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      01-08-2015, 02:14 PM   #23
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Originally Posted by Whostheboss View Post
My internet connection is 100%.
Anyway, I try to stay away from Credit cards as much as possible. Until one day i will find a very valuable reason to own one. Until then, i only buy what i can afford now. Obviously with the exception of big loans such as Tuition, Mortgage or car.
I thought just like you did for a long time, because I don't finance anything unless it's a mortgage. But as a European, I quickly figured out cash isn't king but credit scores are king. So I have a work and a personal credit card now, which are paid off every single month in full. I enjoy the points (free money) and have never paid a cent in interest.
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      01-08-2015, 02:18 PM   #24
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Originally Posted by P1et View Post
I thought just like you did for a long time, because I don't finance anything unless it's a mortgage. But as a European, I quickly figured out cash isn't king but credit scores are king. So I have a work and a personal credit card now, which are paid off every single month in full. I enjoy the points (free money) and have never paid a cent in interest.
Don't you pay fees? How do these card companies make money?
Yes, credit scores are valuable. Last i checked, my median score was >800
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      01-08-2015, 02:19 PM   #25
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Originally Posted by Whostheboss View Post
My internet connection is 100%.
Anyway, I try to stay away from Credit cards as much as possible. Until one day i will find a very valuable reason to own one. Until then, i only buy what i can afford now. Obviously with the exception of big loans such as Tuition, Mortgage or car.
Buying what you can afford doesn't mean you need to stay away from credit cards, FYI...

With no credit history, you'll often have difficulty getting that mortgage or car.

Edit: missed your reply.

Oh I don't have fees on my cards either.
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      01-08-2015, 02:26 PM   #26
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Originally Posted by Whostheboss View Post
My internet connection is 100%.
Anyway, I try to stay away from Credit cards as much as possible. Until one day i will find a very valuable reason to own one. Until then, i only buy what i can afford now. Obviously with the exception of big loans such as Tuition, Mortgage or car.
Yes. 100% of financially responsible adults who use credit cards only buy what they can afford now, too. Except they reap the countless benefits of doing so as opposed to using debit cards or cash. I've never heard a compelling reason to use a debit card. One I have for my accounts with UBS defers charges until the end of the month, but even then...why use something which is a direct link to my money.
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      01-08-2015, 02:45 PM   #27
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Quote:
Originally Posted by Whostheboss View Post
My internet connection is 100%.
Anyway, I try to stay away from Credit cards as much as possible. Until one day i will find a very valuable reason to own one. Until then, i only buy what i can afford now. Obviously with the exception of big loans such as Tuition, Mortgage or car.
Regularly using a credit card and "only buying what [you] can afford" are not mutually exclusive ventures. The vast majority of affluent individuals use credit cards for the majority of their purchases and simply pay off the balance in full each month. In effect they're using their cards like debit cards, but they get additional rewards (cash back, redeemable points, etc.) in addition to boosting their FICO scores.

There is 0 drawback to owning a credit card. In fact, I would argue credit cards are even safer than cash. If someone steals your credit card (either physically or digitally) and charges something to it, you are not responsible for that. I've had my card information stolen probably 3 times in my life with criminals purchasing merchandise varying from as little as $100 to as much as $700, and I wasn't responsible for a dime of that.

I'm a little surprised that your FICO score is > 800 if you've barely used your credit card. While your credit utilization ratios are low, they aren't optimal as (for example) a 1% credit utilization ratio with regular credit card use through 12 months will boost your credit score more than a 0% credit utilization ratio with rare credit card use through 12 months. But it's certainly possible I suppose. You can buy your scores for $50 at myfico.com. You'll get all three FICO scores.

Quote:
Originally Posted by Whostheboss View Post
Don't you pay fees? How do these card companies make money?
Yes, credit scores are valuable. Last i checked, my median score was >800
They make money from the vendors that accept your credit card through credit card fees. You go to a restaurant and charge $50 to your credit card. The credit card company gets a base fee plus 2% of that amount. Have you ever wondered why many stores have "minimum purchase of $5 required for credit card" (or something along those lines)? That's why.

Sure, they also get money from suckers who willingly choose to pay interest on their credit card balance by not paying the balance down in full each month, but there's no reason you need to do that. It's clear that you spend your money responsibly. Why not use a credit card?

