topic Re: Anyone with a previous BK closing cards to avoid temptations in this economy? in Credit Cards

Anyone with a previous BK closing cards to avoid temptations in this economy?

MAZDA3 — Fri, 17 Apr 2020 05:01:06 GMT

With the economy basically collapsing and people being laid off, and hours cut (myself 10 hours a week), is anyone who previously had a BK pre-emptively closing cards to avoid the inevitable temptation to overspend? I've closed three this week and lowered the limits on my remaining three. I just don't want to even entertain the thought that I might get back into debt.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

Anonymous — Fri, 17 Apr 2020 05:31:17 GMT

Not me. I would rather have the cards there for an emergency. I have BK PTSD still when it comes to carrying balances but I'm not so afraid of bankruptcy that I'm willing to put myself at risk to keep myself from spending. If I have to file for BK again, it will suck, but I have cultivated relationships with some lenders that would allow me to bounce right back as long as I didn't burn them along the way. I worked hard to get the limits I have and I'm not giving them up willingly for anything.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

Anonymous — Fri, 17 Apr 2020 13:47:31 GMT

@Anonymous wrote:
I worked hard to get the limits I have and I'm not giving them up willingly for anything.

^this

I paid my cards down $10k (even though the balances were all at 5.99%) because I want any lenders spot checking my reports to see a noticeable improvement since the downturn began.

I still owe about $13k split on two cards, but they're both under 30% utilization now. Going to let those balances ride and make double minimum payments while I go into savings mode.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

JR_TX — Fri, 17 Apr 2020 16:00:03 GMT

Nope! Not me. My BK actually taught me an invaluable lesson and made me much much stronger in resisting temptations now! I treat credit cards as "Debit Cards + 25 days float" with cherry rewards on top!

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

vic6string — Fri, 17 Apr 2020 17:57:35 GMT

@Anonymous wrote:
Not me. I would rather have the cards there for an emergency.

You beat me to the punch with this one. I have a spreadsheet where I keep track of every single purchase so even though there is money in the bank, I know that whatever the bank shows means nothing, I go by the spreadsheet. If there is a grand in the bank but I have $800 on cards, then I have $200 as far as I am concerned. I know what it is to avoid collection calls. I know what it is to live paycheck to paycheck with nothing but cash. It's nice to know that if I need it, as a last resort, I have about 30k available to me on a handfull of cards that are currently all at $0.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

Anonymous — Fri, 17 Apr 2020 18:01:29 GMT

@vic6string wrote:
@Anonymous wrote:
Not me. I would rather have the cards there for an emergency.
You beat me to the punch with this one. I have a spreadsheet where I keep track of every single purchase so even though there is money in the bank, I know that whatever the bank shows means nothing, I go by the spreadsheet. If there is a grand in the bank but I have $800 on cards, then I have $200 as far as I am concerned. I know what it is to avoid collection calls. I know what it is to live paycheck to paycheck with nothing but cash. It's nice to know that if I need it, as a last resort, I have about 30k available to me on a handfull of cards that are currently all at $0.

Yeah I became an excellent budgeter between my BK and having to live on SSDI. If I have an emergency that forces me to use so much credit that I have to file for BK, I have bigger problems to worry about than just BK!

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

Gmood1 — Fri, 17 Apr 2020 18:06:35 GMT

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

kerplunk — Fri, 17 Apr 2020 20:56:09 GMT

@MAZDA3 wrote:
With the economy basically collapsing and people being laid off, and hours cut (myself 10 hours a week), is anyone who previously had a BK pre-emptively closing cards to avoid the inevitable temptation to overspend? I've closed three this week and lowered the limits on my remaining three. I just don't want to even entertain the thought that I might get back into debt.

American Express Serve

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

recoveringfrombk7 — Fri, 17 Apr 2020 21:06:02 GMT

@MAZDA3 wrote:
With the economy basically collapsing and people being laid off, and hours cut (myself 10 hours a week), is anyone who previously had a BK pre-emptively closing cards to avoid the inevitable temptation to overspend? I've closed three this week and lowered the limits on my remaining three. I just don't want to even entertain the thought that I might get back into debt.

