Credit card for applications

[westbranch]

People will not necessarily you, but I’m sure the study is correct. I think that you can mitigate that various ways, for instance you could pay off your card completely, every day or after every charge of you wanted. Welcome to modern mobile banking. I think David Ramsey has great themes but is anachronistic, would be interesting for a millennial to do Ramsey 2.0.

Also I’m not sure if babyboomer spending habitats apply to all generations or not, eg do spending studies account for generational differences in spending.

Many millennials, graduated college with student loan debt in a terrible economy, I would guess our habits are more akin to the depression era generation, maybe that’s bs, maybe all groups spend the same... would be interesting to see a study.

I am a CPA that works with a variety of clients and so I have a lot of anecdotal evidence. Quite a bit of selection bias since most clients are going to have higher than average incomes and are people trying to save and improve their financials. People also tend to overshare once they hear what I do when talking to random people at social events so that gets some interesting info occasionally. I know quite a few younger people in their 30s paying off debt and maxing their retirement accounts and keeping expenses low to have a lot of after-tax savings. Quite a few are interested in the FIRE (financial independence, retire early) movement that has been popular for few years now. There are a lot of blogs/forums out there that talk about it. Credit card churning for travel benefits gets mentioned a lot on those blogs/forums. The vast majority of these people are not spending more due to credit cards.

When I meet with high-earning people in their 50s and 60s they seem to have high expenses to go along with it. Even though they have a decent savings by some measures it will not cover their expenses enough to retire. The idea of cutting their expenses so they could leave stressful jobs, get rid of long commutes and have a more relaxing lifestyle is foreign to them. Some of these people are buying giant, expensive houses in their 60s. Seems crazy to me.

 

[westbranch]

Correct...i forgot to point out that all debt type accounts need to be closed. I guess that was assumed. If you don’t use debt then having those accounts wouldn’t make sense.
I don’t think your other points are accurate. I would say utilities and cable companies reporting would be a real rarity. Never heard of that before, but i suppose it’s possible especially if you’re delinquent on payments or something. Heck, they don’t even look at foreclosures and bankruptcies after 7 years. They aren’t looking back at your history from 10 years ago to determine a score. Anecdotally I have checked my reports annually for probably 10 years just to check for fraud. For the past several years the only thing showing up as a determining factor is my mortgage.

Usually no reason to close unused accounts. My wife and I have messed around with credit card point bonuses for travelling. Cleared a few thousand a year for a few years in a row. The only cards we close are ones that have annual fees, and some of the annual fee cards we just downgrade and leave open. Without checking my records I would guess there are currently 10-12 open cards between us with an obscene combined credit limit. Easy to monitor all of these accounts for fraud with online banking.

 

[nontyp]

Usually no reason to close unused accounts. My wife and I have messed around with credit card point bonuses for travelling. Cleared a few thousand a year for a few years in a row. The only cards we close are ones that have annual fees, and some of the annual fee cards we just downgrade and leave open. Without checking my records I would guess there are currently 10-12 open cards between us with an obscene combined credit limit. Easy to monitor all of these accounts for fraud with online banking.

Yeah I was referring to if someone wants a indeterminate credit score. Using your methods that is correct, probably wouldn’t be any reason to close them.

 

[AvidIndoorsman]

Here you go. Straight from Experian.

“Utility bills don't usually appear on your credit reports—unless you fail to pay them.”

Exactly, lol “usually”.
Personal finance has a ton of variability, which makes it really hard to give blanket answers. The credit profile of a person from miles city could be very difference from a person from NYC.

I'm not an expert by any means, I do my own finances, was the executor on my dad's estate and helped my mom get her finances straightened out, have talked with younger cousins and my sister about building their own credit, and talked with a few friends who moved to the US from abroad and therefore had no credit as a 30-40 year old... all this taught me that there are a million ways to do it and there are all kinds of things that effect credit and finances that you wouldn't expect.

Couple eye openers for me over the years as examples;

If a foreign born citizen marries a US citizen, moves to the US, and then gets put on their accounts as a cosigner they almost instantly gets their spouses credit score.

Credit cards are only attached to one person, if you die the card closes even if your spouse is on the card, some companies will let the executor transfer reopen the card in the surviving spouses name, but some will just straight up close the card and you will have to work entirely with a third party.

A bunch of companies have started "credit building programs" to help college age folks build a good score, utilities, rental agencies, etc. These companies will report your timely payments so that you can build your score without a credit card.

Lots of ways to look at credit scores, I view them more as a responsibility index. I see no reason not to have huge lines of credit to draw upon if needed and a great credit score, doesn't mean your in debt, just means you are financially flexible.

 

[NEWHunter]

Let us know how that DU card is... I've had eyes on that one

It’s good. 5% back on gas is better than the 3% I was getting. The extra 2% will get us about $80 more in rewards over the course of a year. Took all of 3 minutes of effort to earn that $80. Keep a card in each vehicle at all times - easy as it gets.

