topic Re: Did something STUPID... help?! in Credit Cards

Did something STUPID... help?!

lmfields84 — Tue, 29 Jul 2014 16:14:59 GMT

My husband and I went mattress shopping yesterday, and though I am a smart person and I KNOW BETTER, I decided to let them finance it through GE Capital at 0% for 12 months. This not only hit us with a HP, but opened a new line of credit which I had not planned on doing any time soon. I got caught up in the moment- we REALLY need a new bed and I didn't want to wait a few months to save for it, or put it on our credit card so it can accrue interest (We PIF each month, never pay interest!) Anyway, I believe we can swing payments of $100 or so a week, meaning in about 10 weeks we will have the mattress paid off completely. My question is, should I pay it off and immediately close the account? Would that negatively impact my score, or not so much since it is a new account anyway, not a seasoned card? I could also leave the line of credit open ($1,000) for up to 18 months after its paid off before they will close the account on their own. I feel so dumb for even doing it in retrospect, now I just want to get away with as little damage as possible! Thanks for your help!

Re: Did something STUPID... help?!

daybreakgonesXe — Tue, 29 Jul 2014 16:22:19 GMT

Imfields,

I'm on mobile so not sure if you have details about your credit, but hey, you got approved and you're saving some money - I don't think it was a bad move at all!

If you're not planning any crucial apps in the next 6 months, you're fine! Utilize the 0% offer to the fullest and then just sock drawer the account after. At least you know for any future purchases you have an account for such offers.

Good luck on your credit journey! Enjoy the new mattress!

Re: Did something STUPID... help?!

coldnmn — Tue, 29 Jul 2014 16:23:52 GMT

Damage is done you may as well enjoy the 0% financing. Your scores will come back. Saving money in my opinion is why I garden in the first place. I never feel bad about that.

Re: Did something STUPID... help?!

lmfields84 — Tue, 29 Jul 2014 16:26:58 GMT

Thanks guys- I just feel like I should've been smarter and waited. I wonder how much the HP and new account will impact us and worry it will be a lasting sting... maybe it won't be. So the suggestion is to hold onto the account after it's paid?

Re: Did something STUPID... help?!

coldnmn — Tue, 29 Jul 2014 16:31:09 GMT

@lmfields84 wrote:
Thanks guys- I just feel like I should've been smarter and waited. I wonder how much the HP and new account will impact us and worry it will be a lasting sting... maybe it won't be. So the suggestion is to hold onto the account after it's paid?

I would to extend the positive reporting. It still will report for ten years it may as well be 11 1/2 if they close it after a year and a half.

Re: Did something STUPID... help?!

Kenny — Tue, 29 Jul 2014 16:32:17 GMT

Wait until it's post on your CR to show whether it's an installment loan or a LOC.

If it shows as a revolving line of credit, then you can pay it off quicker than the year, but to me if it's just an installment loan.. better to only pay what is required and get the full history on your report. They won't care that you paid it off in 6 months - 6 months faster. Won't matter.

Re: Did something STUPID... help?!

PlasticOrPlastic — Tue, 29 Jul 2014 16:32:25 GMT

@lmfields84 wrote:
Thanks guys- I just feel like I should've been smarter and waited. I wonder how much the HP and new account will impact us and worry it will be a lasting sting... maybe it won't be. So the suggestion is to hold onto the account after it's paid?

Honestly depending on the rest of your profile you may see a 5 point drop max. I just opened a Sallie Mae card and my score went down 1 point. What kind of limit did you get? That could help your overall util. As the others have said you did nothing wrong, you got approved and are saving interest, sounds like a win to me. And I would keep the card after its paid off, my DG kept her Wells Fargo furniture card with 5K limit after we paid off our kitchen table and the extra credit line helps her UTIL a lot.

Enjoy the purchase!

Re: Did something STUPID... help?!

leegreen — Tue, 29 Jul 2014 16:36:21 GMT

I think the real question here is are you and DH sleeping better? If so you saved money and improved your life, congrats. DW and I had a horrible time finding a good mattress, we bought three over three years.

Re: Did something STUPID... help?!

Anonymous — Tue, 29 Jul 2014 16:39:07 GMT

Congrats!

Re: Did something STUPID... help?!

Kenny — Tue, 29 Jul 2014 16:42:41 GMT

@leegreen wrote:
I think the real question here is are you and DH sleeping better? If so you saved money and improved your life, congrats. DW and I had a horrible time finding a good mattress, we bought three over three years.

