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Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
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Re: Putting my 11 cards to rest until March

[ Edited ]

FYI: If a TL does not report for six months it is considered dormant and is removed from the FICO calculations. If you are managing UTIL or age this can become a serious problem.

 

 

ETA: For the benefit of future readers of this thread I have been informed by an undisclosed FICO insider that "while it's true that an account not reported to the bureau with X months will be excluded from certain calculations, i.e. utilization, that number of months isn't 6 and there are other calculations that do include such accounts, i.e. length of history." Apparently the value of "X" is considered a FICO intellectual trade secret. It's still best to keep your accounts active and make sure they are currently reporting.

Message Edited by creditwherecreditisdue on 12-20-2009 02:19 PM
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JoJo74
Posts: 80
Registered: ‎10-09-2009
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Re: Putting my 11 cards to rest until March


Watchmann wrote:

score_building wrote:
using cash = no rewards :smileyindifferent:

 

Don't let a couple of percentage points of 'rewards' dictate your financial well being.  Careful shopping will win back most of those rewards in lower cash costs.  CASH IS KING, always has been, always will be. 

 

And do you really need 11 fully active cards each and every month?  Seems like overkill.

Message Edited by Watchmann on 12-14-2009 05:55 PM

That's that best advice yet..CASH IS KING.

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Uborrow-Upay
Posts: 2,708
Registered: ‎10-16-2008
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Re: Putting my 11 cards to rest until March


DI wrote:
This month I've decided to let zero balances report to the CRA's on all my cards.   Next week, after I PIF the cards, I am givng them all a rest and use cash only.  Do I risk not getting CLI's and closures for inactivity? 

DI, just curious here...

 

A while back, I recall you posted about your plans for keeping all cards active with small, recurring charges (this card pays your gym membership, another card pays your cell phone, etc.)  I'm wondering what may have changed for you recently that has motivated you to alter your plans 180 degrees.

 

Hope everything's OK.

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DI
Posts: 5,744
Registered: ‎01-28-2008
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Re: Putting my 11 cards to rest until March


Uborrow-Upay wrote:

DI wrote:
This month I've decided to let zero balances report to the CRA's on all my cards.   Next week, after I PIF the cards, I am givng them all a rest and use cash only.  Do I risk not getting CLI's and closures for inactivity? 

DI, just curious here...

 

A while back, I recall you posted about your plans for keeping all cards active with small, recurring charges (this card pays your gym membership, another card pays your cell phone, etc.)  I'm wondering what may have changed for you recently that has motivated you to alter your plans 180 degrees.

 

Hope everything's OK.


UBUP-  Out of the 11 cards I have, two of them, AMEX and PenFed will still have to be used.  I still have to charge my cell phone bill to the PenFed card to keep the insurance.  My gym fee supposedly drafts from my AMEX.  But ever since August, I haven't been charged any gym dues.  Therefore, only PenFed will continue to be used.  I will start using other cards in March.  

 

I am making this temporary change until the new credit laws goes into effect.  Plus, I do not want to start my new years using credit cards.

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txjohn
Posts: 4,214
Registered: ‎09-12-2008
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Re: Putting my 11 cards to rest until March


DI wrote:
This month I've decided to let zero balances report to the CRA's on all my cards.   Next week, after I PIF the cards, I am givng them all a rest and use cash only.  Do I risk not getting CLI's and closures for inactivity? 

 

I do not understand how using a credit card is not cash.

 

Do you mean you will actually "cash" your pay check and use green backs for everything? 

 

If you deposit a check or have direct deposit, and you only spend within your income means, then it matters very little what form of payment you use, check, debit card, credit card, online billpay, etc.

 

At the end of the month, if you PIF as you have stated you always do, then how is this not living a cash lifestyle or cash only.  You only charge your normal recurring or customary monthly expenses.  You pay them in full.  This is cash.  The instrument you use is more for convenient sake, purchase protection and merchant dispute arbitration purposes, safety (not carrying cash) and finally offers potential benefits under rewards if your normal expenses accept your credit card as payment method.

 

In either case, whether using checks/debit cards/greenbacks or using credit cards....cash only means you are not borrowing money beyond your means to PIF and pay over time, usually with interest.

 

Also, I'm not sure how "waiting for new regs" helps anything.  Most CCC's have all ready adopted CIT and gone to variable APR.  And if you aren't carrying a balance, that part really doesn't matter. 

 

Again, I'm not arguing, I am just curious.  How does stopping all use of CC's simplify life if you tend to PIF anyway?

