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Re: Credit Cards

Postby Metroid » Mon Aug 23, 2010 9:33 pm

The Artful Dodger wrote:
kab21 wrote:
woodson_28 wrote:
This. I suggest grabbing the books "Total Money Makeover" or "Financial Peace University" (both by Dave Ramsey) before you get yourself into to credit card debt. Both can be found at your local library and checked out for free. And both deal with the idea of living "debt free".


Credit cards don't equal debt. it's only when you use them to buy stuff you can't afford.


Ah, having a balance means debt. Buying things you couldn't really afford in the first place is what I'd call being "in debt". It's fine to have debt as long as you can keep it manageable.

Exactly. I have debt. We owe on our home and I am building up some debt to get an education. I don't go out and buy jet skis, or a new flat screen, or take a trip to the Bahamas. That's stuff I'd love to have, or do, but none of it is anything I need or can afford. I use my credit cards for gas, food, clothes, trips(that I can afford) etc., and I pay them off right away. Being in debt would be if I had a mortgage, a car payment, owe on school loans, and had 10K in credit card debt because I bought all those things I couldn't afford.
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Re: Credit Cards

Postby StlSluggers » Mon Aug 23, 2010 9:38 pm

Metroid wrote:
The Artful Dodger wrote:
kab21 wrote:
Credit cards don't equal debt. it's only when you use them to buy stuff you can't afford.


Ah, having a balance means debt. Buying things you couldn't really afford in the first place is what I'd call being "in debt". It's fine to have debt as long as you can keep it manageable.

Exactly. I have debt. We owe on our home and I am building up some debt to get an education. I don't go out and buy jet skis, or a new flat screen, or take a trip to the Bahamas. That's stuff I'd love to have, or do, but none of it is anything I need or can afford. I use my credit cards for gas, food, clothes, trips(that I can afford) etc., and I pay them off right away. Being in debt would be if I had a mortgage, a car payment, owe on school loans, and had 10K in credit card debt because I bought all those things I couldn't afford.

I really want to tap my HELOC to replace my wood floors and/or update our bathrooms, but that's just not good debt right now. :-/
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Re: Credit Cards

Postby bigh0rt » Mon Aug 23, 2010 9:39 pm

StlSluggers wrote:
Metroid wrote:
The Artful Dodger wrote:
Ah, having a balance means debt. Buying things you couldn't really afford in the first place is what I'd call being "in debt". It's fine to have debt as long as you can keep it manageable.

Exactly. I have debt. We owe on our home and I am building up some debt to get an education. I don't go out and buy jet skis, or a new flat screen, or take a trip to the Bahamas. That's stuff I'd love to have, or do, but none of it is anything I need or can afford. I use my credit cards for gas, food, clothes, trips(that I can afford) etc., and I pay them off right away. Being in debt would be if I had a mortgage, a car payment, owe on school loans, and had 10K in credit card debt because I bought all those things I couldn't afford.

I really want to tap my HELOC to replace my wood floors and/or update our bathrooms, but that's just not good debt right now. :-/

Sell one of your children on the black market. That'll net you plenty of cash, and boost the value of your home.
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Re: Credit Cards

Postby StlSluggers » Mon Aug 23, 2010 9:59 pm

bigh0rt wrote:
StlSluggers wrote:
Metroid wrote:Exactly. I have debt. We owe on our home and I am building up some debt to get an education. I don't go out and buy jet skis, or a new flat screen, or take a trip to the Bahamas. That's stuff I'd love to have, or do, but none of it is anything I need or can afford. I use my credit cards for gas, food, clothes, trips(that I can afford) etc., and I pay them off right away. Being in debt would be if I had a mortgage, a car payment, owe on school loans, and had 10K in credit card debt because I bought all those things I couldn't afford.

I really want to tap my HELOC to replace my wood floors and/or update our bathrooms, but that's just not good debt right now. :-/

Sell one of your children on the black market. That'll net you plenty of cash, and boost the value of your home.

Amen to that! They're part of the reason we're not updating the flooring.

:-b
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Re: Credit Cards

Postby Pogotheostrich » Mon Aug 23, 2010 10:51 pm

StlSluggers wrote:Does using the credit card actually matter in your credit score?

I thought the things that mattered were:

1. Debt-to-asset, where debt is calculated by total available credit
2. Utilization ratio, calculated as outstanding balance divided by available balance
2. Time since last delinquency
3. Time with the company

With respect to #2, you might get less of a positive uptick for not having any balance, but you'll still get the other benefits.
I'm pretty sure that just taking out a card and letting it sit there is a perfectly fine strategy (ceteris paribus).


See that's what I thought. Using your card doesn't actually build your credit having an open line of credit does that. If you get rewards then go ahead and use it but if you don't get rewards and you are only spending what you can afford get a debit card.
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Re: Credit Cards

Postby ayebatter » Tue Aug 24, 2010 12:06 am

StlSluggers wrote:Does using the credit card actually matter in your credit score?

I thought the things that mattered were:

1. Debt-to-asset, where debt is calculated by total available credit
2. Utilization ratio, calculated as outstanding balance divided by available balance
2. Time since last delinquency
3. Time with the company



I'll add few other important factors in your score:
1. Time on the bureau (how many years have you had credit that rates on the bureau)
2. Numbers of trade lines in good standing(the number of creditors you have; house,cards, cars, etc. with paid as agreed status weather open or closed)
3. High limit amounts that are not home loans (a $40,000 car loan that's paid off or not scores better than a $5000 boat loan)
4. 1st mortgage with no lates
5.be aware of helocs, as even with a zero balance, helocs score as revolving debt (credit cards)
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