How do you use your credit cards now?

[HHM]

If you play around with the balances on your cards, it is interesting to see that actually having zero debt reporting on the cards lowers your scores. This is assuming that you have reached the top of the bucket where nothing else you can do will raise your scores. I found that if I have zero balances on all my cards I lost about 6 points. If I have anything over zero ... sometimes like .50 cents even, I get those 6 points back. Credit is so screwy...

However, that is not to say you should run a balance, 6 points, 10 points, or any amount of points on your credit score is not worth paying interest. But, if you use your cards to pay living expenses like I do, you never actually have a zero balance for purpose of credit reporting. Yes, I pay it off each month, but there is a continual flow of charges so there is always some balance showed on my credit report.

[Amy26]

I was just relaying information... and perhaps 6 or 10 points is useful to some people. And I hardly think paying interest on a 1.00 balance is earth shattering.

[Logan]

I was just relaying information... and perhaps 6 or 10 points is useful to some people. And I hardly think paying interest on a 1.00 balance is earth shattering.

I may be all done with credit cards. My bank has been bought and my current 3% interest rate on my checking will be going away so I'm considering a switch to perkstreet financial where you get 2% in awards with a balance over 5k if you use your debit card.
I'm looking to buy a house in the future but since I won't have 20% I'll have to go FHA and building a higher score won't really matter since I'm already somewhere in the low 700's (maybe higher but I haven't checked in a long time). 740 is the next level to get the best pricing but I've done everything to clean up my credit and reestablish credit so I'm at the point where I don't really give a dam about my score anymore and if I don't have a 740 then oh well. It is what it is.

Anyways, for those that don't want to use credit cards check out perkstreet financial. For the Dave Ramsey people I know he likes this bank.

Logan

[Amy26]

Sounds like you're all set then Logan. Sucks about your bank though. :/

[IBroke]

However, that is not to say you should run a balance, 6 points, 10 points, or any amount of points on your credit score is not worth paying interest. But, if you use your cards to pay living expenses like I do, you never actually have a zero balance for purpose of credit reporting. Yes, I pay it off each month, but there is a continual flow of charges so there is always some balance showed on my credit report.

Interest shouldn't apply - unless you have a card without a grace-period.

The other thing is a question of how you organize it. Actually, you only have to make 2 payments in the first month to take care of that. The first payment takes care of the minimum payment. The second payment should be made just before closing to cover the charges 'til then. From there on, you only have to make one payment/month - the payment before the closing-date. That results in a zero balance (or the balance you want to have reported). If you have more than one CC, you just use a different one between making the payment and the closing date. When paying online, that often is less than 72 hours. That's how I do it.

If it's an account where you want to have a $0 balance reported, you only have to make one payment/month because there is no payment due on an account with a $0 balance on your statement. The new "due date" would be the closing-date.

When my mother purchased our house, she only had one CC and a very short credit-history. 680 was the crucial number to reach in order to get a better interest-rate on the mortgage. She made it because I told her to have a $6-balance reported on the card with a $300 CL. Those $6 were well spent..

[IBroke]

If you play around with the balances on your cards, it is interesting to see that actually having zero debt reporting on the cards lowers your scores. This is assuming that you have reached the top of the bucket where nothing else you can do will raise your scores. I found that if I have zero balances on all my cards I lost about 6 points. If I have anything over zero ... sometimes like .50 cents even, I get those 6 points back. Credit is so screwy...

Hmm, actually, .50 cents should also be reported as $0 balance...

And even if you think you knew it all, you're still learning.

- You want to use less than 9% of your total combined available credit.
- You want to carry that balance on ONE card only and don't spread it evenly on all your accounts to have less accounts with a balance.
- If you are using more than 9% of the CL on ONE single CC, you are penalized as well, even if that amount is well below the 9% of your TOTAL available credit (that was news to me). That's why your balance carrying account should be the CC with the highest CL.

[Amy26]

Yes, its always a learning experience... and .50 cents may be zero... but I guess I should have .90 cents because I have that reporting on one of my cards now.

[IBroke]

Yes, its always a learning experience... and .50 cents may be zero... but I guess I should have .90 cents because I have that reporting on one of my cards now.

Even 99 cents might still be reported as $0. As far as I know, they only report full Dollar amounts without rounding.

[ValleYum]

How do I use my credit cards now? Well, they make awesome drywall smoothers when I am patching nail holes. They also work well as ice scrapers. :teehee: Oh, and if you run a card vertically about halfway thru your shredder it makes a great disposable pasta spork.

I used all those old AOL installation CDs to tile my backsplash in my kitchen.

[Amy26]

Even 99 cents might still be reported as $0. As far as I know, they only report full Dollar amounts without rounding.

No, I was saying I actually have .90 cents reporting on my reports. It didn't get rounded to zero.

[IBroke]

No, I was saying I actually have .90 cents reporting on my reports. It didn't get rounded to zero.

Really??

That surprises me. I've NEVER seen anything else than an even $-amount reported on any of my accounts...

[Amy26]

Yea, depending on what bureau I pull it from though...its correct on my paper report from the bureau but if I pull it from like USAA or something it shows zero.