Do you carry a balance on your credit cards?

[offTopic]

[jdl22]

I checked zero but I actually have a balance. I have a mileage card and I use that to make most of my purchases, then at the end of the month when I get paid I pay it all off.

My fiance however has some debt that I am knocking out with poker winnings.

[adamstewart]

as people who realize the concept of + vs - EV, I'm surprised anyone checked anything other than "0".

Credit card debt is not smart.

Adam

[AngryCola]

[ QUOTE ]

Credit card debt is not smart.

[/ QUOTE ]

True, but there are times when it's unavoidable.

[billyjex]

I have begun to start using a credit card because at the age of 22 I have absolutely nothing to show for a credit rating.

[nolanfan34]

[ QUOTE ]
as people who realize the concept of + vs - EV, I'm surprised anyone checked anything other than "0".

Credit card debt is not smart.

Adam

[/ QUOTE ]

Yeah, some of us didn't realize the whole EV concept when we were as young as some of you punks. /images/graemlins/wink.gif

Student loans + Low paying job out of college + engagement/marriage + wife who goes back to school + one income = debt.

[TimM]

[ QUOTE ]
[ QUOTE ]

Credit card debt is not smart.

[/ QUOTE ]

True, but there are times when it's unavoidable.

[/ QUOTE ]

I was very stupid and racked up over 30K. I got a better job in Sept 2002 paying almost double my old one, plus started poker in Dec 2003. I was able to pay it down to about 5K as of last month when I left my job. I could pay off the rest right now, but that would take out my whole poker bankroll. This would clearly be -EV, as the interest is only a few BBs per month. I am only paying a few percent on the money as I keep shifting it to the lowest rate offer. But I will not borrow more to play higher.

[Ianco15]

[ QUOTE ]
as people who realize the concept of + vs - EV, I'm surprised anyone checked anything other than "0".

Credit card debt is not smart.

[/ QUOTE ]

Agreed 100%.
I realize that there are some times when its unavoidable but even considering that, the amount of debt accumulated by people (who are often times intelligent) is staggering.

[34TheTruth34]

[ QUOTE ]
as people who realize the concept of + vs - EV, I'm surprised anyone checked anything other than "0".

Credit card debt is not smart.


[/ QUOTE ]

lol. genius.

[cardcounter0]

True. Which is why it was a long struggle until 1992 when I cut up the last of my credit cards. Haven't had one since. Now my ATM card has a MasterCard logo on it, so the few times I "need" a credit card, it works fine. Renting a car, hotel reservations, plane tickets, etc.

It is really amazing how much more money you really have when you are on a pay-as-you-go plan. Instead of paying credit card bills every month, I have money in my pocket to actually buy things.

[CCass]

[ QUOTE ]
True. Which is why it was a long struggle until 1992 when I cut up the last of my credit cards. Haven't had one since. Now my ATM card has a MasterCard logo on it, so the few times I "need" a credit card, it works fine. Renting a car, hotel reservations, plane tickets, etc.

It is really amazing how much more money you really have when you are on a pay-as-you-go plan. Instead of paying credit card bills every month, I have money in my pocket to actually buy things.

[/ QUOTE ]

Cardcounter, that is IMO the best post you have ever made, and I agree with you 100% (I doubt I will ever say that again /images/graemlins/grin.gif).

[ThaSaltCracka]

I have some debt, roughly 1300, which doesn't bother me, my interest rate is fairly low, and its nice to have in case of an emergency. Credit Cards can be a death trap for people though, do your homework and be patient. If you are smart, you can use a credit card quite reasonably though.

[STLantny]

I have abotu 600 in debt, but i pay it off every month. I use credit cards, basically to est good credit.

[shadow29]

Don't you need credit though? I'm looking to get a loan in a few years and I have 0 credit. (thinking about getting a cc)

[mason55]

Got a credit card during a college internship, maxed it out at $500. went back to school for three months, just finished school paying only the minimum each month. I now owe $530 or so and will pay it off with my first paycheck in a week. I now have a credit rating, was able to have lots of fun my last quarter of school, and not accrue that much in interest. so i'm technically carrying a balance but not for long and i don't regret it at all.

