Borrowing money I do not need

[oldman45]

Just for fun, I had my bank run my credit score. It was ZERO.

Asking why, the bank officer said I did not have any credit.

It seems that for the last 14 yrs, I have paid cash for anything I needed. The money is in the bank. Everything I own is paid for and has been for 12 years. Only thing I have to pay is utility bills, insurance and such. I thought I was doing good to have money in the bank and not owe a dime.

Now my bank is moving $5,000 into a special savings account and loaning me $5,000 that goes back into my regular savings account. I pay a minimum amount of interest but it is for money I do not need. The bank will deduct the payment from my checking account each month and turn the prompt payment into the credit reporting agencies.

I think this is plain wrong. In essence, I am being penalized for not being in debt and having money in the bank. Why should I charge things that I can pay cash for? My assets are more than the avg person that owes on everything. And I still have to borrow money from myself and pay interest for doing so.

It just ain't right.

 

[CigarGuy]

Need to que up Dave Ramsey on the radio. He would be PROUD of you.......until you took out the loan.......

 

[venomballistics]

Just for fun, I had my bank run my credit score. It was ZERO.

Asking why, the bank officer said I did not have any credit.

It seems that for the last 14 yrs, I have paid cash for anything I needed. The money is in the bank. Everything I own is paid for and has been for 12 years. Only thing I have to pay is utility bills, insurance and such. I thought I was doing good to have money in the bank and not owe a dime.

Now my bank is moving $5,000 into a special savings account and loaning me $5,000 that goes back into my regular savings account. I pay a minimum amount of interest but it is for money I do not need. The bank will deduct the payment from my checking account each month and turn the prompt payment into the credit reporting agencies.

I think this is plain wrong. In essence, I am being penalized for not being in debt and having money in the bank. Why should I charge things that I can pay cash for? My assets are more than the avg person that owes on everything. And I still have to borrow money from myself and pay interest for doing so.

It just ain't right.

and we wonder why the economy is in dire straights ...
Banks encourage you to go into debit while the economic state and common sense demand you get out of it

 

[novalty]

Seems only fitting, the Gov't is spending money on stuff we don't need.

 

[NFrameFred]

No, it's not right but it's the way the system works - if you have no record of credit payments there is no way to distinguish you from someone who has the same record from, say, living on the dole and having no history of credit payments. Your only recourse is to have enough money in the bank that you do just what you're doing - putting up your own money as collateral or "borrowing your own money", which most of us aren't well heeled enough to do.

It grates on me a bit that we're being pushed toward a cashless society, especially when I see morons whipping out a credit/debit card to pay for a Baby Ruth ( and I have seen this) and regardless of what the advertising tries to portray, it DOES NOT speed up the transactions but holds up everyone. If you're going to use those cursed things at least learn to operate the 'convenience stations' for swiping the card and entering your PIN numbers. Can't count the times each week I'm standing in line with cash-in-hand to complete my purchases and some mouth breather holds up the line for 10 minutes trying to figure out how to make the machine work. But I digress . . . .

The simple solution (I'm not well off enough to have your problem but I do have good credit) is to carry a credit card and pay for your gas, groceries, and such with that and pay the statement in full each month as it comes in. Good credit record of payments and no interest or fees if you play it right.

The wife and I decided that our Christmas gift to each other this year would be a new TV since the old one was at least 20 years ancient, so I went to the local Sam's Club and snagged one; had the cash to pay for it in my pocket. But they were running a promotion where you got an instant $45 rebate if you put it on a Sam's Credit account. I signed up, took the discount, made the first payment there immediately for about 90% of the total and carried the televisor home. I'll send them their other 10% over a couple of months as the statements come in and I got the TV for less than the cash price and have another positive mark on my credit record if and when I really need to apply for credit . Unfortunately, you have to play their game if you think you may ever need to ask for credit.

 

[ChattanoogaPhil]

You don't use a credit card for anything?

