Credit Card Debt

[Frixxxx]

I had not closed many of accounts.(I usually just let the expiration run out--and tear up any new cards they send)

Wrong, I used to work for Experian in another life. Revolving debt hurts worse than debt limits. If you have one card with a $10,000 limit and make occasional purchases and paid them off every month your score would be ok because of debt management.

Since I never would have or use a cc that had an annual fee, I saw no harm in doing this. Even if they have zero balances and are years old, these insurance types use anything so you "don't get the best possible rates." Well, now that I have talked ya'alls ears off here is my question(finally). Has this happened to anyone else here?

Since you have a lot of available credit and the # of accounts are many, more than 5 is bad, you can carry $0.00 balance but your revolving credit is affected because your "ABILITY" to charge is not being utilized, therefore, your not "managing" your debt. Your score is affected.

But the kicker is, your credit score was never created to qualify a person to buy a house. You might think - I know it's crazy, but it's TRUE! (I'm not caught between the moon and New York City, leave that alone)
It was a trustworthy score between merchants. Banks just decided to start using it and now it is an inherent part of the housing industry.

Anyway, trivia aside, for new people and those needing a refresher course:
http://www.credit.com/credit_information/
I'm not endorsing their products, but their information page is very robust for a quick read!

 

[wv-girl]

Thanks for the reply Frixxx, if by revolving credit you mean dept store, then the only one I had was sears and that was used only for a disability/death policy at about ten dollars a month, which I paid off every month. The credit cards I am referring to are like Chase, Mastercard, etc. Do you know anything about how insurance rates are calculated? I could get very few answers except what I wrote above. Very frustating. wv-girl

 

[Frixxxx]

Thanks for the reply Frixxx, if by revolving credit you mean dept store, then the only one I had was sears and that was used only for a disability/death policy at about ten dollars a month, which I paid off every month. The credit cards I am referring to are like Chase, Mastercard, etc. Do you know anything about how insurance rates are calculated? I could get very few answers except what I wrote above. Very frustating. wv-girl

Insurance companies use your credit score as well. But if your credit is good, it shouldn't adjust your insurance payment. You should get the best possible. If you have a low credit score, remember, it might just be the agency the insurer used, then you need to find out why that score is so bad and request a report to see why.

Remember there are three agencies, Equifax, Transunion, and Experian. All the scores can be different. If you have a 700 with Experian, but a 625 with Transunion, that could cause issues. The insurer may get the Transunion report and quote you a different price. Ask the Insurer who they used and go straight to the source to determine the offset/discrepancy and try to correct if possible.

http://www.credit.com/products/auto/Credit-and-Car-Insurance.jsp

^ good information as well.

 

[Show-me]

Since we are on the subject of credit card here is a quick story from me, today.

Just got off the phone with Bergner's because I was infuriated to receive my statement with a balance of $16 when I paid the balance last month in full. A grand total of $39.33, I always pay the balance in full as not to incur interest charges. I do my billing online and apparently I was one day late and they assessed what equated to a 50% late fee and raise the interest rate from a outrageous 21.90% to a unbelievable 35.77%.

Needless to say my mood was and I proceeded to tell the customer service lady, who I know hate to talk to people like me, that I wanted the card remove from existence. She offered to remove the fee and lower the rate back to the original outrageous amount. Once I get my next statement and verify that this all happened the card will be GONE!

We own several department store card in order to get the store discounts and I am seriously rethinking that policy.

 

[Show-me]

Insurance companies use your credit score as well. But if your credit is good, it shouldn't adjust your insurance payment. You should get the best possible. If you have a low credit score, remember, it might just be the agency the insurer used, then you need to find out why that score is so bad and request a report to see why.

Remember there are three agencies, Equifax, Transunion, and Experian. All the scores can be different. If you have a 700 with Experian, but a 625 with Transunion, that could cause issues. The insurer may get the Transunion report and quote you a different price. Ask the Insurer who they used and go straight to the source to determine the offset/discrepancy and try to correct if possible.

http://www.credit.com/products/auto/Credit-and-Car-Insurance.jsp

^ good information as well.

I hear everyone uses credit scores now, even potential employers. Even landlords.

 

[nnuut]

As I've said before the Credit Card Companies are just as big CROOKS an the Mortgage Companies. I keep one credit card from my credit union 8.something% interest. I did buy a big screen and audio system from Circuit City and took their no interest for a year credit card, the fine print said if I was late on a payment it would go up to about 28%. I paid it off in 2 months, with the help of the STIMULUS money! There use to be a limit on the interest rate that could be charged for loans, what happened to that? They need regulation BIG TIME they are cheating Americans every day and need to go to JAIL! MAD AS HELL!!!! 37%??? that's not a crime?!

 

[Birchtree]

Yes, your credit score will follow you like an albatross. And it says a lot regarding any risk that a lender may take. Keep it high and keep it clean.

 

[wv-girl]

Insurance companies use your credit score as well. But if your credit is good, it shouldn't adjust your insurance payment. You should get the best possible. If you have a low credit score, remember, it might just be the agency the insurer used, then you need to find out why that score is so bad and request a report to see why.

