What should I do with my old credit card?

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DoingHomework
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Re: What should I do with my old credit card?

Postby DoingHomework » Mon Dec 03, 2012 1:00 pm

Skiwi wrote:I own my own home, (with a mortgage guaranteed to be .5% lower than the going rate for the next 5 years)

Hmm, so you are either not in the US or you have an ARM? If you are not in the US then perhaps things are different. In the US you need good credit to get the best rates and it is almost impossible to have good credit without a credit card at some point.


Skiwi wrote:my debit card has identical fraud protections to a credit card with NO fees.


No it doesn't. Credit cards are subject to more protective federal laws. Again, perhaps different outside the US. Your bank may offer protections but those are not guaranteed by law in the same way.

Skiwi wrote:Have you really been seduced so far by the myth of the need to carry debt on a credit card in order to have a good credit rating that you really believe this? WAKE UP AMERICA! :(
Don't confuse carrying a credit card with being credit worthy.....
[/quote]
Not at all. I use credit cards for everything I can yet have not carried a dime in debt on them for at least a decade. Don't confuse using a credit card with carrying debt.

I don't think people should carry consumer debt for the most part. It does have a high price as you say. But using a credit card for expenditures and building good credit is a good thing.

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Re: What should I do with my old credit card?

Postby DoingHomework » Mon Dec 03, 2012 1:02 pm

LeRainDrop wrote:Skiwi, I take it you're not that familiar with DH and his various posts around this forum. Nowhere did he advocate carrying consumer debt. I believe he means that having a single credit account is important for purposes of building a good credit history, on which a number of other life things hinge (e.g., being able to qualify for a mortgage, favorable employment credit checks, lower insurance rates). Wholly consistent with DH's post is to have/use a credit card, but pay it off in full every single month. That is the sort of responsible credit behavior that, over time, garners access to the better opportunitites for mortgage, insurance, etc. Are you saying that you have never ever held a credit card in your life? Are you saying that securing your mortgage (that is "guaranteed" to be 0.5% below the "going rate," whatever that means) was the very first use of credit you ever made in your entire life? And how do you know that you "pay less for insurance than [your] peers"?


Thank you. That is exactly what I meant. You just said it better.

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Re: What should I do with my old credit card?

Postby Skiwi » Tue Dec 04, 2012 3:13 pm

DoingHomework wrote:
Skiwi wrote:I own my own home, (with a mortgage guaranteed to be .5% lower than the going rate for the next 5 years)

Hmm, so you are either not in the US or you have an ARM? If you are not in the US then perhaps things are different. In the US you need good credit to get the best rates and it is almost impossible to have good credit without a credit card at some point.


Skiwi wrote:my debit card has identical fraud protections to a credit card with NO fees.


No it doesn't. Credit cards are subject to more protective federal laws. Again, perhaps different outside the US. Your bank may offer protections but those are not guaranteed by law in the same way.

Skiwi wrote:Have you really been seduced so far by the myth of the need to carry debt on a credit card in order to have a good credit rating that you really believe this? WAKE UP AMERICA! :(
Don't confuse carrying a credit card with being credit worthy.....

DoingHomework wrote:Not at all. I use credit cards for everything I can yet have not carried a dime in debt on them for at least a decade. Don't confuse using a credit card with carrying debt.

I don't think people should carry consumer debt for the most part. It does have a high price as you say. But using a credit card for expenditures and building good credit is a good thing.

At this stage I will bow out of the conversation around my situation as it appears you believe you know more about my personal finances than I do, and arguing about it serves no purpose. |(

We will have to agree to disagree that using a credit card to build a credit rating is a good thing, and about the definition of "carrying debt", as in my mind the moment you swipe your card you create debt.

Back to my original point....
If canceling a credit card with a $200 limit is enough to hurt your credit score there are probably more important financial decisions to be made.

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Re: What should I do with my old credit card?

Postby Arica » Mon Jan 28, 2013 7:26 pm

If you are smart, you can make money off of using a credit card. Not much but you can! Cash rewards pay bill in total, every time, make money :)

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Re: What should I do with my old credit card?

Postby Arica » Mon Jan 28, 2013 7:31 pm

Arica wrote:If you are smart, you can make money off of using a credit card. Not much but you can! Cash rewards pay bill in total, every time, make money :)


I guess maybe I should make myself a little clearer... Assuming it's a "no fees" CC and also the money stays in your bank longer so you earn more interest off that money... again miniscule but every penny helps.

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Re: What should I do with my old credit card?

