Which cards to eliminate/lower limit to improve my score? (long-term goal: mortgage)

[GotIssues]

No, I probably would not take a loan like that.

You might call it "dumbass, immature vendetta against lenders", I call it my personal morals and values.

It's vendetta based, and that's very, very obvious. You wouldn't be basing your decisions off of "someone else is making money off my money, so f that" if it was values based, so don't try to feed me that line of bull crap.

To take the loan would go against how I wish to live my life. I can not say I live a debt free life, "except" for that $100k loan I am paying on.

So your sacrifice your own financial well-being to "stick it to the man." I hate to tell you this, but they don't give a shit. The only person you are hurting is yourself.

 

[Texashiker]

So your sacrifice your own financial well-being to "stick it to the man."

Taking out a $100k loan would be sacrificing my financial future.

Here is the issue - I am not sacrificing anything, and I am not "sticking it to" anyone.

Banks and I are not on speaking terms, that is by my choice. I bring them my payroll check, they give me my money, and that is as far as our relationship goes. You want to know something else, I like it that way.

 

[Train]

Well ok maybe I HAVE overlooked something. Please explain why the banks/CC companies have decided to be so generous as to send you that 1% to 5% you get and how they can afford to do so.
I think they realize that for every person who is able to keep the balls in the air they will have another 20 who succumb to the risk involved with CCs and pay outrageous interest in an effort to catch up. I'm advocating not exposing ones self to becoming one of the 20 due to no fault of my own....regardless of my assets/worth.
Again in the case of the OP, I recognize a house of cards that is about to be greatly stressed. In his particular case I happen to believe that "take out more debt, do nothing, debt is good" is not good advice for him (nor truth be know for most of the rest of us).
You folks with the financial security, (what is it you call it..."float"), to be able to play around and ignore the risks involved with having and using CCs should go right along (whos debt are you leveraging to your advantage btw). You should, however, thank the OP for his sacrifice which allows you to earn your 5%.

You are ignorant of how the system works, and make up an assumption as to where the rewards money is coming from. Which, hate to break it to you bud, is wrong.

that 1 to 5% kickback the buyer is getting is mostly paid by the merchant via swipe fees and tranaction fees. Which come out right off the top. It is a huge misconception that CC companies only make money on interest. Even if no one carried a balance, the CC companies would still be making money hand over fist.

Others are kickbacks for the CC company steering the buyer in their direction. All the major CC's have web portals offering huge discounts on major retailers.

They also make money by gaining market info. Sometimes the added rewards programs come with Opt-in clauses where they will use yourbuying history as market research or for targeted advertising. Might mean I get a few more pieces of junk mail, but for nearly $1000 extra in my pocket each year, who cares.

Buying with CC's also has the added security of being MUCH easier to get a refund if he merchant tries to screw you. Usually if there is a dispute between a buyer an a merchant, the CC sides with the buyer, gives them thier money back, and tells the merchant to go screw themselves. Try doing that with a cash reciept. Hell try doing it without a receipt.

Tired of buying a high tech toy like a computer or cell phone only to see it at half the price you paid a month later? Many CC's will refund you the difference if the price is lower than what you ad for up to 30, 45 or even 90 days, depending on your contract.

 

[spidey07]

Taking out a $100k loan would be sacrificing my financial future.

Here is the issue - I am not sacrificing anything, and I am not "sticking it to" anyone.

Banks and I are not on speaking terms, that is by my choice. I bring them my payroll check, they give me my money, and that is as far as our relationship goes. You want to know something else, I like it that way.

Even if that 100k got you 150k? There's a reason there's a term for ROI.

 

[Texashiker]

Even if that 100k got you 150k? There's a reason there's a term for ROI.

Ok, tell me how I can make $50k off a $100k loan?

 

[spidey07]

Ok, tell me how I can make $50k off a $100k loan?

Investment property, land, buy a franchise, etc.

 

[GotIssues]

Well ok maybe I HAVE overlooked something. Please explain why the banks/CC companies have decided to be so generous as to send you that 1% to 5% you get and how they can afford to do so.

Because they get ~3% of the purchase price from the retailer. They often offer higher %'s to get you to try to use the card more and make it your primary.

