One of the things my husband has wanted me to do since I moved to the U.S. is build my credit. As soon as I got my permanent residence I opened a bank account, got a car and a couple of store credit cards that I barely use, but that I keep paid off. While I know that this is a country that lives of credit and applying for a credit card is less painful than a tooth extraction, I still get surprised when I obtain one. And when I receive it in the mail, I start hyperventilating because I consider credit cards the work of the devil. I’m sure nobody needs me to elaborate on that one.
My history with credit cards is not horrible, but it isn’t nice either. I got one while I was in college that my dad had to pay off because I wasn’t working, of course. And then I swore I was never going to get another one until I was responsible enough. But it turns out that “responsible enough” didn’t come with marriage. I don’t like to dig in the past or compare, but my building credit was definitely not one of my ex-husband’s suggestions. And then one day I found myself credit-cardless at Miami International Airport after Delta decided to cancel a flight. How was I supposed to get a hotel room? I did… It was just a pain in the butt. Then I got a copy of the ex’s CC and the rest became history with the divorce.
As soon as I was on my own and got a decent job, I applied for a Visa card from Desjardins in Canada and I obtained it fairly easily; it’s been paid off for months now. But I still see it, and it scares me. And now I have a MasterCard and another Visa I just got from Citi, with a decent limit (plus air miles that are greatly appreciated). I plan to leave them in my wallet collecting dust, though. I may like the idea of having them, but I still think there are evil forces behind them and they are emergency only.
I had lousy credit before I met my 2nd wife.
She helped me fix it, we ran up a lot of debt, then we got divorced, I got saddled with ALL the debt and wound up having to declare bankruptcy. Now I have lousy credit again.
Correction, I have NO credit. I live paycheck to paycheck, have no outstanding debt other than rent and monthly bills. Instead of credit, I rely on savings. I take $50 and transfer it to my Savings Accout. I also collect each day’s spare pocket change and periodically deposit it in the same account.
I started my Savings Account in March and I now have $437.00 in reserve for emergencies.
BTW, paying off your credit card balance every month doesn’t help your credit, it hurts it.
Credit card companies don’t want you to keep current. They want you to carry a balance because that’s how they make money.
Most credit card companies will ding you on your credit report for paying off your balance every month.
If you are going to stay current each month, you want American Express, not Visa Or Mastercard.
Oh! Thanks, XO! I actually just paid off my MasterCard after a few months. I don’t keep $0 balance every month, I just make sure it doesn’t get huge.
John and I have a savings account, and I love to see it grow. Managing finances after a divorce can be an interesting experience.
We mostly use cash, I have a debit MasterCard from our bank and a PayPal debit MasterCard. So I have the convenience of plastic without the debt that comes afterward.
We have exactly three credit cards right now – a Capital One Visa, a Sears store charge, and my Woman Within charge. No plans to get any more. At one point, Mike wanted to get rid of the Sears charge, because the account was bought out by the evil Citibank. I convinced him that we should keep it.
And then last winter, our clothes dryer died beyond repair. We didn’t have enough cash sitting around to buy a new one, but didn’t want to throw money away at the very expensive laundromat, or use the landlady’s dryer forever. Sears card to the rescue…I ordered a new dryer at Sears.com, and it was here in less than a week.
This is why we keep what cards we do have. You never know when you might actually need them for something.
You know I don’t disagree with XO very often, but I don’t think your credit score will get hurt by paying off your balances every month. Doing that will be more beneficial that detrimental.
It’s true that the credit card co’s want you to carry a balance so they can profit from the interest. But they aren’t the ones scoring your credit. The credit reporting agencies (Experion, Equifax and TransUnion) are.
The important thing is to show the reporting agencies that you have “punctuality of payment in the past.” This accounts for about 35% of your score. Your balance-to-available credit ratio is another 30 percent.
So charging a little bit each month and then paying off the entire balance shows the reporting agencies that your are a responsible user of your credit, and not likely to charge $700 to buy a Highlander sword and then default on the payments.
I have a very high credit rating and I’ve never gone bankrupt (yet). So take it from me, you’re doing everything correctly.
emawkc – The sword was only $350.00. It was the chainmail shirt that was $700.00.
My question is: Does Christopher Lambert agree with these prices?