CREDIT... Learn me...

z31maniac wrote:

Johnboyjjb wrote:

Dr. Hess wrote: Yo Momma wuz rite. Here's everything you'll ever need to know about credit: DON'T. Ramsey may be a bit of an asshat. I disagree with some of his ideas, but he says "If you play with snakes, you're going to get bit."

I agree. He may be a bit of an asshat at times, but I know several families who followed his process to change their life around. His key thing is to run from debt.

Meh, rewards cards are great. Use them for stuff you'd usually use your check card for, groceries/gas/booking vacations, then pay them off at the end of the month.

Exactly. I use credit quite a bit right now because I make money off it. Not a huge amount, but something at least, on stuff I'm going to buy anyway. I keep waiting for the cash-back credit to expire on the gas card I'm using, but 2 years in and it hasn't, so I keep using it. To date, I've gotten almost $300 back. I drive a lot, so I buy a lot of gas & diesel...

Credit can simply be a nice tool to have, but like many tools, if you use it wrong it can hurt you.

I can totally understand being fearful - I've been down that path and it's no fun. What I've learned, I learned through painful experience. And the reality is, some folks can't handle it. My father is a good example. He has no ability to manage credit or money and whenever he tries it turns into a disaster. We're estranged now and I fear the day I get "that call" from some apologetic Richmond official. That will be a messy day.

In fact I just took out a Chase Sapphire credit card. Double points for food and travel, and after $3k spend in the first 4 months I get $400 cash back.

We are going on a road trip to Montana at the end of next month, so that will end up knocking nearly 15% off the cost of the trip.

Also get 7% bonus at the end of the year on points earned, etc etc.

ronholm wrote:

Conquest351 wrote: - Save up $40k and pay cash for anything and everything I could ever need and don't worry about credit. This is pretty much impossible given my current income. Not a bad plan though, and one I'd much prefer.

If you see 40K as an 'impossible' goal... You have no business ever letting thoughts of a new car ever cross your mind. (sorry if it sounds like I am being a jerk... but.......)

Nah, I understand what you're saying. But right now it's not really feasible. Once I get my other business off the ground, I'm hoping $40k will be relatively pocket change comparitively. I don't think it'll ever really be "pocket change" but you get the point.

This raises the other point of getting a decent credit score. I'm going to start a business selling tube frame race cars. I'll get them as pretty much finished chassis, but I'll have to install the drivetrain and gauges and all that finish stuff. Doing so out of pocket will limit my ability to churn out the cars with any type of acceptable speed. Getting a line of credit would be fantastic, but again, no credit score is gonna make that hard.

What was it the post office says? Oh yeah, there ain't no free lunch.

If you're getting points or any other bonus for using the card then you are paying a higher rate or fees than on the same card without those things. Just an FYI

After dealing with loads of creditors I've found you never want to have a card with Capital One or any type of Citi card. When you have an issue, and you will one day, these are the 2 least likely to resolve the issue quickly and fairly. Those are also the 2 I most often see with strange collections for strange fees. With C1 good luck in talking to anyone that doesn't live in India.

And Curmudgeon you couldn't be more wrong about the way to get the lowest rate and costs. For the longest now Mortgage Brokers have been the least expensive way to get a loan. They have the lowest origination overhead and therefore the lowest costs. The Wall Street Journal published an article that said going direct cost you about $700 in extra closing costs and .125% - .25% in interest rate. The TBTF Banks don't have to follow the same rules the other mortgage lenders have to.

Conquest351 wrote: . Getting a line of credit would be fantastic, but again, no credit score is gonna make that hard.

Or it could quickly allow you to get to big for your britches.

I don't imagine you would find it by searching through conventional methods...

But financially.. if you have a sound business plan.. and a track record of being able to handle money with wisdom. Extra funding shouldn't be hard to come by.

FICO score or not.

And if done properly it will afford you the opportunity to test the wisdom of your plan against gifted and experienced investors who will be able to teach and guide you along the way...

Or you could just let some banker sell you a credit card.

carguy123 wrote: What was it the post office says? Oh yeah, there ain't no free lunch. If you're getting points or any other bonus for using the card then you are paying a higher rate or fees than on the same card without those things. Just an FYI

So far, the cash-back cards I have don't have annual fees and any card that has tried gets a phone call where I threaten to cancel the card. It's amazing how quickly they'll credit an annual fee when you call them on it.

With the gas card, I think they really are losing money on me since I've never carried a balance on the card and I don't think the vendor usage fee equals the cash-back rate. I keep waiting for them to catch it and nix the cash-back, but so far they haven't. Either that or they figure the people who do carry a balance far outnumber the guys like me who don't, so they make money on the system as a whole. So it really has been a "free lunch" so far, but I don't expect it to last forever and then I'll stop using it.

Well, as for the business, I'm not going to be overextending myself at all. I just would like to have the line of credit there, in case I get a large order and can't use my existing capitol to fund it initially. Sure, the deposit should take care of everything I need, but it's still nice to have the cushion there, even if I never touch it.

Bumped from page 2, just to see if any more advise surfaces. LOL

carguy123 wrote: What was it the post office says? Oh yeah, there ain't no free lunch. If you're getting points or any other bonus for using the card then you are paying a higher rate or fees than on the same card without those things. Just an FYI

Incorrect, I'm not paying more. The place I'm buying stuff is taking care of that for me. Unless you're such a smooth talker that you can get the grocery store to give you a few bucks off for paying cash, A guy with a rewards card is going to pay less in the end than you will.

