Do you need a credit card?

[TruePaige]

Originally posted by: Beattie

Originally posted by: spidey07
Your credit score is dependent on the length of your credit accounts.

True. And the amount you borrowed, and how you repaid it.

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

Don't spread misinformation.

You qualify for the same rates with no credit history as the person who has a very high credit score?

THAT MAKES NO SENSE AND IS NOT TRUE.

What would be the purpose of a credit score if they gave everyone the same rates anyway?

"Oh I don't know you, here is a 15% rate, and this guy who has repaid every debt he ever has and has a 750 credit score, here's a 15% rate too" would make no sense.

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

That is not true either, a plain debit card will not grant the same protections.

A check card is pursuant to the issuers of the check card, but it still functions as your debit card as well, leaving you open to the dangers of a normal debit card (if you're pin is not secure enough).

 

[Beattie]

Originally posted by: Xavier434

Originally posted by: Beattie

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

That is not true. I have spoken with several banks concerning this issue and they treat no credit history as being equivalent to really bad credit. Remember, the only purpose behind credit is to determine how much they can trust you to pay back their money. If you don't believe me then go sit down with some representatives at your bank and discuss the issue with them.

I don't need to believe you or not. I know you are wrong. Look up something called "Manual Underwriting"

I don't doubt that there are banks that won't do manual underwriting since it require some work on their part whereas looking at a number that some computer tells you doesn't. But overall you will qualify just the same based on your income and liabilities whether it's via FICO or Manual Underwriting.

 

[MikeyIs4Dcats]

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

 

[Beattie]

Originally posted by: TruePaige

Originally posted by: Beattie

Originally posted by: spidey07
Your credit score is dependent on the length of your credit accounts.

True. And the amount you borrowed, and how you repaid it.

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

Don't spread misinformation.

You qualify for the same rates with no credit history as the person who has a very high credit score?

THAT MAKES NO SENSE AND IS NOT TRUE.

What would be the purpose of a credit score if they gave everyone the same rates anyway?

"Oh I don't know you, here is a 15% rate, and this guy who has repaid every debt he ever has and has a 750 credit score, here's a 15% rate too" would make no sense.

The purpose of the FICO score is to make lending easier for the banks.

And who would want a 15% loan?

 

[Xavier434]

Originally posted by: Beattie

My car was financed below 2% but I paid it off a while ago. My house is 5.75%. You qualify for the same rates with no credit history that you do with a good credit history. The only difference is that they look at your history of paying rent/mortgage/utilities, and they want to see some bank records proving that you do in fact have an income.

I don't think you understand. The way that it works is each lender has its own custom system which determines how much they can trust you and what rates you qualify for. These custom systems are not the same thing as your credit history. However, they do act as a point system like your credit history does and it heavily takes your credit history into account. In addition, most lenders take other things into account such as your household income, debt to income ratio, and other monthly expenses like you mentioned. The point here is that they consider the whole pie. So, if you have no credit history then that means that the part of their system which takes into account credit history is scored as if you have bad credit. The remaining portions of the system take into account everything else and combine it with your credit history score to come out with the final result. Since every lender's system is custom, this means that you may qualify for some kind of loan from some lenders if you have no history and others will turn you down.

In any case, having lengthy good history is always a lot better than bad history or no history.

 

[Viper GTS]

I think we can safely ignore the advice from our friend Beattie, he obviously has no clue what he's talking about.

Credit cards are FAR better than debit cards for protection purposes.
Credit history is extremely important and has a huge impact on the rates you will qualify for.

Your credit will impact your life, whether you like it or not. Your best bet is to start young and demonstrate prudent financial choices over a long period of time.

Anybody who advises you otherwise is an idiot.

Viper GTS

 

[Beattie]

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: TruePaige

Originally posted by: Beattie

Originally posted by: spidey07
Your credit score is dependent on the length of your credit accounts.

True. And the amount you borrowed, and how you repaid it.

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

Don't spread misinformation.

You qualify for the same rates with no credit history as the person who has a very high credit score?

THAT MAKES NO SENSE AND IS NOT TRUE.

What would be the purpose of a credit score if they gave everyone the same rates anyway?

"Oh I don't know you, here is a 15% rate, and this guy who has repaid every debt he ever has and has a 750 credit score, here's a 15% rate too" would make no sense.

The purpose of the FICO score is to make lending easier for the banks.

And who would want a 15% loan?

It's called an example.

Rates are based on risk assessment, which the FICO scores (among others) helps detail.