So true. I hate my mattress. I should buy a new one, but I don't. I'm the stupid one! lol

Re: Did something STUPID... help?!

lmfields84 — Tue, 29 Jul 2014 18:16:13 GMT

LOL! I don't know yet, he is picking it up tomorrow. Hopefully it is worth the money- the sticker shock almost killed my husband! I tried to tell him mattresses are not cheap! I called GEC and the rep told me it would be reported as revolving- $1000 limit, but maxed out with the bed purchase of course. We have a walmart card ($500) with no balance and a NFCU Visa Siggy with $14k, we PIF each month, but the balance reporting this month will probably be about $2500. I just hate seeing any dings on score for something small!

Re: Did something STUPID... help?!

Kenny — Tue, 29 Jul 2014 18:21:26 GMT

@lmfields84 wrote:
LOL! I don't know yet, he is picking it up tomorrow. Hopefully it is worth the money- the sticker shock almost killed my husband! I tried to tell him mattresses are not cheap! I called GEC and the rep told me it would be reported as revolving- $1000 limit, but maxed out with the bed purchase of course. We have a walmart card ($500) with no balance and a NFCU Visa Siggy with $14k, we PIF each month, but the balance reporting this month will probably be about $2500. I just hate seeing any dings on score for something small!

It will normalize with payments. Don't worry. This is what credit is for. Once you have some great sleep filled nights you'll be like I'd do this again each day of the week if need be! lol

Re: Did something STUPID... help?!

Chaselover — Tue, 29 Jul 2014 18:39:59 GMT

Imo, u dint do anything stupid.
As others have mentioned, that one HP is worth it as u got the financing unless u had planned to open some other really prime credit card soon. And also now u can split ur payments over time which wud feel much better than paying lumpsum.

Re: Did something STUPID... help?!

-NewGuy- — Tue, 29 Jul 2014 18:56:27 GMT

@KennyRS wrote:
@lmfields84 wrote:
LOL! I don't know yet, he is picking it up tomorrow. Hopefully it is worth the money- the sticker shock almost killed my husband! I tried to tell him mattresses are not cheap! I called GEC and the rep told me it would be reported as revolving- $1000 limit, but maxed out with the bed purchase of course. We have a walmart card ($500) with no balance and a NFCU Visa Siggy with $14k, we PIF each month, but the balance reporting this month will probably be about $2500. I just hate seeing any dings on score for something small!
It will normalize with payments. Don't worry. This is what credit is for. Once you have some great sleep filled nights you'll be like I'd do this again each day of the week if need be! lol

Agreed. Good sleep is worth good money. After all, if you sleep for eight hours a night you are spending a third of your life on the mattress that you just bought, and it affects how you feel and perform the next day. I think that your HP was spent very well indeed!

Also, I am assuming that since you are married that you bought maybe a queen or bigger? If so, $1000 is a pretty good price for a bed that feels good. Congrats to you both.

Re: Did something STUPID... help?!

lmfields84 — Tue, 29 Jul 2014 19:15:43 GMT

^^^ I think so too, it was on sale. It's a memory foam bed that he fell in love with the moment he laid on it. I wanted the better model, which was more than double the price- but I took it as a sign to stay within what we can comfortably afford when they came back with only $1000 financing. The nice salesman actually knocked off the difference so we didn't have to pay anything out of pocket- it was originally $1099 plus tax ($1165). We would have had to come out of pocket another $1500.00 for the one I wanted!

Re: Did something STUPID... help?!

-NewGuy- — Tue, 29 Jul 2014 19:21:01 GMT

@lmfields84 wrote:
^^^ I think so too, it was on sale. It's a memory foam bed that he fell in love with the moment he laid on it. I wanted the better model, which was more than double the price- but I took it as a sign to stay within what we can comfortably afford when they came back with only $1000 financing. The nice salesman actually knocked off the difference so we didn't have to pay anything out of pocket- it was originally $1099 plus tax ($1165). We would have had to come out of pocket another $1500.00 for the one I wanted!

I feel your pain. That darn mattress section of stores is brutal, cause once I find one that I like I don't ever want to move again.

Re: Did something STUPID... help?!