Josh wrote:

carguy123 wrote: What was it the post office says? Oh yeah, there ain't no free lunch. If you're getting points or any other bonus for using the card then you are paying a higher rate or fees than on the same card without those things. Just an FYI

Incorrect, I'm not paying more. The place I'm buying stuff is taking care of that for me. Unless you're such a smooth talker that you can get the grocery store to give you a few bucks off for paying cash, A guy with a rewards card is going to pay less in the end than you will.

The only thing I've ever paid less for buy paying cash is gasoline, for what ever it's worth.

carguy123 wrote: What was it the post office says? Oh yeah, there ain't no free lunch. And Curmudgeon you couldn't be more wrong about the way to get the lowest rate and costs. For the longest now Mortgage Brokers have been the least expensive way to get a loan. They have the lowest origination overhead and therefore the lowest costs. The Wall Street Journal published an article that said going direct cost you about $700 in extra closing costs and .125% - .25% in interest rate. The TBTF Banks don't have to follow the same rules the other mortgage lenders have to.

TANSTAAFL (There Ain't No Such Thing As A Free Lunch).

I brokered my refi. Only later did I discover that after they immediately sold the loan to Smells Nargo (who had my other loan) that I could have gone direct and saved some up front costs. How, you ask? Mention that you have been talking to a broker about the loan and damn it's surprising how quick the fees melt away.

Conquest351 wrote: Well, as for the business, I'm not going to be overextending myself at all. I just would like to have the line of credit there, in case I get a large order and can't use my existing capitol to fund it initially. Sure, the deposit should take care of everything I need, but it's still nice to have the cushion there, even if I never touch it.

Good idea, but that cash cushion needs to work for you as well. Look into investments which will help you make some $ off of it. No point in the money sitting in a savings account drawing damn near zip if you can find something else to put it in which could return more. Just be sure you have quick access to the money if needed.

Curmudgeon wrote: TANSTAAFL (There Ain't No Such Thing As A Free Lunch). I brokered my refi. Only later did I discover that after they immediately sold the loan to Smells Nargo (who had my other loan) that I could have gone direct and saved some up front costs. How, you ask? Mention that you have been talking to a broker about the loan and damn it's surprising how quick the fees melt away.

Heinlein reference FTW!

My previous mortgage was with Wells... I mean, Smells Nargo. I wanted to refinance a few years ago and called them up about it. They wouldn't budge on the fees at all, so I ended up going back to the broker. Now I'm with Bank of, uhhhh, Kramerica at a great rate.

Curmudgeon wrote:

Conquest351 wrote: Well, as for the business, I'm not going to be overextending myself at all. I just would like to have the line of credit there, in case I get a large order and can't use my existing capitol to fund it initially. Sure, the deposit should take care of everything I need, but it's still nice to have the cushion there, even if I never touch it.

Good idea, but that cash cushion needs to work for you as well. Look into investments which will help you make some $ off of it. No point in the money sitting in a savings account drawing damn near zip if you can find something else to put it in which could return more. Just be sure you have quick access to the money if needed.

I have a money manager who helps me with my investments and retirement accounts and such. My mom gave us $10k for our wedding and we put it in one of those accounts and could write checks from it. We did that to pay for the wedding as we went and in the few months it was in there, we made a couple hundred bucks. I would definitely do the same with the line of credit or loan or whatever for the business.

Duke wrote:

Curmudgeon wrote: TANSTAAFL (There Ain't No Such Thing As A Free Lunch). I brokered my refi. Only later did I discover that after they immediately sold the loan to Smells Nargo (who had my other loan) that I could have gone direct and saved some up front costs. How, you ask? Mention that you have been talking to a broker about the loan and damn it's surprising how quick the fees melt away.

Heinlein reference FTW! My previous mortgage was with Wells... I mean, Smells Nargo. I wanted to refinance a few years ago and called them up about it. They wouldn't budge on the fees at all, so I ended up going back to the broker. Now I'm with Bank of, uhhhh, Kramerica at a great rate.

That's weird. Must be the individual 'personal banker'. The girl I talked to was very willing to modify/waive fees to get the loan.

Curmudgeon wrote:

Duke wrote:

Curmudgeon wrote: TANSTAAFL (There Ain't No Such Thing As A Free Lunch). I brokered my refi. Only later did I discover that after they immediately sold the loan to Smells Nargo (who had my other loan) that I could have gone direct and saved some up front costs. How, you ask? Mention that you have been talking to a broker about the loan and damn it's surprising how quick the fees melt away.

Heinlein reference FTW! My previous mortgage was with Wells... I mean, Smells Nargo. I wanted to refinance a few years ago and called them up about it. They wouldn't budge on the fees at all, so I ended up going back to the broker. Now I'm with Bank of, uhhhh, Kramerica at a great rate.

That's weird. Must be the individual 'personal banker'. The girl I talked to was very willing to modify/waive fees to get the loan.

Yeah, I love Wells Fargo. Every two years I refinance for free. They mail me some papers. I sign them. I send them back. Bingo. I have a new lower interest rate.