At worst you could get a free cash rewards credit card like Bank of America Cash Rewards and you'd get 3% cash back on gas, 2% on groceries, and 1% on everything else. You also get an additional 10% bonus if you redeem your cash rewards into a bank of america checking or savings account or if you use your cash rewards to pay down your balance. Thus in effect you're really getting 3.3%, 2.2%, and 1.1% cash back, respectively. If your annual expenditures are $50,000 a year, you're losing out on a free $500 at minimum. It's not mountains of cash but it's free money.

There are also credit cards with annual fees, but in exchange for these annual fees they also offer superior rewards provided that you charge a minimum amount to the card every year and provided that you're fully taking advantages of the rewards the card provides. Not all credit card rewards are cash back. Some of them are focused on lowering airfare costs which is good if you travel a lot, for example. You'll have to do the "break even" analysis yourself, but I would suggest starting out with a simple, free credit card like BoA cash rewards.
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      01-08-2015, 02:47 PM   #28
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Quote:
Originally Posted by Whostheboss View Post
My internet connection is 100%.
Anyway, I try to stay away from Credit cards as much as possible. Until one day i will find a very valuable reason to own one. Until then, i only buy what i can afford now. Obviously with the exception of big loans such as Tuition, Mortgage or car.
Quote:
Originally Posted by Whostheboss View Post
Don't you pay fees? How do these card companies make money?
Yes, credit scores are valuable. Last i checked, my median score was >800

Many people have told me the same thing, and I don't understand that mentality. Using a credit card does not mean you are spending more than you can afford. Responsibly using one is using it for your daily expenses, treating it like cash and paying in full each month so you are not charged any interest. Depending on the card, you can also take advantage of flight miles or cash back which is a nice perk. It is also more secure in the event of any fraud, as cash is not coming directly out of your account like that of a debit card.

Some cards may have annual fees, but many don't. Aside from people who do pay interest on their balances, credit card companies make money on each transaction. Businesses must pay a fee on a percentage of the sale for every credit card transaction. It is a cost of doing business that retailers accept, otherwise customers wanting to use credit cards may go elsewhere.

In addition to creating a credit history, credit cards are useful and sometimes necessary for reserving a rental car or hotel room. A hotel or rental car company may accept a debit card, but they will put a temporary authorization charge on it which will instantly tie up those funds in your checking account. This is a non issue with a credit card.
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      01-08-2015, 02:49 PM   #29
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Originally Posted by Templar View Post
Buying what you can afford doesn't mean you need to stay away from credit cards, FYI...

With no credit history, you'll often have difficulty getting that mortgage or car.

Edit: missed your reply.

Oh I don't have fees on my cards either.
Quote:
Originally Posted by FC4 View Post
Yes. 100% of financially responsible adults who use credit cards only buy what they can afford now, too. Except they reap the countless benefits of doing so as opposed to using debit cards or cash. I've never heard a compelling reason to use a debit card. One I have for my accounts with UBS defers charges until the end of the month, but even then...why use something which is a direct link to my money.
So can you guys school me a on cards then.

You use your CC to purchase what you can afford, then at the end of the month, you pay your card bill? How's that any different from paying cash/Debit card? Is it because by using a credit card, each time you swipe, the card company gives you a miserly 25cents or you earn "Points" to use in Hotels and Plane tickets?

The main reason i even stayed away is because of some people i've seen, they end up ranking a >$10,000 cc debt. I'm like fck that.

I have a decent amount saved in my savings account, all my bills are paid. And like i mentioned before, last time i checked my credit score, the median score was above 800.
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      01-08-2015, 02:50 PM   #30
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Quote:
Originally Posted by JasonCSU View Post
Many people have told me the same thing, and I don't understand that mentality. Using a credit card does not mean you are spending more than you can afford. Responsibly using one is using it for your daily expenses, treating it like cash and paying in full each month so you are not charged any interest. Depending on the card, you can also take advantage of flight miles or cash back which is a nice perk. It is also more secure in the event of any fraud, as cash is not coming directly out of your account like that of a debit card.

