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Credit card education

  1. #26
    Posting Freak xsiliconkid's Avatar
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    Re: Credit card education


    Quote Originally Posted by csmutty View Post
    But what about the average age of credit lines?
    nothing stops you the day after loan approval to max out your cards...

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  2. #27
    Your Father csmutty's Avatar
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    Re: Credit card education

    Quote Originally Posted by xsiliconkid View Post
    nothing stops you the day after loan approval to max out your cards...
    Makes sense, but in this scenario it seems to be the better of 2 negative outcomes.

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  3. #28
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    Re: Credit card education

    Another factor is customer service. I believe AMEX is famous for theirs, and I had a great, but brief experience with a card through them. My primary card has been Discover for a long time, and I've had great customer service experience with them. No bullshit phone trees, easy to understand human, problems dealt with quickly.

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  4. #29
    Senior Member BMMCBR's Avatar
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    Re: Credit card education

    Quote Originally Posted by aldend123 View Post
    Another factor is customer service. I believe AMEX is famous for theirs, and I had a great, but brief experience with a card through them. My primary card has been Discover for a long time, and I've had great customer service experience with them. No bullshit phone trees, easy to understand human, problems dealt with quickly.
    Agreed. Every time I've had to call Discover I spoke with a human being within 30 sec.

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  5. #30
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    Re: Credit card education

    Quote Originally Posted by xsiliconkid View Post
    When seeking a loan (e.g.house mortgage) your current credit card's max limits are taking into account as if you borrowed on every card to the max. They become existing liabilities for the purposes of how much you can borrow.
    As someone who took out a loan a couple of weeks ago, this was simply not the case. The bank is most concerned with your debt to income ratio and your history of on time payments. If you have excellent credit but a lot of high limit credit cards with small balances, you are still considered a good risk.

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  6. #31
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    Re: Credit card education

    Amex blue cash back for gas (3%) and groceries (6%), i make several hundred bucks a year on this

    Chase marriott rewards, if you business travel you can bank a LOT of points, use for dining and entertainment (3x points) and marriott expenses (5x points)

    BoA signature rewards - good points/cash back and a low interest rate (7%)... use for large purchases that may need a couple bill periods to pay off (used for some tuition recently)

    I have a couple others but these are the three main ones.

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  7. #32
    Lifer Danz19899's Avatar
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    Re: Credit card education

    Quote Originally Posted by BMMCBR View Post
    Agreed. Every time I've had to call Discover I spoke with a human being within 30 sec.
    I've only had a discover for 6 years and even when I wasn't exactly great at paying my bill on time they had excellent customer service. I couldn't even count how many late fee's they have reimbursed me for even when it was blatantly my fault. Great card, you can probably get 0% for either 12 or 18 months and they usually do 5% back on a lot of things, gas for the summer, it changes every quarter though.

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  8. #33
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    Re: Credit card education

    Quote Originally Posted by OreoGaborio View Post
    Good recommendations, guys.



    Question for those that have the BOA Cash Rewards card... I just saw "3% fee (min $10) applies to balance transfers.".... are they saying they're gonna charge me 3%, min 10 bucks to pay off my bill using my BOA checking account???
    balance transfers are when you transfer the balance of one CC to another. i do this alot. most CC will offer something like 12 months 0% interest on balance transfers. if youre carrying a balance on a card with 18% interest then its tough to get ahead. transfer the balance to another card with 0% and you can actually make some headway for a year. when the year is up, transfer again. i have about 5 or 6 CCs although only 2 or 3 typically have a balance. i have one that i use for stuff that i have cash for so i just pay it off in a month or 2.
    carrying a balance isnt a bad thing either so dont feel obligated to pay the whole thing off every month. just dont let it get out of hand that you end up underwater

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  9. #34
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    Re: Credit card education

    for best discount on gasoline, check out Cumberland Farms smart phone app

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  10. #35
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    Re: Credit card education

    I have a no-fee Amex that is tied in with my daughter's college savings plan - every time we use it we get 2% into her account (not as good a percentage as the cash back options, but completely mindless for us). We don't use it much, but the plan is to use it for daily expenditures once we get some other stuff aligned. It is through Fidelity - they have other plans available as well (cards that tie in with IRAs, cash back, etc.). If you're looking for one to build credit, get a low credit line and use it sparingly, but use it. If you're looking to reap rewards, figure out what the most beneficial reward is for you right now, and go with that. you can always change cards down the road.

