What is Digg?169 Comments
- Usodarake, on 10/12/2007, -3/+91It's also always a good idea to pay off your balance every month
- gharding, on 10/12/2007, -4/+91Exactly. I have no idea what the APR is on my credit cards, let alone the default rate. I've never not paid it off in full. If I ever wanted to buy something I couldn't afford, I didn't buy it. Easy as that.
- gharding, on 10/12/2007, -1/+53@swiftekho:
How do you buy stuff online or make big purchases? If I get robbed, I'd rather be able to call a number and report a CC stolen than have lost $3k in cash.
If you're responsible, credit cards rock. I get rewards, insurance, discounts and all that jazz with my card, as well as a way to cancel charges if I get screwed by a merchant. - killinger777, on 10/12/2007, -2/+27I use a credit card for everything. I don't carry any cash. I pay it off regularly. I paid $0.00 interest last year. I regularly get $50.00 checks for reward points or whatever it is. The technical term that the credit card companies have for me is a "deadbeat."
- inactive, on 10/12/2007, -2/+22Swift, that works well until you have to buy a car, or a house, or try to establish a line of credit later. Get a card or 2 and don't use them except for gas, and pay that off every month.
- VeganG, on 10/12/2007, -2/+20@swiftekho
Financial experts do NOT say that cash-only is the way to go. You make me laugh. - grubesteak, on 10/12/2007, -1/+17*sigh* So much misinformation.
I'm a trained budget coach, so I'll let you in on a few "secrets."
1. When you pay with plastic, you spend more. That's why McDonald's lets you pay with your credit card and debit card. When you pay with cash, it registers in the head a little more and you spend less.
2. Eighty percent of credit card holders don't pay off their credit cards every month. So, those airline miles that you never use are actually costing a lot of people a lot of money in interest.
3. You don't need a high credit score to buy a house. Believe it or not, there are still banks that manually underwrite your loan, meaning they actually look at your income, debt, and your life status. A high credit score really only means that the person has a large amount of debt, for long periods of time. Essentially, it's an "I love debt score."
4. You can save up money and buy things like cars, computers, you name it. And with the right bank, you can even do it with your debit card, which has the same protection as a credit card. Don't believe me? Look at Visa's own policies on their web site.
5. I've seen several people have the problem David Bach addresses. It's a fairly new practice, but it's quickly becoming more popular with credit card companies.
Feel free to bury me, but let me tell you from personal experience: there's no better feeling than not having a credit card payment month after month and being able to walk into a store, buy what you want, and actually OWN it.
For what it's worth. - sdfghjkl, on 10/12/2007, -2/+18Cash is for idiots. Get a cashback/points card and pay your bill off in full each month; free money. Credit card companies only win if you carry over a balance.
- sdfghjkl, on 10/12/2007, -0/+13According to digg users you just use your huge amount of capital to buy it straight out.
- lbih, on 10/12/2007, -1/+13Having credit cards and using them is good (responsibly) for your credit rating, which is important if you ever want a loan for a house, etc.
- trer, on 10/12/2007, -0/+12@jbarnett
Careful with your debit cards. If that gets stolen, that money is coming straight from your checking account also. At least with credit cards, you can owe a balance while you get the whole mess figured out instead of having your checking account emptied. - gharding, on 10/12/2007, -2/+14In fact, keeping unused credit cards around is BAD for getting a loan. The company sees you have the line of credit with your card available, so they'll give you less.
Who the hell taught all you people that credit cards = bad? If you're a responsible person with enough cash to cover it, they're amazingly useful and quick and hassle-free. Sure, credit cards suck for idiots that can't manage their money or can't avoid impulse buying everything, but for regular intelligent people, they're so useful. And whoever these financial advisors are that people are talking to, they're full of *****. - gharding, on 10/12/2007, -0/+11Yeah, I walked to the broker with $450,000 in an attache briefcase handcuffed to my wrist. The rest of you are chumps!!
- sergeantmudd, on 10/12/2007, -0/+9I consider anyone who sees the word "flip" as the key to financial success an enormous idiot.
