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

[spidey07]

Your mortgage was probably sold before the end was dry.

Nope. Local bank.

 

[GotIssues]

If he can not save money, he should not be buying a home.

After all, we are talking bout being responsible here, right? Being responsible does not mean carrying a lot of debt.

Each thread, you seem to become less and less in touch with what "being responsible" means.

You can be obstinate all you want trying to shove your beliefs down people's throat, but it still doesn't change the fact that your advice is flat out wrong. "All debt is bad and irresponsible" shows that you have all the economic sense of a lawnchair.

1) Mortgage rate at an all-time low
2) Rent at a long-term (maybe all-time, not sure) high
3) It's a buyer's market

In many places, buying an income-appropriate house means you could have a mortgage payment the same or even LOWER than rent, except you are putting money toward the principle each month, which ultimately makes buying cheaper if you can get the loan. Sure, if you lose your job, you could lose your house, but do you think that the apartment complex won't throw your ass out on the street if you can't make payments?

Your lifestyle choice is simply that, a choice. I don't care what you do, but when someone comes in asking for advice on how to best go about this or that financially, don't come in acting like your way is the best and only way, when clearly it is not.

It's obvious that you had financial trouble in your past, and it was caused by your bad financial mistakes. However, you over-corrected your mistakes - you are still wrong, just for entirely different reasons.

 

[Fausto]

I would rather build wealth without the use of credit.

Some people can use credit as is should be used, but a lot of people do not know how to use credit, or otherwise abuse credit. Personally, I would rather not be tempted to use to much credit. To totally eliminate the possibility of spending too much, I do not have any credit cards.

You don't own a home either, I'm guessing.

 

[CoachB]

Stop and think why the bank doesn't care about your net worth or assets or savings.....they want you on the hook. They can use their self-serving FICO score to determine how much tthey will make off of you. Interestingly, if you have a low FICO but a $100,000 in the bank, you will pay a high interest rate for a mortgage. Why....not because you are a credit risk but because the bank has (I say again), rigged the game.

Good old common sense (which is so often applauded here) would tell you that the safest person to loan to is the one with 1) very low credit utilization, 2) very low outstanding debt, 3) low monthly expenses vs high income, 4) savings. Yet the high FICO goes to none of the above.

I'm not saying that people don't need to borrow money. A home mortgage and running a business are two excellent examples of justification. Even then it should be HARD to get a loan and the collateral should cover the loan amount. I think we can all see now what "easy credit" can lead to.

As to the OP and his situation.....he has so many balls in the air that I worry when (not if), Murphy's Law kicks in. Also, he mentioned being on the mortgage with two other people. What happens when they get mad at each other or one decides he wants out or one gets sued. Then we really gots a mess.

And you folks who "pay it off every month". Why not wait a month and pay cash. It would only take you a month or so to get out ahead and not have to worry about layoffs, accidents, or other "life events". Unless of course you need that ego boost of flashing your card!

If you all are wondering why I'm so rabid about CC, it comes from spending the last 4 years digging out of a hole caused by a loss of salary due to a medical condition. Up until that day, I was playing with snakes just like the rest of you smucks.(a term of endearment!)

 

[Texashiker]

Each thread, you seem to become less and less in touch with what "being responsible" means.

You can be obstinate all you want trying to shove your beliefs down people's throat, but it still doesn't change the fact that your advice is flat out wrong. "All debt is bad and irresponsible" shows that you have all the economic sense of a lawnchair.

I am not trying to shove anything down anybodies throat.

All debt is wrong. Certain types of debt are a little less wrong then other types.

The only types of debt that are somewhat excusable are home or car loans. But even then, debt is still bad.

Your lifestyle choice is simply that, a choice. I don't care what you do.

If you truly did not care, then you would not be making a big deal about my opinion.

The fact is, my opinion is different then yours. You can not respect a differing opinion, so you throw insults around trying to discredit my post.

You don't own a home either, I'm guessing.

You guess wrong.

 

[rcpratt]

And you folks who "pay it off every month". Why not wait a month and pay cash. It would only take you a month or so to get out ahead and not have to worry about layoffs, accidents, or other "life events". Unless of course you need that ego boost of flashing your card!

If you all are wondering why I'm so rabid about CC, it comes from spending the last 4 years digging out of a hole caused by a loss of salary due to a medical condition. Up until that day, I was playing with snakes just like the rest of you smucks.(a term of endearment!)

Because we get rewards from using our credit cards, and we have enough float in our bank accounts to not have to worry about a month's worth of CC charges?

 

[Drako]

I am not trying to shove anything down anybodies throat.