Seriously, I'm just glad other posters are here to stop all your mis-advice from helping some kid ruin his credit. 0.o

 

[Beattie]

Originally posted by: Xavier434

Originally posted by: Beattie

My car was financed below 2% but I paid it off a while ago. My house is 5.75%. You qualify for the same rates with no credit history that you do with a good credit history. The only difference is that they look at your history of paying rent/mortgage/utilities, and they want to see some bank records proving that you do in fact have an income.

I don't think you understand. The way that it works is each lender has its own custom system which determines how much they can trust you and what rates you qualify for. These custom systems are not the same thing as your credit history. However, they do act as a point system like your credit history does and it heavily takes your credit history into account. In addition, most lenders take other things into account such as your household income, debt to income ratio, and other monthly expenses like you mentioned. The point here is that they consider the whole pie. So, if you have no credit history then that means that the part of their system which takes into account credit history is scored as if you have bad credit. The remaining portions of the system take into account everything else and combine it with your credit history score to come out with the final result. Since every lender's system is custom, this means that you may qualify for some kind of loan from some lenders if you have no history and others will turn you down.

In any case, having lengthy good history is always a lot better than bad history or no history.

This is basically correct except that they can and will replace the portion that comes from the credit bureau with another formula if they aren't lazy.

Also, a lot of lenders just the credit score and nothing or almost nothing else.

edit = Oh, and your last line is not correct.

 

[Xavier434]

Originally posted by: Beattie

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Have you ever had your card stolen? The first thing they do is take out money from an ATM. You cannot do that with a credit card. :roll:

 

[Viper GTS]

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Think a little deeper here:

When you make a purchase with your debit card the money is gone from your account right away. If someone wipes your account out with a fraudulent purchase you are screwed until your money is replaced by the bank. That can be a long process.

With a credit card you're never out any money - You simply call them up & say "hey that's not mine" and they deal with the rest. That is an absolutely invaluable barrier between potential thieves and your money.

Yes the end result ($0 liability) is the same but if an empty bank account makes you miss your rent payment, or your car payment, etc. you'll be wishing you had used a credit card.

Viper GTS

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Zero liability policy does not equal all the protection of a credit card.

Also it doesn't cover ATM and non-visa-branded PIN transactions, which are two big security holes the card opens you up to compared to a credit card. 0.o

 

[Beattie]

Originally posted by: Xavier434

Originally posted by: Beattie

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Have you ever had your card stolen? The first thing they do is take out money from an ATM. You cannot do that with a credit card. :roll:

Yes you can. It counts as a cash advance and they start interest immediately instead of after the next billing cycle.

 

[TruePaige]

Originally posted by: Viper GTS

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Think a little deeper here:

When you make a purchase with your debit card the money is gone from your account right away. If someone wipes your account out with a fraudulent purchase you are screwed until your money is replaced by the bank. That can be a long process.

With a credit card you're never out any money - You simply call them up & say "hey that's not mine" and they deal with the rest. That is an absolutely invaluable barrier between potential thieves and your money.

Yes the end result ($0 liability) is the same but if an empty bank account makes you miss your rent payment, or your car payment, etc. you'll be wishing you had used a credit card.

Viper GTS

Nice point as well.

 

[Xavier434]

Originally posted by: Beattie

This is basically correct except that they can and will replace the portion that comes from the credit bureau with another formula if they aren't lazy.

Also, a lot of lenders just the credit score and nothing or almost nothing else.

edit = Oh, and your last line is not correct.

Then maybe you would like to explain to me why I was denied credit cards, car loans, and even reduced security deposits when signing apartment leases during the time I had no credit, but I was offered all of this and more at great rates after I got a good credit history? Keep in mind that prior to trying to get all of the above and being denied I had already accumulated 4 years of impeccable history paying for rent and all of my other bills. I also was bringing in a good entry level salary as a programmer.

This whole lazy thing you are talking about is nonsense. It is not possible to be lazy here since that entire system is automated once the data entry portion is finished which they have to do in the exact same way whether you have a credit history or not.

 

[Beattie]

Originally posted by: Viper GTS

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Think a little deeper here:

When you make a purchase with your debit card the money is gone from your account right away. If someone wipes your account out with a fraudulent purchase you are screwed until your money is replaced by the bank. That can be a long process.

With a credit card you're never out any money - You simply call them up & say "hey that's not mine" and they deal with the rest. That is an absolutely invaluable barrier between potential thieves and your money.

Yes the end result ($0 liability) is the same but if an empty bank account makes you miss your rent payment, or your car payment, etc. you'll be wishing you had used a credit card.

