# Credit cards ?



## IKE (Sep 22, 2017)

I've had two visa cards, from two different banks, for ages and rarely use them and I initially got them many years ago for emergencies.

** I stand to be corrected but I seem to recall reading many moons ago that you shouldn't totally pay off a credit card because it shows your payment history which in turn helps establish and maintain your credit rating. ** 

The reason I ask I received one of the card bills yesterday and the balance is only $295.17 (the other is right at $350.00) and while funds are available to easily pay both off entirely I normally only send in around $25.00 or so over the minimum payment, which is what I'm about to do now.

We are both retired and have no debt whatsoever now other than monthly utilities and such.......does what I seem to recall reading hold true about keeping a small balance on credit cards ?


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## Aunt Bea (Sep 22, 2017)

I pay my cards in full every month.

All it will do is show your credit utilization rate is zero, not a bad thing.

If you close a card completely it may have a slight negative impact.

The biggest thing is to pay everything on time with no late payments, defaults, charge offs, etc...


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## Roadwarrior (Sep 22, 2017)

Timing with credit cards & FICO scores are important.  I pay the total amount owed, (not minimum pmt) each month well before the due date.  I use them exclusively for my monthly utility bills.  Right after my payment posts & just prior to the date my credit card company reports I charge 20% of the limit of my card ($500) or $100 then after report date I charge the balance of my utility bills.  I've had to reverse the unrequested limit increase several times.  Too tempting.  I redeem the cash rewards also at pmt time.   I've been tempted to get a second card (good idea if you book rooms) but so far haven't needed one.

At first before I understood the process I was getting dinged if I paid the card off & had no reported balance.  With only one card it showed no consumer debt, the reporting agencies want you in debt (no more than 20% of limit) & handling your bills.  Retail cards & too many 'hard' inquiries for credit can hurt your FICO score more than credit cards, mortgages or auto loans.  They want to see a variety of debt & how well you handle it.  Normally I use cash only, unless I order something online (very seldom don't need more 'stuff').  Never use a card for gas, most have a cash & card price.  The cash savings offset any rewards you may have missed.


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## helenbacque (Sep 22, 2017)

I have a couple of cards and use them freely.  One I keep in my purse and use when I'm out and about.  The other I keep at my desk and use for phone or on-line purchases.  I deliberately keep the credit limit on the last one low.  Both are paid in full before the due date as I hate paying interest.  I've done this for years and it cannot have damaged my credit rating as it is in the 800s.


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## Ken N Tx (Sep 22, 2017)

What good are the credit ratings if you never plan on buying anything on credit??


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## AZ Jim (Sep 22, 2017)

Ken N Tx said:


> What good are the credit ratings if you never plan on buying anything on credit??


You bet!  You should retain some debt and payment history.


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## Roadwarrior (Sep 22, 2017)

Ken N Tx said:


> What good are the credit ratings if you never plan on buying anything on credit??


Applying for auto insurance for one, opening a bank account for another, qualifying for a rental another, the list goes on.


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## Ken N Tx (Sep 22, 2017)

AZ Jim said:


> You bet!  You should retain some debt and payment history.



.
I do have a card and pay the balance 7 days before due date.


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## AZ Jim (Sep 22, 2017)

Ken N Tx said:


> .
> I do have a card and pay the balance 7 days before due date.


We do the same thing, never pay interest.


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## Roadwarrior (Sep 22, 2017)

My POS ISP wants $3.25 if you pay your bill with a credit or debit card.  My bill is $44 so that fee represents a 7.38% charge.  They don't charge a fee if you pay either auto (which I avoid) or pay from your checking account.  It's my only utility bill that does.  It all adds up it's those pesky small fees you don't pay much attention to that slowly erode your budget.


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## Lethe200 (Sep 22, 2017)

It's useful when you are first starting a credit history, to pay in installments. But don't forget that installments also covers lien-worthy purchases, such as autos, appliances, and RE. 

Once your credit history is firmly established - I'd guess most financial institutions like to see at least a couple of years of on-time, regular payments - feel free to pay off cards (if that's your ONLY debt) in full every month.