- sergeantmudd, on 10/12/2007, -0/+9My ass it is. I am sure the profits stemming from people on the brink of bankruptcy pay the losses of bankruptcies several times over. If unworthy people weren't profitable, they wouldn't mail out pre-approved credit cards to any and everyone
- brstilson, on 10/12/2007, -1/+9I know someone who got her credit card interest raised. Why? Because her credit score went up. Credit card companies are so bad now it's criminal. They got the bankruptcy laws changed and now have marched forth undeterred. Credit is a scam and a vehicle for class discrimination. You are judged everywhere by your credit report. Bad credit or no credit can raise your car insurance rates, keep you from getting jobs or even housing. It's an elaborate trap designed to keep poor people poor and in debt with no means of escape.
When this country becomes a fascist dictatorship, it will be at the hands of mega-corporations. Corporations aren't bound by the constitution, and now we have groups like the RIAA actually deploying their own make-shift police forces.
Don't believe me? http://www.laweekly.com/news/news/music-industry-puts-troops-in-the-streets/2111/ - sergeantmudd, on 10/12/2007, -1/+9It's a bad idea. One constantly signing up for cards will lower your credit score. Two inactive cards don't build credit. And three, the unused cards' credit limit counts against your "total credit line"
- dannyapplesauce, on 10/12/2007, -0/+8Do not use freecreditreport.com unless you want to be sucked into the enrollment in Triple Advantage for $12 a month. And then you have to call and deal with crappy customer support to cancel as they "check your numbers" and see that your eligible for a decreased amount of $6.
Quoted from their site "ConsumerInfo.com and Freecreditreport.com are not affiliated with the annual free credit report program. Under a new Federal law, you have the right to receive a free copy of your credit report once every 12 months from each of the three nationwide consumer reporting companies. To request your free annual report under that law, you must go to www.annualcreditreport.com."
Meh ... - Chompy, on 10/12/2007, -3/+10"Debit card. I have a "Visa" and "Mastercard" that works just like a credit card, but linked directly to my checking account. So instead of a "charge" with "interest" it just takes it from my checking like it was a check. They work every where that accepts mastercard or visa (that I've tried)."
Debit cards are for suckers. All the convenience of credit cards, but with no insurance coverage, hidden fees at many places, no credit building, and no recourse if a retailer screws you. Why does anyone even use debit cards? Just use a credit card and pay it off each month.
"You can link Paypal directly to your checking account. No CC required."
God have mercy on the soul of anyone who gives Paypal a line into their checking account. - qqstar, on 10/12/2007, -0/+7The joke is on us! I watched the coverage of the special hearings in on credit card issues on CSPAN the other day. The democratic congress man-whore from Delaware was gushing about how wonderful the credit card companies are. It was embarrassing to hear...I thought he should have had "sponsored by" sewn on labels like a NASCAR driver on his suit. Of course, you can now pay the IRS with your credit card, so it's seriously doubtful anything will happen to straighten any of the "Loan Shark" interest rates or abuses by these companies. Simply stated, they're in bed together and it's a match made in campaign contribution heaven. Of course, we the voters have lost.
- lbih, on 10/12/2007, -3/+10No, you do need to use them to have them help your credit score.
- mookiemookie, on 10/12/2007, -2/+8Yeah, sure....no trace, no credit....no buying a house or car for you.
- inactive, on 10/12/2007, -2/+8how do you get a loan for a house with no credit?
- vv42, on 10/12/2007, -0/+5I second that... Do NOT use freecreditreport.com, it's a scam site.
Use the governement sanctioned site (FREE): https://www.annualcreditreport.com - shakin, on 10/12/2007, -1/+6Getting a mortgage is easy because the house is collateral. You'll have a problem if you have bad credit, but having no credit is not a problem. I bought my house when I was 22 and I had never had a credit card or anything that could have given me a good credit score and I still got the loan.
If I couldn't pay then the bank would have just sold my house to get their money back.