Remember there are three agencies, Equifax, Transunion, and Experian. All the scores can be different. If you have a 700 with Experian, but a 625 with Transunion, that could cause issues. The insurer may get the Transunion report and quote you a different price. Ask the Insurer who they used and go straight to the source to determine the offset/discrepancy and try to correct if possible.

http://www.credit.com/products/auto/Credit-and-Car-Insurance.jsp

Ok. All that is ok. I am aware of all of this. Let me give just a little more info. I have one of the highest credit scores you can get. While I was on the phone to the insurance companies, I have my copy of my credit report in front of me. I had just obtained it using all three of the reporting companies you listed above. I tried for over an hour on the phone to find out why my insurance was being increased. The same rules they use for issuing credit scores do not apply when determining insurance scores. I tried to get the info on what the insurance company uses in their scoring system. This is the question and the insurance companies do not want you to know. I got such a run around you would not believe. Bottom line is the insurance companies can skirt around the issues in order to charge what they want to. There is absolutely nothing wrong with my credit but that they wanted to try and use that as an excuse until I told them that I had a very recent (that day)copy in front of me and still did not understand how they reached their conclusions. Then they said they only used it as a guideline but the determining factors is in how the insurance rates you. They would not give up the info on how or what they used to determine that. After an hour of going in circles he finally agreed to send me what they used in scoring. That was just to get me off the phone. The info they sent said absoutely nothing other than they have a scoring process. More crooks in action. I finally gave up(which is what they wanted) but then moved my policy to another insurance co. At least I am getting better rates. I understand with all of the natural disasters that we have had warrants some sort of increase but twice in the same year? In case anyone wants to know my old insurance companies name pm me. They are one of the BIG ones.

Thanks for all the info and the posts. Mucho appreciate.

wv-girl

^ good information as well.[/quote]

 

[wv-girl]

As I've said before the Credit Card Companies are just as big CROOKS an the Mortgage Companies. I keep one credit card from my credit union 8.something% interest. I did buy a big screen and audio system from Circuit City and took their no interest for a year credit card, the fine print said if I was late on a payment it would go up to about 28%. I paid it off in 2 months, with the help of the STIMULUS money! There use to be a limit on the interest rate that could be charged for loans, what happened to that? They need regulation BIG TIME they are cheating Americans every day and need to go to JAIL! MAD AS HELL!!!! 37%??? that's not a crime?! View attachment 4736

Legalized exhortion. We try that we would go to jail.

 

[fabijo]

This is a great topic. In Feb 2006, I used the TSP Loan to pay off my credit card debt. I didn't have any house to use as equity. At the time, my credit card kept hovering around $4,000. I'd make some nice chunks in it, but something would happen - like getting a car inspection and ending up with a huge bill at the end of the day.

I took out a $10,000 loan, paid off the card, and planned to use the rest for my wife getting a start on being a self-employed artist. A few months later, my car was stolen. So the rest of the money went to buying a used car. At least I did not go into any extra debt! I finished paying off the loan this January. By that time, I had gotten so used to getting by without that money, that it immediately went into my savings account every paycheck. That was great, because then I was offered a promotion which would involve a move. So in those few months, I was able to really build up some extra money in savings for the down payment on a house.

All this to say that I am so happy to not be using a credit card any more. I consider regular savings deposits a bill that I MUST pay. My wife and I have been able to manage our money without using credit cards for two years and we've consistently put away savings - and that is with just one income. She doesn't get paid except maybe some random check for three hundred dollars after two months or something. So, we're able to provide for ourselves, our kids, and make payments on a $280k house on just my income - and I don't make 6 figures. My pay is well under $100k.

A coworker of mine has consistently been making $20-$30k more than me, plus his wife worked, and they were drowning in credit card debt. It eventually became one of the factors that led to their divorce. Some people say that you shouldn't touch the TSP, but if that's what needs to be done, go for it - it could save a dying marriage. You'll never find a loan at a better rate. It takes discipline, but living without a credit card can be done.

 

[Frixxxx]

..... I understand with all of the natural disasters that we have had warrants some sort of increase but twice in the same year? In case anyone wants to know my old insurance companies name pm me. They are one of the BIG ones.

Thanks for all the info and the posts. Mucho appreciate.

wv-girl

^ good information as well.

Yes, Insurance companies are feeling the pinch from claims lately. However, what is really causing insurance to be in issue is the insurers of the insurers.

Your credit score is "one" aspect of your insurance cost. Unfortunately, if you have a low credit score, this means you are not trustworthy. It has also shown that people with low credit scores will make more claims thus costing the insurance companies more. You say you don't have this issue so keep going:

If your credit score is perfect, then it comes down to location, car, driving record. Location is the number of cars stolen in area, distance to work, zip codes. Car is cost of replacement, so how much does your car cost? Now driving record, points are bad and we all know this.

So, if you feel you are getting a raw deal, then caveat emptor. You know what to do and it looks like you are/have shopped for a new company.

I know it feels like wasted time when you have to sit on the phone and listen to customer service and their bland scripted responses. But if it saves you a lot of money, then consider it an investment with return on your money and your sanity.

