77 People Helped
Member Since: January 2011
Of course the Credit Card Companies are going to tell "charge it on up" and pay it in full or the minimum. They have learned from experience, roads leading to Rome are not paved in gold for too long.
You intend to pay it in full each month, the car needs tires..."charge it", you'll pay it off in full next month, but then the A/C in your home goes out...put it on the card", I'll divide the cost by 6 months.
In the 3rd month your child needs Braces to the tune of $6000. Yep! Rip the ol' card out of your wallet and because this is a emergency, you'll stretch it out for 12 to 18 months...but nothing else is to be charged with that Mastercard, right!
Hello Visa! I have a lawnmowe, edger and weedeater to put on you, but I'm going to pay it off in full as soon as the bill comes......Most debters have a relative named Murphy whom seems to visit them a lot. He even lives in their spare bedroom in some cases. This scenario goes on like this for 4 or 5 years and one day you wake up, go to the mailbox and open the Mastercard, Visa, Discover and Sears and can't believe what you see! You owe $40,000 to $50,000.! I know because I have been there. Mine was $57,000 4 years ago. Now I'm down to $9400 at 3.92%. Minimum payment is $125, but I pay $300 every month and will have it paid off in about 28 months. I have not charged anything on the card since I've had it, just paying down a few balance transfers from 0% to 10.24%, but $6750 of it is at 2.99% until paid off. The blend rate on the $9400 is the 3.92%
I have 5 other credit cards with 0 balances. I don't use them but don't want to affect my FICO and Utilization rate by closing them. Hope this gives ya'll something to ponder.
stgcret's reply was:
Now pay this one on time for 12 to 18 months and you can ask for their normal interest rate of around 8.9%.BTW, Start each month with a written budget, forget the new ride and don't see the inside of a resturant unless you are working there. Pay smallest debt to largest ( called the snowball effect)! Good Luck
Scott, trust me dude, even with a 620 you don't want to be buying a home.
1) You won't get the best rate.
2) FHA will be all you can qualify for, therefore; have to pay PMI insurance (about $75 to $100 a month on top of your PITI......"forvever" or until you refinance or sell it.
3) Even though you would be qualified by FICO score, you'll find Lenders are going to find a way not to qualify you for some other frick'n reason. I know! I went through what I just told you and I had a 740 FICO then. Now it is 826.
You have to get a hold of all 3 credit bureau files on you and see what is holding you to a 625. If you owe it .....pay it. If you don't owe it submit a different written Dispute on each account you question. The company's have 30 days to satisfy the Credit Bureaus that the accounts in question are legit. If they can't get their acts together in the 30 days the Bureaus must by Federal Law remove them from your credit file.
Hope this helps
In my humble opinion, this is really stupid advice, but he is a Lender!
If you are going to have Credit cards, the magic number is keeping the U/R or utilization rate under 30% and the lower the better (mine is 13%). I read U/R wasn't understood very well on this blog, so here goes;
1) U/R only has to do with Credit Cards
2) I will use 4 credit cards to show the math
3) Card one has a max credit line of $2000 and you have used $1000, then you have a U/R of 50% on that card,
card two has a max credit line of $5000 and you have used $2000, then you have a U/R of 40% on that card,
card three has a max limit of $10,000 and you have used $2000, then you have a U/R of 20% on that card,
card four has a max limit of $3000 and you have used $300, then you have a U/R of 10% on that card.
To figure to total U/R, add all four cards max limit; $2,000 +$5,000 +$10,000 +$3,000= $20,000 divided by the amount you owe or; $5,300/$20,000= 26.5% U/R hope this helps
Because the scoring model you see is not the same scoring model used for business's and Transunion is crap. The only business that uses them is the Mortgage lenders so they can see all 3 scores but only use the middle one.
With 18 months of on time payments, you should be able to refinance to a lower interest rate.
So laxl, STOP SPENDING! Carry a Debit Card or cash. I have a similar delimma; I am down to just one Credit Card with a balance of $7645 at a blended rate of 3.34% until the balance is paid in full OR paying down a Fixed Equity Loan that has a balance of $18123 at 7.5%?
I should have the CC paid in full in 18 months + or -. If I sent the same extra money for the FEL, it would take about 36 months + or -.
What keeps me leaning and paying 4x the minimum payment on the CC is it is unsecured credit which is worse than secured credit and I can write of the small interest on my taxes.
I'm still maying $85 extra a month on the Home Equity Loan. For the money I would save verses the cost of refinancing such a small amount, and the hassle factor, it would not be worth it to me.
I disagree with the part of the article that states;"Don't consolidate too much of your credit card debt on to one card". Here is why;
It's called Blended Rate (BR) To illustrate how it works I will use my actual Chase Statement.
The first, second, third standard and promotional rates are figured, thusly;
($1681 x 10.49) + ($5000 x 0%) + ($6722 x 2.99%)= ( $17.63) + ($0) + ($201)= $219 divided by total owed of $13219= BR of 1.65% or $17 and some change per month finance charge on $13,219. All four of my other zero bal credit cards were 8 to 12%. I converted all 5 cards into 1.65% blended rate.
You can do this same formula to any type of loan, such as; a 1st mortgage with a 2nd and even 3rd mortgage of which all have different rates and balances.
Hope this helps ya'll
stgcret's response was:
If it makes you feel better, pay it. I wouldn't. If you do decide to pay it get a letter or email stating that the $700 settles the debt in full. Do not give them electronic access to your bank account (they will wipe it out, because they are liars) and send a money or. Staple your receipt to the letter from the Collection Co and keep it for the rest of your life, because in a few years it will resurface and you need the proof that you paid it. Remeber "most" collection companies are lying sob's.
Hard headed are we? LOL