Some cards may have annual fees, but many don't. Aside from people who do pay interest on their balances, credit card companies make money on each transaction. Businesses must pay a fee on a percentage of the sale for every credit card transaction. It is a cost of doing business that retailers accept, otherwise customers wanting to use credit cards may go elsewhere.

In addition to creating a credit history, credit cards are useful and sometimes necessary for reserving a rental car or hotel room. A hotel or rental car company may accept a debit card, but they will put a temporary authorization charge on it which will instantly tie up those funds in your checking account. This is a non issue with a credit card.
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      01-08-2015, 02:54 PM   #31
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Quote:
Originally Posted by NemesisX View Post
Regularly using a credit card and "only buying what [you] can afford" are not mutually exclusive ventures. The vast majority of affluent individuals use credit cards for the majority of their purchases and simply pay off the balance in full each month. In effect they're using their cards like debit cards, but they get additional rewards (cash back, redeemable points, etc.) in addition to boosting their FICO scores.

There is 0 drawback to owning a credit card. In fact, I would argue credit cards are even safer than cash. If someone steals your credit card (either physically or digitally) and charges something to it, you are not responsible for that. I've had my card information stolen probably 3 times in my life with criminals purchasing merchandise varying from as little as $100 to as much as $700, and I wasn't responsible for a dime of that.

I'm a little surprised that your FICO score is > 800 if you've barely used your credit card. While your credit utilization ratios are low, they aren't optimal as (for example) a 1% credit utilization ratio with regular credit card use through 12 months will boost your credit score more than a 0% credit utilization ratio with rare credit card use through 12 months. But it's certainly possible I suppose. You can buy your scores for $50 at myfico.com. You'll get all three FICO scores.



They make money from the vendors that accept your credit card through credit card fees. You go to a restaurant and charge $50 to your credit card. The credit card company gets a base fee plus 2% of that amount. Have you ever wondered why many stores have "minimum purchase of $5 required for credit card" (or something along those lines)? That's why.

Sure, they also get money from suckers who willingly choose to pay interest on their credit card balance by not paying the balance down in full each month, but there's no reason you need to do that. It's clear that you spend your money responsibly. Why not use a credit card?

At worst you could get a free cash rewards credit card like Bank of America Cash Rewards and you'd get 3% cash back on gas, 2% on groceries, and 1% on everything else. You also get an additional 10% bonus if you redeem your cash rewards into a bank of america checking or savings account or if you use your cash rewards to pay down your balance. Thus in effect you're really getting 3.3%, 2.2%, and 1.1% cash back, respectively. If your annual expenditures are $50,000 a year, you're losing out on a free $500 at minimum. It's not mountains of cash but it's free money.

There are also credit cards with annual fees, but in exchange for these annual fees they also offer superior rewards provided that you charge a minimum amount to the card every year and provided that you're fully taking advantages of the rewards the card provides. Not all credit card rewards are cash back. Some of them are focused on lowering airfare costs which is good if you travel a lot, for example. You'll have to do the "break even" analysis yourself, but I would suggest starting out with a simple, free credit card like BoA cash rewards.

I think i'm understanding now.
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      01-08-2015, 04:14 PM   #32
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Quote:
Originally Posted by Whostheboss View Post

I think i'm understanding now.
I got my visa signature rewards card a few months ago and have already racked up almost $500 in free money. I should have done this years ago.
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      01-08-2015, 04:32 PM   #33
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Originally Posted by Whostheboss View Post
So can you guys school me a on cards then.

You use your CC to purchase what you can afford, then at the end of the month, you pay your card bill? How's that any different from paying cash/Debit card? Is it because by using a credit card, each time you swipe, the card company gives you a miserly 25cents or you earn "Points" to use in Hotels and Plane tickets?

The main reason i even stayed away is because of some people i've seen, they end up ranking a >$10,000 cc debt. I'm like fck that.