I think they realize that for every person who is able to keep the balls in the air they will have another 20 who succumb to the risk involved with CCs and pay outrageous interest in an effort to catch up. I'm advocating not exposing ones self to becoming one of the 20 due to no fault of my own....regardless of my assets/worth.

If everyone paid off their CCs at the end of the month, they'd still be just fine.

Again in the case of the OP, I recognize a house of cards that is about to be greatly stressed. In his particular case I happen to believe that "take out more debt, do nothing, debt is good" is not good advice for him (nor truth be know for most of the rest of us).

He's eliminating debt on his CCs so that he can improve his credit standing in order to purchase a house, which will (assuming he purchases in the appropriate price range) cost similar to what he would have to pay in rent, except he'll have money going into the principle of the large asset he just purchased.

He's eliminating bad debt (yes, pretty much all CC debt is bad) to pick up an asset backed debt that is tax deductible, and an expense he will have anyways.

You folks with the financial security, (what is it you call it..."float"), to be able to play around and ignore the risks involved with having and using CCs should go right along (whos debt are you leveraging to your advantage btw). You should, however, thank the OP for his sacrifice which allows you to earn your 5%.

It's painfully obvious that you haven't even spent 3 minutes to google or wikipedia the credit system. Do yourself a favor, stfu and spend an hour to get at least a minor grasp on how the system works before you try to play financial advisor.

 

[Texashiker]

Investment property, land, buy a franchise, etc.

In other words you are gambling?

Kinda like the people who took out loans to flip houses. When the housing market crashed, the invest was worth a fraction of the original price.

My wife and I are looking at buying a couple of acres of land to move some rental trailers on. We could take out a loan to buy the land, but we decided to save our money to pay cash for the venture.

It means that we will be saving for another couple of years. Hopefully by the end of 2012 we can make some kind of move.

In the long run, I would rather go slow and steady and have a firm footing, then try to go fast and get on a slippery slope.

 

[GotIssues]

Taking out a $100k loan would be sacrificing my financial future.

How is it "sacrificing your financial future"? You've never actually put forth reasonable arguments. The only thing you've said has been the hippy-esque "Because I don't want to be a slave to the man, man."

Here is the issue - I am not sacrificing anything, and I am not "sticking it to" anyone.

You are sacrificing both long term and short term gains because you have a beef against lenders.

Banks and I are not on speaking terms, that is by my choice. I bring them my payroll check, they give me my money, and that is as far as our relationship goes. You want to know something else, I like it that way.

Blah, blah, blah. We know it's your preference to be debt free, but you've never once presented a cogent argument as to why all debt is bad and evil, while several people have given reasons as to why it is not. No one has said "Load up on debt, everything will be fine," we are saying that there are plenty of times when debt makes sense, and is profitable. The only argument you've put forth is that "someone else makes money off it, therefore it's evil," which is, quite frankly, an ignorant and paranoid way of thinking.

If you want to convince people you are right, you'll have to provide logical proof and reasons, not hippy anti-establishment rhetoric.

 

[Texashiker]

How is it "sacrificing your financial future"? You've never actually put forth reasonable arguments. The only thing you've said has been the hippy-esque "Because I don't want to be a slave to the man, man."

If you are referring to what spidey said with "Investment property, land, buy a franchise, etc."?

Isn't that what helped create the spike in housing prices, and eventually the banking crisis?

 

[GotIssues]

If you are referring to what spidey said with "Investment property, land, buy a franchise, etc."?

Are you incapable of reading what was quoted? You said it was sacrificing your financial future, I'm asking how it does so.

I guess, for you, it would be sacrificing the future, because you would just be putting the money in a coffee can and sit on it with a shotgun, thus costing yourself 4%.

For non-paranoid schizophrenics, we can use that money for many, many other things. When you factor in the tax advantages of things like mortgages, it's very, very easy to come out ahead.

Isn't that what helped create the spike in housing prices, and eventually the banking crisis?

If you are incapable of understanding multi-variable economic conditions, then the answer would be yes. However, the fact that the housing bubble and bank crisis are multi-faceted and much more complex than 99.9% of Americans can grasp, then no. The roots of the housing bubble and bank crisis go about 15+ years.

