Reply
Senior Contributor
Wolf3
Posts: 3,198
Registered: ‎01-24-2010

Re: My rules for using credit cards.....


ficofox wrote:

Thread's only value is in offering the opportunity to toss in the word 'Draconian'.

 


draconian
1876 (earlier Draconic,  1680), from Draco,  Gk. statesman who laid down a code of laws for Athens 621 B.C.E. that mandated death as punishment for minor crimes. His name seems to mean lit. "sharp-sighted"

Valued Contributor
tntexans72
Posts: 1,071
Registered: ‎04-24-2008

Re: My rules for using credit cards.....

I carry a balance anywhere between 15-30% month to month. I don't missed any payments and paid all my bills.

Now when I plan on asking for a CLI or try obtain some types of loan, I will pay my balance down to less than 15%, wait a few months to get the best score optimization than apply. It works everytime.

I don't think there is anything wrong with carrying a balance. Just pay your statement in full before they cut and you won't incurred any interest fees from the lenders.

I've been doing this the last 5 yrs and don't seem to have any problems.

 

Personally...I feel if you don't use your card and continue to ask for a CLI, eventually your not going to get it or they will reduce your CL.

My parents have perfect credit, a high revolving accounts, and CITI called them late last year and told them, if you don't start using your card, we are going to close your account. Their CL was $25K but it's not the oly CC they have. The card was stagnant for 5-6 months. Everybody's situation is different I understand....but this is just one example.

 

So I say, if you got it, use it reponsibly, pay your statement before it cuts and you will be fine.

 

Established Member
minerva
Posts: 23
Registered: ‎04-04-2011

Re: My rules for using credit cards.....

[ Edited ]

 


happy0510 wrote:

daytrade5 wrote:

DI wrote:

Annalog-  I love your rules!! 


I like those rules also... It's pretty simple for me. I don't swipe my credit card if I don't have the cash readily available in my bank account 1st. I always pay my balances before the statement cut off date on all my accounts except for one, which I leave about $50 bucks on or less to pay by the actual due date. If you're buying things that take you three statements or more to pay off then you probably couldn't afford it in the 1st place. Save up the money in a savings account & then purchase the big ticket item on your credit card if you wish. Just my thoughts....


LilMirths #5

 

Is it really that bad to carry a balance for 3-4 months when you have a steady job, bills paid, etc.

 

For instance, the purchase of a "somewhat" larger item. i.e. computer?

When spreading the purchase out over 3-4 months you practically don't even notice the change in your everyday financial life?

Not to mention, you get offered 0% interest, etc.

 

Is this setting myself up for utter failure?

 

By the way, I am a rebuilder and this is one SCARY topic for me, and when I seen the word "draconian" used, it made it worse!

 


 

Personally, i don't think that's such a bad idea.

for example: last month after doing taxes i decided to use my return to build a new pc, i bought all my parts through amazon, and they offered 0% interest finanacing for 12 months if i applied for their store card, since i do a lot of spending on amazon, i took the offer. I then took my tax return and put it in a USAA CD for a year. it was money i was going to spend in 1 shot anyways, but it just made more sense to let it work for a year.

but as other's have stated , there are some situation where carrying a balance can be advantageous.


Starting Score: 570
Current Score: 776
Goal Score: 800


Take the FICO Fitness Challenge
Contributor
daytrade5
Posts: 114
Registered: ‎03-30-2011

Re: My rules for using credit cards.....


happy0510 wrote:

daytrade5 wrote:

DI wrote:

Annalog-  I love your rules!! 


I like those rules also... It's pretty simple for me. I don't swipe my credit card if I don't have the cash readily available in my bank account 1st. I always pay my balances before the statement cut off date on all my accounts except for one, which I leave about $50 bucks on or less to pay by the actual due date. If you're buying things that take you three statements or more to pay off then you probably couldn't afford it in the 1st place. Save up the money in a savings account & then purchase the big ticket item on your credit card if you wish. Just my thoughts....


LilMirths #5

 

Is it really that bad to carry a balance for 3-4 months when you have a steady job, bills paid, etc.

 

For instance, the purchase of a "somewhat" larger item. i.e. computer?

When spreading the purchase out over 3-4 months you practically don't even notice the change in your everyday financial life?

Not to mention, you get offered 0% interest, etc.

 

Is this setting myself up for utter failure?

 

By the way, I am a rebuilder and this is one SCARY topic for me, and when I seen the word "draconian" used, it made it worse!