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## terry123 (Sep 22, 2017)

I pay my 2 cards off each month.  I refuse to pay interest.  I use a cash back credit card from Kroger as I enjoy getting the $20.00 check a couple of times a year to spend there.  I put my insurance premiums on there and pay off each month. This way I do not pay interest and collect cash back rewards every few months.  I have a regular checking account that deposits $125.00 each month into another account that pays interest.  I put my yearly house and car premiums on a cash rewards credit card, and then pay in full from the other bank account.  $125.00 each month pays my house insurance and car insurance in full each year and I get a check from Kroger for the cash rewards credit card.  It works for me nd both bank accounts collecs a little interest along the way.


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## Bobw235 (Sep 22, 2017)

Have four primary credit cards, three of which are used all month. Balances are always paid in full about a week before the due date. I have one card that accumulates points for the hotel brand that we favor, another card for airline miles which I use for all purchases at the grocery store, where I get 3 miles for each dollar spent and I have one for Costco that has a great cash back plan. I use them for different purposes, but always pay them off in full. Have never carried a balance.


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## Knight (Sep 22, 2017)

IKE said:


> We are both retired and have no debt whatsoever now other than monthly utilities and such.......does what I seem to recall reading hold true about keeping a small balance on credit cards ?




No. 

We are also retired with no debt, pay everything with one of our 2 credit cards. Pay the amount no matter what it is so we pay no interest. Recent credit rating 805.


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## Butterfly (Sep 22, 2017)

Roadwarrior said:


> My POS ISP wants $3.25 if you pay your bill with a credit or debit card.  My bill is $44 so that fee represents a 7.38% charge.  They don't charge a fee if you pay either auto (which I avoid) or pay from your checking account.  It's my only utility bill that does.  It all adds up it's those pesky small fees you don't pay much attention to that slowly erode your budget.



So pay it online with your checking account.  I've been doing that for years.


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## oldmontana (Sep 22, 2017)

We are both retired and have no debt whatsoever now other than monthly utilities and such.......does what I seem to recall reading hold true about keeping a small balance on credit cards ?

==========================================================================

I see no need to do so.  We have had two credit cards for like 25 years and have always paid off our balances every month. The CC companies make money from the firms were the CC's are used...like Safeway, JC Penney, etc.  So they make money even when you pay your balance ... they do make more from interest if one only pays off part of the balance.

We use our credit card because we get from 1% to 5% cash back on purchases....it adds up.


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## nvtribefan (Sep 22, 2017)

IKE;698660

** I stand to be corrected but I seem to recall reading many moons ago that you shouldn't totally pay off a credit card because it shows your payment history which in turn helps establish and maintain your credit rating. ** 



We are both retired and have no debt whatsoever now other than monthly utilities and such.......does what I seem to recall reading hold true about keeping a small balance on credit cards ?[/QUOTE said:
			
		

> No.  The only advantage in maintaining a balance is to the credit card issuer.
> 
> I use cash back credit cards for everything, and pay them in full each month.  Advantage me.


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## IKE (Sep 23, 2017)

Thanks for the replies everyone......when the next two bills arrive I'll go ahead and pay them off in full.


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## Don M. (Sep 23, 2017)

IKE said:


> Thanks for the replies everyone......when the next two bills arrive I'll go ahead and pay them off in full.



Paying less than the full balance does little other than making the CC companies rich.  The interest they charge quickly causes the price of whatever you purchased to balloon.  Carrying a balance on the credit cards does little to improve your credit score.  We made our last house payment somewhere in the mid 1980's, and have not paid a nickel in interest on anything since....everything we buy is cash/check, or the balance is paid as soon as the bill arrives.  I recently pulled all my credit reports after this Experian hack, and all show a full history of bills paid quickly, and with our credit score showing between 805 and 825.  

Making minimum payments just improves the bottom line of the banks.


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## Knight (Sep 23, 2017)

Whether retired or still working the idea is to make money work for you. Buying something on credit often times means buying at a savings from the regular price. Buying on credit with a cash back percent adds to money in ones own pocket over the cost of whatever is purchased. Easy to understand concept of paying in full is making your money work for you. Whether a little or a lot it is still money that you can use to buy something else.


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## helenbacque (Sep 23, 2017)

Slightly off subject but ..... I always tried to teach my children that money NOT spent (saved) is worth more than the same amount earned.  You've already paid taxes on one of those.