Can you get your cards to a trusted friend/family member and remove the temptation without losing your cards permanently?

My BK was due to necessity items, so it wasn't a temptation to spend and more a need to eat and have a roof over my head. Like @Anonymous I have PTSD from my BK. I start to lose sleep if I carry a balance at all. I hope I never lose this honestly.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

AverageJoesCredit — Fri, 17 Apr 2020 22:11:15 GMT

There will be enough Lenders closing out our cards to go around without us volunteering. Just look up Synchrony today. Some will survive this virus economically, some of us wont, in the end we all must do what we must .

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

tricie17 — Fri, 17 Apr 2020 23:48:32 GMT

I am cautiously keeping my balances low for this reason. However, you do not want to burn bridges with your credit score in case there is an emergency need. I can not understand all of these Ficoers getting all of this credit in such a volatile state that this world is in. And now I am reading on this Forum that Synchrony, a card issuer is closing accounts leaving people with high utilization and I am sure more is to come. Because your credit is rated high does not mean you need a card. This is my story and I am sticking to it. But to each his/her own.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

budugu — Sat, 18 Apr 2020 06:12:14 GMT

Best method i have heard is to litereally freeze the credicard in the middle of ice! by the time ice melts hopefully temptation goes away? I also think moonlighting frugality / minimalism forums does reduce the urge to spend.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

CreditInspired — Sun, 19 Apr 2020 11:04:39 GMT

@Anonymous wrote:
Not me. I would rather have the cards there for an emergency. I have BK PTSD still when it comes to carrying balances but I'm not so afraid of bankruptcy that I'm willing to put myself at risk to keep myself from spending. If I have to file for BK again, it will suck, but I have cultivated relationships with some lenders that would allow me to bounce right back as long as I didn't burn them along the way. I worked hard to get the limits I have and I'm not giving them up willingly for anything.

DITTO!!!! 100%

I prefer to have credit available in case of an emergency need, rather than to be in a dire position to really need credit and can't get it.

Nope, being in debt comes a distant second compared to having/needing the basics to live. My 2cents anyway.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

sarge12 — Sat, 18 Apr 2020 18:19:22 GMT

@MAZDA3 wrote:
With the economy basically collapsing and people being laid off, and hours cut (myself 10 hours a week), is anyone who previously had a BK pre-emptively closing cards to avoid the inevitable temptation to overspend? I've closed three this week and lowered the limits on my remaining three. I just don't want to even entertain the thought that I might get back into debt.

No, Handling credit properly is a habitual learned and practiced skill. So is not handling it properly. In my youth I never took credit issues seriously, which resulted in both a chapter 13 when single, and much later a chapter 7 while married. I finally set up good credit practices until these practices became a habit. I have not even had so much as a single day late on anything in about 20 years. Some might need to remove temptation, but for me the self discipline and restraint to overcome all temptations while having a lot of that temptation is much of the reason it is satisfying. Having somewhere around 250k in credit card limits, and still always PIF is very rewarding in a way that not having the temptation could never be.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

notmyrealname23 — Sun, 19 Apr 2020 16:47:57 GMT

At the beginning of the year I decided to (in effect) float some purchases on a 0% DiscoverIt Cashback card while I ramped up to participate in a company stock purchase plan (it works out to a couple thousand extra in income to me in 2020, potentially more in 2021). Regular payments to Discover well above monthly minimums (twice a month each payday plus giving Discover my security deposit on an older card) during the spring and early summer, but it does get that particular card up to 75-80% max utilization until I pay it down to 0 in about (checks calendar) 80 days from now. Everything else is at 0 right now- I've occasionally let some balances post and then paid them off in full, but for right now I would rather keep the other cards at zero. Perfect payment record on all cards since I reopened for business post-Ch 13. Not laid off yet.

