Credit cards are trouble no matter what way you look at it.

Take me for example. 3 years ago, I had the perfect credit rating. Then, my car took a dump, so I unloaded it, and bought a Bronco 2. With my credit card. I could have paid it off with the paycheck I was getting in 2 weeks, but at the last minute, the dog got sick, and so much for paying off my credit card. (only $2000 but still.) Then, I make the payments, broken down monthly, and just about got to a zero balance again, and, stupid me, proposed to my girlfriend, and charged her engagement ring. Life goes on. make the payments. Got sent to school for work. The way it works is, I got paid 55% of my regular paycheck for attending school. So my monthly payment took a dump. I did this 4 times in 2 years, so you can just imagine what my credit looks like now. I figure I'll have my head above water in about March 04.

BUT

If you don't take me for an example, then credit cards are VERY useful pieces of plastic. As stated before, you will need one to secure a rental car, a seat on an airplane, a bed in a hotel, etc. Keeping a monthly balance is a good thing to a point, as shown in my case. Try not to keep a balance of more than a couple grand at a time. As you pay it off, the lendor will see that you have the ability to pay your debt, and they make money at the same time, so they take a risk and up your buying power with a higher limit. Good for buying one time purchases, like a home theater with 51" tv, or a fancy Italian suit, a lawyer (or bail for that matter)

Hope this helps.

 

i can't agree with that. i'm 25, and have never missed a payment on any of my bills. ever. heck, i'm 12 payments from having my house paid off. own both my car and my truck, and have a great credit history.

my problem is, that i can't get them to stop sending me pre-approved loans, and credit cards... i guess that means that you'll still get a good history, if you do pay your bills.....

actually, it helps if you over pay your bills every month.. i round all my bills up to the nearest $10...

 

FTE pays some of its bills on the corporate card and pays in full each month. We earn enough frequent flyer miles to buy two flights each year. As to paying off hurting our credit rating, I'm not sure I can agree with that. Prior to FTE I worked as a programmer writing fault tolerant credit application software, had lots of exposure to the agencies. Paying off in full helps your credit. Carrying a balance helps more. Neither hurts. Regardless of whether you pay off each month the credit card company makes money from the merchant. They make thousands each year from FTE.

 

I can't see that paying off my card in full each month hurts anything. I get a dozen or more requests from credit card companies a week all wanting me to use their card. All of them have fantastic terms, no annual fees, huge limits and zero interest balance transfers, with low reg rates. The few cards I actually take are the best of the lot and they usually end up delivering better terms than edvertised. There are a few CC companies I won't deal with tho... They send me guaranteed card aps anyway.

I put a stop to the pre approved loans whenever I get one with a telephone call. The major credit houses know better than to send me one of those. I can get all the money I need from any number of regular banks etc.

I have tried putting statements in my credit reports to stop the card companies but that has been unsuccessful so far.

I do not use store credit cards.

 

Do all these excellent ideas make the writers liberals vs conservatives? Dem vs rep?

 

Amen. If paying off hurt your credit I wouldn't keep getting limit increases and seeing my beacon score go up, up, up. My real estate agent said my beacon score is high enough that my income doesn't matter. The banks can go by my beacon alone because I've never defaulted or paid late even when the amount was high. They figure the higher the score, the better the odds that the person is responsible enough not to over-extend themself.

 

Libertarian...

My score whatever it is called is about as high as it gets according to the bank.

My score thru the Insurance firm that I use that uses credit reports and claims history is next to the highest grade, but in the top group, the reason it isn't higher is that I have had a couple of insurance claims.

 

Being in the military I see people getting in trouble all the time for credit cards. If you are very responsible (don't kid yourself) get one. As far as the emergency thing goes you should set up a "Do not touch fund" and save about $3000. Keep it in a separate savings account and pretend it isn't there until one day when you are stuck somewhere with whats left of your transmission stacked neatly in the bed of the truck. You have to try to stay on the positive side of the curve. You also need to build credit for when you go to buy a new car or build a house. I recommend against anybody buying a new car until they can really afford it. I still haven't bought one. When I do it will be with cash (many years from now). Also start invensting now. Even starting with $50 a month goes a long way with time and compound intrest.

Think about it this way:
A CREDIT CARD WILL NOT HELP YOUR CREDIT IF YOU CAN'T MAKE THE PAYMENTS

Also, why pay the rich guy to make you poor?

 

Along with Ratsmoker I too see many people get in trouble over their credit cards in the military. People think hey I can get this card and only have to pay the minimum amount. Ends up biting them in the ___ after a year or so. The minimum amount doesnt pay the principle only the interest. So like everyone has said pay in full or double or triple your payment per month.
I am 22 and have had credit since I was 16. I have had about 10 different credit cards. Excluding my government travel card. I have since closed all but my Sears master and my true emergency visa cards. I have never missed a payment and have an excellent credit rating. On accasion ive been known to co-sign for loans for friends. I know its not the best idea, but I know my friends can pay thier bills. Other wise I know where they sleep.
Also a good idea is to forget about having a high limit, say 3-5 thousand dollars. Have it changed to a more reasonable and payable 1-2 thousand. That way your not tempted over spend and get into a bind.
Like Ratsmoker said save some money too. That goes for anyone. It feels a lot better to pay for something in full with a hand full of green backs. Before I even pay bills or buy anything I pay myself 100 bucks each pay day.
The concensus says get a credit card but be smart with it. Responsibility is the key to good credit.

 

Nationally syndicated consumer reporter Clark Howard says to never co-sign a loan. If they aren't a good credit risk to the bank, what makes you think they can pay you back when you can't legally go after them for the debt once you co-sign (you are entering a legal agreement to take on the debt). Are you willing to put a black spot on your credit for 7 years because someone else isn't responsible enough to build their own credit? No amount of paying you back later when they get the money will stop the late payment from showing up on your credit report. By the time you find out they've missed a payment (or made a late one) its too late and its irreversably on your credit report. Remember, the co-signer is the true person who is taking on responsibility for the debt.

Not trying to preach, but rather save you a lot of trouble down the road. It would really suck having a call from a collection agency because of someone else's problem.

 

Wow! Once again I have started developing confidence that young 'uns can take care of our sad world. It seemed for a while that everybody was on the war wagon and not cognizant of reality.
Thank guys