Viper GTS

This is very false and a very bad misconception to spread. If they can't get the money back from the vendor for whatever reason they say, "Too bad, we are charging you anyway".

And you will have the same luck getting them to put the money back into your account after there were fraudulent transactions. Which means, usually it works. Sometimes it doesn't.

 

[Special K]

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Even so, it's much easier to dispute a CC charge because you haven't actually paid for the fraudulent charge yet. With a debit card, the money is instantly taken out of your account. You may get it back in the end, but you still have to deal with the inconvenience of being short however much money the thief took. Plus I doubt the bank is going to resolve the situation and have the money credited back to your account by the next business day.

 

[MotF Bane]

Great trick for those under 18 and whose parents have excellent credit - get a credit card with your name physically on the card that is linked to their account. You give them money under the table, they pay the bill, and their credit score will be cloned to yours. When I turned 18 and opened a new BoA account, I was just shy of an 800.

 

[Beattie]

Originally posted by: Xavier434

Originally posted by: Beattie

This is basically correct except that they can and will replace the portion that comes from the credit bureau with another formula if they aren't lazy.

Also, a lot of lenders just the credit score and nothing or almost nothing else.

edit = Oh, and your last line is not correct.

Then maybe you would like to explain to me why I was denied credit cards, car loans, and even reduced security deposits when signing apartment leases during the time I had no credit, but I was offered all of this and more at great rates after I got a good credit history? Keep in mind that prior to trying to get all of the above and being denied I had already accumulated 4 years of impeccable history paying for rent and all of my other bills. I also was bringing in a good entry level salary for a programmer.

This whole lazy thing you are talking about is nonsense. It is not possible to be lazy here since that entire system is automated once the data entry portion is finished which they have to do in the exact same way whether you have a credit history or not.

You just proved my point.

The reason is because they wouldn't look at your income/rent payments/whatever and instead just wanted to be lazy and do FICO lending.

 

[MikeyIs4Dcats]

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope


http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

A debit card and a Visa debit card are not the same thing.

 

[Beattie]

Originally posted by: Special K

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope

http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

Even so, it's much easier to dispute a CC charge because you haven't actually paid for the fraudulent charge yet. With a debit card, the money is instantly taken out of your account. You may get it back in the end, but you still have to deal with the inconvenience of being short however much money the thief took. Plus I doubt the bank is going to resolve the situation and have the money credited back to your account by the next business day.

If they don't put the money back the next day like they say they do then they are liars. And yea, I am sure most of them are but then you have to apply the same logic to everything else. Like the lie that you 100% aren't going to be charged the money for a credit card purchase if you decide to dispute it.

 

[Special K]

Originally posted by: Beattie


False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

This is wrong. When I was in college, I applied for a private student loan. I had no credit history prior to this. The rate they were offering me was something absurd, specifically because I had no existing credit history. I had to get a parent to cosign the loan to qualify for the best rate.

As another example, a couple years later I tried to apply for a credit card. I was denied because of "insufficient credit history". That is exactly what it said in the denial letter I received.

 

[Viper GTS]

Originally posted by: MotF Bane
Great trick for those under 18 and whose parents have excellent credit - get a credit card with your name physically on the card that is linked to their account. You give them money under the table, they pay the bill, and their credit score will be cloned to yours. When I turned 18 and opened a new BoA account, I was just shy of an 800.

They are in the process of closing this loophole due to heavy abuse. It may even be in effect already. Essentially what was going on is people with high credit scores would rent out their credit history to random people. You make them an authorized user but don't give them the card, & they pay you a nice amount of money for boosting their credit score.

Authorized user reporting (or at least inclusion in credit score calculation) is supposed to die, if it hasn't already.

Link for those who want to read more

Viper GTS

 

[Beattie]

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: MikeyIs4Dcats

Originally posted by: Beattie

Originally posted by: amdskip
Sure you could live with a checkbook and cash but that's old school. A credit card offers you much more in terms of protecting your money if it is lost/stolen when compared to a debit card.

False. A debit card (or check card) gives the same protections that a credit card does for purchases.

INCORRECT.

Nope


http://usa.visa.com/personal/s...am/zero_liability.html

The Zero Liability policy covers all Visa credit and debit card transactions processed over the Visa network?online or off. The only transactions not covered under the Zero Liability policy are commercial card, ATM, and non-Visa-branded PIN transactions.

A debit card and a Visa debit card are not the same thing.

True, but all of your "protections" are company specific anyway.