In our family everything goes on the CC... we even pay utility bills with a CC. We use a Toyota Visa and the points we get pays for all routine maintenance. The CC balance is paid in full every month. Use the bank's money... get paid for it... and enjoy the convenience.

 

[oldman45]

You don't use a credit card for anything?

In our family everything goes on the CC... we even pay utility bills with a CC. We use a Toyota Visa and the points we get pays for all routine maintenance. The CC balance is paid in full every month. Use the bank's money... get paid for it... and enjoy the convenience.

Nope, I have a debit card and a six figure balance in the checking account. If I do not have the cash in my pocket, I use the debit card.

 

[truckemup97]

The credit score tells them if you are properly using the credit available to you. You have no credit lines open, no credit available to you, therefore no credit score. I would be in a similar boat, as I have canceled credit cards, lines of credit, etc. and only have a house payment.

If you are not planning on using credit in the future, then why do you need to raise your score? Sounds like your banker figured out a way to get 2% plus fees out of you....

 

[novalty]

In our family everything goes on the CC... we even pay utility bills with a CC. We use a Toyota Visa and the points we get pays for all routine maintenance. The CC balance is paid in full every month. Use the bank's money... get paid for it... and enjoy the convenience.

We do the same thing in my family. Use my Cabela's card for almost everything, with the Cabela's points I figure I will be able to reload for practically nothing, based on the volume I shoot. We use a Discover card for a lot then usually redeem cashback for gift cards for greater than value, so $20 in cashback for a $25 gift card--even good for Cabelas

 

[gr8AmericanBash]

If you are not planning on using credit in the future, then why do you need to raise your score? Sounds like your banker figured out a way to get 2% plus fees out of you....

I agree.

Sounds like he was just out to make a buck, not look after you or your credit score.

They cannot make you take out a loan, or open another account.

If it was me, I'd be taking my money to another bank.

 

[ChattanoogaPhil]

Nope, I have a debit card and a six figure balance in the checking account. If I do not have the cash in my pocket, I use the debit card.

IMO, a debit card isn't such a great idea... even if carrying a small checking account balance as you do. I'd rather deal with fraudulent charges to my credit card than try to recover my checking account balance... regardless of how secure or insured a banker may tell you that you are.

 

[feralmerril]

All my working life I had my nose to the grindstone. I probley had a perfect or high score as I never was late on any payment. At retirement I shuffled things around and owed nothing. After a bad divorice I had to work over 40 hours a week before I ate. Thank God I had a job with endless overtime always available. 65 hours was a short week! Double shifts, maybe 4 months at a time before I would take a few days off.
The one thing I did right was always to put every allowable cent in my 401K at work.
Had no one ever lent me a cent they probley would have done me a favor! The only thing I ever borrowed for was a house and maybe half the time a used truck payment.
Almost overnight when I retired I went from working roughly 70 hours a week with a big house payment, to owning two paid off houses, (Bought the secound for a rental), two pick up`s and a new avalon. Also went from single to married. I said almost immediately, thats not quite right, it was 5 years of shuffeling, but I paid off everything when I retired at 58 1/2 in january 2,000. The biggest factor was my 401K. I was temperarly rich, but along with everything else the market tanked 3 months later and I lost 50% of my 401K!! When I retired I took a plan where I got paid huge untill 65. Then it dropped to next to nothing! I was single and didnt consider I would marry again, but soon did. On top of that my insurance went from $27s a month being single to over $600s a month now!!
Even with all this my wife and I are doing fine. Somehow God takes care of fools! (If you are one of his).

 

[truckemup97]

IMO, a debit card isn't such a great idea... even if carrying a small balance as you do. I'd rather deal with fraudulent charges to my credit card than try to recover my checking account balance... regardless of how secure or insured a banker may tell you that you are.

Depends on who issues your card and how it's branded. I have a Visa debit card from a local bank. It's treated EXACTLY the same as their Visa credit card, and I can sit down in an office a mile from my house and get everything worked out instead of being place in a hold queue for hours on end.