 

[Steelhead]

Dave Ramsey:
Overwhelming scientific evidence pointing to the fact that you spend more on a credit card than with cash or a debit card. This negating your _% cash back or whatever.
No millionaire ever got there because of their reward points, bonus miles, etc
Credit score....borrow money so your credit score goes up so you can borrow money so your credit score goes up so you can borrow money so your credit score goes up so you can borrow money so your credit score goes up...get it?

 

[Carnage2011]

Dave Ramsey works for some people. When I was fresh out of college I listened to his deal and felt like it was a waste. Pay off your smallest debt, then your next smallest, and so on. I went the route of paying off my debt with the highest interest first and worked my way down. He always pitches that you don’t need credit, but that is also a poor idea. Sure people can pay off their debt and save money every month and eventually have a lot of money stockpiled as long as nothing goes wrong, but using your money to invest in cash flowing assets is a much more efficient route. It’ll probably come with a little more risk, but if you analyze the deal correctly and don’t over extend yourself financially it should provide you with financial freedom much faster.

 

[TheGrayRider]

I still can’t understand why a house in California costs $600,000 and the same house in Texas costs $200,000. Are the bricks higher quality in California compared to Texas?

 

[AvidIndoorsman]

I still can’t understand why a house in California costs $600,000 and the same house in Texas costs $200,000. Are the bricks higher quality in California compared to Texas?

Supply and demand

 

[HighDesertSage]

I follow Ramsey, started in October. I have paid off 46k in debt that has been following me for years. His system works, but it's not for everyone. Personally I would never subject myself, or my family, to a half a million dollar mortgage, and if that is what a competitive cost for a home was, I would leave and go elsewhere. I have a few thousand left on a student loan, I will be debt free this month. My goals are to pay off the mortgage in 8 years and have enough F U money to go do what ever I want. Moose in AK, tuna in Mexico, maybe see what the Alps are all about. Once my mortgage is paid for, I will never borrow money again, for anything. So as far as I am concerned my credit score can go $%&# itself. It will be irrelevant to me. It worked for me, I completely understand that its not a one size fits all program.

I pay all my app fees on a debit card. It's a VISA card and carries all the same protections that a CC has.

 

[OKED]

Anyone else here follow Dave Ramsey? Credit Card is a bad word in my house. Pay real money. no credit. no late fees.

i guess dave ramsey dont hunt.

 

[NEWHunter]

So following David Ramsey caused you to pay $85,000 more over the course of your loan.... how many sheep hunts is that?

Pfff . . . $85K barely gets you a desert bighorn sheep hunt today - let alone in 30 years. Heck, the cartels have moved in to avocados now, in a few years it’ll probably be bighorn sheep too. Why bother?

 

[Steelhead]

I get what Ramsey is trying to do... but it's personal finance to protect people from themselves, it's not a how to guide explaining to exploit the system to your advantage.

Correct!!!! It’s great!!! Tons of people are in debt of all sorts. Basically a concept of “living on less than you make” is completely unknown to many (most?) in this country. Just trying to help...because I’m sure hunters are among many of em.
See: “how to float application fees on a credit card” podcasts...really dude? If you can’t cough up a grand to apply how are you gonna pay for the tag...and gas to get there, and hunt cost and taxidermy fee, etc....I’m guessing that you’ll also be “floating” that on a credit card too!!
I’ll get off my soapbox. Y’all do what you want.

 

[AvidIndoorsman]

Correct!!!! It’s great!!! Tons of people are in debt of all sorts. Basically a concept of “living on less than you make” is completely unknown to many (most?) in this country. Just trying to help...because I’m sure hunters are among many of em.
See: “how to float application fees on a credit card” podcasts...really dude? If you can’t cough up a grand to apply how are you gonna pay for the tag...and gas to get there, and hunt cost and taxidermy fee, etc....I’m guessing that you’ll also be “floating” that on a credit card too!!
I’ll get off my soapbox. Y’all do what you want.

I think the point you’re missing is that one is trying to float 5-8 apps at a time you won’t draw more than 1 if any.

Also if you have the money for a tag why wouldn’t you put it on a cc, get points from the purchase, and then pay your card off immediately. Say you apply for 5k worth of tags, on a 2% cash back card that’s $100 in your pocket.
For that matter if you have the cash to buy a car in cash, why not try and see if the dealer will let you put it on your card?

 

[duckhunt]

I use my debit card. No interest that way. Got away from credit cards years ago.

 

[Steelhead]

Dave Ramsey:
Overwhelming scientific evidence pointing to the fact that you spend more on a credit card than with cash or a debit card. This negating your _% cash back or whatever.
No millionaire ever got there because of their reward points, bonus miles, etc

This is why brah