All debt is wrong. Certain types of debt is a little less wrong then other types.

The only types of debt that are somewhat excusable are home or car loans. But even then, debt is still bad.

Dave Ramsey, is that you? :biggrin:

 

[CoachB]

Because we get rewards from using our credit cards, and we have enough float in our bank accounts to not have to worry about layoffs or accidents anyways?

Ahhh, so it IS an ego thing! I totally understand....I have a hungry one too. I've just learned to feed mine with rolls of cash. I find it impresses just as much as a "Americal Depress Super Rewards Platinum Deloren Card".
Happy Holidays

 

[rcpratt]

Ahhh, so it IS an ego thing! I totally understand....I have a hungry one too. I've just learned to feed mine with rolls of cash. I find it impresses just as much as a "Americal Depress Super Rewards Platinum Deloren Card".
Happy Holidays

:whiste:

 

[GotIssues]

. . .
And you folks who "pay it off every month". Why not wait a month and pay cash. It would only take you a month or so to get out ahead and not have to worry about layoffs, accidents, or other "life events". Unless of course you need that ego boost of flashing your card!

If you all are wondering why I'm so rabid about CC, it comes from spending the last 4 years digging out of a hole caused by a loss of salary due to a medical condition. Up until that day, I was playing with snakes just like the rest of you smucks.(a term of endearment!)

Pay in cash

OR

Put on CC and get 1% - 5% cash back at the end of the month, while your cash that you have already is earning interest (albeit low, still greater than 0).

I'm not seeing how this one is difficult to figure out.

I am not trying to shove anything down anybodies throat.

All debt is wrong. Certain types of debt are a little less wrong then other types.

The only types of debt that are somewhat excusable are home or car loans. But even then, debt is still bad.

Debt can be very advantageous when one has a proper grasp of how to use it properly.

If you truly did not care, then you would not be making a big deal about my opinion.

It's your dispensing of shitty advice to other people who might not know better that I have a problem with. I can't sit by while you dispense shit advice that could hurt the financial welfare of someone else.

The fact is, my opinion is different then yours. You can not respect a differing opinion, so you throw insults around trying to discredit my post.

I respect your opinion just fine, I'm just trying to save some poor innocent soul from listening to some really bad advice because 1) It's flat out wrong. It doesn't take more than a simple calculator to determine the financial losses incurred by your style 2) It will do serious damage to their financial health and set him back years.

I don't care about you in the slightest. I care about the poor, uneducated soul that walks into this thread looking for advice. I'd rather they get the right answer and be better off for it, and that is not through listening to you.

 

[GotIssues]

Ahhh, so it IS an ego thing! I totally understand....I have a hungry one too. I've just learned to feed mine with rolls of cash. I find it impresses just as much as a "Americal Depress Super Rewards Platinum Deloren Card".
Happy Holidays

Do you also decline raises from your job, because it's "an ego thing"?

1) Use CC instead of cash, spending the exact same amount anyways.
2) get 1% - 5% cash back at the end of the month for those purchases

Yeah, it's an "ego thing" to basically get 1% - 5% off all your monthly purchases.

 

[Schfifty Five]

Ahhh, so it IS an ego thing! I totally understand....I have a hungry one too. I've just learned to feed mine with rolls of cash. I find it impresses just as much as a "Americal Depress Super Rewards Platinum Deloren Card".
Happy Holidays

There is nothing egotistical about being smart with your money.

 

[Texashiker]

Debt can be very advantageous when one has a proper grasp of how to use it properly.

The only people that use debt properly, are the ones making money off of you through interest or fees.

It's your dispensing of shitty advice

My wife and I live a debt free life, if you call that crappy, then so be it.

My home is paid for (thats right its paid for, I have a clear title), my truck is paid for, my wifes SUV is paid for, the big screen TV my wife and I bought on black friday was paid for with cash, my boat is paid for,,,. I owe no money to any lender.

Being is debt is a form of servitude. You are a servant to whoever you owe money to. Look up a word that is not used very often - usury. The banks and money lenders make money by using you. If you like being used, that is fine with me, but I am nobodies servant.

If you think being in debt can be advantageous, then you sir have willing enslaved yourself.

I care about the poor, uneducated soul that walks into this thread looking for advice.

If you truly cared, you would stop trying to turn people into money slaves.

 

[GotIssues]

The only people that use debt properly, are the ones making money off of you through interest or fees.

Shows how poorly you grasp debt.

My wife and I live a debt free life, if you call that crappy, then so be it.

I didn't say it was crappy to live debt free, I said it's stupid to think that you can't make debt work for you, rather than harm you.

