looking strictly at debt to income ratios, the 720 score individual seems much less risky than the 740 scoring person.
Point is - its a fucked up and weird system that is at times counter intuitive.
Sorry, can't help ya.
I think there's a law where if you apply for some kind of loan they are obligated to go over your credit report with you, which i believe should include all 3 bureaus as sometimes they differ (and produce different scores).
I know there's those free websites but in the past they never worked for me or they required you to go through a lot of bullshit just to get the free reports such as signing up for free trials that turn into monthly payment type things.