Revelate — Tue, 29 Jul 2014 19:47:27 GMT

@-NewGuy- wrote:
@lmfields84 wrote:
^^^ I think so too, it was on sale. It's a memory foam bed that he fell in love with the moment he laid on it. I wanted the better model, which was more than double the price- but I took it as a sign to stay within what we can comfortably afford when they came back with only $1000 financing. The nice salesman actually knocked off the difference so we didn't have to pay anything out of pocket- it was originally $1099 plus tax ($1165). We would have had to come out of pocket another $1500.00 for the one I wanted!
I feel your pain. That darn mattress section of stores is brutal, cause once I find one that I like I don't ever want to move again.

I'm about to go through that next month sometime, but the way I look at it is it's something I'm going to keep for 10+ years and amortizing even the expected ~3K for a good mattress over 10 years is way less than I pay for stupid things, and sleep is arguably of the one if not the most important things in our lives. I put it as way more important than my car (and I live in a pretty terrible mass transit environment), and when I'm spending $30k on that, and a mattress is an order of magnitude cheaper when I consider sleeping well to be darned near close to priceless, here we go!

imfields: to reiterate what everyone has said, using your credit report is good for two things: 1) when it will save you money, and 2) when you need it right now and can't afford it otherwise. I put house, car, and bed into that "need" category when I can't just write a check for it, and in your case you hit both... ABSOLUTELY the right thing to do imo. Well done, seriously.

Re: Did something STUPID... help?!

s_haliz — Tue, 29 Jul 2014 21:28:36 GMT

@lmfields84 wrote:
My husband and I went mattress shopping yesterday, and though I am a smart person and I KNOW BETTER, I decided to let them finance it through GE Capital at 0% for 12 months. This not only hit us with a HP, but opened a new line of credit which I had not planned on doing any time soon. I got caught up in the moment- we REALLY need a new bed and I didn't want to wait a few months to save for it, or put it on our credit card so it can accrue interest (We PIF each month, never pay interest!) Anyway, I believe we can swing payments of $100 or so a week, meaning in about 10 weeks we will have the mattress paid off completely. My question is, should I pay it off and immediately close the account? Would that negatively impact my score, or not so much since it is a new account anyway, not a seasoned card? I could also leave the line of credit open ($1,000) for up to 18 months after its paid off before they will close the account on their own. I feel so dumb for even doing it in retrospect, now I just want to get away with as little damage as possible! Thanks for your help!

First let me tell you that you did not do any stupid thing. Four years back we did same. Mattress firm did offer us 24 months financing at 0%. And a furniture store offered 0% for six months. Technically we were having cash to pay right away. But we took advantage (both were Wells Fargo store cards). I kept paying slightly more than propotional installment. Say $2,400 and 24 months to pay. I was paying about $120 instead of $100. Score might have dinged because of high utilization initially (back then I never bother to check score..) but it did also help in terms of raising score later (different type of credit utilization and paid in full). We paid up both before end of 0%. Afterwards we never used it. In few months they had closed it themselves.

Key is not to carry beyond 0% period.

Re: Did something STUPID... help?!

SOGGIE — Tue, 29 Jul 2014 23:24:32 GMT

@KennyRS wrote:
Wait until it's post on your CR to show whether it's an installment loan or a LOC.

If it shows as a revolving line of credit, then you can pay it off quicker than the year, but to me if it's just an installment loan.. better to only pay what is required and get the full history on your report. They won't care that you paid it off in 6 months - 6 months faster. Won't matter.
+1 ...BTW this isn't STUPID IMHO. There are people out there making serious credit errors. This does not come close. Enjoy your purchase and your new TL!

Re: Did something STUPID... help?!

SevenNEW — Wed, 30 Jul 2014 00:13:50 GMT

@lmfields84 wrote:
^^^ I think so too, it was on sale. It's a memory foam bed that he fell in love with the moment he laid on it. I wanted the better model, which was more than double the price- but I took it as a sign to stay within what we can comfortably afford when they came back with only $1000 financing. The nice salesman actually knocked off the difference so we didn't have to pay anything out of pocket- it was originally $1099 plus tax ($1165). We would have had to come out of pocket another $1500.00 for the one I wanted!

I agree with everyone else. You got a good deal--a mattress you need and a comfortable and free payment solution. This was possible because you have good credit, and it won't impact your credit negatively. (Yes, your score will go down a little but then it will come up again). Our credit should work for us, not the other way around!