The hard loans to get are for things like cars that are worth so little. - atbnet, on 10/12/2007, -2/+7No they have to be used to be a benefit.
- greenlight2001, on 10/12/2007, -1/+6I'm guessing some sort of movie reference(?)... its obscurity didn't help and neither did the 'all caps'. You have to quote movies people actually *know*... and let off the shift key once you start the sentence. Practice then come back and try again.
- Tricky, on 10/12/2007, -7/+12I'd like to see you send an eBayer cash, or send Paypal cash. I don't care if it even works, it's too inconvenient to be worth it.
- Charlesbian, on 10/12/2007, -0/+5Even if you consider yourself intelligent, its easy to fall within the grasp of cunning credit card company practices. Good think our consumer education class in highschool gave us a heads up on what to expect on a college campus, aka booths of credit card reps hawking free pizza in exchange for signing up for a card.
The rates offered by these "special student offer" cards are outstanding, and it doesnt even matter if you just cut up the card after getting it in the mail, usually they have a "membership" fee you have to pay off yearly otherwise they charge you out the bunghole.
Just last semester, as the new freshman came in, Jimmy Johns offered free subs and tshirts in exchange for signing up for a capital one card. the line was literally out the door, and almost reached a block. I tried to explain to the kids what was going on, but most of them either gave me blank stares or said "dude, its a free sub". Its not free, its your soul. - z3rr0, on 10/12/2007, -1/+5Financial expert that is all about cash: http://www.daveramsey.com/
- zanzzz, on 10/12/2007, -1/+5The problem with credit cards are the banks. This industry is hugely profitable and banks have spared no expense at lobbying/ buying Congress. The banks have managed to get legislation that allows them to charge interest rates that would have resulted in jail time for them not too many years ago. Recently bankruptcy laws were drastically altered so the banks essentially get their money no matter what now. It seems every other month a new set of rules is issued to the consumer changing the contract to better terms for the bank. The prose is usually such that even experienced finance lawyers can have a difficult time discerning every legal nuance in the new terms of the service agreement. Banks should be allowed to make a fair profit but the balance between profit and fairness to the consumer is way out of wack. Terms should be easy to understand. 30% interest rates and the like should be prohibited. Raising a customer's interest rate to the default maximum based on missing a payment to another unrelated institution should not be allowed. The abuse of fees for profit should stop. The trend has gone away from moderation to aggressive predation by banking institutions and Congress should refuse their bribe offerings and pass reform legislation. Fat chance that will happen!
- CaptSS, on 10/12/2007, -0/+42 days late on mortgage, because we were out of town - but it doesn't matter... credit card interest went to 32%.
I hate MBNA.
Dugg
That one confuses me. Were you 2 days late after the contractual due date or 2 days late after 30 days? 2 days late after your actual due date won't normally show up on your credit report. The reporting increments are 30/60/90 days late. - inactive, on 10/12/2007, -1/+5JB, that does nothing to help you build credit.
- atbnet, on 10/12/2007, -0/+4Congress is investigating universal default and eventually will be making the credit card companies give it up. Citi already dropped it in a goodwill gesture type of move, but they knew it was coming soon anyhow.
- inactive, on 10/12/2007, -0/+4The same congress that decided to change the usury laws so that credit card companies can charge over 30% now? I have my doubts.
- GABULLDAWG, on 10/12/2007, -0/+4"There's a new, completely legal game they're playing" 1) It is not new. Universal Default has been around for years. 2) Congress is probably about to make the clause illegal soon. 3) If you sign, don't whine!
- binaryspiral, on 10/12/2007, -3/+72 days late on mortgage, because we were out of town - but it doesn't matter... credit card interest went to 32%.
I hate MBNA.
Dugg - sdfghjkl, on 10/12/2007, -1/+4'open' cards are a bad sign for a home loan; you have an open $6,000 credit card, a new house, and no furniture, what happens?