[mason55]

[ QUOTE ]
Don't you need credit though? I'm looking to get a loan in a few years and I have 0 credit. (thinking about getting a cc)

[/ QUOTE ]

Yeah, just get a card and put something like your cell phone bill on auto pay with the card. don't carry it anywhere with you. pay it off each month. it will look really good on your credit report because you won't use up very much of your available credit (which they like) and if you pay on time it will give you a great credit score.

[david050173]

Just to be muck raiser: You are an idiot if you don't charge everything possible on a CC. If you pick up a a good card you get 1-5% cash back, no annual fee, and a grace period to you can get some float on your money. Of course this assumes you are disciplined (ie don't spent needlessly and pay off your balance each month). A lot of people seem to have problems with that though.

[mason55]

Can you get all those without any previos credit though? I admit I'm pretty ignorant when it comes to CC perks as I'm just starting my first job and therefore I've only been offered student credit cards that have a $500 limit and no perks.

If you can get a cashback card with no credit then do that and charge everything and pay it off each month.

[cardcounter0]

No, you don't "need" credit. The only people who tell you that you "need" credit are the ones that want to rope you into collecting interest off you.

What you "need" to do, is live within your means.

You don't "need" a $30,000 car. You need a vehicle that will get you from point A to point B. I have had my current car for about 3 years. Paid $2500 cash for it. Haven't had any problems, and when I do, I don't care. I'll just drop 1 or 2 grand on another vehicle. Really cuts down on the old car insurance also.

"Need" new furniture? Carpet? Drapes? Clothes? OR any other consumer good? No, you don't. The ones you have are just fine until you can actually afford to buy new ones with cash.

A House? I simply "loaned" myself the money out of my 401k plan. I paid myself the interest back. Now, I have even more money in my 401k (house payments + interest were 401k payments I would make anyways), the house appreciated and a rolled it over to a better house.

If you check my credit report I have ZERO late payments. /images/graemlins/grin.gif

But what do I need credit for? The money I would throw away in interest is invested and makes me more money.
/images/graemlins/confused.gif

[mason55]

Taking out a loan on your 401(k) is not such a hot idea. You're paying yourself back with aftertax money which defeats the purpose of a 401(k). Plus most places won't let you contribute more until you finish paying back the load, although this isn't true everywhere.

[david050173]

[ QUOTE ]
Can you get all those without any previos credit though? I admit I'm pretty ignorant when it comes to CC perks as I'm just starting my first job and therefore I've only been offered student credit cards that have a $500 limit and no perks.

If you can get a cashback card with no credit then do that and charge everything and pay it off each month.

[/ QUOTE ]

I have no idea. You can apply (www.citicards.com) and see if you get one. I started getting platinum and the like cc in college (ie my credit limit was like 3x my annual salary). I didn't do anything fancy other than pay off my card every month.


This really all basic money managment (ie if you spent more than you make your have to change your life). CC just make it easier to get your self in trouble if you can't do math.

[cardcounter0]

And making a house payment would be with what kind of dollars?

If someone has to collect interest on me getting a loan for a house, I would rather it be me. Plus you loan yourself the money at the Fed Prime Rate, which you aren't going to get from a conventional lender. Your payments and your interest goes directly back into your 401k.

If you can afford decent 401k payments and a house payment, then the argument is moot. Maximum 401k payments are about $13,000 a year anyways.

[mason55]

[ QUOTE ]
[ QUOTE ]
Can you get all those without any previos credit though? I admit I'm pretty ignorant when it comes to CC perks as I'm just starting my first job and therefore I've only been offered student credit cards that have a $500 limit and no perks.

If you can get a cashback card with no credit then do that and charge everything and pay it off each month.

[/ QUOTE ]

I have no idea. You can apply (www.citicards.com) and see if you get one. I started getting platinum and the like cc in college (ie my credit limit was like 3x my annual salary). I didn't do anything fancy other than pay off my card every month.


This really all basic money managment (ie if you spent more than you make your have to change your life). CC just make it easier to get your self in trouble if you can't do math.

[/ QUOTE ]

Yeah, I didn't have any credit until my last quarter in college so I haven't had time yet to get any offers except for student cards. I'm going to leave this thread cause I'm just talking out of my ass now.

[mason55]

[ QUOTE ]
If you can afford decent 401k payments and a house payment, then the argument is moot. Maximum 401k payments are about $13,000 a year anyways.