I have a decent amount saved in my savings account, all my bills are paid. And like i mentioned before, last time i checked my credit score, the median score was above 800.
That's right mate. And to answer your previous question, I have two credit cards and pay zero annual fees for them (one is American Express, the other is from Chase). Say you have a $10K limit. I'd suggest not exceeding half of that per month. At the end of the month, you pay your credit card online. The only people that rack up credit card debt are irresponsible people, which credit card companies LOVE. You're right: responsible people like you and I are slightly useless to credit card companies. We pay off our cards every month, and reap the benefits. I've made thousands of dollars on points and it's 100% free. So I can swipe a debit card, or a credit card. The swipe is the same, but the credit card gives me points. So why not?
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      01-08-2015, 05:36 PM   #34
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Originally Posted by Whostheboss View Post
Is it because by using a credit card, each time you swipe, the card company gives you a miserly 25cents or you earn "Points" to use in Hotels and Plane tickets?
That "miserly" $.25 is better than the $0.00 you're earning by using your debit card, unless you're using a points earning/cash back debit card, which I assume you're not.
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      01-09-2015, 10:13 AM   #35
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Quote:
Originally Posted by upstatedoc View Post
If ur takin clients out and want to show them the blaaaaang, get the Amex Platinum..
This is definitely industry dependent.

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Originally Posted by P1et View Post
Now that would be frowned upon if you're in sales mate... Just like showing up in an expensive car at a customer meeting.
Right you are. I deal with a lot of blue collar maintenance personnel and plant managers in the country who would either not care about the card or look down on something flashy.

A few years back I showed up to a meeting with a Facility Manager in my 2006 330i (7 years old at the time) and he made a negative comment about my car. In sales the image you portray always matters.
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      01-09-2015, 10:33 AM   #36
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Quote:
Originally Posted by NemesisX View Post
Regularly using a credit card and "only buying what [you] can afford" are not mutually exclusive ventures. The vast majority of affluent individuals use credit cards for the majority of their purchases and simply pay off the balance in full each month. In effect they're using their cards like debit cards, but they get additional rewards (cash back, redeemable points, etc.) in addition to boosting their FICO scores.

There is 0 drawback to owning a credit card. In fact, I would argue credit cards are even safer than cash. If someone steals your credit card (either physically or digitally) and charges something to it, you are not responsible for that. I've had my card information stolen probably 3 times in my life with criminals purchasing merchandise varying from as little as $100 to as much as $700, and I wasn't responsible for a dime of that.
THAT! That's the #1 and only beneficial reason i was thinking when i was considering getting a card. It's safer, whereas my debit card is linked to my bank account cash.

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Originally Posted by SunnyD View Post
That "miserly" $.25 is better than the $0.00 you're earning by using your debit card, unless you're using a points earning/cash back debit card, which I assume you're not.
Quote:
Originally Posted by P1et View Post
That's right mate. And to answer your previous question, I have two credit cards and pay zero annual fees for them (one is American Express, the other is from Chase). Say you have a $10K limit. I'd suggest not exceeding half of that per month. At the end of the month, you pay your credit card online. The only people that rack up credit card debt are irresponsible people, which credit card companies LOVE. You're right: responsible people like you and I are slightly useless to credit card companies. We pay off our cards every month, and reap the benefits. I've made thousands of dollars on points and it's 100% free. So I can swipe a debit card, or a credit card. The swipe is the same, but the credit card gives me points. So why not?
Hmmmmmmmm.... free money, why not?!
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      01-09-2015, 01:36 PM   #37
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Quote:
Originally Posted by NemesisX View Post
Regularly using a credit card and "only buying what [you] can afford" are not mutually exclusive ventures. The vast majority of affluent individuals use credit cards for the majority of their purchases and simply pay off the balance in full each month. In effect they're using their cards like debit cards, but they get additional rewards (cash back, redeemable points, etc.) in addition to boosting their FICO scores.

There is 0 drawback to owning a credit card. In fact, I would argue credit cards are even safer than cash. If someone steals your credit card (either physically or digitally) and charges something to it, you are not responsible for that. I've had my card information stolen probably 3 times in my life with criminals purchasing merchandise varying from as little as $100 to as much as $700, and I wasn't responsible for a dime of that.

I'm a little surprised that your FICO score is > 800 if you've barely used your credit card. While your credit utilization ratios are low, they aren't optimal as (for example) a 1% credit utilization ratio with regular credit card use through 12 months will boost your credit score more than a 0% credit utilization ratio with rare credit card use through 12 months. But it's certainly possible I suppose. You can buy your scores for $50 at myfico.com. You'll get all three FICO scores.



