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raiderbuck

Senior Member

1,623 posts
Apr 11, 2010 11:55 AM
I don't understand these tools of the devil...

What's a good debt to credit ratio to have? I thought it was around 20% of your overall available credit? I worked pretty hard to bring my debt down, and as of a few months ago I've gotten it down to around 20-25%...well, I got a mailing from Chase telling me that they've decided to cut my limit down to less than half of what it was before on one of my cards, and at the same time they've sent me a new card with a huge limit and decent interest rate (which I did not activate, btw). I currently have two major cards, and two small Department Store cards. The smaller cards don't carry any balances at this time...

They did this to me before, about six months ago. I had a high balance on a relatively new card only because I bought some furniture for my new place (about $2500-$2700 worth). Explained to the csr at Chase the situation, and ultimately got the limit increased.

Their reasoning for this limit decrease was "high balance" "not enough established credit" or something like that. I try to use my card when I absolutely need to, I've never used it to pay any of my monthly bills, but because of some big purchases of furniture and a car repair...they've slashed my credit line (not to mention increased my rate right before the federal Credit CARD Act). Now I have to have this same convo with Chase again...ugh, I fockin' hate credit cards.

/rant
Apr 11, 2010 11:55am
I

I Wear Pants

Senior Member

16,223 posts
Apr 11, 2010 11:58 AM
Umm...don't use them?
Apr 11, 2010 11:58am
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Apr 11, 2010 12:00 PM
Let me get this out of the way................Credit cards are the devil, pay cash for everything, any kind of debt is a horrible idea.
Apr 11, 2010 12:00pm
Mr. 300's avatar

Mr. 300

Senior Member

3,090 posts
Apr 11, 2010 1:31 PM
Love the Visa. Pay it off monthly plus get free gas cards from Chase for paying it off. Never ever carry a balance.
Apr 11, 2010 1:31pm
M

MontyBrunswick

Apr 11, 2010 1:32 PM
se-alum wrote: Let me get this out of the way................Credit cards are the devil, pay cash for everything, any kind of debt is a horrible idea.
Unless you want to buy a house, or car, or anything with a loan.
Apr 11, 2010 1:32pm
LJ's avatar

LJ

Senior Member

16,351 posts
Apr 11, 2010 2:31 PM
Chase is Satan when it comes to credit cards. Get a new credit card.
Apr 11, 2010 2:31pm
Quint's avatar

Quint

Captain

737 posts
Apr 11, 2010 2:36 PM
I love Visa. I very rarely use cash. Credit cards are awesome if you pay it off every month, because you get points, miles, rewards, etc. People who hate them are the people who can't control themselves, and have to pay the bad interest rates when they don't pay it off in full. . . which is how the credit card companies make their money.
Apr 11, 2010 2:36pm
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Apr 11, 2010 2:40 PM
LOL. Devil.
Apr 11, 2010 2:40pm
sleeper's avatar

sleeper

Legend

27,879 posts
Apr 11, 2010 2:49 PM
Think of credit cards as a 30 day loan and you'll never have any problems. If there's a purchase that you can't pay cash for, save your money and then buy it.
Apr 11, 2010 2:49pm
Glory Days's avatar

Glory Days

Senior Member

7,809 posts
Apr 11, 2010 3:02 PM
sleeper wrote: Think of credit cards as a 30 day loan and you'll never have any problems. If there's a purchase that you can't pay cash for, save your money and then buy it.
Quint wrote: I love Visa. I very rarely use cash. Credit cards are awesome if you pay it off every month, because you get points, miles, rewards, etc. People who hate them are the people who can't control themselves, and have to pay the bad interest rates when they don't pay it off in full. . . which is how the credit card companies make their money.
+infinity
Apr 11, 2010 3:02pm
j_crazy's avatar

j_crazy

7 gram rocks. how i roll.

8,372 posts
Apr 11, 2010 3:06 PM
raiderbuck wrote: I don't understand these tools of the devil...
congratulations. I've disregarded the entire post after just one sentence.
Apr 11, 2010 3:06pm
Mr. 300's avatar

Mr. 300

Senior Member

3,090 posts
Apr 11, 2010 6:05 PM
sleeper wrote: Think of credit cards as a 30 day loan and you'll never have any problems. If there's a purchase that you can't pay cash for, save your money and then buy it.
Your mama and wife both take cc and cash.
Apr 11, 2010 6:05pm
F

fan_from_texas

Senior Member

2,693 posts
Apr 11, 2010 8:51 PM
sleeper wrote: Think of credit cards as a 30 day loan and you'll never have any problems. If there's a purchase that you can't pay cash for, save your money and then buy it.
Unless you're an SEC grad. Then max it out to buy a double-wide.

