Credit Card Funnies

[Krogen]

I bet your experiment works. I think your understanding is correct. I read an article about a recent college grad who used that technique to build up her score.

I've thought of it, but then I've thought, "Why bother? Why would I want a higher score if I have no intention of buying anything on credit, or taking out a loan, in the future?" I have the auto pay function set to pay when the monthly payment is due, and my score moves up and down within maybe a ten point range depending on that month's balance due.

I suppose another way to up your score would be to ask for higher credit card limits, but again, why bother if you have no intention of borrowing in the future?

I received a credit limit increase on my request a year or so ago. Completely unneeded, but part of the experiment. (sometimes it doesn't take much to entertain me!) If I ever hit that limit it means I'm sadly out of control. It did bump my FICO rating a few points upward. Interestingly, I paid of the mortgages on two houses in the last few years. Each time, my FICO dropped. Very counter-intuitive. They like to see well-managed debt. To far in the hole and FICO suffers. Minimal managed debt and FICO suffers.

It's a racket IMNHO. My credit record is perfect but with no debt on the books, FICO isn't at the max. While still in the exceptional range, I can't see how I'm any risk to them at all. And, like you say, it shouldn't really matter. I'm not in the market for any debt.

 

[NYlakesider]

I received a credit limit increase on my request a year or so ago. Completely unneeded, but part of the experiment. (sometimes it doesn't take much to entertain me!) If I ever hit that limit it means I'm sadly out of control. It did bump my FICO rating a few points upward. Interestingly, I paid of the mortgages on two houses in the last few years. Each time, my FICO dropped. Very counter-intuitive. They like to see well-managed debt. To far in the hole and FICO suffers. Minimal managed debt and FICO suffers.

It's a racket IMNHO. My credit record is perfect but with no debt on the books, FICO isn't at the max. While still in the exceptional range, I can't see how I'm any risk to them at all. And, like you say, it shouldn't really matter. I'm not in the market for any debt.

Money wise if you can do what you want when you want to, who cares what the FICO is this month!

 

[Bekeart]

A business can not constantly loose money!

Snipped most of the quote.

Constantly loosing money is the government way!

Bekeart

 

[arjay]

A local gas station offers a $0.10 discount /gallon if you pay with cash.I haven't seen a gas station do that that in years

 

[Grayfox]

When I was a young man with a wife and small children, I fell into the trap and almost drown in credit card debt. After many years of hard work, I finally freed myself of it. I have also paid off my mortgage and vehicles. I have only normal monthly living expenses. Utilities, groceries, insurance, etc. I am debt free.
I have one credit card. Its used primarily for on-line purchases and I do pay it off every month.
But as Engineer 1911 remarked, because I have no debt, my credit score has tanked. It seems that the more you owe, the better your credit is. Oh well.

 

[CAJUNLAWYER]

Not only do I not pay the CC companies interest nor an annual fee, but they also pay me cash back or give the wife points so that she can fly to see the grandkids. The APR is meaningless to me.

You pay-you just don't know it. That merchant fee is built into EVERY price for EVERY item you buy. Whether you buy it with a card or pay cash you pay it. Which is why I have no issue with merchants charging extra for credit cards. That 3% is directly off of profit. I take credit cards as a convenience for clients but you can bet your backside I tack on the extra fee. Which is why I try whenever possible to pay cash for meals or other purchases, and I ALWAYS leave server tips in cash.

 

[CalifEd]

But as Engineer 1911 remarked, because I have no debt, my credit score has tanked. It seems that the more you owe, the better your credit is. Oh well.

Yes, your debt to available credit ratio is a big part of the FICO score.
Having a big credit limit, without the big debt will lower your score.
That is on reason that paying off debt or cancelling a credit card will ding your score.
Of course, since "they" keep the calculations secret, maybe not mowing your lawn has something to do with it too.

 

[DWalt]

Several months ago I made a large purchase, over $10K, on one of my credit cards. It was a somewhat unusual transaction for me, but there was a reason for it. Of course it was paid back quickly. I noticed my FICO score dropped by 20 points as a result. My largest ever CC purchase was for a hospital bill payment of over $20K, which was 25 years ago. Also an abnormal transaction for me, and close to my limit, but essential at the time. My FICO score also took a hit then, don't remember by how much. But it recovered.

 

[SMSgt]

Snipped most of the quote.

Constantly loosing money is the government way!

Bekeart

The government is not a business, more of a crime organization collecting tribute.

 

[lkabug]

As calculated by Bank rate, Credit card debt in the the US as of 8/26/24 is
$1.14 trillion. The average credit card APR is 22.76%.
50% carry a balance month to month.
60% have had a balance for at least a year........

Interest rate alone is a good piece of change, add to that merchant's fee and really soon we talking about some serious money going to someone.

 

[TX-Dennis]

The only local place I've run into that charges a surcharge for card use was the body shop that repaired some hail dents for me. They added 5% for using a card. Made no difference if it was a credit or debit card. I asked.

I asked him if I could just write a check. He pointed at a sign on the counter, "NO CHECKS." I could have gone to my bank and gotten cash, but it's way on the other side of town. So I bit the bullet and paid the extra.

 

[robvious]

I love the fact that most of us are debt free and payoff in full any credit card usage... have only paid interest once.. and it wasn't my fault... before we were married, we bought a house.. put the fridge oven & living room furniture on my card... wrote the check and put it out to be mailed... well... she didn't get it in the mail... we weren't living together and well, she forgot with all the wedding stuff distractions... it hurt, we were young and poor... but it only happened once... and well... we will celebrate 30 years next month... so it is ok...

 

[Golddollar]

Since I don't have any kids or grandchildren I don't know what is being taught in school anymore. If financial education isn't, it should be. On my last job before I retired I did a lot of collection work. The firm I worked for represented a finance company. I interviewed a lot of the defaulting debtors to see if they had enough assets and/or income to make it feasible to pursue the judgment against them. I ended up being an impromptu credit counselor for a lot of them. I thought they would be all sullen and grumpy about meeting with a representative for the finance company, but it turned out they were very glad to talk to a human being. From what I remember the biggest thing I told them about was the accrual of interest. Some of the debtors got on payment plans to work out their judgments. I made sure to tell them 1) to make sure they made the agreed on payments on time; and 2) any time they could scrape together an extra $20 to send it in and extinguish the interest clock running on more of the principal of the debt. I never really heard how these people made out but they seemed to be glad that someone was willing to listen to them.

 

[mtgianni]

We do the same thing but have the Costco premium membership that gets you their credit card. Pay the balance on date payment is required. Use it for large purchases just to get the points. Last year we got almost $900 back, put it on a Costco gift card in February, only use it for gas purchases and now that I am retired and drive as little as my wife, we still have money left on card. It might get us to next year, but I think it will be a couple of months short.

The costco cc also pays you 2% back on gas purchases. By putting it on a gift card you lose those points. If you want them to, they will give you cash at the service center.