118 posts in this topic

That's what I've been told while growing up. It doesn't matter if you spend $20, or $200, your credit is determined by if you pay it off. Unfortunately Good Credit = almost everything in life.

Was it that important to share that you bumped this thread?

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Was it that important to share that you bumped this thread?

What's it to you? I'll reply freely within these forums.

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I was just surprised to see this thread already had 7 pages and then I noticed the date.

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If I wanted to use my debit card how many free transactions do I get? 10

If I want to use more than 10 transactions on my debit card, what do I pay? $1/transaction.

 

That's a pretty cr*ppy bank. Change immediately. I have never heard of that.

 

My bank pays 3.01% interest on my checking account balance and refunds ATM fees, if I have direct deposit set up and do a minimum of 10 transactions per month.

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Ditched my credit cards over ten years ago and not missed them at all. Don't need them for anything either.

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I use a debit card for online payments and that's it. I don't plan on borrowing money, did it once for a business I was starting with a friend, seemed like it would save me time at first, but overall ended up costing me much more than anticipated.

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i am 26, i have never had nor do i ever want a credit card. you can also used pre-paid cards to help build your credit as well as just having recurring bills in your name (like utility bills)

Wrong and wrong.

Prepaid cards do not help build your credit. Secured credit cards do but those aren't considered pre-paid.

Recurring bills do not help build credit either, they can only hurt your credit if you miss a payment and they send a bill collector after you.

---

Get a credit card, even if it's secured, and just pay it off at the end of every month. Then take advantage of your banks policies (ie every 6months most banks will increase your credit limit if you ask for it) and not too long later you will have pretty good credit.

The biggest problem you will have without credit cards is if you ever go to try and buy a car or a house. Most banks will want to see a good credit report that goes back a couple of years. If you don't have credit cards it will be very difficult for you to build up that report. You don't have to use all the credit cards you open, you can keep them open by spending small amounts of money on them every month and it'll still report and help increase your credit score.

The problem most people have with credit cards is they use them incorrectly. Many many people go "Oh I can keep putting massive purchases on the card and pay it off over time", that's a stupid way of doing it. They don't seem to understand that they're essentially taking out a loan for that purchase that has 11-25% interest attached to it. The proper way of using them is "Oh I want to buy that and I have the money in my account to pay for it, so I'll use my credit card for convenience and the rewards" If you keep reminding yourself about that, it'll help stop you falling into the trap of "oh I have a credit limit of $25000 on this card, so I can now spend $25000 and pay it off 5 years later".

Another way you can help yourself not fall into the trap is get an American Express charge card (but you will need good credit before you can do this). Basically it's a credit card that has no pre-set spending limit (there's a hidden limit) but you have to pay it off in full at the end of the month. This forces you to be conservative with your spending because you know that you have no choice but to pay it off.

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Never owned a single credit card and my credit has always been good. Sure, I had a co-signer on my first car, but after that it was all based on my ability to pay and pay on time.  Anyone that thinks you need a credit card to earn credit is a fool.

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Wrong and wrong.

Prepaid cards do not help build your credit. Secured credit cards do but those aren't considered pre-paid.

Recurring bills do not help build credit either, they can only hurt your credit if you miss a payment and they send a bill collector after you.

---

Get a credit card, even if it's secured, and just pay it off at the end of every month. Then take advantage of your banks policies (ie every 6months most banks will increase your credit limit if you ask for it) and not too long later you will have pretty good credit.

The biggest problem you will have without credit cards is if you ever go to try and buy a car or a house. Most banks will want to see a good credit report that goes back a couple of years. If you don't have credit cards it will be very difficult for you to build up that report. You don't have to use all the credit cards you open, you can keep them open by spending small amounts of money on them every month and it'll still report and help increase your credit score.

