CC mentality/philosophy

[Anonymous]

So I've been doing a lot of reading on here over the past few months, but just signed up.  I'm curious what people's thoughts are regarding CCs after having dealt with paying down debt/raising their scores.  One thing that I see a lot is excitement over getting new CCs but also sometimes like it's a status thing.  I'm not judging at all here.  I'm genuinely curious where people are coming from.  See I've been on a DMO for the past 2.5 years where I had to close all my CCs so have operated on a stictly cash basis.  I've sort of grown a healthy distain for banks.  Don't get me wrong, I fully understand that it was my own mismanagement that got me into debt.  But I'm not a fan of some of the predatory (albeit legal) practices.  So now that I'm working on trying to build my credit back up I'm finding myself still very reluctant to "play the game" so to speak and try to open a CC for the utilization ratio benefit.  Currently I only have one open account (student loan) of about 6.5k on my report.  That's it.  I'm curious to hear if other folks found themselves in the same mindset when they were back in a position to apply for a CC again.

[Anonymous]

Whoops!  DMP, not DMO. 

[Anonymous]

You know, I'm trying to think about this from someone else's point of view who has good cash flow, good discipline, and passed out of their bad credit score into good credit score zone.  I suppose I could see where it could become a game where the goal is to get the "best" card/benefits to game the gamers.  It just seemed odd to me when I first started noticing it.  I'm not sure I'm ready/willing get to ease up on my dislike of CCs/banks yet, but I think I get it.

[creditnocash]

well i dont know if i qualify as having good cash flow but i make around 1700 dollars take home after taxes and 401k deductions. (mind you im a 21 year old college student/work full time)

going from only 2-3 store cards and paying everything with a debit card or cash it is defintly a different mind set. 

i haven't really paid down debt like in a dmp. but i have had some high balances in regards to my cc limits. 

seeing my scores in the 700's was a rush but now that my util is a little higher at 20% instead of my 4% my score tanked almost 35-40 points. 

although ive never missed a payment so im sure once i pay down the cards and not have 2-3 cards showing as maxed out next month my score will recover for the better. 

but a good rule of thumb to follow is if you dont have it in your checking dont put it on your card. 

i mostly use the cards just for the cash back as for on a debit card or cash you get nothing. 

[QueenofReinvention]

Well, my credit sucks, so I am definitely NOT the audience you are seeking to respond to this; however, I do get your point, and what you are saying. Me, personally, I look at all of these people with these great CL's and multiple times their income limits and think that it's fantastic that a. they can keep all of it straight (those spreadsheets and programs for cc management seem to help them);and b. those (especially the people who filed for BK's like me), who are able to get back to even better and higher scores than they had before they filed BK (granted, with a lot of time and energy).They are a source of inspiration to me, because they have proven that anything is possible with discipline and time.

With that being said, I did what my attorney recommended and opened these (awful) subprime cards, even before my BK was discharged (in order to start the rebuilding process), and I have to say; the year and a half I went without any cc's actually was much better than the past year and a half after my BK with these bad cards. I wrote this somewhere else, that I wish I had found this site when I first filed (or before), as I would have handled things a LOT differently. I'm not saying my attorney was wrong, but I would have preferred to open secured cards instead and the just gone from there. I know a lot of people don't prefer secured cards, and like to have unsecured cards/loans, but given my past experience; I really am going to move away from credit card as much as reasonably possible and go back to cash.

I will retain 3 cards and get an installment share secured loan at some point, but otherwise, I want to keep the credit to a minimum and work on rebuilding my emergency account; 6 months to a years' living expenses account, and finally, a savings account for a future condo purchase in about 3-5 years.

[bs6054]

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@Anonymous wrote:

You know, I'm trying to think about this from someone else's point of view who has good cash flow, good discipline, and passed out of their bad credit score into good credit score zone.  I suppose I could see where it could become a game where the goal is to get the "best" card/benefits to game the gamers.  It just seemed odd to me when I first started noticing it.  I'm not sure I'm ready/willing get to ease up on my dislike of CCs/banks yet, but I think I get it.

