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Valued Contributor
SnackTrader
Posts: 1,558
Registered: ‎09-15-2012

Please Use Credit Responsibly!

Alright folks, this is my 1,000th post on MyFico. I didn't think when I started reading last June that I would ever post this much, but I got addicted to helping myself and helping others. It has been a blast thanks to all of you!

I want to celebrate this occasion with an accomplishment post, but since my 1 year anniversary of getting my first credit card is coming up, I will delay my accomplishment post and instead give some insight on something I think is severely lacking from some discussions on this forum. Emphasis on some, not all.

That is - Financial Responsibility!

Many who have been in credit problems before know that it isn't always their fault when the creditors come calling. Financial strain comes from illness, divorce, job loss, and so much more. But the easiest way to avoid the impact from these problems is to live within your means consistently when you have that option. And that's where credit cards come in - here are three rules I follow for myself:

1) I refuse to use the 0% interest periods on my cards (all five are in that period) because that is money I will need to pay back over time. A $120 purchase on day 1 of your 12 month 0% interest period means $10 extra per month towards your balance. That $1,200 smart TV means an extra $100. Do I have the extra discipline to save that much extra? Yes. But can I count on my car not breaking down or the health of my family members staying the same or the price of gas not going up 300%? No. So I don't use it.

2) I am careful with the size of my app sprees. Adding a card with a bonus cash back offer requires a certain level of spending within a short period of time. Adding too many of these cards will increase my spending to a level above my comfort levels. Lenders require this spending for their profitability since they are giving you cash back. If you compound this by spending too much and paying interest, or even just spending money you didn't want to spend, you just played right into their hands. Depending on your income it could set you back months financially. So I am trying to go one or two cards at a time from now on. My first app spree took way too much spending in too short a time.

3) I try to avoid paying interest. Obviously all my cards are 0%, but I haven't even carried a balance these last 12 months. Interest paid on things you don't need just reduces the amount you have to spend on things you need. It also reduces any and all benefit from rewards in the long run.

Because I don't plan to pay interest, I therefore don't plan to balance transfer. Moving around debt does not eliminate the fact that you have to pay the money someday. So I like to "forget" that BT offers even exist, and instead avoid charging anything that I cannot pay off within a month.

Sorry to sound like a broken record on all this stuff. I just want to help you all and hope this post helps each of you reevaluate if you are better off today than you were when you started reading about the wonders of credit cards.

Thanks for listening and being a great community. Let the discussion of other ways to improve financial stability commence!

In My Wallet: Amex BCP (12/12) $22.200, Chase CSP (4/14) $12,000, Barclaycard Arrival (5/13) $10,500, Citi Forward (12/12) $9,600, Cap1 Cash Rewards (6/12) $9,000, Chase Freedom (12/12) $5,000

Last App: April 2, 2014
New Contributor
mcf
Posts: 355
Registered: ‎02-25-2013

Re: Please Use Credit Responsibly!

Hey Now! Thats what i call an awesome 1000 post! Congrats, and ty for the knowledge and sharing some awesome points for us all here. :smileyhappy:

Starting Score:Walmart TU 686, MyFico EQ 630, Credit Sesame 649, CK 636Current Score: 689 TU/Walmart CK 645 Goal Score:700 CLUB
Last HP:5/21/13Take the myFICO Fitness Challenge
Community Leader
Senior Contributor
myjourney
Posts: 25,133
Registered: ‎02-07-2013

Re: Please Use Credit Responsibly!


SnackTrader wrote:
Alright folks, this is my 1,000th post on MyFico. I didn't think when I started reading last June that I would ever post this much, but I got addicted to helping myself and helping others. It has been a blast thanks to all of you!

I want to celebrate this occasion with an accomplishment post, but since my 1 year anniversary of getting my first credit card is coming up, I will delay my accomplishment post and instead give some insight on something I think is severely lacking from some discussions on this forum. Emphasis on some, not all.

That is - Financial Responsibility!

Many who have been in credit problems before know that it isn't always their fault when the creditors come calling. Financial strain comes from illness, divorce, job loss, and so much more. But the easiest way to avoid the impact from these problems is to live within your means consistently when you have that option. And that's where credit cards come in - here are three rules I follow for myself:

1) I refuse to use the 0% interest periods on my cards (all five are in that period) because that is money I will need to pay back over time. A $120 purchase on day 1 of your 12 month 0% interest period means $10 extra per month towards your balance. That $1,200 smart TV means an extra $100. Do I have the extra discipline to save that much extra? Yes. But can I count on my car not breaking down or the health of my family members staying the same or the price of gas not going up 300%? No. So I don't use it.