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  11. #36
    Posting Freak xsiliconkid's Avatar
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    Re: Credit card education

    Quote Originally Posted by ZX-12R View Post
    As someone who took out a loan a couple of weeks ago, this was simply not the case. The bank is most concerned with your debt to income ratio and your history of on time payments. If you have excellent credit but a lot of high limit credit cards with small balances, you are still considered a good risk.
    hmmmm if you had 10 cards with hi limits (no used) "most" lending institutions will add the limit to your debt calculations.
    Let's hope are not sliding back towards the little or no documents lending world..

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  12. #37
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    Re: Credit card education

    Quote Originally Posted by xsiliconkid View Post
    hmmmm if you had 10 cards with hi limits (no used) "most" lending institutions will add the limit to your debt calculations.
    Let's hope are not sliding back towards the little or no documents lending world..
    Don't think it's really true. I have about $50k in total credit lines with few cards with lines over $10k. My overall credit utilization is less than 1% (FICO credit rounds up, my balance is about $200)of total line. Just got a auto loan with DCU couple months ago and they didn't mention anything about my credit line being debt. They actually praisedy credit.

    If you want a good no-fee card, my Discover and Chase Freedom is great. They're summer category is 5% back on gas and I think the categories for the rest of the year is good too. Chase Freedom also has $200 sign up bonus right now. When gas is not one of the categories on those 2 cards I use AMEX Blue Cash Everyday for the 2%.

    If you want to venture into Travel and restaraunts, I really like my Chase Sapphire Preferred and Chase IHG Rewards Club but both have fees; $95 and $49 a year. It's worth it. Sapphire bonus sign up is 40k points which can be used to book travel for up to $500. IHG starts you off with 80k points. Rooms can be had for as low as 5k points per their Pointbreaks program otherwise it's 10k points for rooms. The kicker of this card is that they give you a free night every year that makes the $49 annual fee worthwhile. My gf and I both have the card and just booked Intercontinental in Time Square for July 4th. The room is at least worth $300/night and it was free.

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  13. #38
    Lifer SwiftTone's Avatar
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    Re: Credit card education

    If you're just starting out on credit and credt cards you should start with lower end cards. Many are free. It's been a trend that people with no credit that they start out on secured or partially secured cards. Many of these cards can be graduated to a regular card and your deposit is refunded after a year of good use.

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  14. #39
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    Re: Credit card education

    Quote Originally Posted by SwiftTone View Post
    Don't think it's really true. I have about $50k in total credit lines with few cards with lines over $10k. My overall credit utilization is less than 1% (FICO credit rounds up, my balance is about $200)of total line. Just got a auto loan with DCU couple months ago and they didn't mention anything about my credit line being debt. They actually praisedy credit.
    Almost identical credit card situation with me. A year ago I took out an auto loan and a few weeks ago out a loan with Triangle CU to pay for some home renovations and in both cases they had no problem with a large total credit line amongst several cards. In fact, they even gave me an interest rate lower than their published numbers because my credit was excellent and I've done business with them in the past.

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  15. #40
    Perpetual Amateur CEO's Avatar
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    Re: Credit card education

    I think they care more about ratio of usage to available on credit cards... want to keep it below 20 or 30 percent I think. So having higher limits is actually better (?).

    FYI they go by your monthly statement and not necessarily by your balance. I.e. if you have one card with 10k limit, and you fill it up to 10k every month, get your statement, and pay it down to zero, the credit bureau will still show your usage as 100% of your available. This is bad. So this is another reason high limits are good, if you put a lot of purchases on your CC's. Another way around this is to make some/all of your payments prior to the statement closing date.

    I have a handful of cards, a couple with very high limits, and use only a small percentage of available each month. for example, a couple grand a month on cards that have total purchasing power of 100k gives you a 2% usage ratio. This is a good mark on your credit.

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  16. #41
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    Re: Credit card education

    Quote Originally Posted by CEO View Post
    I think they care more about ratio of usage to available on credit cards... want to keep it below 20 or 30 percent I think. So having higher limits is actually better (?).