The worst case scenario is that were I to get furloughed/laid off I'd have all my participation money coming back to me and could pay the Discover bill immediately (and still have money to live on for a couple of months, before I collected unemployment). I'm still holding my breath a bit though. In theory this all should work...

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

ChargedUp — Sun, 19 Apr 2020 18:49:31 GMT

BK or not, this is when you want to have financial options already in place. I've never filed BK, but I've burned a few lenders back when I wasn't so credit smart in my 20's. All that mess finally fell off and I've rebuilt pretty well. Starting over again would suck and I hope no one else finds a need to either.

There is light at the end of the tunnel. Over here in CA, there are places that are getting ready to begin opening things up again. Monterey and Santa Cruz counties are set to begin opening businesses back up May 5th, with precautions in place for social distancing and hygiene practice mandates.

Just hang in there...

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

CreditInspired — Sat, 18 Apr 2020 19:37:38 GMT

@sarge12 wrote:
@MAZDA3 wrote:
With the economy basically collapsing and people being laid off, and hours cut (myself 10 hours a week), is anyone who previously had a BK pre-emptively closing cards to avoid the inevitable temptation to overspend? I've closed three this week and lowered the limits on my remaining three. I just don't want to even entertain the thought that I might get back into debt.
No, Handling credit properly is a habitual learned and practiced skill. So is not handling it properly. In my youth I never took credit issues seriously, which resulted in both a chapter 13 when single, and much later a chapter 7 while married. I finally set up good credit practices until these practices became a habit. I have not even had so much as a single day late on anything in about 20 years. Some might need to remove temptation, but for me the self discipline and restraint to overcome all temptations while having a lot of that temptation is much of the reason it is satisfying. Having somewhere around 250k in credit card limits, and still always PIF is very rewarding in a way that not having the temptation could never be.

@sarge12 You NAILED it.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

sarge12 — Sat, 18 Apr 2020 21:39:47 GMT

@CreditInspired wrote:
@Anonymous wrote:
Not me. I would rather have the cards there for an emergency. I have BK PTSD still when it comes to carrying balances but I'm not so afraid of bankruptcy that I'm willing to put myself at risk to keep myself from spending. If I have to file for BK again, it will suck, but I have cultivated relationships with some lenders that would allow me to bounce right back as long as I didn't burn them along the way. I worked hard to get the limits I have and I'm not giving them up willingly for anything.
DITTO!!!! 100%

I prefer to have credit available in case if an emergency need than to be in a dire position to really need credit and can't get it.

Nope, being in debt comes a distant second compared to having/needing the basics to live. My 2cents anyway.

While I agree with keeping high limits, it is best for the boost it gives the credit scores. I would recommend against using credit as an emergency fund. People are better off to have at least a month of necessary funds in savings. Now some might would have to skip going on a vacation, or buying non-necessities to accomplish that but it should be a high priority. Actually 3 months is what I would recommend.

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

Guyatthebeach — Sat, 18 Apr 2020 21:51:37 GMT

Mazda3,

My bankrupcty was due the recession in 2008-10 and I have completely changed how I conduct business. I'm not closing any cards or lines of credit now. I'm actively attempting to get the 3% Visa from AOD FCU. If I get it, great. If not, that's ok and my life will go on.

I have enough saved to pay off my all my credit card debt, my car loan, and still have enough for 4 to 5 months of expenses in the event I lose my job. Also my side business is completely paid in full. Yes I use my business Amex and lines of credit, but I have the cash in the bank to run if I didn't want to use the credit.

I learned my lessons from 2010 and prepared to never let that happen again.

Guyatthebeach

Re: Anyone with a previous BK closing cards to avoid temptations in this economy?

MAZDA3 — Sun, 19 Apr 2020 04:45:32 GMT

Interesting bit of lecturing going on these two pages. And I only counted one person who has saved enough money to not have to rely on cards with what may be coming (aside from myself).

This certainly was an interesting social experiement "ghostrider". But only you know you right? 😉

I look forward to the "I fell of the wagon threads" in about a year. I won't be one of them.