- swiftekho, on 10/12/2007, -2/+5Last I checked Debit cards work online too... So, don't even begin to say you need it for online use
- VeganG, on 10/12/2007, -2/+5@southwestnut
You get paid in cash deposit? I think you mean DIRECT deposit. If you're getting paid into your bank account, obviously you're NOT getting paid in cash. - snotrokit, on 10/12/2007, -0/+3If you live anywhere near Richmond, VA. I highly recommend a trip out to the west side and a nice drive around the Capitol One campus. That is a pretty good illustration of how much these folks make off of loan sharking small loans at not necessarily high, but long term interest rates.
Running with zero debt is not something that everyone can do, but living within your means is. Keep your debt load down, and always (quarterly) re-evaluate your debt, where it is, what rates it is at, etc. etc and don't be afraid to move it around after looking at the short and long term impacts. Make a schedule to pay it off and stick to it! - ncdoyle, on 10/12/2007, -1/+4I haven't run into this problem yet (being dropped by a bank), so I can't speak from experience.
But, even if you don't carry a balance, the credit card companies still get per-transaction fees from retailers (I think it's 2% for VISA and 3% for MasterCard). So, the people paying cash help subsidize my MC fees, and I get 1% back with no annual fee. - sdfghjkl, on 10/12/2007, -0/+3Which means it's less likely you can make the mortgage payment.
- sergeantmudd, on 10/12/2007, -3/+6Debit cards are a bad idea for online stuff. Once they've got your card number, it's nearly impossible to put a stop payment on anything. The retailer can slightly change the name of the company, or change the amount by pennies and it will go through. You probably won't run into the problem with big retailers, but it only takes one shady company to cause you months of headaches.
- inactive, on 10/12/2007, -0/+3Debit cards, FTW.
- drdank, on 10/12/2007, -0/+2My college roommate had a capital one card that he paid off the whole balance except for a very small amount. They hit him with the full amount of interest for what he originally owed, regardless if 99% was paid. I think they called it "trailing interest". No shame, these people.
- brstilson, on 10/12/2007, -0/+2"It's not that hard to build credit to a decent score without ever being in "debt.""
I'll vouch for that. I'm 24 years old and have never owned a credit card. I checked my FICO score this morning and it's at 740. I have three car loans on file (one is current), all of which have near-spotless payment history. I have a store finance I used to buy a camcorder at 0% interest.
You can build good credit when buying big ticket items at a retail store. First, save up enough money to pay for the item outright. Then, wait until they're offering 0% financing on the item you want to buy. Then, sign up for their credit card (only if it has no annual fee, most don't anyway but it's good to check) or financing, and buy the item. Usually there is a 6 month or 1 year no interest term. Take all that money you would have used to pay for the item and use it to open a money market account. Over the next 6 months-1 year or more, that money will gain interest while you establish a credit history, all for free. Before your last payment is due, withdraw the money and pay off the loan. You not only built some credit for free, you also made a little bit of money in the process. - siszam, on 10/12/2007, -0/+2It's called manual underwriting and churchillmortgage.com does it. If you have steady income, no bad credit such as late payments etc, and have paid rent, utilities, etc on time, you can get a mortgage with no credit history. Don't let anyone tell you that you can't.
- sergeantmudd, on 10/12/2007, -2/+4Must we have the To Have or Not to Have the Epic Credit Card Battle each time there's an article related to credit cards. Let's all just compromise. Credit cards are a good idea if you are responsible enough to pay your balances each month, contigenices aside. If you are not responsible, only have one with a low limit, and use cash or checks for everything. And we all should stay away from debit cards.
- ScottMitchell, on 10/12/2007, -0/+2I would wager that it's more that they've saturated the market with credit cards and so to continue the growth in profits (which is what drives the growth in share price), they need to raise fees/interest rates. Once you've captured the market, the only way to keep growing is to raise what everyone in the market pays.
I think it has little to do with an increase in responsibility. The last couple of years have posted the lowest savings rates since THE GREAT DEPRESSION. It's negative, by the way. Yes, the average American literally spends more per year than he takes home. That's not the trend you'd expect to see if people are paying off their balances... -
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