    FYI they go by your monthly statement and not necessarily by your balance. I.e. if you have one card with 10k limit, and you fill it up to 10k every month, get your statement, and pay it down to zero, the credit bureau will still show your usage as 100% of your available. This is bad. So this is another reason high limits are good, if you put a lot of purchases on your CC's. Another way around this is to make some/all of your payments prior to the statement closing date.

    I have a handful of cards, a couple with very high limits, and use only a small percentage of available each month. for example, a couple grand a month on cards that have total purchasing power of 100k gives you a 2% usage ratio. This is a good mark on your credit.
    Yeah.

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  17. #42
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    Re: Credit card education

    Quote Originally Posted by KnuckleBallz View Post
    If you go BoA make sure you talk to a rep, because you'll want to clarify that the card you're getting reports its limits to the big credit agencies. I believe their Visa cards do not, but their Mastercards do. Because of the way some of their cards are tied to your bank account, they fall under different reporting rules & may not actually factor into your score. I found this out the hard way.
    The last I checked, their VISA Signature does not report the credit line/limit to the credit report. If you do end up getting a VISA Signature (>$5k limit) you can request a non-signature.

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  18. #43
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    Re: Credit card education

    Quote Originally Posted by csmutty View Post
    But what about the average age of credit lines?
    Average age of accounts is calculated based on all credit accounts, both open and closed. Closed accounts will stay on your credit for a minimum of 10 years. Negative info on your credit stays on your credit for maximum of 7 years then drop off, but the account will stay on your account.

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  19. #44
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    Re: Credit card education

    Quote Originally Posted by xsiliconkid View Post
    nothing stops you the day after loan approval to max out your cards...
    I think to an extent that is true. But banks also want to see that you can handle and are responsible with large credit limits. If you are responsible and your credit file shows, you would be considered low risk with little chance of defaulting.

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  20. #45
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    Re: Credit card education

    Quote Originally Posted by aldend123 View Post
    Another factor is customer service. I believe AMEX is famous for theirs, and I had a great, but brief experience with a card through them. My primary card has been Discover for a long time, and I've had great customer service experience with them. No bullshit phone trees, easy to understand human, problems dealt with quickly.
    AMEX has always been so-so for me. Within the last year or so they started outsourcing their call center overseas. My gf had her account compromised yesterday and had to call. She couldn't understand the women due to accent and the connection was poor.

    In my experience Chase Sapphire Preferred and Discover has been the best. When you call Chase Sapphire Preferred customer service they literally pick up in 1 ring and greet you by name. There are no prompts. Discover is also good and you can get to a "account manager" with 1 prompt. I'm starting to believe the account manager is their lower level customer service.

    Another thing to consider is fraud prevention. Out of my all the cards from different banks (Citi, BoA, Chase, Discover, AMEX) Discover has had the most fraud commited on it. In the last 2 years, I've had to get 5 accounts through them. The most recent account lasted one month. Their customer service was great though and took care of it.

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  21. #46
    Lifer
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    Re: Credit card education

    I use my Discover card liberally online (within reason... no russian knock-off sites or mexican pharmacies) and have only had one compromise. It was attributable to the Nov 2013 Target breach, so I don't find the card provider at fault.

    Do you have a link to that data? First time I've heard that stat. I wonder if the typical card holder is part of the cause?

    Too bad to hear about the off-shoring of the AMEX call center, though something tells me that's only for their lower-tier cards.

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  22. #47
    Lifer SwiftTone's Avatar
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    Re: Credit card education

    Quote Originally Posted by aldend123 View Post
    I use my Discover card liberally online (within reason... no russian knock-off sites or mexican pharmacies) and have only had one compromise. It was attributable to the Nov 2013 Target breach, so I don't find the card provider at fault.

    Do you have a link to that data? First time I've heard that stat. I wonder if the typical card holder is part of the cause?

    Too bad to hear about the off-shoring of the AMEX call center, though something tells me that's only for their lower-tier cards.
    I don't think I use my Discover card at anywhere sketchy. I pretty much use all my cards at different places equally so it does have me puzzled.

    What data are you talking about?