2) I am careful with the size of my app sprees. Adding a card with a bonus cash back offer requires a certain level of spending within a short period of time. Adding too many of these cards will increase my spending to a level above my comfort levels. Lenders require this spending for their profitability since they are giving you cash back. If you compound this by spending too much and paying interest, or even just spending money you didn't want to spend, you just played right into their hands. Depending on your income it could set you back months financially. So I am trying to go one or two cards at a time from now on. My first app spree took way too much spending in too short a time.

3) I try to avoid paying interest. Obviously all my cards are 0%, but I haven't even carried a balance these last 12 months. Interest paid on things you don't need just reduces the amount you have to spend on things you need. It also reduces any and all benefit from rewards in the long run.

Because I don't plan to pay interest, I therefore don't plan to balance transfer. Moving around debt does not eliminate the fact that you have to pay the money someday. So I like to "forget" that BT offers even exist, and instead avoid charging anything that I cannot pay off within a month.

Sorry to sound like a broken record on all this stuff. I just want to help you all and hope this post helps each of you reevaluate if you are better off today than you were when you started reading about the wonders of credit cards.

Thanks for listening and being a great community. Let the discussion of other ways to improve financial stability commence!

Congrats on the milestone post and great info  

"Intelligence plus character--that is the goal of true education"
I will be gardening until a better offer/bonus comes along
Last escape 06/06/13 Bronze 7/6/2013 Silver 9/6/2013 Gold 12/6/2013 Palladium 3/6/14 made it...6/6/14 Plat is all mine
Valued Contributor
Rhaeny
Posts: 1,507
Registered: ‎07-24-2011

Re: Please Use Credit Responsibly!

Great advice for sure.  And as you've said, we hear about all of the approvals, but with the approvals does come a great level of financial responsibility.  It just take a second to swipe but it can be difficult to pay the consequences.


Major CC's - Barclay's ($5.5K) | Barclay's Sallie Mae MC ($5K) | DCU ($7.5K) | Discover IT ($1.4K) | Genisys Visa ($1.4K) | NFCU Visa ($22K) | Navcheck ($15K) | Chase Freedom ($5K) | SDFCU Visa ($8K) | Amex BCP ($9.5K) | Amex Delta ($10K) |Store CC's| -Amazon ($4K) | Catherines ($850) | JCP ($4K) | Macy's ($1.7K) | Avenue ($850) | Victoria's Secret ($1.4K) | Walmart ($4.1K) | Paypal SC ($1.3K) | HSN ($2.5) | Sears ($2.6K) | Sams Club ($4.1K) |Goal|: Age with grace to 750 across the board |Last app|: 3/3/2014
New Contributor
mcf
Posts: 355
Registered: ‎02-25-2013

Re: Please Use Credit Responsibly!


Rhaeny wrote:

Great advice for sure.  And as you've said, we hear about all of the approvals, but with the approvals does come a great level of financial responsibility.  It just take a second to swipe but it can be difficult to pay the consequences.


AMEN A second can leaad to 7.5 yrs quick... been there done that!

Starting Score:Walmart TU 686, MyFico EQ 630, Credit Sesame 649, CK 636Current Score: 689 TU/Walmart CK 645 Goal Score:700 CLUB
Last HP:5/21/13Take the myFICO Fitness Challenge
Regular Contributor
MonkeyBelly
Posts: 136
Registered: ‎03-06-2013

Re: Please Use Credit Responsibly!

+1!!
Starting myFICOs 2013
TU:664 March --> 726 May 25
EQ: 687 on March 6 --> 772 May 25
USAA EX (FAKO): 701 March 27 --> 768 May 26
Original goal (720+ across the board) achieved!
Valued Contributor
asphaltcowboy
Posts: 1,121
Registered: ‎02-03-2013

Re: Please Use Credit Responsibly!

Well spoken @snack, congrats on 1,000 post

You offer great advice!!




Starting Score TU 667 EQ 663 EX 655
Current Score TU 694 EQ 692 EX 696 Last Update 8/2013
Garden Club 04/10/2013 (Goal 2015 or Longer)




Established Member
RandomCreditDude
Posts: 41
Registered: ‎02-15-2013

Re: Please Use Credit Responsibly!

I agree with this in every manner, shape, and form!

 

Here's how I use credit: I only buy things that I can afford to pay off in full that month. I have carried a balance on zero interest, but never more than a sum that I couldn't pay instantly; I carry balances for stuff like airline tickets, using the CC as a zero interest loan with a steady payout. Basically smoothing out my cash flow.

 

Basically, it's a simple rule. I know how much I earn, and therefore, how much I can afford to spend. Sometimes I allow myself to spend a little more. When I say "little more", I mean buying the $250 video card instead of the $200 one; nothing crazy like buying a Camaro instead of a Honda.