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Well, I have sometimes posted things that are a little "strange" about this forum.  The universal "Congratulations" given to people when they obtain cards or CLIs, when we really don't know if this is a good thing, particularly those that have had bad credit in the past.  In my more cynical moments, I convert this to an Alcoholics Anonymous forum where members are congratulating eachother on finding a way to get drinks from the barman.

I think the question is whether you need credit.  As others have said, if you pay cash or use debit cards, you are losing rewards you could get with credit cards, but if you have a strong dislike of banks and credit cards, I don't think that is enough of a reason to change. 

So that leaves stuff you will need to buy on credit, hopefully just big ticket items such as house and maybe car (and just buy what you can afford in cash for everything else).  If you think you will someday need a mortgage, then it makes sense, as soon as you are ready, to get one or more credit cards, and not use them, to get the history.  And then quit the forum till nearer the time!

[loviedovie]

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@bs6054 wrote:

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Well, I have sometimes posted things that are a little "strange" about this forum.  The universal "Congratulations" given to people when they obtain cards or CLIs, when we really don't know if this is a good thing, particularly those that have had bad credit in the past.  In my more cynical moments, I convert this to an Alcoholics Anonymous forum where members are congratulating eachother on finding a way to get drinks from the barman.

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I was just thinking about this... also olderwiser as you said, people sometime seem to be getting new credit as a status symbol..  I have read a few older posts about people excited to get in the 6 figures of available credit. And I wonder... 

is there any advantage to having 100k of available credit line?  

is it really an issue of, the more credit the better?

[Anonymous]

Thanks for the replies.  And I'm glad to hear that I'm not the only one who's noticed this.  In the long term, yes, a house is something that I'd like to buy so that would be the main reason I'd be willing to play the game of trying to raise credit scores.  But otherwise, I actually like paying for things in cash.  Sort of like some people get a rush out of posting that they have the new shiny card, I get a bit of a rush knowing that I'm spending what I've already earned and am in a better financial position/being more disciplined than the majority of other people in the checkout lines around me.  (Sure that's a generalization and there obviously lots of people that are in a far better place than I am.)

[bs6054]

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@loviedovie wrote:

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@bs6054 wrote:

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Well, I have sometimes posted things that are a little "strange" about this forum.  The universal "Congratulations" given to people when they obtain cards or CLIs, when we really don't know if this is a good thing, particularly those that have had bad credit in the past.  In my more cynical moments, I convert this to an Alcoholics Anonymous forum where members are congratulating eachother on finding a way to get drinks from the barman.

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I was just thinking about this... also olderwiser as you said, people sometime seem to be getting new credit as a status symbol..  I have read a few older posts about people excited to get in the 6 figures of available credit. And I wonder... 

is there any advantage to having 100k of available credit line?  

is it really an issue of, the more credit the better?

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That combines several active threads!   Probably CL/Income is a better ratio, if you earn 700K, the answer to whether 100K credit is enough is different than it is to someone who earns 30K.

The more credit you have, up to a point, the lower any utilization so the better the score.  Obviously, GETTING the extra credit can also reduce your score with inquiries etc.  And some lenders that matter, such as mortgage companies, may eventually decline you if you have too much available credit, as there is the perceived risk that you will use it and not have enough cash flow to pay them.

[creditnocash]

I actually went to a store and the clerk said how are you free (referring to the chase freedom) when your tied down with debt? 

I simply just pay in full. 

Like stated I budget my money just like I would my debit card. (sure there's the extra days where you don't have to pay but I always keep that in mind)

I do use a spread sheet and update it every couple days with balances and due dates and such. 

Then I just set the full amount in my bank and push the payment a couple days before its due and don't use that card until the statement cuts.