The problem most people have with credit cards is they use them incorrectly. Many many people go "Oh I can keep putting massive purchases on the card and pay it off over time", that's a stupid way of doing it. They don't seem to understand that they're essentially taking out a loan for that purchase that has 11-25% interest attached to it. The proper way of using them is "Oh I want to buy that and I have the money in my account to pay for it, so I'll use my credit card for convenience and the rewards" If you keep reminding yourself about that, it'll help stop you falling into the trap of "oh I have a credit limit of $25000 on this card, so I can now spend $25000 and pay it off 5 years later".

Another way you can help yourself not fall into the trap is get an American Express charge card (but you will need good credit before you can do this). Basically it's a credit card that has no pre-set spending limit (there's a hidden limit) but you have to pay it off in full at the end of the month. This forces you to be conservative with your spending because you know that you have no choice but to pay it off.

funny, because i have a mortgage which I was instantly approved for.  Also paying for two cars, both approved on credit without a question and I have never owned a single credit card.  All my approved credit was based on my income, current debt, and long history of paying off bills.

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Wrong and wrong.

Prepaid cards do not help build your credit. Secured credit cards do but those aren't considered pre-paid.

Recurring bills do not help build credit either, they can only hurt your credit if you miss a payment and they send a bill collector after you.

---

Get a credit card, even if it's secured, and just pay it off at the end of every month. Then take advantage of your banks policies (ie every 6months most banks will increase your credit limit if you ask for it) and not too long later you will have pretty good credit.

The biggest problem you will have without credit cards is if you ever go to try and buy a car or a house. Most banks will want to see a good credit report that goes back a couple of years. If you don't have credit cards it will be very difficult for you to build up that report. You don't have to use all the credit cards you open, you can keep them open by spending small amounts of money on them every month and it'll still report and help increase your credit score.

The problem most people have with credit cards is they use them incorrectly. Many many people go "Oh I can keep putting massive purchases on the card and pay it off over time", that's a stupid way of doing it. They don't seem to understand that they're essentially taking out a loan for that purchase that has 11-25% interest attached to it. The proper way of using them is "Oh I want to buy that and I have the money in my account to pay for it, so I'll use my credit card for convenience and the rewards" If you keep reminding yourself about that, it'll help stop you falling into the trap of "oh I have a credit limit of $25000 on this card, so I can now spend $25000 and pay it off 5 years later".

Another way you can help yourself not fall into the trap is get an American Express charge card (but you will need good credit before you can do this). Basically it's a credit card that has no pre-set spending limit (there's a hidden limit) but you have to pay it off in full at the end of the month. This forces you to be conservative with your spending because you know that you have no choice but to pay it off.

Here in the UK, all bills which are charged "in arrears" appear on your credit history. They also build up a decent credit history. This includes all utilities (gas/electric, phone, cable, etc).

Credit cards are fine if you use them sensibly. I pay for EVERYTHING on my Amex. It gives several benefits:

- Purchase protection

- Air Miles

- I don't have to worry about cash

I've never paid a penny interest, and have earned over 80,000 air miles when you take bonuses, etc into account. It also means that my money kind of manages itself - which makes my life that little bit easier.

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funny, because i have a mortgage which I was instantly approved for. Also paying for two cars, both approved on credit without a question and I have never owned a single credit card. All my approved credit was based on my income, current debt, and long history of paying off bills.

Things have changed since 2008ish. It used to be a lot easier to be approved for credit but there were a lot of changes passed after then.

For example, before you could be an authorized user on someone else's credit card and it would benefit your score. However FICO now longer considers authorized users on their cards.

You don't have to have a credit card, but they are currently the easiest way to build up credit.

If you built up a credit report before 2008, everything on that will help you out. If you're just starting good luck getting a loan without requiring a cosigner and high interest rates.