[/ QUOTE ]

Yes, I assumed contributing the max to your 401(k) and making house payments. You can write off the interest you pay on the house anyways, so it's not as big of a deal.

Paying into your 401(k) with after tax dollars just deafeats the purpose. Yeah, you're paying back the interest into the plan but you're still losing the taxes. Depending on how much you're contributing/borrowing, that could be like 4000-5000 dollars/year you cost yourself. That money would be worth a LOT in 20-30 years.

[HDPM]

Get one crappy 500 max credit card and buy some stuff with it. Pay it off. My guess is that within 4.7 months you will get 23476 offers for credit cards that offer more. /images/graemlins/smirk.gif

[miajag81]

Zero. I can't stand being in debt. I have only one credit card that I reserve for emergency use only. I use a check card that withdraws directly from my checking account.

[HDPM]

Friend of mine is a credit card maven. He loves them and shifts balances around etc.... He gets so many offers it is sick. They started sending offers to his 3 year old son. So he tested them. He had his son fill in the application truthfully. Well, he asked the questions and his sone answered. Age? 3. Occupation? Part time student. Income? $0. Any bankruptcies? No. Etc... Had his son sign in crayon. I was surprised they didn't give the kid the 100000 super platinum scandium prime plus for life card. I guess the companies do read the applications once in a while, but it doesn't seem like it.

[mason55]

[ QUOTE ]
Get one crappy 500 max credit card and buy some stuff with it. Pay it off. My guess is that within 4.7 months you will get 23476 offers for credit cards that offer more. /images/graemlins/smirk.gif

[/ QUOTE ]

Yeah I've moved 3 times in the past 5 months so I think they just can't find me. I always forget to forward my mail so I bet my identity has already been stolen.

[tripdad]

the branch manager at one of the banks i do business with has all of his high dollar assets on 0% credit cards. he hasn't paid interest on his home in over 3 years.

flatly telling someone carrying unsecured debt is "dumb" is, well, dumb.

cheers!

[mason55]

[ QUOTE ]
the branch manager at one of the banks i do business with has all of his high dollar assets on 0% credit cards. he hasn't paid interest on his home in over 3 years.

[/ QUOTE ]

One of these things is not like the other, one of these things just isn't the same.

[pudley4]

[ QUOTE ]
A House? I simply "loaned" myself the money out of my 401k plan. I paid myself the interest back. Now, I have even more money in my 401k (house payments + interest were 401k payments I would make anyways), the house appreciated and a rolled it over to a better house

[/ QUOTE ]

There are less than 1% of the posters here who have anywhere close to enough in their 401k to be able to do this. Maybe less than .01%. Even if they had contributed the max since they first started working...

[Matt Flynn]

i pay off each month but use the cards as much as possible. you can find a card that will give you what you want. i use southwest airlines. everything that can be cycled through it is.

you eventually take a credit hit if you go through too many cards (shifting to lower interest rates constantly) but it takes many accounts to drop you below the top bracket. much of the credit rating system is grossly unfair: you take hits when people check your credit, when banks sell your mortgages or student loans more than 30 days after purchase, and when you go from credit card to credit card to get better rates. what crap.

to the car guy: having owned many piece o' shite cars and paid too much in maintenance bills, i now buy 1-2 year-old cars wholesale and drive them until they start failing, then sell them. cost dropped about 5 cents/mile and the cars are nicer.

matt

[Dr. Strangelove]

Credit card?

[AncientPC]

I'm in the >$10k. Scroll to bottom for Cliff notes.

Honda screwed me over and refused to fix my transmission under warranty. They neglected to tell me this until after they've pulled the transmission. CC +3k.

I get into a car accident accident 6 months later. CC +3k.

I have been financially independent from my parents since I moved out and went to college at 18. My part-time job never fully covered my living expenses, don't even bother mentioning tuition.

Working more to help pay for expenses only helped to drop my grades even worse.

Tack on interest for 2-3 years. CC +4k.

Around June 2004 I transferred the entire balance to a 0% intro APR credit card until April 2005, a temporary interest free loan.