 

I sometimes think that the easy access to credit in the US leaves some people with a sense of detachment to the value of money. I'm a recent immigrant from a country where living on credit is pretty much unthinkable (at least in my family). Everyone has credit cards, but the idea of buying stuff that you clearly can't afford just because you have credit doesn't make sense.

 

I hope to buy a house in the next five years, and for that, I need to have excellent credit. That's where I'm headed, slowly... it's the American dream! Work hard, and reap your rewards. :smileyvery-happy:

Frequent Contributor
E150GT
Posts: 367
Registered: ‎12-30-2012

Re: Please Use Credit Responsibly!

[ Edited ]

great post. I should have done that last year and the year before. I could have saved myself about $500 in interest charges. I got tired of it and I came a lookin for help and I found this place. Im glad I did and thank you all for your guidance. I now have a good set of cards and most have decent limits and I have not paid a dime in interest since the begining of the year! I now have two cards in the interest free period but I have no plans to revolve a balance on any of them.

 I have added my little sister to two of my cards as an authorized user because I know she was itching to get a credit card, and before I think she should, she should learn to use them responsibly. I am teaching her about stuff no one else did and I think she will benefit. She has been great so far. I may even let her use some of the rewards she has earned on my cards! lol


CSP-$8700, Amex BCE-17.2k, Chase Freedom-$5700
Discover It-$6600, USAA MC-$5900 Ink Bold- $18k
EQ-742 EX-702 TU-737
Frequent Contributor
RSCo
Posts: 472
Registered: ‎02-11-2013

Re: Please Use Credit Responsibly!


SnackTrader wrote:
Alright folks, this is my 1,000th post on MyFico. I didn't think when I started reading last June that I would ever post this much, but I got addicted to helping myself and helping others. It has been a blast thanks to all of you!

I want to celebrate this occasion with an accomplishment post, but since my 1 year anniversary of getting my first credit card is coming up, I will delay my accomplishment post and instead give some insight on something I think is severely lacking from some discussions on this forum. Emphasis on some, not all.

That is - Financial Responsibility!

Many who have been in credit problems before know that it isn't always their fault when the creditors come calling. Financial strain comes from illness, divorce, job loss, and so much more. But the easiest way to avoid the impact from these problems is to live within your means consistently when you have that option. And that's where credit cards come in - here are three rules I follow for myself:

1) I refuse to use the 0% interest periods on my cards (all five are in that period) because that is money I will need to pay back over time. A $120 purchase on day 1 of your 12 month 0% interest period means $10 extra per month towards your balance. That $1,200 smart TV means an extra $100. Do I have the extra discipline to save that much extra? Yes. But can I count on my car not breaking down or the health of my family members staying the same or the price of gas not going up 300%? No. So I don't use it.

2) I am careful with the size of my app sprees. Adding a card with a bonus cash back offer requires a certain level of spending within a short period of time. Adding too many of these cards will increase my spending to a level above my comfort levels. Lenders require this spending for their profitability since they are giving you cash back. If you compound this by spending too much and paying interest, or even just spending money you didn't want to spend, you just played right into their hands. Depending on your income it could set you back months financially. So I am trying to go one or two cards at a time from now on. My first app spree took way too much spending in too short a time.

3) I try to avoid paying interest. Obviously all my cards are 0%, but I haven't even carried a balance these last 12 months. Interest paid on things you don't need just reduces the amount you have to spend on things you need. It also reduces any and all benefit from rewards in the long run.

Because I don't plan to pay interest, I therefore don't plan to balance transfer. Moving around debt does not eliminate the fact that you have to pay the money someday. So I like to "forget" that BT offers even exist, and instead avoid charging anything that I cannot pay off within a month.

Sorry to sound like a broken record on all this stuff. I just want to help you all and hope this post helps each of you reevaluate if you are better off today than you were when you started reading about the wonders of credit cards.

Thanks for listening and being a great community. Let the discussion of other ways to improve financial stability commence!

Hi Suze, I watch you every Saturday night.. Well, not really, I tivo you then watch you Sunday mornings as I recover from my hangovers..  :smileywink:

 

Citi Hilton Honors: $25,000 -- Amex PRG: $NPSL -- Citi TY Premier World: $9,880 -- NWFCU: $7,500 -- Citi Home Depot: $7,000 -- Citi AAdvantage Platinum Visa Sig: $5,000 -- Visa Black Card: $5,000 -- Discover IT: $5,000 -- AmexTrueEarnings: $5,000 -- Amex Gold Delta: $4,500 -- Pottery Barn: $4,000 -- Ethan AllenGE: $4000 -- Chase Slate: $2,500 -- CapOne Platinum: $2,500 -- CapOne Platinum: $2,500 -- AmazonGE: $2,200 -- Barclays BJs: $1,800 -- WalmartGE: $1,500 -- PenFed LOC: $500

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