Credit card question

[CyberB0b]

I have a bank card that has been in my wallet for years and has NEVER been used whether for credit or debit.
I have no other cards.

Normally use Google Play cards to pay for whatever streaming services I use or to buy movies on occasion.

If I want to order something that is not too pricey. I get a prepaid credit card.

In the very rare times I want to order something that exceeds what most pre paid credit cards allow...I have the wife give me her debit card to the bank and use that with money already in the bank. I use hers because I do not remember my pin number nor do I know if it even works anymore.

The only think I got in the last five years or so that I needed the debit card was my guitar I recently bought.

In the past if I wanted a guitar I would do it on musicians friend credit
I never had trouble paying those off but I would rather not have a monthly bill on a credit card.

Hate the idea of paying all that interest.

Credit Cards are the Debil.
Debit cards are an invitation for people to get your info and use it for themselves. My wife has had this happen numerous times in the last four years.

That sounds incredibly inconvenient. Credit is a tool, like a chainsaw. You need to use it responsibly. I use a credit card for everything and have never paid interest. Just this year alone, I’ve used CC points for airline tickets and 7 nights in a 5 star hotel in Tokyo.

I heard it's even better to occasionally carry a balance. Thus it's better to, for example, charge 60 bucks worth of groceries, then pay roughly 30 when the bill arrives, and pay the remainder the following month. Somehow that's better for your credit than to just pay the whole thing off immediately. Anyone know if this is true or not?

False. Never carry a balance. The main factors for credit score are on time payments (no late payments or defaults), age of account, and available credit. If you have 1k in credit and are using $900 every month, that’s bad.

 

[Runwildboys]

I heard it's even better to occasionally carry a balance. Thus it's better to, for example, charge 60 bucks worth of groceries, then pay roughly 30 when the bill arrives, and pay the remainder the following month. Somehow that's better for your credit than to just pay the whole thing off immediately. Anyone know if this is true or not?

I believe it is true, but the amount of credit probably isn't worth the interest you pay.

 

[gtb1943]

I pay my card off every month, so they recently lowered my limit about $5000. That's fine with me. I don't ever want to put $23,000 on a CC anyway.
What bothers me is that I've never been late on a payment, but my card, which started off at a 6% APR is now at 15%.
The powers that be need to do something about the APRs these banks are allowed to charge.

In the late 70's the Usury laws were repealed when interest rates went so high. That opened Pandora's box and that is how you get what we have now. Like those absolutely obscene payday loan schemes.

 

[Praxit]

..depends on your APR. If its around 10-15%, your ok. I dont think you owe thousands, so it wont build up.

If your APR is 20% and higher. Then yeah, best to pay it off in faster increments. In bigger scoop, thats how they make biz off your APR.

 

[big dog cowboy]

I heard it's even better to occasionally carry a balance. Somehow that's better for your credit than to just pay the whole thing off immediately. Anyone know if this is true or not?

Nope. Pay it off every month. Pay off all your bills every month. Your credit history will take care of itself.

I don't want to pay even $5 a month. That's $60 a year! I can find better ways to use that money.

 

[gtb1943]

Nope. Pay it off every month. Pay off all your bills every month. Your credit history will take care of itself.

I don't want to pay even $5 a month. That's $60 a year! I can find better ways to use that money.

If you do that over a period of a year, your card will get canceled. They are not making any money off of you.

 

[Creeper]

If you do that over a period of a year, your card will get canceled. They are not making any money off of you.

Not true. I haven't carried a balance on my credit card in over 30 years and it still works. In fact they keep trying to raise my credit limit! Also not true that they don't make any money off of you if you never carry a balance. They make money every time you use your card on transaction fees they charge the retailers that take their cards. While it is true that they make more money if you carry a balance and have to pay their ridiculous interest rates, they just want you using their cards as much as they can get you to use it. Hence, rewards for purchases like cash back and reward points. What they do not want is you not using your card or running up the balance until they have to cut you off. They especially hate when you do not pay your bills and they have to send collectors after you.