You really need to realize that rarely something so large as the housing and banking industries ever have problems that are simple. If they were, we could put people like you in office and be just fine, instead of having teams of PhDs and economists trying to figure it out and struggling.

 

[Texashiker]

You really need to realize that rarely something so large as the housing and banking industries ever have problems that are simple. If they were, we could put people like you in office and be just fine, instead of having teams of PhDs and economists trying to figure it out and struggling.

Maybe the best answers are the simple answers.

I guess, for you, it would be sacrificing the future, because you would just be putting the money in a coffee can and sit on it with a shotgun, thus costing yourself 4%. For non-paranoid schizophrenics, we can use that money for many, many other things. When you factor in the tax advantages of things like mortgages, it's very, very easy to come out ahead.

Kinda hateful there don't you think?

You know nothing about me, or what I would do with a surplus of money.

 

[Svnla]

Ok, TexasHiker, we understand that you don't like CCs or any kind of debts, we got it. Different strokes for different folks.

Why do you have to come in all of finance/credit cards threads and talking smash/trolling?

 

[CoachB]

Texashiker,

I think we should just give it up. Obviously you and I are not sophisticated enough to understand what GotIssues and Spidey07 and all those phds and economists know so well. I'll just sit here beholden to no one and hope they get their mess straightened out.

You see, we are arguing two different things. you and I are arguing the moral and social implications of greed while they are trying to justify the math. As long as they get their 5% it doesn't matter if Billy Bob pays 35% on his CC. It doesn't matter if the costs of goods and services must be jacked up to pay the transaction fees. It doesn't matter if people are losing their life savings due to CC fraud. It doesn't matter if a huge segment of the population are getting raped by credit companies daily. Just give them their 5%.

You could change the names in this thread and have a very good semblance to some of the Wall Street hearings in Washington. They can always justify why it was necessary to wreck the company yet still get the bonuses. They absolutely must believe they have it all figured out. To believe otherwise is to recognize how much crap goes on to support their need. Somebody has to pay...just not them.

I'm finished. Thanks for the (mostly) civil discussion.

 

[Texashiker]

Why do you have to come in all of finance/credit cards threads and talking smash/trolling?

I am not trolling, I just post my opinion.

It just so happens that most people disagree with my opinion, thats ok though. If you do not stand for something, you will fall for anything.

Its like this article on foxnews I was reading - http://www.foxbusiness.com/personal-finance/2011/12/12/10-innocent-ways-to-damage-your-credit-score/

Close your credit card account - hurts your credit
Pay your balance off every month - hurts your credit
Keeping a high balance - can hurt your credit
Disputing a credit card transaction - can hurt your credit
Taking out a student loan - can hurt your credit
Looking for auto insurance - can hurt your credit

Its like trading in a car. Regardless of what you do, the car lot will find "something" to make your car worth less then what its real value worth. Then the salesmen turns around and tells the next customer how great the car you just traded in is, and how its a good deal.

To me, its all a game. If you try to do something good, it hurts you in another way. I choose not to play their games. If someone else wants to play games with credit cards and banks, that is fine with me, I do not care.

 

[MrsBugi]

Epic advice in this thread! Just wanted to chime in to say thanks to everyone for the helpful feedback. Love ATOT.

 

[GotIssues]

Texashiker,

I think we should just give it up. Obviously you and I are not sophisticated enough to understand what GotIssues and Spidey07 and all those phds and economists know so well.

You can try to be a condescending prick to attempt to discredit everyone else in this thread, but the point stands that from all your posts, it's painfully obvious that you've done zero research and have zero understanding how the credit system works. I actually thought it was common knowledge that CC's received a % of the purchase price from stores. I guess when 99.9% of the population knows something, there IS still the .1% that doesn't...

You can't blame the system because you are too lazy and/or stupid to understand how it works.

I'll just sit here beholden to no one and hope they get their mess straightened out.

Or you could stop being a lazy complainer and learn how the system works, at least a rough understanding, so that you can more appropriately use the system.

You see, we are arguing two different things. you and I are arguing the moral and social implications of greed while they are trying to justify the math. As long as they get their 5% it doesn't matter if Billy Bob pays 35% on his CC.

Bob doesn't need to drop everything on his CC and not pay for it each month. So, what you are saying, is that I should take responsibility for someone else's mistakes?