 

 

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DI
Posts: 5,744
Registered: ‎01-28-2008
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Re: Putting my 11 cards to rest until March


txjohn wrote:

DI wrote:
This month I've decided to let zero balances report to the CRA's on all my cards.   Next week, after I PIF the cards, I am givng them all a rest and use cash only.  Do I risk not getting CLI's and closures for inactivity? 

 

I do not understand how using a credit card is not cash.

 

Do you mean you will actually "cash" your pay check and use green backs for everything? 

 

If you deposit a check or have direct deposit, and you only spend within your income means, then it matters very little what form of payment you use, check, debit card, credit card, online billpay, etc.

 

At the end of the month, if you PIF as you have stated you always do, then how is this not living a cash lifestyle or cash only.  You only charge your normal recurring or customary monthly expenses.  You pay them in full.  This is cash.  The instrument you use is more for convenient sake, purchase protection and merchant dispute arbitration purposes, safety (not carrying cash) and finally offers potential benefits under rewards if your normal expenses accept your credit card as payment method.

 

In either case, whether using checks/debit cards/greenbacks or using credit cards....cash only means you are not borrowing money beyond your means to PIF and pay over time, usually with interest.

 

Also, I'm not sure how "waiting for new regs" helps anything.  Most CCC's have all ready adopted CIT and gone to variable APR.  And if you aren't carrying a balance, that part really doesn't matter. 

 

Again, I'm not arguing, I am just curious.  How does stopping all use of CC's simplify life if you tend to PIF anyway?

 

 


It means my debit card will be used.   It also means, I won't have to log into 11 accounts to pay the balances.  Jan and Feb, I will only have to pay one card which is the PenFed card.   And yes, I PIF each month.  My FICO scores can back that up.  No more than $265 out of a CL of $26,600 appears on my credit reports.  That equals 1% utilization.  

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pNa
Posts: 62
Registered: ‎09-22-2009
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Re: Putting my 11 cards to rest until March


creditwherecreditisdue wrote:

FYI: If a TL does not report for six months it is considered dormant and is removed from the FICO calculations. If you are managing UTIL or age this can become a serious problem.


 

cwcid, this sounds interesting, because such a dormant card would be used for scoring less than a closed card. At least I have previously been told that closed accounts count towards age until they drop off, and may even count towards available limits in utilization if they were closed with a residual balance AND report the CL.
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creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
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Re: Putting my 11 cards to rest until March

Yup, dormant TL's are bad news. You do not want your trade lines to become dormant and they rarely do. But it can happen. There isn't much you can do about it either. It is the account not reporting that causes it to become dormant and you don't control that. The issuer does.
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concert_debt
Posts: 1
Registered: ‎12-19-2008
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Re: Putting my 11 cards to rest until March

best advice i ever heard (but i'm no expert, so people feel free to educate me if this is wrong!) -  whatever you wanna buy, pay that money in advance on whatever card you want to use, then go buy it!  that way you look REALLY good to the cards, little or no finance charges, it's almost exactly like paying in cash, BUT you have a record of your payment (the cc payment) in case of any disputes, and you earn whatever points and your accounts aren't inactive!

 

.....however, i have never been financially solvent enough to put this into practice.... but i got the advice from a teacher whose sister did the aforementioned...

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beamMEup
Posts: 4,470
Registered: ‎12-31-2008
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Re: Putting my 11 cards to rest until March


concert_debt wrote:

best advice i ever heard (but i'm no expert, so people feel free to educate me if this is wrong!) -  whatever you wanna buy, pay that money in advance on whatever card you want to use, then go buy it!  that way you look REALLY good to the cards, little or no finance charges, it's almost exactly like paying in cash, BUT you have a record of your payment (the cc payment) in case of any disputes, and you earn whatever points and your accounts aren't inactive!

 

.....however, i have never been financially solvent enough to put this into practice.... but i got the advice from a teacher whose sister did the aforementioned...


 

For those cards which will not accept payments above current balance (for us: Alliant CU, BofA, Jupiter, Kroger 123, Macys), you can follow this same procedure, but pay immediately after.  Lots of posters PIF monthly, which is basically doing the same thing.

 

Cabelas will let you post payments above the current balance (plus, it's a Bank Card!) and so will Orchard (but they will always question you, and want to know if you'd like a check for the credit balance).

 

Great idea to avoid carrying balances on cc's - for so many reasons!  Peace of mind being my favorite :smileywink:.  Good post!

Just puttin' syrup on something, don't make it pancakes.

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