 

[Steadygain]

My wife and I have been able to manage our money without using credit cards for two years and we've consistently put away savings - and that is with just one income. She doesn't get paid except maybe some random check for three hundred dollars after two months or something. So, we're able to provide for ourselves, our kids, and make payments on just my income

Sorry my friend - but I would have to argue on her behalf.

Number ONE - she is a Mother - which is the only role close enough to what God represents to give us an understanding of how loving, caring, self sacrificing and wholly in touch a Creator could be with all that's created and especially life itself.

So her pay goes far beyond Money - her pay are the bonds she's developed which instill the nurturing, love, and care to her family, friends, and others.

Her relationships - are way beyond what's in her purse.

Number TWO - her pay (money wise) is way more characterized by the manner in which she lives and her endless efforts to find the better deals and conserve - to keep spending to a minimal.

Number THREE - What she does with her life as a mother and as a wife - in the typical household chores she maintains; let alone what she saves the family by maintaining supplies, grocerices, clothes, and attention she provides for the physical and emotional needs of others would probably come close to 6 figures (if not go beyond it).

Number FOUR - She is the one that mostly maintains the value of the house and keeps it a huge "nestegg" over the years.

Well, I've said enough...and need to get back to work.

 

[fabijo]

Sorry my friend - but I would have to argue on her behalf.

Number ONE - she is a Mother - which is the only role close enough to what God represents to give us an understanding of how loving, caring, self sacrificing and wholly in touch a Creator could be with all that's created and especially life itself.

So her pay goes far beyond Money - her pay are the bonds she's developed which instill the nurturing, love, and care to her family, friends, and others.

Her relationships - are way beyond what's in her purse.

Number TWO - her pay (money wise) is way more characterized by the manner in which she lives and her endless efforts to find the better deals and conserve - to keep spending to a minimal.

Number THREE - What she does with her life as a mother and as a wife - in the typical household chores she maintains; let alone what she saves the family by maintaining supplies, grocerices, clothes, and attention she provides for the physical and emotional needs of others would probably come close to 6 figures (if not go beyond it).

Number FOUR - She is the one that mostly maintains the value of the house and keeps it a huge "nestegg" over the years.

Well, I've said enough...and need to get back to work.

You are correct, Steady, and of all people, I am the one that often reminds her of the things you just brought up. She is very hard on herself and keeps saying that she doesn't deserve the gifts I buy her, because - she says - she doesn't make any money. I have to be very, very, very encouraging and gentle. I often tell her that all the money in the house is earned just as much, if not more, by her. How could we possibly have gotten where we are if it wasn't for her self-sacrifice? If I was a single dad, my sons would be so unhealthy and a menace to society.

And just to give her some public kudos, here's her blog:

http://journal.glauciamir.com

and her photoblog:

http://mircats.com/photoblog

 

[Steadygain]

She is very hard on herself and keeps saying that she doesn't deserve the gifts I buy her, because....

Thank you so much for your response and I promise when I have more time I'll gladly go into the links more deeply.

I would say her 'LOVE LANGUAGE' - is "Acts of Service" and when she tells you "I don't deserve these gifts...." it's because the gifts aren't conveying what I know YOU GENUINELY WANT TO CONVEY.

Surprise her: 'Help with the simple everyday things like setting the table, washing the dishes, folding laundry, vacuuming and all those other things....and whatever you do - don't draw attention to yourself, but do it humbly and out of respect and admiration.

I bet that would mean way more to her than a purchased gift, and you would find how touched she is how "well you scored".

Have a good night my friend. Will return tomorrow.

 

[fabijo]

Hey, thanks Steady. Actually her love language is gifts. She just likes the little gifts like a card on a random day or a flower out of nowhere. When I secretly save up my per diem money, then buy her a fancy lens or camera, that's when she gets all choked up, saying she doesn't deserve that stuff.

I've nearly tortured myself with doing all kinds of things around the house only to have her notice the one thing I didn't do. We discussed a lot about the love languages and if anything, I'm the one whose language is service.

 

[JTH]

I wonder how many credit cards is too many? I wonder what kind of activity balance wise becomes a good reflection on your credit.

I have three Credit Cards cards now and one debit. I've had up to 5 and I've known people who had more then 10 :nuts:

 

[Buster]

One thing I count as a blessing during this Credit Crunch...I haven't been receiving the countless CC 0% offers in the mail lately...My junk mail is almost nothing right now..

 

[fabijo]

One thing I count as a blessing during this Credit Crunch...I haven't been receiving the countless CC 0% offers in the mail lately...My junk mail is almost nothing right now..

hmm. Good point. I figured it was because I just moved.

 

[Show-me]

One thing I count as a blessing during this Credit Crunch...I haven't been receiving the countless CC 0% offers in the mail lately...My junk mail is almost nothing right now..

O'yes, USPS is in panic mode. Mail volume is way down and energy prices are killing us. And, labor too, but we don't talk about that.

 

[Buster]

I love the USPS..but I would like you guys to have Saturdays off..at least in the delivery area.