They make money from the vendors that accept your credit card through credit card fees. You go to a restaurant and charge $50 to your credit card. The credit card company gets a base fee plus 2% of that amount. Have you ever wondered why many stores have "minimum purchase of $5 required for credit card" (or something along those lines)? That's why.

Sure, they also get money from suckers who willingly choose to pay interest on their credit card balance by not paying the balance down in full each month, but there's no reason you need to do that. It's clear that you spend your money responsibly. Why not use a credit card?

At worst you could get a free cash rewards credit card like Bank of America Cash Rewards and you'd get 3% cash back on gas, 2% on groceries, and 1% on everything else. You also get an additional 10% bonus if you redeem your cash rewards into a bank of america checking or savings account or if you use your cash rewards to pay down your balance. Thus in effect you're really getting 3.3%, 2.2%, and 1.1% cash back, respectively. If your annual expenditures are $50,000 a year, you're losing out on a free $500 at minimum. It's not mountains of cash but it's free money.

There are also credit cards with annual fees, but in exchange for these annual fees they also offer superior rewards provided that you charge a minimum amount to the card every year and provided that you're fully taking advantages of the rewards the card provides. Not all credit card rewards are cash back. Some of them are focused on lowering airfare costs which is good if you travel a lot, for example. You'll have to do the "break even" analysis yourself, but I would suggest starting out with a simple, free credit card like BoA cash rewards.
not surprising that his score is close to 800. you usually start out with a high score BUT just because you have high credit score does not mean that your credit is strong.

for example, if an 18 year old kid walks into a bmw dealership and wants to lease a car with an 800 credit score but 0 or minimal previous credit he will most likely get declined. on the other hand, if a 25 or 30 year applies for the same loan with a 700 score but a credit history of a few years than he will have a better chance of getting approved.
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      01-09-2015, 03:26 PM   #38
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Originally Posted by bkM3 View Post
not surprising that his score is close to 800. you usually start out with a high score BUT just because you have high credit score does not mean that your credit is strong.

for example, if an 18 year old kid walks into a bmw dealership and wants to lease a car with an 800 credit score but 0 or minimal previous credit he will most likely get declined. on the other hand, if a 25 or 30 year applies for the same loan with a 700 score but a credit history of a few years than he will have a better chance of getting approved.
Well this is not really my area of expertise, but according to this forbes article people usually start off with credit scores in the 600s which is quite low -

http://www.forbes.com/sites/moneywis...credit-scores/

Quote:
To clear up another myth, your credit score doesn’t start out in the “excellent” range until you do something to mess it up. Everyone starts with a moderate credit score somewhere in the 600s, as opposed to a perfect 850. From there, it’s up to you to build credit through a solid history of on-time bill payments and healthy credit card utilization.
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      01-10-2015, 05:37 PM   #39
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Originally Posted by NemesisX View Post
Well this is not really my area of expertise, but according to this forbes article people usually start off with credit scores in the 600s which is quite low -

http://www.forbes.com/sites/moneywis...credit-scores/
Should have explained it a bit better. For example, if your only credit is a cell phone bill that you pay on time your credit can be 800. That doesn't mean that you will get approved for a loan for a large sum of money.
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      01-10-2015, 06:33 PM   #40
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Credit score is only a representation of well you pay back money you borrow. In no way is it an indicator of how much you can borrow.
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      01-10-2015, 10:29 PM   #41
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Quote:
Originally Posted by Whostheboss View Post
THAT! That's the #1 and only beneficial reason i was thinking when i was considering getting a card. It's safer, whereas my debit card is linked to my bank account cash.





Hmmmmmmmm.... free money, why not?!
Just to add on. When I first got my credit card, I thought it was just like a loan and screwed myself. I maxed it out and just slowly paid it down over time. I kept wondering why my score was shit. I stopped using it for a while and then I finally read up on how to effectively use a credit card. I paid it off, and then I maxed it out again, but right before my due date I paid it off again. I only bought the things I can pay in cash at that time, and I also set up my automatic bills to it. I've been repeating that for a while now and my score jumped up considerably. The points are pretty lame, like spend $1000 to get $10 back, but it adds up if you forget about it and also don't buy something useless just to get points.

This really is an effective way to use a credit card. Your credit builds up, you pay no interest and you get points. It's a win win.
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