CC minimum payment increase...HOLY COW!

[vivilasvegas]

I have the key to fixing everyone's problems....let my dad talk to you!!!

I just got off an hour long phone conversation with him about the importance of good credit and the dangers of making minimum payments! And this is after I've dealt with the problems. (it was a "how is it going" phone call)


You should have heard the talk I got years ago when I was in trouble...

I'm exhausted now.

 

[disneymom3]

Bucknaked, Well I guess your only recourse then is to take your question to every single mortgage co in the country then. If a report of first hand experience isn't enough to help you believe that their are mortgages out there approved without a credit score, I guess I can't help ya. Whatever.

 

[sweet angel]

I will say that a credit score above 720 gets you prime rates/loans/credit cards/deals....period. and to get that score above 720 you must carry less than 30% balance to limit ratio. (your balances should not exceed 30% of the limit on any credit card or most cards or your scores will go down). Paying your bills on time, only having 1 card, paying off....those are not biggest factors. Its the ratio !!! and having a few different cards also helps.

I beg to differ on this. Up until 12/19/05, I had way more than a 30% balance to limit ratio, spread out over 4 cards (with low interest rates). I would say it was probably closer to 65-70%. My credit score in December was 728. I can't wait to see what it jumps to now that I've paid all of that off!

 

[cardaway]

Found out this morning it does actually get worse.

The solution to not being able to pay your doubled minimum CC bill...

Get a home equity loan.

Heard the standard radio commercial this morning specifically mentioning getting one because of the doubled payments. I can't believe the folks working for them can give people this terrible advice with a straight face.

 

[Chicago526]

Found out this morning it does actually get worse.

The solution to not being able to pay your doubled minimum CC bill...

Get a home equity loan.

Heard the standard radio commercial this morning specifically mentioning getting one because of the doubled payments. I can't believe the folks working for them can give people this terrible advice with a straight face.

Believe it! I'm not the best with money/ I've made mistakes (and boy am I paying for them!) but I've NEVER put myself in a position that I can't pay WELL over my minimums every month. But I guess there are those that have, either through stupidity or bad luck (job loss, medical bills).

Taking out a HEL isn't bad, per sey, IF it is used wisely to pay off all existing consumer debt and the individual STOPS living beyond their means. But old habits are hard to break, and many or most of those that take out HEL's to pay off the CC's and car loans will be right back where they started in a few years. Only worse, because now they don't have equity in the house anymore!

 

[cardaway]

Taking out a HEL isn't bad, per sey, IF it is used wisely to pay off all existing consumer debt and the individual STOPS living beyond their means. But old habits are hard to break, and many or most of those that take out HEL's to pay off the CC's and car loans will be right back where they started in a few years. Only worse, because now they don't have equity in the house anymore!

It's a problem because I doubt anybody working there is going to explain how things will get real bad if habits don't change before they get them to sign the forms.

 

[brerrabbit]

While there may exsist some form of mortgage that you can get without a credit score check your credit score still remains extrtemely important to your overall financial well being. Part of the change of rules that were implemented to increase minimum credit card payments also alows for the company you hold a credit card with to periodically check your score. Based on their findings they can then raise your interest rate if you scores fall. I can tell you for a fact that because of my wife and my credit scores being good we have save thousands of dollars in our lives. We always qualify for the lowest rates being offered and are able to negotiate on most major purchases from a position of strength because we are a low risk buyer. We save not only on the interest but also on the sales price of cars, and other big ticket items because of the good score. Finally, even though paying cash for everything would seem to create a good credit score thats not always true. Part of the scoring system looks to see if you have had loans and made timely payments on them with no late pays and no other problems. One of the best things a young person can do to help their credit scores early in life is to get a small loan early on and pay it off with no late pays and on time. I did this in college when I bought a boat for $1,400 and it jump started my credit score right out of the chute. I took a $1,400 loan and used a savings account I had with the bank as collateral for the loan. With no previous borrowing it was the only way I could get the loan. But I paid on time and paid it off and that started my history which has fortunatley remained very good for the rest of my life,