Thanks to 2+2 and some beginners' luck I somehow didn't bust out when I first started. I had found a program off Suprnova.org called Texas Calculatem and thought that it gave me an advantage over the other players. I deposited for the max bonus on Party and immediately cashed out $400. Keep in mind that I've never played poker for money before and still had to refer to a chart to see if a flush was higher than a straight.

I caught cards like I had a pattern mapper. I had at least two quads and 2 full houses within my first hour at .5/1 limit. I thought, "poker is easy" and moved up to 1/2 6-max on a $130 BR. I had long ignored the "advice" Texas Calculatem was giving me, and had an estimated VP$IP of 75%. As luck would have it, I met a LAG who kept bluffing every single hand and I was the fish calling station. My bankroll grew to $200, but before I knew it 1/2 6-max was kicking my ass and back to .5/1 with $100. I was still stuck at $100 even after clearing $200 worth of Party bonuses.

If you count September as when I really started playing poker (the first month I put more than 1,000 hands in), I may have only been playing poker for ~6 months but have over 140k hands in PT. I will be paying off my entire credit card debt before the end of this month and will still have a comfortable bankroll to play poker at my current stakes. I definately don't consider myself a pro, especially given the negative connotations floating around these forums. Once I get some money put into savings, I fully intend on returning back to school but poker has been my only source of income for as long as I've played.

If all goes well, I have a longshot at hitting 5 figures in a single month for March which would definately be a big milestone in my career.

I had intended to start a thread in the general forum once I paid off my CC debt, but this thread is as good as any. Thanks to amoeba for first pointing me to 2+2 when I first started, Bunky and Wayfare for when I switched to SSNL and never looked back, and to all the regular 2+2 posters that make this community such a great place. Thanks to Mason and Sklanksy too, even though I've bought four 2+2 books but still haven't managed to finish half of a single one. /images/graemlins/blush.gif Only topics from TOP could relate to NL.

Cliff Notes: I owe credit cards a lot of money. I found Party Poker and 2+2 in July 2004. I like 2+2. I made lots of money. I'm a happy guy.

/me gets off the soapbox.

[PsYcHo-ScHnAuZeR]

When I had a bad run of cards, I redeposit with my credit cards.

When I have a good run of cards, I go out and celebrate and blow it all on women and wine.

[wonderwes]

tuition + loans + books + paying off some bills x 3.5 years = current debt.

[TStoneMBD]

im absolutely shocked that there is so much credit card debt on these forums. i would have figured that the number would be close to 5%, not 50%. yah, i suppose credit card debt is not avoidable in some situations, and maybe some people made mistakes early on in life that theyre paying for now, but that number is still staggering.

[MMMMMM]

[ QUOTE ]
much of the credit rating system is grossly unfair: you take hits when people check your credit, when banks sell your mortgages or student loans more than 30 days after purchase, and when you go from credit card to credit card to get better rates. what crap.

[/ QUOTE ]

There are statistical reasons for this. According to page 14 of the linked Guide, people with 6 or more inquiries are 8 times more likely to declare bankruptcy than people with no inquiries on their report.

The scoring system does however takes into account the fact that people may legitimately comparison shop for mortgages or auto loans, so multiple (similar?) hits within a window of 14 days (if I recall corectly) count as only one hit. Also, the system only counts inquiries in the last 12 months. If you take just one inquiry hit your score should probably only drop a little (5 points or less for most people).

People in financial trouble and on the way down often try to obtain as many new sources of credit as they can, so seeking many credit sources raises warning flags (unless it is in the very short window as described above where multiple inquiries count as one hit).

Multi-page Guide (PDF):

http://www.bankrate.com/brm/frames/hyperlink.asp?link_address=http://www.myfico.com

Quick Score Estimator:

http://www.myfico.com/ScoreEstimator/MyFicoScoreEstimator.html

[Mars357]

Not only do I not carry a balance on my credit cards, I don't have ANY credit cards. I do have a debt card so I can check into Hotels and rent cars but I don't have a single bank, store, gas, or any other type of credit card. I hear some of you who have mentioned cards for emergencies gasping..... What will I do in case of an emergency?? There is this strange thing out there called a savings account....you should check into it.

Mars

[StevieG]

[ QUOTE ]
Not only do I not carry a balance on my credit cards, I don't have ANY credit cards. I do have a debt card so I can check into Hotels and rent cars but I don't have a single bank, store, gas, or any other type of credit card. I hear some of you who have mentioned cards for emergencies gasping..... What will I do in case of an emergency??

