Amount of unpaid credit card bills is rising

NEW -> Contingent Buyer Assistance Program
flmgrip: you are right, it is just that you have this awesome credit card, mine doesn't have any cash back...

The debit account of mine that has a credit feature actually does show up on my credit report (I happened to check it last week)... The biggest impact on my credit score was the moment when I repayed my HELOC entirely. Smth to consider.

If you want to improve your FICO score, just pay off whatever debts you have on it, b/c it also shows your closed accounts and debts. (like student loans maybe?) Also, I heard that if you have cash, you can put it on CD for 3 months prior to applying for a mortgage, it helps to qualify...If you don't have cash, borrow it from your parents :)
 
<em>"if one understands what money is and what money is in one's life, it would be unnecessary and undesirable to borrow and accrue interest at different rates or try to improve one's FICO or arrange payments or accumulate points or ..."</em>





What ever happened to simplicity? I used to think like Gollini, that is a great deal of brain damage to make a few dollars in interest over a few years. Is it the financially correct decision? Sure. Is it the going to contribute to peace of mind? I have my doubts. I don't do those kind of things any more. In fact, I bought my last two cars with zero percent interest thinking I had no incentive to pay it off. I was making interest on the savings, and I was paying the loan back with inflated dollars. I doubt I would do it again. I did not enjoy the payments for 5 years. It felt like a weight on me. I much prefer to live a life without payments, multiple accounts, etc. It isn't that I am not sophisticated enough to figure it out, it is that I do not want the stress and complication that goes along with it. I will do it if the financial benefit is great enough, but the threshold has been rising for the last several years with me.
 
I certainly had no intent of being critical of other's choices. If anyone took my comments otherwise, I apologize. To each his own. But there are quite a few people on this blog that hope to / intend to purchase a home at some point in the future. The point I was trying to make is that there are some relatively simple (and zero cost) choices you can make over the next couple of years to improve your credit score. Given the on-going return to lending sanity, that improved credit score will almost certainly improve one's ability to achieve that goal of home ownership. Having a very limited credit history (by not having any open accounts) is damaging to an otherwise good credit score.



BTW, I lead a pretty simple, stress-free life. Partly due to never having a spouse or kids. :-) But I sold the house in '04 and now rent. Also quit working as an employee, and am self-employed.



"I live in that solitude which is painful in youth, but delicious in the years of maturity."

Albert Einstein (1936)
 
Gollini,





I didn't mean to sound critical of what you were saying. You are correct in what you are doing, and your advice is good for improving a credit score. I guess I was just picking up on awgee's vibe with the bigger picture of what is more important. I still have one credit card that I use periodically and pay off the balance just to boost my credit score, so my life is not so simple either. I just wish it could be...
 
i completely agree with lawyerliz about spending 20% more with CC than cash. if i have 20 bucks in my pocket and see something that costs more, i'll think, "well i guess i dont have the money to pay for that right now." or i'll shop harder to make my purchases fit with what cash i've got on hand at the moment.



now if i have no cash at all, i figure i'll just swipe it and not think as hard about the difference between a few bucks.



have cash = spend less

no cash = spend more



i know, its totally stupid.
 
<p>Awgee, I seen a few times in the forum that you really don't believe on financing cars. Pay ca$h and only ca$h.</p>

<p>First, if you don't put 20% down on a home, the second mortgage rate is often higher than a car loan. Therefore, you better finance your car and put the money down on a home.</p>

<p>Second, if you don't own a home put started putting money aside for a later purchase. IF you plan on buying sooner than the term of your loan, you might not have the money necessary to make a decent downpayment on a home. Example if you have $50,000 aside and buy a $30,000 car, if you pay cash you will only have $20,000 to put down, which might not qualify you for your loan.</p>

<p>Third, make an auto loan will improve your credit score and possibly save you .25% on your home loan which will save you a TON of money on your home purchase.</p>
 
Roo - Buy a cheaper car with cash, or take the bus, or ride a bike. No, I am not kidding.<p>