BIG TEN WHAT?
Apr 11, 2010 8:51pm
C

Con_Alma

Senior Member

12,198 posts
Apr 12, 2010 7:44 AM
There's very little that I can't put on my American Express. There's very little that I need to buy that I don't pay for in less than 30 days.
Apr 12, 2010 7:44am
RedRider1's avatar

RedRider1

Senior Member

3,850 posts
Apr 12, 2010 9:09 AM
Lots of companies have lowered credit limits and imposed new fees ahead of the CARD act.

Watch your statement.....I got one that said I'd see a $60 annual fee in May. Only way to opt-out was to close the account....so I did.

Some companies are even charging $1 for sending out paper statements.

The gov't restricts their profit making activities, they'll find news ways.
Apr 12, 2010 9:09am
O

OUgrad

Senior Member

125 posts
Apr 12, 2010 12:06 PM
When I was young, my dad told me if I wanted to use a cc, then I must pay it off at the end of the month to avoid interest charges. Great advice. He also told me to make sure if something was a want and not a need, then I'd better have the $ to pay it off or I shouldn't charge it. Also great advice. But I also learned there would be times I wouldn't be able to pay it off b/c the charge was more than I had, usually for car repairs. But I paid it off asap and I've really never been in trouble. The spouse, OTOH, is the total opposite. lol Oh, and Chase sucks.
Apr 12, 2010 12:06pm
Fab1b's avatar

Fab1b

The Bald A-Hole!!

12,949 posts
Apr 12, 2010 12:10 PM
I don't know if the devil has anything to do with them but I know I don't use a single one and pay cash for everything. There was a time in my live I had a bunch of debt due to credit cards, I've worked hard paid it all off and will never go back to that way of life!!
Apr 12, 2010 12:10pm
thePITman's avatar

thePITman

Senior Member

3,867 posts
Apr 12, 2010 12:56 PM
When I was growing up and still while I was in college, I professed that I would never, ever own a credit card. I wholly do NOT believe in spending money I do not have, therefor I thought credit cards were only for people who were NOT financially responsible.

However, I work some really smart folks who totally convinced me otherwise. If you want to build credit, having a credit card is the easiest way to do so. I still live by the principle of not spending money I don't have, but instead of using my debit card, I just use my credit card for specific things (like gas and groceries, which I get cash back rewards through National City/PNC). I have a payment set up through my card services so that my balance gets paid in full automatically on the 2nd day of each month.

If you want to build credit but don't want to be caught in the dangerous side of the game, I recommend getting a free card with rewards (cash back, points, or something), and only using it a few times a month, or maybe only once a month. All you have to do is make one payment in a month, and pay it off. Make one payment with it the next month. Pay it off. Just as long as you pay off your bill every month, no matter how big it is, you are improving your credit. Buy one tank of gas a month with a credit card (or all your gas, if you're like me). But as others say, you NEED to get a credit card and use it wisely if you want to build serious credit.

I used to be one of the types that said "I will NEVER own a credit card!" But I've been hooked on all the advantages, IF USED WISELY, of course.
Apr 12, 2010 12:56pm
F

fan_from_texas

Senior Member

2,693 posts
Apr 12, 2010 1:42 PM
Credit cards aren't stupid, but they can facilitate stupid decisions. if you're prone to overspending, having a credit card can result in ridiculous amounts of debt at high interest rates. Think of it like gun ownership--the gun itself isn't bad and doesn't kill people, but it can facilitate worse outcomes for those prone to doing stupid things (like getting in fights and then shooting people). The tool itself isn't bad, even if it makes it easier to do bad things.

Credit cards are great for:
(1) convenience; if you travel, entertain clients, or shop online ever, having a credit card makes things much easier.
(2) floating the interest for a month, as mentioned above. When you can pair this with an interest-bearing account (or match it up with a HELOC that always carries a balance), you can save good money on the interest.
(3) keeping track of your spending, inasmuch as you can download and track every penny, which you can't do as readily with cash.
(4) cash back/rewards/points.
(5) building good credit.