    Admittedly I don't have a high tier AMEX. It's just Blue Cash Everyday. That's probably it though but a company that prides itself in customer service should not have it outsource especially when it's low quality.

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  23. #48
    BMW track whore e30addict's Avatar
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    Re: Credit card education

    Quote Originally Posted by xsiliconkid View Post
    hmmmm if you had 10 cards with hi limits (no used) "most" lending institutions will add the limit to your debt calculations.
    Let's hope are not sliding back towards the little or no documents lending world..
    I had that happen once, and only once. As soon as I asked why the hell they counted "potential" debt and not just my debt to income ratio their tone changed. You should not be penalized for what you might (or could) do i the future, only judged by what you've done in the past.

    Quote Originally Posted by CEO View Post
    I think they care more about ratio of usage to available on credit cards... want to keep it below 20 or 30 percent I think. So having higher limits is actually better (?).

    I have a handful of cards, a couple with very high limits, and use only a small percentage of available each month. for example, a couple grand a month on cards that have total purchasing power of 100k gives you a 2% usage ratio. This is a good mark on your credit.
    Quote Originally Posted by SwiftTone View Post
    I think to an extent that is true. But banks also want to see that you can handle and are responsible with large credit limits. If you are responsible and your credit file shows, you would be considered low risk with little chance of defaulting.
    I think this kinda all depends on where you are in the cycle too. If you are just starting out having a high debt utilization compared to your limits has the potential to have more of a negative impact. As time goes on and you build a good payment history that negative impact isn't as huge when weighed against the positives you now have working for you.

    Case in point, I have several cards with pretty high limits. High enough where I could easily get in trouble if I maxed them all out and never be able to pay them down. Half of them are completely maxxed out at any given time. I use the 0% transfer offers that always come in the mail and roll them over just before they expire. I'm basically using other people's money to make me money in the stock market. The money only costs me 3-4% to borrow that way instead of 8%+ using a margin investment account.

    My point being with that info is that if you looked at solely at my balance vs. available credit on the cards you'd cringe and go no way I'd lend money to this guy, he's strapped. When you weigh it against the fact I've never missed a payment on anything and have had installment loans and a mortgage for the past several years I don't look so bad.

    Don't get me wrong, my debt to income is sky high and I wouldn't qualify for another loan on anything at this point using normal guidelines, but I still have excellent credit according to the bureaus. It was 780 last time I checked. The high balances did drag it down some, but I'm still in the excellent range.

    That's my long winded way of saying it all depends and nothing is black and white

    If Pete is trying to build credit, yeah low balances compared to limits is the way to start.

    For someone already established, the picture gets muddied some, and possibly very complicated, depending on what you're trying to do.

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  24. #49

    Re: Credit card education

    BOA is my preferred card, although they have many different cards. The Simplicity Card doesn't give cash back but only points towards purchases in stores like Neiman-Marcus where I don't shop. The BOA ThankYou card has the 3-2-1 rewards, but you cannot pay the balance from another bank. They force you to pay from a BOA checking account, which earns next-to-nothing interest. I keep my checking in Amex PersonalSavings that at least gives me 0.80% on my balance. Other places offer up to 0.95% on free checking, so why give your money away for nothing? Also the BOA card doesn't have autopay from other banks. I use autopay on all my credit cards to pay balances in full every month. With that I have a 100% rating of never missing a payment for over 8 years.

    I never use cash because credit cards offer rewards, give me time to think about my purchase which I can easily return within a week or two (try before I pay), price protection to get a lower price within 60 days, doubles the warranty on bike parts, keeps track of how much I spent, if I lose it I'm protected vs if I lose a wad of cash it is gone forever. P.S. I have a line of credit with my cards of $200,000 and have them send me offers of 0% balance transfer with a 1% fee. They love people who pay on time, and punish anyone who misses even one payment.

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    Last edited by luv2win; 07-01-14 at 07:29 PM. Reason: grammatical errors

  25. #50
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    Re: Credit card education

    Quote Originally Posted by SwiftTone View Post
    What data are you talking about?
    Sorry, I misread. I thought you were referring to some data/study/news you'd read about Discover being more often compromised. It sounds like some business you have your card on file with is being regularly compromised, and is either negligently clueless, or keeping a secret.

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