[/ QUOTE ]

Credit cards are great tools. Yes, even for emergency.

I have plenty of over 6 months of expenses in savings, but I don't want in my checking account ready for use via debit card. I don't even want it in a savings account linked by overdraft protection. I want it at ING Direct, a business day or two away, earning top interest.

Also, I do a lot of business travel, routinely on the order of $2500 a month. I want to float this until I get reimbursed, and I want a kick back from the credit card, too. I get it.

As long as you pay off the balance every month, on time, credit cards are a perfectly reasonable part of your finances.

[BradleyT]

[ QUOTE ]
Not only do I not carry a balance on my credit cards, I don't have ANY credit cards. I do have a debt card so I can check into Hotels and rent cars but I don't have a single bank, store, gas, or any other type of credit card. I hear some of you who have mentioned cards for emergencies gasping..... What will I do in case of an emergency?? There is this strange thing out there called a savings account....you should check into it.

Mars

[/ QUOTE ]

Let's say I need to spend $2500 on new furniture or an auto repair.

Yes, I have a lot more than that in my savings but I can also put it on my Visa, get 2500 airline miles and pay off my Visa at the end of the month with no interest while continuing to get the interest from my savings account.

[AncientPC]

Don't forget to get your free copy of your credit report:
https://www.annualcreditreport.com/cra/index.jsp

[RunDownHouse]

To anachronistic individuals who refuse to have credit cards: When Suzy Q from the local news does a human interest piece on someone destroyed by credit card debt, or Johnny Bigshot from USA Today writes an editorial about how horrible the average citizen is for using credit cards, don't automatically believe them.

If you are a responsible person, you're leaving a lot of benefits on the table by not having a credit card. If you are a worthless, impulsive person lacking in self control and a feeling of personal responsibility, then its probably best that you don't have a card.

[BradleyT]

I posted that on the internet forum on March 1st (the day Midwesterners could check for free) and got reported to the mods lol.

I'm glad I got mine though, I had a $3,000 debt that I haven't paid since 1998 (now past SOL for collecting debts) that will be falling off my report this year. Well last August I got a collection letter about it and I sent them a validation request letter and never heard from them since. Well Discover took the liberty of using that date to re-age the account and now it says it won't come off till 2011! Now I get to dispute that with the credit reporting agencies and get it removed.

However if I hadn't checked, when I go to buy a car this summer I would have been in for quite the suprise.

[AncientPC]

Ditto, I didn't realise what was happening on my credit report until one of my credit cards reported my FICO score dropping something like 300 points within 6 months.

Even then, since I'm in Texas I don't get a free copy until June 1st.

[MarkL444]

i dont have credit card debt but if you take my school loans and what i have left to pay off on my car im >10k

[CORed]

Many credit cards have a grace period on purchases, so if you pay the full balance every month, you pay no interest. In this case, it makes sense to use the credit card to effectively get a short-term, no interest loan and improve your cash flow.

[Paluka]

[ QUOTE ]
No, you don't "need" credit. The only people who tell you that you "need" credit are the ones that want to rope you into collecting interest off you.

What you "need" to do, is live within your means.

You don't "need" a $30,000 car. You need a vehicle that will get you from point A to point B. I have had my current car for about 3 years. Paid $2500 cash for it. Haven't had any problems, and when I do, I don't care. I'll just drop 1 or 2 grand on another vehicle. Really cuts down on the old car insurance also.

"Need" new furniture? Carpet? Drapes? Clothes? OR any other consumer good? No, you don't. The ones you have are just fine until you can actually afford to buy new ones with cash.



[/ QUOTE ]

I know this is against the rules, but when are the weekly Fight Club meetings?

[Rick Diesel]

Although technically no longer credit card debt, I have about 9k in a second mortgage on my house. I ran up about 25k in credit card debt when I got married (6k), went on a honeymoon (6k) and furnished the entire house that I just bought (12k) within a couple of months.

Immediately I went out and got a second mortgage, turning the debt over into a 7-year note for 25k at 5.25%. It has been about 1.5 years, and thanks mostly to poker I have that down to 9k. I will probably have it completely paid off within one year from now.