Credit card rant

[JDgreen227]

Bird...I am trying to figure out how I can buy a ZTR for that monthly payment as I sure need one !! When I purchased my Deere in late 2002 I paid 20% cash down and could have paid all cash but I wanted to have Deere Credit give me a good report to add to my credit record so I financed thru them, paid monthly for a year and then paid the loan off 4 years early, only to find Deere DIDN'T do credit reporting to the 3 major companies. Was I ticked off !!!

 

[Bird]

I am trying to figure out how I can buy a ZTR for that monthly payment as I sure need one !!

You have to remember that I have the smallest, cheapest Toro ZTR.:laughing:

 

[CBW1999]

Bird-
The whole credit score thing (for the most part) has nothing to do with responsibility but with the companies being paid interest on a consistent basis.

So, we could argue that- the responsible consumer who uses credit, maintains a balance and, pays on time provides the industry with income. So, the credit score increases to tell the rest of the industry "hey- this consumer is a good risk to generate revenue from interest". In a sense, that consumer is a good, reliable source of revenue.

Now, the responsible consumer who doesn't use credit, provides no revenue for the industry therefore- is not a "good risk" for several reasons. Obviously, the history of responsibility with payments hasn't been established (either a "young" consumer or from not using credit at all) So they cannot gauge if the revenue will pay off. One could also argue that the lower credit score is to keep them out of the system because it will tie up their capitol on this person and won't pay off vs the bunch of others they can generate revenue off the same amount of capitol.

The whole thing with bumping interest rates for non payment just sets up the company for a big win. the responsible, trying to honor the debt- scrambles to make payments and in reality- the industry recoups the capitol quicker with little revenue generated.

If the person files bankruptcy- then they are "out" of the system and if they want to re-enter, the industry has the control again. All sorts of rules govern this and it is not as easy for a person to successfully do this.

If the person deals with "settlements", the industry still wins because they get some money back and bump the consumer "out" of the system. Now in this scenario, the interest and fees have bumped up the balance and if the consumer is not careful, the "settlement" they end up with is close to, if not more than the balance was before all of the fees started. So, the capitol is recovered and the consumer in ruins.

Although I am a self admitting conspiracy theorist, this is still basic fact. I shall now turn the soap box over to the next deserving opinion...

 

[Pixguy]

Bird-
The whole credit score thing (for the most part) has nothing to do with responsibility but with the companies being paid interest on a consistent basis.

So, we could argue that- the responsible consumer who uses credit, maintains a balance and, pays on time provides the industry with income. So, the credit score increases to tell the rest of the industry "hey- this consumer is a good risk to generate revenue from interest". In a sense, that consumer is a good, reliable source of revenue.

Now, the responsible consumer who doesn't use credit, provides no revenue for the industry therefore- is not a "good risk" for several reasons. Obviously, the history of responsibility with payments hasn't been established (either a "young" consumer or from not using credit at all) So they cannot gauge if the revenue will pay off. One could also argue that the lower credit score is to keep them out of the system because it will tie up their capitol on this person and won't pay off vs the bunch of others they can generate revenue off the same amount of capitol.

The whole thing with bumping interest rates for non payment just sets up the company for a big win. the responsible, trying to honor the debt- scrambles to make payments and in reality- the industry recoups the capitol quicker with little revenue generated.

If the person files bankruptcy- then they are "out" of the system and if they want to re-enter, the industry has the control again. All sorts of rules govern this and it is not as easy for a person to successfully do this.

If the person deals with "settlements", the industry still wins because they get some money back and bump the consumer "out" of the system. Now in this scenario, the interest and fees have bumped up the balance and if the consumer is not careful, the "settlement" they end up with is close to, if not more than the balance was before all of the fees started. So, the capitol is recovered and the consumer in ruins.

Although I am a self admitting conspiracy theorist, this is still basic fact. I shall now turn the soap box over to the next deserving opinion...

Good understandable explanation.

Sent from my iPad using TractorByNet

 

[kneedeep]

Sir, you are what the credit card companies call a "deadbeat".
Please don't take offense - it just means that you are a responsible user of their plastic, and they can not abide that sort of behavior.
Small, infrequent purchases and a bill paid in full every month is enough to make a serious credit man weep.
It's almost impossible to make any fee money off a deadbeat, so they are hoping you cancel your account so they can focus their time on separating those more leveraged from their income.