Postby iDude » Tue Jan 29, 2013 3:27 pm

Skiwi wrote:At this stage I will bow out of the conversation around my situation as it appears you believe you know more about my personal finances than I do, and arguing about it serves no purpose. |(

We will have to agree to disagree that using a credit card to build a credit rating is a good thing, and about the definition of "carrying debt", as in my mind the moment you swipe your card you create debt.

Back to my original point....
If canceling a credit card with a $200 limit is enough to hurt your credit score there are probably more important financial decisions to be made.


I'm kind of curious as to how you got such a good deal on your mortgage, I don't suppose you'd be willing to give us some hints about doing so?

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Re: What should I do with my old credit card?

Postby Skiwi » Thu May 02, 2013 2:39 am

iDude wrote:
Skiwi wrote:At this stage I will bow out of the conversation around my situation as it appears you believe you know more about my personal finances than I do, and arguing about it serves no purpose. |(

We will have to agree to disagree that using a credit card to build a credit rating is a good thing, and about the definition of "carrying debt", as in my mind the moment you swipe your card you create debt.

Back to my original point....
If canceling a credit card with a $200 limit is enough to hurt your credit score there are probably more important financial decisions to be made.


I'm kind of curious as to how you got such a good deal on your mortgage, I don't suppose you'd be willing to give us some hints about doing so?


I employed a broker to find me the best possible deal from available lenders then took that to my existing bank and told them if they wanted to retain my business they needed to better that offer.
I was expecting maybe .25% so was pleasantly supplied when they offered (yes offered) .5%

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Re: What should I do with my old credit card?

Postby RayinPenn » Thu May 02, 2013 2:57 am

See my post below ........
Last edited by RayinPenn on Thu May 02, 2013 3:22 am, edited 1 time in total.
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Re: What should I do with my old credit card?

Postby RayinPenn » Thu May 02, 2013 3:09 am

Just an fyi...

I hate credit cards more then anyone but i use them regularly, pay them off each month..why?
1) If I have a dispute with a vendor the credit card company can help me get my money back. I work in the CC industry and this can be a life saver.
2) I get 1, 2 or more % back on purchases - I bought the replacement Ipad and keyboard case I am typing on right now with points I earned. I've convinced myself that this iPad I got for free.
3) i do not like carrying cash...

The trick is never, never carry a balance. If you ask most people "deep in the cards" they cant remember what they spent it on. They say stuff. Ask yourself do you need stuff? Probably not. I've come to hate stuff; I trip over it in the basement, I move it around in the garage to get to the lawnmower or to make room for my car in the winter...Stuff is the worse. My wife on the other hand cant let go of stuff. I ask you just how much holiday paper do you need? how many boxes?
RayinPenn

“If you tell the truth, you don't have to remember anything.”
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Re: What should I do with my old credit card?

Postby Skiwi » Thu May 02, 2013 3:33 am

RayinPenn wrote:Just an fyi...

<snip>

The trick is never, never carry a balance. If you ask most people "deep in the cards" they cant remember what they spent it on. They say stuff. Ask yourself do you need stuff? Probably not. I've come to hate stuff; I trip over it in the basement, I move it around in the garage to get to the lawnmower or to make room for my car in the winter...Stuff is the worse. My wife on the other hand cant let go of stuff. I ask you just how much holiday paper do you need? how many boxes?


You must have married my wife's sister............ ;)

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Re: What should I do with my old credit card?

Postby RayinPenn » Thu May 02, 2013 3:47 am

you mean there are other stuff people? omg!

I've decided to declare war on stuff...
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Re: What should I do with my old credit card?

Postby brad » Thu May 02, 2013 5:33 am

As someone pointed out above, nobody really knows how the scoring system works, but it is at least clear that decisions on favorable loan rates are made based on thresholds rather than absolute scores. For example using hypothetical numbers, if your score is 800 and cancelling your card drops you down to 700 but the threshold for favorable loan rates is 650, then there's no actual impact on your ability to get the best loan rates. If your score is 700 you won't get any worse rates than someone whose score is 800. According to everything I've read, this is how it works.

If your score is anywhere near a threshold, or if you have a mortgage or insurance policy up for renewal (or need to take out a car loan, etc.) anytime in the next few years, it's probably worth hanging on to the old card as a precaution.

I've cancelled many credit cards over the years and never had any problems getting the best loan rates because my score has always been high and the impact of cancelling cards has never bumped me below the thresholds (I've actually never bothered to check my score, which I know is against all good advice, but in the two cases in the past 20 years where I've had to apply for a line of credit or a mortgage I was told that my credit score and history were excellent).


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