If you think your C- average in sociology is going to get you very far in this thread, think again. This isn't a situation of morality or "the social implications of greed." To be honest, I don't even think you truly understand the meaning of what greed is. Greed is an excessive desire for wealth, not "making money" or "making the best financial decision." Greed IS bad, because it causes people to make many decisions that are detrimental to those around them. Unfortunately for you, using a CC because it gives cash back isn't greed, it's just common sense.

It doesn't matter if the costs of goods and services must be jacked up to pay the transaction fees. It doesn't matter if people are losing their life savings due to CC fraud. It doesn't matter if a huge segment of the population are getting raped by credit companies daily. Just give them their 5%.

Stop trying to play the victim. People aren't losing their life savings to CC fraud. Do you even know what CC fraud is? The most money anyone can be responsible for should their CC be lost or stolen is $50. Fifty dollars. If that's their life savings, they have bigger problems.

They are losing their "life savings" because they abuse a service given to them and disregard the consequences. They spend beyond their means. I am not responsible for Bob running up his CC bill. It is Bob making those purchases, and he has every right to do so, because it's his life. Since they are his choices, they are his consequences.

You could change the names in this thread and have a very good semblance to some of the Wall Street hearings in Washington. They can always justify why it was necessary to wreck the company yet still get the bonuses. They absolutely must believe they have it all figured out. To believe otherwise is to recognize how much crap goes on to support their need. Somebody has to pay...just not them.

I'm finished. Thanks for the (mostly) civil discussion.

You don't even know the most basic workings of the credit system and you try and say you are following hearings in Wall Street (and understanding them)? Lol.

 

[Texashiker]

You can try to be a condescending prick to attempt to discredit everyone else in this thread,

He is not being a prick, the only prick in this thread is you gotissues.

gotissues, you are the only one in this thread that is slinging insults around. Quit frankly, you are acting like a bully. You are acting like a kid who is throwing a fit to get his way.

Not everyone in this world lives their life the same way you do gotissues. The issue here is your lack of respect for others. I live my life the way I want, and not the way the credit agencies want. If that is a problem for you, to bad.

Maybe there is a "real" reason why your username is "gotissues", maybe you have issues in real life.

 

[Train]

Banks and I are not on speaking terms, that is by my choice. I bring them my payroll check, they give me my money, and that is as far as our relationship goes. You want to know something else, I like it that way.

HOLY FUCK, you don't even have a checking account? Why don't you just go live in the woods like a gypsy.

You're free to what you want but.... Do everyone a favor and stay the FUCK out of financial threads, forever.

 

[Texashiker]

HOLY FUCK, you don't even have a checking account? Why don't you just go live in the woods like a gypsy.

No to living in the woods.

And no, I do not have a checking account.

You're free to what you want but.... Do everyone a favor and stay the FUCK out of financial threads, forever.

I am one of the few people in this forum that promotes living a debt free life, if that bothers you, to bad.

 

[Schfifty Five]

HOLY FUCK, you don't even have a checking account? Why don't you just go live in the woods like a gypsy.

You're free to what you want but.... Do everyone a favor and stay the FUCK out of financial threads, forever.

Don't listen to Texashiker, he does this in every thread about finance. He actually does have a checking and savings account but for some reason will blatantly lie about it and say he does not.

Or it could be that he doesn't know what the difference between checking/savings/cc are.

 

[GotIssues]

I am not trolling, I just post my opinion.

It just so happens that most people disagree with my opinion, thats ok though. If you do not stand for something, you will fall for anything.

If it makes you feel better, I don't think you are trolling. I think you have a flawed opinion and a stubborn fingers-in-your-ears attitude.

Its like this article on foxnews I was reading - http://www.foxbusiness.com/personal-finance/2011/12/12/10-innocent-ways-to-damage-your-credit-score/

Didn't read the article because it was obviously sensationalized to ruffle the feathers of people who won't go out and do the research themselves. Rule #1: News needs to sell to make money. Easiest way to do that is to sensationalize it and get people up in arms over it. Being the paranoid that you are, I'd have thought you knew that.