We made approximately $400-500 last year off credit cards without paying a cent of interest. Used wisely, credit cards can be great. Used poorly, not so much.
Apr 12, 2010 1:42pm
R

raiderbuck

Senior Member

1,623 posts
Apr 12, 2010 4:00 PM
I've used the card sparingly, but for big purchases that needed to be made. I moved out of my parents house a few years ago and used the card for items I needed (a bed, mattress, couch, chair, etc.,). If I had the ability to payoff $2500 in furniture in a month I'd do it...but unfortunately I don't lol.

I also used to it to fix my car a while back. This did drive up my balance and shoot down my available credit, and I've paid it down but not off. I'm definitely guilty of carrying a balance on the card, but I'm in no way an abuser IMO. I use my other cards for the rewards points and discounts, especially my department store cards with the outrageous rates. I try to use cash on my purchases, or use my card when I know I'm getting something in return (online, Ultimate Rewards with Chase, etc.,)...it just sucks because the sole purpose of opening the card was to use it for emergencies...and I feel like I'm getting penalized.

I'll talk to Chase tonight to see what I we can work out. Lucky for me, I do have parents who are willing to help.
Apr 12, 2010 4:00pm
thePITman's avatar

thePITman

Senior Member

3,867 posts
Apr 12, 2010 4:09 PM
raiderbuck wrote:I moved out of my parents house a few years ago and used the card for items I needed (a bed, mattress, couch, chair, etc.,).
This is where we differ. I got my credit card a little over a year ago, and I moved out/bought my own house in August of 2009. I am still without a kitchen table or chairs, and I finally got to get a couch and love seat after I had lived in the house for 2-3 months. I waited until I had the money, and THEN I bought it. I understand that depending on living situations, the things you got may have been a necessity (I'm not judging you, just recognizing differences. Sorry if that came off the wrong way.) I had 3 house purchases I was going to make - new big screen TV for basement, couch and loveseat for upstairs living room, and kitchen table and chairs. I knew I didn't have the money to get them all at once, so I have spread them out. Two have been knocked out, and I have one to go. I'm saving up for it now.
Apr 12, 2010 4:09pm
F

fan_from_texas

Senior Member

2,693 posts
Apr 12, 2010 4:12 PM
^^^^Sounds like you're doing it the right way.

raider, look at the interest on your card. It's probably in the 15-20% range. Going on those numbers, you're better off paying down credit card debt than paying extra on your mortgage, investing in the stock market, etc.
Apr 12, 2010 4:12pm
Q

queencitybuckeye

Senior Member

7,117 posts
Apr 12, 2010 4:18 PM
raiderbuck wrote: I've used the card sparingly, but for big purchases that needed to be made. I moved out of my parents house a few years ago and used the card for items I needed (a bed, mattress, couch, chair, etc.,). If I had the ability to payoff $2500 in furniture in a month I'd do it...but unfortunately I don't lol.
Too late now, but for future reference, we've bought some furniture recently and just about every store has had some sort of 6-, 12-, or 24-month interest-free payment plans available.
Apr 12, 2010 4:18pm
McFly1955's avatar

McFly1955

Senior Member

1,441 posts
Apr 12, 2010 4:55 PM
I got a card on my parents plan when I was 14 --- When I check my credit score it says "credit history --- 10 years"..

Never carried a balance, ran up a couple grand for finishing the basement into a movie theater/office just a couple weeks back (ongoing), and it will be paid off by the end of the month, and I was able to use around $100 worth of Lowe's gift cards that I received from credit card rewards....

Now this was out of the ordinary for us, but I always buy groceries, household items, and pay my cell phone bill each month with a credit card, and I ALWAYS pay it off each month.....

The 30 day loan statement above is exactly how I treat it.
Apr 12, 2010 4:55pm
M

MontyBrunswick

Apr 12, 2010 5:51 PM
Quint wrote: People who hate them are the people who can't control themselves, and have to pay the bad interest rates when they don't pay it off in full. . . which is how the credit card companies make their money.
Actually, credit card companies make most of their money off of transaction fees between the seller and Visa/Mastercard/Whoever. That's why some convenience stores have a minimum cost before you can use a credit card.

If someone lets their credit card usage spiral out of control, the CC companies normally just cut their loss in the event a cardholder files for bankruptcy.
Apr 12, 2010 5:51pm