 


I should clarify (speaking for myself here)…. If you NEED to carry a balance on your credit card for 3 months or more it’s not the end of the world. As a rule of thumb for myself I stay away from doing so. Most of the time (not all the time) if someone is carrying a balance for that amount of time it’s a pretty penny. Not everyone has the luxury of having a zero % APR. In the long run it could be costing someone extra just to carry that balance. In this economy we all should be mindful of our spending, even with a steady job. That means having the ability to notice the difference between our needs & wants. If you “need” to carry a balance for 3 months or more then do what you have to do. But if you’re simply carrying a balance for that amount of time to satisfy your “wants”, then it’s probably not worth it. This especially holds true if you find that after you’ve satisfied your “wants” , the time comes when you really have a “need”.

Moderator Emerita
LilMirth
Posts: 3,091
Registered: ‎08-09-2008

Re: My rules for using credit cards.....


happy0510 wrote:

LilMirths #5

 

Is it really that bad to carry a balance for 3-4 months when you have a steady job, bills paid, etc.

 

For instance, the purchase of a "somewhat" larger item. i.e. computer?

When spreading the purchase out over 3-4 months you practically don't even notice the change in your everyday financial life?

Not to mention, you get offered 0% interest, etc.

 

Is this setting myself up for utter failure?

 

By the way, I am a rebuilder and this is one SCARY topic for me, and when I seen the word "draconian" used, it made it worse!

 


Carrying a balance is hardly the end of the world, or a credit dooms day scenario. Debt for which you have no reasonable exit strategy, or mounting debt due to overspending, etc... is a disasterous scenario, in my mind. My personal aversion to balance carrying is that I'm cheap (all of my cards are sufficiently old enough that nobody is offering me 0% save for the occasional BT offer (useless, because I have no debt). I don't want to pay any interest. But, I tried to qualify my feelings with the notion of financially advantageous transactions. Buying a computer on a 0% (introductory) card , with the means to pay, a back-up plan, and an exit strategy (within the introductory period) is not a bad deal at all.

And, the fact of the matter is that a recent high school or college graduate (for example, and there are many others) just striking out on their own, is not likely to have the savings or resources that those of us have that have been in the workforce for a few (fine.. a LOT) years. Everday savings, nest eggs, and emergency funds take time to build up. IMO, it's perfectly reasonable to borrow money (at a reasonable cost) to procure necessary, or even luxury items, as long as you can *really* and truly afford it. Most people don't buy cars and houses with cash. Most people don't fund their educations with cash. We consider these to be "reasonable" debt, so there is a such thing.

 

I wouldn't worry about a computer purchase with 0% interest, that you're paying off within the introductory period. I'd worry if it were your 2nd, 3rd, 4th, computer currently financed (and you're not running a small business), and you were only comfortable with making minimum payments, which would take you well out of the introductory period. And, default was an inevitability if you suffered either a job loss, or reduction in pay. And, your other obligations had to stretch or suffer to make the minimum payments. You'd be overly leveraged, and in the red zone. <-- Doesn't sound like that's where you are. :smileyhappy:

-------------------------------------------


Friendly, Supportive & Respectful


Understanding Your FICO Score  |  Credit Scoring 101  |  Common Abbreviations  |  FTC: FCRA Links  |  FTC: FDCPA Links  |  Opt-Out  |  State Resources


"However gradual may be the growth of confidence, that of credit requires still more time to arrive at maturity” ~ Benjamin Disraeli

Moderator Emerita
LilMirth
Posts: 3,091
Registered: ‎08-09-2008

Re: My rules for using credit cards.....


Marinevietvet wrote:

 

I won't speak for LilMirth (I know better  :smileywink:  ) but I will give my opinion about this.

 

In a perfect world where real life never interferes with our best laid plans then carrying a balance is usually not a good idea because for one thing in many cases it costs you interest.

 

But it's not a perfect world and if there are times when carrying a balance for a few months is necessary then so be it. Just pay it off as fast as you can and don't worry about it. And don't let anyone criticize you for it. We all have to do what we think it right for us.

 

Edited cuz' I kent typ rite!!!

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".


My sentiments exactly.

-------------------------------------------


Friendly, Supportive & Respectful


Understanding Your FICO Score  |  Credit Scoring 101  |  Common Abbreviations  |  FTC: FCRA Links  |  FTC: FDCPA Links  |  Opt-Out  |  State Resources


"However gradual may be the growth of confidence, that of credit requires still more time to arrive at maturity” ~ Benjamin Disraeli

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009

Re: My rules for using credit cards.....


tntexans72 wrote:

I carry a balance anywhere between 15-30% month to month. I don't missed any payments and paid all my bills.

Now when I plan on asking for a CLI or try obtain some types of loan, I will pay my balance down to less than 15%, wait a few months to get the best score optimization than apply. It works everytime.

I don't think there is anything wrong with carrying a balance. Just pay your statement in full before they cut and you won't incurred any interest fees from the lenders.

I've been doing this the last 5 yrs and don't seem to have any problems.