 

[Chicago526]

While there may exsist some form of mortgage that you can get without a credit score check your credit score still remains extrtemely important to your overall financial well being. Part of the change of rules that were implemented to increase minimum credit card payments also alows for the company you hold a credit card with to periodically check your score. Based on their findings they can then raise your interest rate if you scores fall. I can tell you for a fact that because of my wife and my credit scores being good we have save thousands of dollars in our lives. We always qualify for the lowest rates being offered and are able to negotiate on most major purchases from a position of strength because we are a low risk buyer. We save not only on the interest but also on the sales price of cars, and other big ticket items because of the good score. Finally, even though paying cash for everything would seem to create a good credit score thats not always true. Part of the scoring system looks to see if you have had loans and made timely payments on them with no late pays and no other problems. One of the best things a young person can do to help their credit scores early in life is to get a small loan early on and pay it off with no late pays and on time. I did this in college when I bought a boat for $1,400 and it jump started my credit score right out of the chute. I took a $1,400 loan and used a savings account I had with the bank as collateral for the loan. With no previous borrowing it was the only way I could get the loan. But I paid on time and paid it off and that started my history which has fortunatley remained very good for the rest of my life,

I did something simular. I only had a Target card out of high school ($500 limit! ) so I had no credit rating to speak of. Once I bought my first car, though, my score shot up because I always made every payment on time. I was able to qualify for a mortgage at age 25!

Good credit is very important, and doesn't need to cost you much. I don't advocate getting into debt JUST to raise your credit score, but if you need to purchase a car or other big ticket item anyway, you may as well take advantage of the situation!

 

[cardaway]

Good credit is very important, and doesn't need to cost you much. I don't advocate getting into debt JUST to raise your credit score, but if you need to purchase a car or other big ticket item anyway, you may as well take advantage of the situation!

A good way to do this is to buy TV's and the like with the "90 days same as cash" deals even if you have the cash available. Pay it off, never pay any interest, and have it show as a paid loan.

Of course this is only true if you have the self control to actually pay it off because these usually have the highest interest rates around.

 

[vivilasvegas]

So how do you raise your score? I finally paid off my debt, and I have one card that I am making timely payments on. But my score leaves something to be desired....what to do?

 

[scubamouse]

So how do you raise your score? I finally paid off my debt, and I have one card that I am making timely payments on. But my score leaves something to be desired....what to do?

a lot of it is just time. making timely payments every month is the best way to raise your score. the longer you can make the interval between your last bad payment and now, the better.

 

[cardaway]

So how do you raise your score? I finally paid off my debt, and I have one card that I am making timely payments on. But my score leaves something to be desired....what to do?

See my example above about "same as cash" loans. If you have the money to pay them off at the end of the period it's a great way to work the system in your favor.

 

[azgal81]

I would never just make the minimum payments on my credit card I always pay it off each month I think my minimum is still 10 bucks. I do understand though that some people do need to use their credit cards for emergencys and can't pay it off every month. I don't get however when people just charge everyday purchases that they can't afford. I think I would worry too much if I did that but then I tend to worry about things anywayse. At least the people that are paying their minimum balance each month and then some are trying to get out of debt and aren't hiding from the credit card collectors and not paying.

 

[cardaway]

I would never just make the minimum payments on my credit card I always pay it off each month I think my minimum is still 10 bucks. I do understand though that some people do need to use their credit cards for emergencys and can't pay it off every month. I don't get however when people just charge everyday purchases that they can't afford. I think I would worry too much if I did that but then I tend to worry about things anywayse. At least the people that are paying their minimum balance each month and then some are trying to get out of debt and aren't hiding from the credit card collectors and not paying.

IMO the issue is the people who had bad spending habits before having an emergency. Lots of people have no problem climbing out of the temporary emergency hole, usually because they were not in the hole to begin with due to responsible spending habits.