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## HipGnosis (Sep 23, 2017)

IKE said:


> I've had two visa cards, from two different banks, for ages and rarely use them and I initially got them many years ago for emergencies.
> 
> ** I stand to be corrected but I seem to recall reading many moons ago that you shouldn't totally pay off a credit card because it shows your payment history which in turn helps establish and maintain your credit rating. **
> 
> ...


By only paying a bit over the minimum payment, more of your payment is going toward the interest than paying off the balance.  If you're not paying off the balance, you're paying interest for eternity.
I think you misconstrued the advice to use your credit cards at least once a year to keep the account active.  And then pay it in full to avoid paying any interest.  The more you use it (or them), even paying in full, the better your payment history and therefor your credit score is.

Through my divorce, I went from 6 figures net worth and good credit to negative 6 figures worth and horrible credit.  I used extreme debt and credit management to pay off the debt and recover my credit.  After I paid off an account, I got offers for new credit cards with  'teaser' rates of 0-2% for X months for balance transfers.  I used them until the final month, and then got a new card with another teaser rate, over and over.
I now have great credit and many credit cards - which I actively manage.   All of the cards I've kept give me some kind of benefit (aka reward).  I use a label maker to label ea card with what I use it for - which is what I get the best benefit on.

I have even begun to make money with my credit cards.  Cards over a couple years old with a high credit limit are sought by 'credit repair' Co's.  They pay the holder of the card to make their clients with poor credit authorized users of the cards for a couple months - when they are trying to get a new loan.  For some reason it's called 'selling tradelines'.  I hate that term as it's not that at all.  I call it AU slot rental.   I only get paid after I've made someone an AU.  The AU doesn't get a credit card or any of my information.  But my credit shows up on their credit report for those months.  It's easy money, but not steady.


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## OneEyedDiva (Sep 28, 2017)

I assume you have a good credit rating. If that is the case, switch to good cash back rewards cards that have no annual fees. Charge things you would normally pay by check or debit card. Pay the balances in full, on time, each month. Paying in full does not harm your FICO score. Mine is "Excellent".  It's costing you money to make installment payments each month! How about making money using your cards, not the opposite. Using this system I've gotten $468 cash back this year, including account opening bonuses and over $3,000 back since 2008.


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## mathjak107 (Sep 29, 2017)

we recently got the chase sapphire reserve card which carries a 450 a year fee . it is by far the best deal in cards for us . the perks ,privileges and rewards are phenomenal .

we use it in conjunction with our chase freedom card which offers 5% back each quarter on certain categories . we then transfer the points to the chase sapphire where  they get a 50% boost when used through the chase travel portal along with all points you accumulate .

the benefits of the card easily exceed the cost and chase lost 200-300 million dollars on it last year . you have to wonder how long they will offer what they do .

we got 60,000 points right off the bat  plus each year you get a 300.00 statement credit for travel and restaurants .

you get 3x the points for travel and restaurant and all points get a 50% boost when used for travel through the chase portal .

they pay the 300 bucks for the  priority pass lounges at the airport which offer free food and drinks . as an example you and your spouse can eat and drink up to 28 bucks each at miami airport .


they pay 100 bucks towards tsa precheck or global entry .

you get free trip cancellation and trip interruption insurance 

the list of perks you get with that sapphire reserve card are just to long to list .


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## Ken N Tx (Sep 29, 2017)

OneEyedDiva said:


> I assume you have a good credit rating. If that is the case, switch to good cash back rewards cards that have no annual fees. Charge things you would normally pay by check or debit card. Pay the balances in full, on time, each month. Paying in full does not harm your FICO score. Mine is "Excellent".  It's costing you money to make installment payments each month! How about making money using your cards, not the opposite. Using this system I've gotten $468 cash back this year, including account opening bonuses and over $3,000 back since 2008.


.
Ditto...


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## Trade (Sep 29, 2017)

oldmontana said:


> We are both retired and have no debt whatsoever now other than monthly utilities and such.......does what I seem to recall reading hold true about keeping a small balance on credit cards ?



If you want to make a monthly donation to the credit card company sure. Otherwise, no.

My advice is, be a deadbeat. 



> The credit card industry, infamous for making up their own rules,  says that a credit card deadbeat is someone who pays their credit card  balances in full and on time each month. Here's why you don't want to listen to what the credit card industry says.
> 
> *Why the Credit Card Industry Uses "Deadbeat?"*
> 
> ...


 

continue


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