 

Personally...I feel if you don't use your card and continue to ask for a CLI, eventually your not going to get it or they will reduce your CL.

My parents have perfect credit, a high revolving accounts, and CITI called them late last year and told them, if you don't start using your card, we are going to close your account. Their CL was $25K but it's not the oly CC they have. The card was stagnant for 5-6 months. Everybody's situation is different I understand....but this is just one example.

 

So I say, if you got it, use it reponsibly, pay your statement before it cuts and you will be fine.

 


Just FYI, when they're talking about carrying a balance, they mean carrying a balance where you pay interest as opposed to reporting a balance.  This isn't about manipulating utilization.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


Take the FICO Fitness Challenge
Valued Contributor
tntexans72
Posts: 1,071
Registered: ‎04-24-2008

Re: My rules for using credit cards.....


Walt_K wrote:

tntexans72 wrote:

I carry a balance anywhere between 15-30% month to month. I don't missed any payments and paid all my bills.

Now when I plan on asking for a CLI or try obtain some types of loan, I will pay my balance down to less than 15%, wait a few months to get the best score optimization than apply. It works everytime.

I don't think there is anything wrong with carrying a balance. Just pay your statement in full before they cut and you won't incurred any interest fees from the lenders.

I've been doing this the last 5 yrs and don't seem to have any problems.

 

Personally...I feel if you don't use your card and continue to ask for a CLI, eventually your not going to get it or they will reduce your CL.

My parents have perfect credit, a high revolving accounts, and CITI called them late last year and told them, if you don't start using your card, we are going to close your account. Their CL was $25K but it's not the oly CC they have. The card was stagnant for 5-6 months. Everybody's situation is different I understand....but this is just one example.

 

So I say, if you got it, use it reponsibly, pay your statement before it cuts and you will be fine.

 


Just FYI, when they're talking about carrying a balance, they mean carrying a balance where you pay interest as opposed to reporting a balance.  This isn't about manipulating utilization.


 

I understood the topic, just merely pointing out how you can still beat the system and carry a balance. If you read the thread's posts, it's not all topic related sir. Do you have something positive to add or do you want to go around and correct ppl's post?

 

 

Contributor
daytrade5
Posts: 114
Registered: ‎03-30-2011

Re: My rules for using credit cards.....


tntexans72 wrote:

Walt_K wrote:

tntexans72 wrote:

I carry a balance anywhere between 15-30% month to month. I don't missed any payments and paid all my bills.

Now when I plan on asking for a CLI or try obtain some types of loan, I will pay my balance down to less than 15%, wait a few months to get the best score optimization than apply. It works everytime.

I don't think there is anything wrong with carrying a balance. Just pay your statement in full before they cut and you won't incurred any interest fees from the lenders.

I've been doing this the last 5 yrs and don't seem to have any problems.

 

Personally...I feel if you don't use your card and continue to ask for a CLI, eventually your not going to get it or they will reduce your CL.

My parents have perfect credit, a high revolving accounts, and CITI called them late last year and told them, if you don't start using your card, we are going to close your account. Their CL was $25K but it's not the oly CC they have. The card was stagnant for 5-6 months. Everybody's situation is different I understand....but this is just one example.

 

So I say, if you got it, use it reponsibly, pay your statement before it cuts and you will be fine.

 


Just FYI, when they're talking about carrying a balance, they mean carrying a balance where you pay interest as opposed to reporting a balance.  This isn't about manipulating utilization.


 

I understood the topic, just merely pointing out how you can still beat the system and carry a balance. If you read the thread's posts, it's not all topic related sir. Do you have something positive to add or do you want to go around and correct ppl's post?

 

 


All of a sudden i'm not feeling the love in this room.... :smileyhappy:

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009

Re: My rules for using credit cards.....


tntexans72 wrote:

Just FYI, when they're talking about carrying a balance, they mean carrying a balance where you pay interest as opposed to reporting a balance.  This isn't about manipulating utilization.


 

I understood the topic, just merely pointing out how you can still beat the system and carry a balance. If you read the thread's posts, it's not all topic related sir. Do you have something positive to add or do you want to go around and correct ppl's post?

 

 


I didn't mean any offense.  But I don't think you're beating the system.  You're simply not carrying a balance. 

 

While I now understand that you are aware of the distinction between carrying a balance and letting a balance report, I wasn't sure from your post.  My point wasn't that you were off-topic, it was that I thought you were confusing two concepts.  My apologies for misunderstanding you, but I think it is still helpful for others to be clear about the difference.  I've read several posts from people who get confused about the advice to let 9% or less utilization report who think they need to be paying interest on their cards every month.  I think such clarification are a positive addition as it helps others who may later stumble upon this thread. 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


Take the FICO Fitness Challenge

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+