 

[crsides]

Oldman45

you don't need credit. don't worry about it.


Charlie

 

[Rugskipper]

Oldman 45,
If you frequent the same filling station, apply for one of their gas cards. No real credit score is needed as long as your carcass is warm. Fill up on it a couple of times a month, and pay it off every month. No charges to you, and a great way to build up your credit score.

 

[redlevel]

IMO, a debit card isn't such a great idea... even if carrying a small checking account balance as you do. I'd rather deal with fraudulent charges to my credit card than try to recover my checking account balance... regardless of how secure or insured a banker may tell you that you are.

My banker (also my cousin) advised me to only use my debit card for cash withdrawals and use the credit card for everything else. I had a debit card cancelled a year or so back when it was discovered that someone had put a "reader" on a gas pump I had used in MaconGA (that's pronounced 'Muh-CON-ga') and was using the numbers to charge items at stores in S Florida. Theoretically, someone could empty your bank account with a debit card number. Not so with a credit card.

To the OP: has your banker not urged you to do something else with all that money in a checking account? Even with interest rates as low as they have been, 1.5 or 2% per year on a CD is better than the "0%" you are probably drawing in the checking acct.

 

[cowboy117]

You don't use a credit card for anything?

In our family everything goes on the CC... we even pay utility bills with a CC.The CC balance is paid in full every month. Use the bank's money... get paid for it... and enjoy the convenience.

+1.I do the same thing.I pay with CC-for bills that come in the mail i use Bill Pay[bank account,on my computer]Cash is a hassle.One check a month[space rent for RV].IMHO,DO NOT use a Debit Card!Keep your credit good.You might not need it for a lot of years;then all of a sudden it comes in very handy.Don't ask me how i know!

 

[oldman45]

+1.I do the same thing.I pay with CC-for bills that come in the mail i use Bill Pay[bank account,on my computer]Cash is a hassle.One check a month[space rent for RV].IMHO,DO NOT use a Debit Card!Keep your credit good.You might not need it for a lot of years;then all of a sudden it comes in very handy.Don't ask me how i know!

At my age, I do not have a lot of yours left. Actually I do not want their credit at the bank. But I get a small amount of interest at my bank on all the money in there. The checking account does not cost a dime. This is a community, locally owned bank and has a few advantages to doing business there. Everyone knows me by name and I can call on the phone to get money transferred from one account to another.

Yet, I figure their loaning me money at 1% (over what my money earns) is cheap enough so I am going to do it but it is not fair that I have four vehicles, a home, a farm and all the toys paid for with money in the bank but a zero credit score. Then those owing more than they make, have nothing paid for and no money in the bank gets a top score.

 

[Wheelgunner840]

I finally paid off everything and I am 100% debt free at this time. Like mentioned above, I use my Cabela's Visa for everything from groceries, to gas, to internet purchases, to restaurants. The points add up quick, so I get about $200 of free Cabela's stuff at the end of the year.

Thye card gets paid off every month, so there is never any interest. My credit score is way up there in the excellent category. It's a win, win situation!


WG840

 

[ChattanoogaPhil]

At my age, I do not have a lot of yours left. Actually I do not want their credit at the bank. But I get a small amount of interest at my bank on all the money in there. The checking account does not cost a dime. This is a community, locally owned bank and has a few advantages to doing business there. Everyone knows me by name and I can call on the phone to get money transferred from one account to another.

Yet, I figure their loaning me money at 1% (over what my money earns) is cheap enough so I am going to do it but it is not fair that I have four vehicles, a home, a farm and all the toys paid for with money in the bank but a zero credit score. Then those owing more than they make, have nothing paid for and no money in the bank gets a top score.

Well... if you think you are old and figure you're not going to be around much longer, nor want to fool around with the credit or credit cards... I can understand that. But why not tell your banker the same thing? I too enjoy having personal relationships with my bankers. But if your banker is charging you to keep your money in his bank then maybe your banker knows you too well?