My home is paid for (thats right its paid for, I have a clear title), my truck is paid for, my wifes SUV is paid for, the big screen TV my wife and I bought on black friday was paid for with cash, my boat is paid for,,,. I owe no money to any lender.

And if you had a credit card with cashback bonus on it, you'd have 1%+ of all the money that you spent on those items in your bank account. You are leaving money on the table. Just because one has a CC or other form of debt doesn't mean they automatically spend beyond their means or are a "slave."

Being is debt is a form of servitude. You are a servant to whoever you owe money to. Look up a word that is not used very often - usury. The banks and money lenders make money by using you. If you like being used, that is fine with me, but I am nobodies servant.

Finance and economics are vastly more complicated than "They are making money off your loan, obviously it's working against you." Simply put: you are assigning a grade school simplistic mentality to a highly complex and dynamic environment.

If you think being in debt can be advantageous, then you sir have willing enslaved yourself.

If I quit my job right now, I could pay off all my bills, no problem, for at least a year. If I dipped into retirement accounts, I could be 100% debt free and still have six figures. I have accomplished this at the age of 30. The reason I'm not a slave to my debt is because my debt is a slave to me. I know how to make my money work for me.

You are enslaved by ignorance and obstinance. Sure, you don't have debt, but you'd have been far better off making different decisions regarding CCs and debt.

If you can't control your debt spending (which you've already implied you can't), it's a good thing you don't have CCs or debt. But the rest of the adults who have self-control and can are able to take advantage of what it offers. Debt free lifestyle leaves quite a bit of money on the table that someone with a grasp of how things work can take advantage of (hint: it's also not THAT hard).

If you truly cared, you would stop trying to turn people into money slaves.

And if you had a clue, you'd know that's not what I'm doing.

 

[Texashiker]

The reason I'm not a slave to my debt is because my debt is a slave to me.

Once you went into debt, you became a servant. The servant can not be a servant and master at the same time.

You are enslaved by ignorance and obstinance. Sure, you don't have debt, but you'd have been far better off making different decisions regarding CCs and debt.

I have no debt, so therefore I am a free person.

The truth will set you free, and the truth is being in debt is a form of willful enslavement.

Finance and economics are vastly more complicated than "They are making money off your loan, obviously it's working against you." Simply put: you are assigning a grade school simplistic mentality to a highly complex and dynamic environment.

Are the money lenders making money off of you - yes or no. Its a pretty simple question, and the answer is simple as well. There is no need in making something so simple overly complex.

 

[rcpratt]

This was fun, but now it's just boring. TH has devolved into repeatedly muttering the same lines.

 

[Texashiker]

This was fun, but now it's just boring. TH has devolved into repeatedly muttering the same lines.

There is not much to say on the topic, being in debt = bad.

This is not an overly complex issue like what GotIssues makes it out to be. Stay out of debt, use credit only when you need to, save up your money and buy a home when you can afford it.

The OP asked what credit cards he needed to get rid of, I say get rid of them all.

 

[GotIssues]

Once you went into debt, you became a servant. The servant can not be a servant and master at the same time.

Except, I was never a servant to begin with, so yes, I am the master.

I have no debt, so therefore I am a free person.

You still have taxes, utilities, food, etc, etc, to pay, therefore, you are not a free person. You have bills to pay, just like everyone else, therefore you are NOT a free person under your definition.

The truth will set you free, and the truth is being in debt is a form of willful enslavement.

For the uneducated, yes. For those that a minor understanding of the system, no.

Are the money lenders making money off of you - yes or no. Its a pretty simple question, and the answer is simple as well. There is no need in making something so simple overly complex.

So? Who gives a shit if they are making money off me? So is Fidelity when I buy some stocks, or the grocery store when I go buy food. What fucking difference does it make what happens when they get the money? You are trying to attach relevance to something that is completely unrelated to what we are talking about.

The fact is, I gain more money from the debt than I'm losing from paying on the debt, therefore any rational human being would realize that I am better off paying off the debt as slow as possible. How fucking dense can you get? "Herpa Derp, you are a slave because you have a mortgage and a CC." I realize not understanding the system breeds paranoia, but you take it to the next level.

You can keep spouting off unrelated cliche's all you want and keep with the "I am debt free, therefore I'm right," but no matter how much stupid, inane posts you make, you are still wrong.

Please, provide me with one good reason why never taking out any form of debt is the best way to go, and I'll prove it wrong.

 

[GotIssues]

There is not much to say on the topic, being in debt = bad.