Close your credit card account - hurts your credit - length of credit history. If you don't have a history of being able to be trusted, why should a new lender trust you with gobs of money?
Pay your balance off every month - hurts your creditMinorly, to the point that it doesn't even matter, literally
Keeping a high balance - can hurt your creditThe more you owe, the less likely you'll be able to pay it back. Seems obvious...
Disputing a credit card transaction - can hurt your creditIt can hurt your credit if you are lying about it, yes. Leaving off key facts to skew things in your favor is bush league.
Taking out a student loan - can hurt your creditMore debt, more risk of not being able to pay it all.
Looking for auto insurance - can hurt your creditSee, you are keeping it vague to sensationalize it. It's the hard credit inquiry that hurts credit because it signifies that you are looking for loans - another sign that someone is going to load up on debt and increase risk of default. It's very, very easy to avoid.

The banks don't want to loan money out to people and never get it back, much like you don't want to pay for a DVD off Amazon and never receive it.

Its like trading in a car. Regardless of what you do, the car lot will find "something" to make your car worth less then what its real value worth. Then the salesmen turns around and tells the next customer how great the car you just traded in is, and how its a good deal.

If you get hosed on a trade in, it's because you didn't spend 30 minutes researching your car.

Protip #1: Print out the KBB value of the car twice. Leave one on the passenger seat when they go to inspect the car, and carry the other with you.

Protip #2: You don't have to sell it to the dealership. You can a) go to another dealership or b) do a private sale.

If the they know you know what the car is worth, they won't try and screw you. Yes, dealerships are greedy and I don't trust them at all, but they will not mess with a customer who has shown that they know what they are talking about.

To me, its all a game. If you try to do something good, it hurts you in another way. I choose not to play their games. If someone else wants to play games with credit cards and banks, that is fine with me, I do not care.

Everything is a game if thats the way you choose to look at it.

The credit game is no more complicated than Candyland. It takes 20 minutes to learn the basic rules and you'll be just fine.

 

[Texashiker]

The banks don't want to loan money out to people and never get it back,

Isn't that what you were suggesting in some of your post? Get a loan from a bank, invest it, and "hopefully" make money off of it?

When the bank problems started back in 2008, CNN was interviewing a guy who had 3 mortgages. He flipped houses for a living. When the value of the housing market started to decrease, he was left with 3 homes he could not sell. He had no real job, but I imagine his credit was great so the banks kept loaning him more money.

Instead of letting those homes be on the market so a family could buy one, they were being snatched up by house flippers.

Gotissues, now I understand why you picked that username, you seem to have some real life issues. Instead of slinging insults around, how about respecting the fact people live their life differently from you?

Don't listen to Texashiker, he does this in every thread about finance. He actually does have a checking and savings account but for some reason will blatantly lie about it and say he does not.

No, I do not have a checking account; nor do I plan on ever having a checking account.

 

[GotIssues]

He is not being a prick, the only prick in this thread is you gotissues.

Because I disagree with you and provide proof to why my side is better and you continually avoid any commentary that contradicts your opinions by selectively quoting doesn't make me a prick. It makes me right.

gotissues, you are the only one in this thread that is slinging insults around. Quit frankly, you are acting like a bully. You are acting like a kid who is throwing a fit to get his way.

I call them how I see them. Be an idiot, you get called an idiot. If you haven't noticed, no one has come to your defense and several have agreed with me. There is a reason for that.

Not everyone in this world lives their life the same way you do gotissues. The issue here is your lack of respect for others. I live my life the way I want, and not the way the credit agencies want. If that is a problem for you, to bad.

I give respect where I'm given respect. Respect is not free, it's earned. You have never, in any financial thread, given any reason how or why your opinion is superior. Not once has there been a fact used to support your argument and you tend to be rather obtuse about the subject - either on purpose or not. When you start providing facts to back up your opinions on this matter, you will continue to get zero respect when talking about it.

Maybe there is a "real" reason why your username is "gotissues", maybe you have issues in real life.

It actually harkens to my double major in Psychology. I'm a pretty keen observer and notice things about people pretty quickly. Do you really want to delve into who has issues?

 

[Train]

No to living in the woods.

And no, I do not have a checking account.




I am one of the few people in this forum that promotes living a debt free life, if that bothers you, to bad.

What the FUCK does having a checking account have to do with having debt?