Save up 20% for the down payment and if you can't save the 20%, that is a <b>BIG</b> message that you are looking at homes that are too expensive for your income or you are not saving properly and can not afford home ownership expenses until you learn how to save.<p>

Do not borrow money and pay interest in order to "improve" your credit score and "save" money on an interest rate.<p>

We pay cash for everything and I can assure you that our credit is impeccable and better than 99% of the folks who have our income and buy on credit. You will make a ton more money in your lifetime if you understand what money is and understand how it works in your life than if you try to work money.<p>

You do not need a credit score if you have cash. The less you need to borrow, the more others will desire to loan to you.<p>

<i>"With all thy getting, get understanding"</i> Malcom Forbes
 
When I was 23 I bought my very first car. It was a brand new Toyota Tercel and I paid $7,450 for it at the dealership. I did a 3 or 4-year loan that worked out to something like $280 a month. I kept that car for 5 years until trading it in for a brand new Corolla. I financed that car, too. Then six years ago I bought my Volvo station wagon and financed it, but paid it off when I sold the first house.





From now on, I will only be paying cash when I buy a car. However, I do not regret having financed my first two vehicles. I do not believe it was stupid at all. If I had bought cars other than bare bones Toyotas to start with, then yes, that would have been stupid. I even considered Accords to be decadent at that time!





But at 23, I was tired of taking the bus, riding my bike, and bumming rides from people. I was depressed and didn't feel like a grown-up. It was an emotional decision, to be sure. As in, I needed to take care of my emotions because I was very unhappy with my life and decided to do something about it instead of wallowing. So I quit the PhD program that I was in, got a job, financed a Tercel, moved out of the little room I was renting in a house, rented my own 500-square foot studio apartment, got a cat for companionship, and began to build my career.





So in my opinion, it's not always correct to make blanket statements about what's stupid when it comes to financial decisions. Each person needs to weigh their individual situations and identify the best solution for themselves.





Happy New Year!





ISM
 
<i>"I do not believe it was stupid at all." "So in my opinion, it's not always correct to make blanket statements about what's stupid when it comes to financial decisions."</i><p>

I want to go on record as saying that I never said buying a car on credit was "stupid".
 
Well, let me clarify that. Anyone who bought an overpriced house the past couple of years, I have to say, it's pretty safe to call that "stupid." Does that make me a hypocrite?
 
I financed both my cars, though I could have paid cash. At ~6% the rates are within a point of my mortgage. Should I pay all 3 off and live debt-free? I don't think so. Not when savings accounts are paying north of 4% and my at-risk money has been doing better than that, on average, since buying the home. I'm also looking to buy a business within the next couple years and I know that my lender, if I can find one, will prefer that I have substantial skin in the game.
 
And I'm a self-identified hypocrite too. Or I will be after this post.





I have bought one new car in my life, and I financed it. But in retrospect, it was a stupid move on two counts. New cars depreciate way too rapidly, and of course the fact that a car is simply transportation and that it makes a lot more sense to get something that you can purchase with cash on hand. If you buy something a few years old, you can save a lot of money and dedicate those resources to something more worthwhile.





So no offense was intended to anyone. Sometimes smart people make stupid moves.
 
ism - We have a saying in our church. If God didn't allow hypocrites in His church, His church would be empty.
 
Thanks Winex for this "Dave Ramsey doesn't an excellent job explaining the impact of financing your car athttp://www.daveramsey.com/etc/lms/drive_free/" The video is good. It exagerates about the amount you can save over 10, 20, 30 and 40 years, but anyhow it made me think.



For me it's not all clear yet why I shouldn't finance my car or lease it. Don't flame me for that! For one thing, I might go check out some used cars at Carmax instead of only looking a new cars.



However, financing is not as bad as it sounds. Why would the US government be trillions of dollars in debt if it wasn't a good thing? Oops...I pressed athe wrong button there. I know it's different, but I'm trying to put things in perspective.
 
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