 

[gtb1943]

Not true. I haven't carried a balance on my credit card in over 30 years and it still works. In fact they keep trying to raise my credit limit! Also not true that they don't make any money off of you if you never carry a balance. They make money every time you use your card on transaction fees they charge the retailers that take their cards. While it is true that they make more money if you carry a balance and have to pay their ridiculous interest rates, they just want you using their cards as much as they can get you to use it. Hence, rewards for purchases like cash back and reward points. What they do not want is you not using your card or running up the balance until they have to cut you off. They especially hate when you do not pay your bills and they have to send collectors after you.

you are unique then since I know a number of people over the years who did that and got their cards canceled
and you are also wrong about how much they make off of fees; its not a PATCH on what they get for a sizable balance carried over
And I have heard from those who work in banks credit card sessions and your claims are frankly laughable
Cash back and rewards are a PITTANCE compared to carrying sizable balances as regards revenue.
they consider employing collectors just a cost of doing business - it is all very carefully calculated and your view of them is very naive

 

[Creeper]

you are unique then since I know a number of people over the years who did that and got their cards canceled
and you are also wrong about how much they make off of fees; its not a PATCH on what they get for a sizable balance carried over
And I have heard from those who work in banks credit card sessions and your claims are frankly laughable
Cash back and rewards are a PITTANCE compared to carrying sizable balances as regards revenue.
they consider employing collectors just a cost of doing business - it is all very carefully calculated and your view of them is very naive

Perhaps my bank never cancelled my card because I worked for a major bank and credit card issuer for over 30 years. Of course banks make money on interest they charge on balances. I never said otherwise. What I said was they make money off of you whether you pay your balance or not because they get fees from retailers. Which is a true statement proven by the fact that American Express required customers to pay their entire balance every single month for many years. Credit cards issuers charge customers between 1.5% and 3.5% for every transaction.

Did you know that only about 40% of card holders carry a balance on their credit cards? Banks do no want you running up high balances on your cards because then you can't use them to charge things. They want you to use your cards as frequently as possible. The card is an instrument to get transaction fees, which are small, but when you have say, 1 billion card holders using their cards 20 times per month that is 20 billion transaction fees per month. It is big money.

I will guarantee you if you run up a high balance on your card and fail to pay on time you credit card company will cancel your card faster than if you pay it off every month. And by the way, there is a difference between not using your card and paying off the balance every month.

 

[big dog cowboy]

If you do that over a period of a year, your card will get canceled. They are not making any money off of you.

I've been doing that for over 20 years. I finally had to call the credit card company (BOA) a few years ago and tell them to stop raising my credit limit. So I don't know where you got that info from but I had a completely opposite experience. BTW I also pay no annual fees. They haven't made money off of me one time in that 20+ year span.

 

[Reverend Conehead]

I've been doing that for over 20 years. I finally had to call the credit card company (BOA) a few years ago and tell them to stop raising my credit limit. So I don't know where you got that info from but I had a completely opposite experience. BTW I also pay no annual fees. They haven't made money off of me one time in that 20+ year span.

Why not just let them raise your limit? If your limit is $1500 and you charge $50 in a month and pay it completely off, what's the difference if your limit were $2000? You wouldn't be paying more, but you would have more credit available in case of emergency. And by emergency, I don't mean you had to fly to NYC to attend the Bruce Springsteen concert (not that I think you would do that). I mean things like a family emergency or your car breaks down in Timbuktu or somewhere else in Nowheresville.

 

[big dog cowboy]

Why not just let them raise your limit? If your limit is $1500 and you charge $50 in a month and pay it completely off, what's the difference if your limit were $2000?

My credit limit is many many times higher than that.

And I charge everything. A loaf of bread? Charge it. I don't carry much cash. I just want the cash back rewards which is pretty substantial every year.

 

[gtb1943]

I've been doing that for over 20 years. I finally had to call the credit card company (BOA) a few years ago and tell them to stop raising my credit limit. So I don't know where you got that info from but I had a completely opposite experience. BTW I also pay no annual fees. They haven't made money off of me one time in that 20+ year span.

I have seen it happen is where I got it from; numerous occasions over the years. Now I moved around a lot; my career had me in 10 different stats. So I saw a wide variety of banks and credit unions and those involved with them. I do not doubt there are credit cards that do treat people right; but I doubt they are the majority or even all that many.

 

[gtb1943]

One must remember that all corporations and big businesses are run by the bean counters. The bottom line this year is what matters; not what is coming in 10 or 20 years. That kind of pressure means treating your customers like crap and squeezing every last penny out of them. Is anyone really surprised at what come from that attitude?

 

[Runwildboys]

If you do that over a period of a year, your card will get canceled. They are not making any money off of you.

I've been doing it for years on the same card. I'm pretty sure they make money from the purchases themselves, which is why gas stations used to charge more for CC purchases.

 

[Runwildboys]

I have seen it happen is where I got it from; numerous occasions over the years. Now I moved around a lot; my career had me in 10 different stats. So I saw a wide variety of banks and credit unions and those involved with them. I do not doubt there are credit cards that do treat people right; but I doubt they are the majority or even all that many.

Are you absolutely sure you're not conflating paying the card off every month and not using it at all for over a year? I know they'll freeze or cancel it due to inactivity.