This is not an overly complex issue like what GotIssues makes it out to be. Stay out of debt, use credit only when you need to, save up your money and buy a home when you can afford it.

The OP asked what credit cards he needed to get rid of, I say get rid of them all.

You are a fucking retard. Frankly, it's not worth the time to waste on you. You've never given any sort of supporting evidence to your opinion. Not once. As RC has stated, it's just the same dumbass rhetoric.

There is nothing wrong with being debt free, but there is nothing wrong with leveraging debt to your advantage. If you are too fucking stupid to understand that, it's to your own loss, just don't try to drag someone else down with you.

 

[Texashiker]

There is nothing wrong with being debt free,

Of course there is nothing wrong with being debt free, that should be everyones goal.

but there is nothing wrong with leveraging debt to your advantage.

There is no advantage to being in debt.

I would say the only exception is if you have a 401k or savings, and take a loan out against your own money. But that only applies if nobody else is making money from your debt to yourself.

 

[GotIssues]

Of course there is nothing wrong with being debt free, that should be everyones goal.

There are better, more lucrative routes to that goal. When I retired, I will be 100% debt free, no doubt. It will probably be financially inferior, but the security at that age is what you are trading up for.

There is no advantage to being in debt.

Wrong.

I would say the only exception is if you have a 401k or savings, and take a loan out against your own money. But that only applies if nobody else is making money from your debt to yourself.

Please explain why it makes a difference if someone else is making money off it. What happens to other people regarding your loan is 100% irrelevant to the topic.

You are telling me that if you could get 10% back on your money, you wouldn't take a $100k loan at 4% because someone else will make money? Talk about cutting off your nose to spite your face. You are hurting yourself to fulfill some dumbass, immature vendetta against lenders.

 

[Tobolo]

I just looked at prosper to get me a loan. I have a 740 score (as of two months ago) and they said I could get a 31% interest rate? THAT'S HIGHER THAN THE F'N CREDIT CARDS ARGH!!!!!!!!!!!!

 

[Texashiker]

You are telling me that if you could get 10% back on your money, you wouldn't take a $100k loan at 4% because someone else will make money?

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

Talk about cutting off your nose to spite your face. You are hurting yourself to fulfill some dumbass, immature vendetta against lenders.

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

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.

 

[CoachB]

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%.

 

[nanobreath]

I'm going to try and answer the OP's question here:

Canceling a credit card almost NEVER increases your credit rating. One of the primary metrics used in determining credit score is your debt to credit ratio. I.E. how much you owe vrs how much people are willing to loan you. Closing a CC will only reduce the amount of credit you have, thus increasing your debt to credit ratio and reduce your credit rating. This may sound counter-intuitive that a bank would rather loan to somebody with a very large credit limit, but it is the way the FICO score works. Also, as you mentioned, if you have a current credit limit on a card of 15k, you are much more likely to get a credit limit on a future card of 15k+. If you close that card and your next highest is only 8k, future cards will not approach that 15k limit again, you will have to build up to it.

Again: Do NOT close your accounts if your ONLY goal is a higher credit score.

Now, on the other hand it can be useful to you personally to consolidate your credit cards to be more manageable. Less cards and accounts to keep track of. Fewer bills in the mail/email every month. Make it impossible to charge that 35% interest CC in the future and leave a balance on it if you close it. If you keep 10 credit cards, it can be a chore to keep track of everything to ensure they stay payed off, no unwanted charges appear, activate rewards etc etc.

One thing about credit cards is only active accounts are considered in your credit score. A card is listed inactive after a duration of not using the card at all and not carrying a balance, something like 3 months or so. So in order to maintain the highest score possible, you need to charge something to every card every month, and then pay it off. You don't have to carry a balance and pay interest, just use the card.

IMO, the best option is to keep the highest limit cards in order to maintain a high credit limit, and close any of the REALLY high interest cards. Then ensure your CC profile has the following:

Rewards Card: The card with a great rewards program. You will use this card to make normal purchases and pay it off every month to get as much back as possible. The APY doesn't really matter as you should be paying it off in full every month. The type you use is a personal choice. Some get better benefit from airline miles, others prefer straight cash back, etc. Search around and find one that fits you.

Low interest Card: This card is the one to carry a balance on in the future if you have an emergency. You should shoot for something around 10% or lower. Ideally you can find one around 7%. Typically these have much lower limits and their rewards are non-existent, but that low, low interest rate is a must if you need to carry a balance for that emergency.

Everything else you keep is fluff used to keep a high credit score. Just keep them active, and for the love of God, don't be tempted to carry a balance on them. 25% interest is for the dogs.