Credit card companies make money off people who pay interest. But paying interest is a choice and something you can avoid if you have the discipline to treat it like cash. It's really the most logical choice for people who can pay the balance every month.
Out of all my direct debits, Brittish Gas are the only people who never pop up on my credit history, But both mobile phones (Mine and my Fiances), BT (internet and telephone lines), My Landlord agents, electricity provider and car insurance all pop up bout once a quarter. I have one little dot on my credit rating when my ISP never changed my bank details and I never noticed the payment not coming:/ so I was late on that bill and they marked me with some orange tick for being late, rest are green ticks for being on time though
I also use my credit card for convenience. My credit card allows me 3 months with no interest, so I sometimes like to lessen my monthly financial strain by stretching a purchase into 3 monthly payments. I already have the money to pay for it in full, I just pay it off in 3 months instead.
I put everything I possibly can on my travel rewards credit card every month. Utilities, you name it. If they let me pay with a credit card, that's how it gets paid. Then just pay off the balance each month and rack up travel points like crazy. I love the free plane tickets. Can't remember the last time I actually paid for one.
Also, credit card companies used to offer free cash, like $2500 interest free for 3 - 6 months or so. I'd take that money and put it into a matching time length CD and then just pay it all back at the end of the term and keep my interest.
Last edited by ScottsdaleHokie; 2013-02-12 at 04:59 PM.
In addition to your credit score, loaners often look at debt to income ratio as well (especially for car and home loans).
I've been hovering around 780 for a couple of years. I have one credit card. I've never missed a loan, car, or CC payment in my life.
Will it go any higher? Probably not, but I already qualify for the best possible interest rates.
"There are two types of guys in this world. Guys who sniff their fingers after scratching their balls, and dirty fucking liars." -StylesClashv3
"Elo Hell is where the Ego is greater than the Elo." -Bystekhilcar
Just as an FYI, https://www.annualcreditreport.com is where you can get a free yearly credit report from all three agencies. Note that this is NOT your credit score, just the report. It's good to check every now and then to make sure nothing's there that shouldn't be due to identity theft etc (or just forgetting to pay a bill).
i just don't avail myself of those benefits because i don't travel and cash back is 1-3% of purchases.
$100-300 dollars per $10,000 spent is meh in my book. i just pay cash and keep the extra in 401k, Roth and other securities.
you do make a valid point for people who can manage credit carefully and that's the potential travel savings.
That, along with a majority of a customer base that actually DOES carry a credit balance month to month is why these perks exist. Banks don't offer these to lose money.
Last edited by melodramocracy; 2013-02-12 at 09:10 PM.
Benevolence is a luxury for the strong - Wrathion
Last edited by Kujako; 2013-02-12 at 09:17 PM.
You're also ignoring the fact that its easier for merchants to get paid via credit card transactions than cash transactions. Merchants must pay for devices and employees to handle cash while running the risk of losses due to counterfeiting.
The credit card system isn't as clear cut as you make it out to be.
I don't know, but just to chime in with the random suggestions, it sounds to me like you are overburdened financially or in a new situation and banks won't lend you money for a car yet? Also, you could loan with an auto dealer?
Why are you a risky customer for the bank? It sounds like you either have too little equity to put as safety for the bank or you are in too new a situation and the bank isn't sure the situation will last.
Are you skimming the cream so 3 months down the line or 6 months, you will be a much safer debitor for the bank or is there something in your finances that are off? If it's the first case, you can try loaning at a dealership or something that might be more lenient but have higher rates? If it's the last, something is going on that is making the bank not wanting to loan you money.