From FICOs website:

Though your FICO? score captures a pretty accurate picture of your credit history, not every account is recorded. You're assumption is right in that your good history of rental and utilities payments are not listed on your credit report. Even though your landlord, the cable and cell phone providers are pleased with your timely payments, this positive information isn't reported to the credit bureaus. That being said, there are a couple important reasons why you should continue to always pay these bills on time:

Reported delinquencies:

Even though your good payment history isn't reported, if you go late on these bills, your landlord or utility department has the right to report your bills as delinquent to the credit bureaus. If the bill continues to go unpaid, a judgment could be obtained against you in small claims court, and/or your account could be turned over to a collection agency. Any of these blemishes to your credit report can be as harmful to your FICO score as the more commonly reported items such as late payments on loans or credit cards.

---

 

Credit cards are fine if you use them sensibly. I pay for EVERYTHING on my Amex. It gives several benefits:

Yup this.

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Things have changed since 2008ish. It used to be a lot easier to be approved for credit but there were a lot of changes passed after then.

For example, before you could be an authorized user on someone else's credit card and it would benefit your score. However FICO now longer considers authorized users on their cards.

You don't have to have a credit card, but they are currently the easiest way to build up credit.

If you built up a credit report before 2008, everything on that will help you out. If you're just starting good luck getting a loan without requiring a cosigner and high interest rates.

From FICOs website:

---

 

Yup this.

 

Yep.  You can also just look at your credit reports to find out what's going on them, which I don't think enough people do.  The three reporting agencies are required by law to allow you to view your credit report for free once a year.  You can do it in about 3 minutes at annualcreditreport.com

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funny, because i have a mortgage which I was instantly approved for.  Also paying for two cars, both approved on credit without a question and I have never owned a single credit card.  All my approved credit was based on my income, current debt, and long history of paying off bills.

Depends on what country you're in. Credit rules and mortgage rules vary in each of them...

 

In the US, yes you can get a mortgage without ever having a credit card, but you'll pay for this omission on your part. You'll have a higher interest rate due to the lower credit score you'll have as a result.

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However, if you make those higher rate payments ontime (hint: scheduled automatic pay via bank website etc.) you can refinance after a year or so at a much lower rate. Just don't be tempted to take a cash out with it.

Us: we mostly live on cash or debit. Autopay on bills, nothing but savings or short term credit union loans for emergencies - which get paid off early. It's called living within your means.

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Us: we mostly live on cash or debit. Autopay on bills, nothing but savings or short term credit union loans for emergencies - which get paid off early. It's called living within your means.

Yup that's the most important thing. You don't spend more than you make unless it's an emergency. What I like to do with my CC is if I make a big purchase (non emergency) on my CC, I transfer money immediately from my bank account to the card and pay it off. That way I don't fall into the trap of "well I still have plenty of limit left on my card so why bother paying it off".

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However, if you make those higher rate payments ontime (hint: scheduled automatic pay via bank website etc.) you can refinance after a year or so at a much lower rate. Just don't be tempted to take a cash out with it.

Us: we mostly live on cash or debit. Autopay on bills, nothing but savings or short term credit union loans for emergencies - which get paid off early. It's called living within your means.

True, but refinancing has costs as well doesn't it? I haven't done it yet, but my understanding is you'll have some level of closing costs and transactional costs that go along with it.

 

It would be better if you can get the lower interest rate up front versus having to hope for a better deal later on the refi.

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True, but refinancing has costs as well doesn't it? I haven't done it yet, but my understanding is you'll have some level of closing costs and transactional costs that go along with it.

 

It would be better if you can get the lower interest rate up front versus having to hope for a better deal later on the refi.

 

Yep, there are costs to refinancing. I went through a refinance nearly three years ago and was fortunate enough to be in a position to pay for the closing costs up front, while also slightly buying down my loan, cutting my interest rate nearly in half, and cutting the life of my mortgage nearly in half as well. I basically made off like a bandit with that refi and couldn't be more happy about it.

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- Purchase protection

- Air Miles

- I don't have to worry about cash

I've never paid a penny interest, and have earned over 80,000 air miles when you take bonuses, etc into account. It also means that my money kind of manages itself - which makes my life that little bit easier.

+1 extended warranty ftw on amex.

and have also travelled for "free" thanks to points.

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