I don't think this is true, my chase card carries a small balance no where near the limit sometimes but usually is paid off monthly. The credit card companies use a lot of tools to deter unauthorized card use including patterning card use. If you normally only charge small amounts and then a larger charge is noted, it triggers a 'out of pattern' response. This is done to protect you and the merchant from fradulant use.
You should contact your card holder and discuss how you want you account monitored and they should be willing to help. I did this with my card several years ago and it works.

 

[JDgreen227]

I don't think this is true, my chase card carries a small balance no where near the limit sometimes but usually is paid off monthly. The credit card companies use a lot of tools to deter unauthorized card use including patterning card use. If you normally only charge small amounts and then a larger charge is noted, it triggers a 'out of pattern' response. This is done to protect you and the merchant from fradulant use.
You should contact your card holder and discuss how you want you account monitored and they should be willing to help. I did this with my card several years ago and it works.

Believe me, I have tried and tried to reach a happy medium with Chase for at least seven years now...they are simply unwilling to make any type of compromise, and yes, I HAVE talked to management regarding this not just the staff you reach when you call in.

I beg to differ about something CBW1999 states that credit scores have nothing to do with responsibility but rather that the credit card companies get paid interest on a consistent basis. I have probably paid less than $35 in interest on my credit cards IN MY ENTIRE HISTORY OF USING THEM (since at least 1968). If I have paid them so little interest during this period, why is my credit score over 800? My understanding is that your credit score is based more on your record of CONSISTENT AND TIMELY PAYMENTS...never late for any reason, whether one carries a balance or not.

For what it is worth, my credit score is higher than is my wife's score although I never carry a balance nor pay interest, while she charges practically everything, she has never paid late either. She has something like a dozen open accounts while I have two, she carries balances, pays interest....so why is my credit score higher?

 

[CBW1999]

JD-

Interesting point. The only thought might be longevity of your accounts/being in the "system" as long as you have. IMHO, the credit industry has and continues to evolve and change the game so they are apt to "win".

That is what confuses me about the system. How DO they come up with these scores? There is no "transparency" as to how they do it. The "equations" are not known by the public nor the data that gets plugged into them.

Since it has such a profound impact on people, especially with the example after what happened with the mortgage bailout- the government should require a clear explanation of how scores are calculated so consumers can make direct decisions about their behaviors to knowingly IMPROVE their status. We all know what will cause our scores to fall......

 

[JDgreen227]

JD-

Interesting point. The only thought might be longevity of your accounts/being in the "system" as long as you have. IMHO, the credit industry has and continues to evolve and change the game so they are apt to "win".

That is what confuses me about the system. How DO they come up with these scores? There is no "transparency" as to how they do it. The "equations" are not known by the public nor the data that gets plugged into them.

Since it has such a profound impact on people, especially with the example after what happened with the mortgage bailout- the government should require a clear explanation of how scores are calculated so consumers can make direct decisions about their behaviors to knowingly IMPROVE their status. We all know what will cause our scores to fall......

VERY WELL STATED ON YOUR PART !! :thumbsup:

 

[aczlan]

For what it is worth, my credit score is higher than is my wife's score although I never carry a balance nor pay interest, while she charges practically everything, she has never paid late either. She has something like a dozen open accounts while I have two, she carries balances, pays interest....so why is my credit score higher?

IIRC, you get penalized for carrying a balance of more than X% of your credit limit, but I may be wrong on that.

Aaron Z

 

[CinderSchnauzer]

My wife and I constantly get offers for more CC's - supposedly we are pre-approved for $XXXX. It may work differently in different jurisdictions but here a few hints. Get a Home Depot CC. They are always having promotions. Spend $250 or $500 or whatever and no payments for 6 months or a year. We all need carpet, lumber, whatever at Home Depot. Take the offer It's free money. Went to The Bay and bought new mattress / box springs. Just make some minimal payments and no interest for 2 years. Same price as for cash. Again......Free Money. Bought a car for DW. Negotiated a good price and then 0% for 6 years. Free Money. Just a couple of examples all of which aid in building a good credit rating.

Now the key is don't buy stuff you cannot afford in the first place, but we all spend money every day. Put it on the plastic and pay the bill at month end. This is the type of thing that makes them want to give you even more CC's and you don't have to mess around calling for approval to buy $500 either. Fix a vehicle - put it on the card. Buy tires - put it on the card.

I can easily put $30K - $40K per annum on plastic and at the end of each month do not owe $0.01. Used wisely a CC is a great financial tool. If it just sits in you wallet unused for months on end - why bother?