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?

 

[lockhaven]

interest free payments are good, but always read the fine print. late for just 0ne payment can make you owe some high interest rate computed from the day of sale even if you have paid on time for years.

 

[Bird]

Yeah, I've got one of those Home Depot CC in the file cabinet; never use it, but one day long ago, they offered me a discount ($25 if I remember right) on the stuff I was buying that day if I'd accept it, so I did.:laughing:

 

[CBW1999]

You have to be very careful with the cards kept in the sock drawer. 10% off if you apply today.....sometimes 15%....we all have a tendency to be drawn to that. Here lies the problem.

Each time you are approved, the credit limit given effects the amount of other requests. lets say over a years time you do this 5 times. Each card allows 500.00 max. Now 2500.00 is tied up of what you might have as a maximum. Now, something happens good or bad but, you need to finance say- a tractor! You apply and are denied- hmm why? Well based on your income and expense, the creditors calculate you can "afford" or are risk worthy of 10k. The tractor amount financed is 9000.00. well with a potential 2500.00 already in your sock drawer, the industry will only extend 7500.00 because at any point, you could go max everything out and not pay.

Never mind that each time you apply for a card it is recorded- approved or not. at some point, it is considered "excessive credit requests" which, tank your credit score.

I have had this discussion with my wife multiple times. The amount of money saved on the purchase is negligible compared to how it impacts credit. They give you the discount regardless of being approved so, in my mind- they already have the flexibility. Again, it is the interest they will generate as revenue that allows them to offer %off to apply. Their game, their win.

 

[CinderSchnauzer]

There is truth to many of the comments in this thread. The key is we have to be responsible for our own lives and make the choices that work for us. Yes there is always fine print - read it - use it to your advantage. Don't let the CC companies or finance company dictate how you live your life. As I said before, If you use credit responsibly - they love to give you more.

Another example - leased a couple vehicles from GM. Bought a couple with 0% financing. They send me a letter saying "you're pre-approved for any vehicle GM sells."

Sure they love the ones that always carry a balance and pay 30% interest, but with a little effort you can be the winner instead.

 

[JDgreen227]

Wow....I didn't think this thread was going to provoke so much discussion and furnish such good advice. Agree 100% that having a lot of unused cards that one signed up for to get a one time 10-15% discount is a bad idea.

 

[charlz]

Yep, nobody (outside the rating companies) knows how the credit scores are computed and each agency is a little different. It is all about assessing your 'riskiness', how much money they might make off of you in interest payments versus how likely you are to make those payments. That's why you can't get credit if you don't have a credit history, you are an unknown risk. Too many cards? might not be able to make your payments. Too many recent credit reports? you have been applying for credit and might now owe more than has been reported to date. Getting rid of a bunch of unused credit cards can actually make your credit score go down because now fewer other companies 'trust' you with a credit line. It's pretty crazy stuff.

When I was working in the datacenter side we would sometimes do projects to provide connectivity to companies that consisted of nothing but Math PHD's. These guys would analyze data and come up with the algorithms that determine who gets 'special offers' for new credit products etc.

 

[Gale Hawkins]

Guys, I have had a credit card from Chase for at least 15 years now and my credit record with them is impeccable as it my credit rating (800+) but they are really beginning to tick me off. Unlike my wife who charges everything on her cards, I have only two credit cards and basically only use the Chase one, most of my purchases are $50-150 at most. Problem is, when I want to charge a big-ticket item like a plasma tv or a computer they want me to contact them first at the toll-free number and let them know I am making a charge of over $500 (which is what they told me two years ago) and it's really beginning to irritate the h*ll out of me. I might make a charge of over $500 once or twice a year but I might need to make one in an emergency situation like a car repair and it is a PIB having to call and let Chase know I want to exceed their $500 limit.

Called them this morning and told them quote: "My wife can charge $3000 on her card any time she wants and never needs to call you for authorization but you limit me to $500 for what reason?" They told me well if you want to make a charge that is out of the ordinary for you we will put a hold on the charge until you call us. What utter BS !!! My credit limit is twenty grand and I have never used even a tenth of that at one time. I told them this morning if you put a hold on any charge I make under my credit limit for ANY REASON AT ALL from now on I am going to cancel my card and go elsewhere. They say well this is for your protection I told them BULLS*** it's for your protection because you say my liability in case of fraudulent use of my card is $50 and then I hung up on them.

Any comments? Thanks.

It is just like you with your tractor. If it starts making a noise that you have not heard before you stop and check it out do you not? :thumbsup:

 

[JDgreen227]

It is just like you with your tractor. If it starts making a noise that you have not heard before you stop and check it out do you not? :thumbsup:

If you had been following this thread you would realize I cannot hear so that pretty much cancels out my being able to hear any strange noises my tractor makes...:laughing: but I do see your point. BTW I have made multiple charges on the card this week, one for nearly $700, one for just over $800 and the last for $1200 and they did not hold up any of them so maybe they did pay attention to my griping.

 

[CBW1999]

JD.....
I would be willing to help you out with this...............1200 to 2500 dollar transaction having it shipped to me. Really see if they are paying attention or not. I'll PM you a list of "gifts" you can send me! :cool2:

 

[JDgreen227]

JD.....
I would be willing to help you out with this...............1200 to 2500 dollar transaction having it shipped to me. Really see if they are paying attention or not. I'll PM you a list of "gifts" you can send me! :cool2:

Sorry, while I appreciate your kind offer, Jinman has first dibs on the "gifts" as he asked first and is also a FB friend....:laughing: