by Elsewhere 21 Replies latest jw friends
I was denied a Visa card by my bank. I have several other cards and was told the reason I was denied was because I always paid the entire balance each month. The manager suggested I run a balance for a few months, and re-apply. I did and got it with no problem.
They don't make money off of people like me. Hmmmmmm?
Credit cards are wonderful if you know how to play the game and win. I pay the balance in full every month and have not paid any interest on a credit card in decades. I mainly use my Discover card and get cash back. Everytime my cash back balance gets up to $20 I have them apply it to my account as a credit.
Elsewhere, when you pulled your credit report did you also get your credit score? On the cards you do have open are your balances near your credit limit? If so, that will pull your score down a lot. The more of your available credit you have in use on revolving accounts, the lower your score.
Send that letter in and see what their explanation is. As someone else pointed out it is possible they just made a mistake and looked at someone else's credit.
Back when I first got my Discover card my credit limit was about $8000 and my first month's bill was about $850. The bank reported to the credit bureau that my credit limit was $850 - the same as my outstanding balance. So it looked like I was maxed out. That dropped my credit score like a rock. Once I got the error corrected the score went right back up where it was.
An individual bank/company could use their own records if you have done business with them before but they should not be able to tell from your credit report or score that you have not been paying any interest.
I read a quote similar to the following several years ago that really says it all:
People that understand interest, EARN interest.
People that do not understand interest, PAY interest.
All things are possible but not probable.
Basically, when I purchase something like that, I end up making money off of it. Do you think that pisses off the creditors?
It can, but I can't see them denying you credit for that reason alone. Sounds like someone made a mistake.....I'd call their offices and ask them specifically why you were denied credit. From experience I know that many of these places that offer "0% down and do not pay until 2009" are banking on the likelihood that you will not put money aside each month and at the end, they charge you something like 29% which has accrued over the last 2 years and you pay a fortune in interest.
I bought some furniture at The Brick once like this but I put money aside every month so that it could be paid off without any interest. I went in the day before the time limit was up and paid the whole thing off. And yes, I could tell they were pissed off. Apparently, the majority of people end up paying the interest.
I was checking out how to 'play' credit cards yesterday. Here's some info which might be useful to you:
on credit ratings: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101485056,23650,
how to make money with your card: http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1076883546,34894,
(bear in mind that these are aimed at the UK market, but hopefully there should be similar options elsewhere in the world too).
The entire moneysavingsexpert site is really good - full of useful little ideas that you might not think of. It was set up and is still run by one guy who wanted to get back at the 'big boys' - worth looking around!
I took out a $12,000 student loan years ago. Six months after graduating I was supposed to start making payments. Before that no interest was charged.The monthly payments were to go on for 10 years, so you can imagine how much interest would be paid over that time. (I don't remember the interest rate). I went into the bank and paid off the entire loan in my first payment, thus paying no interest at all. They were not happy.
My bank, the same day, cancelled my line of credit and lowered the limit on my ATM card. Imagine my embarrassment when I went to buy a new hard drive for my computer - there was plenty of money in the bank - and the transaction was declined. The bank had lowered my debit card limit from $1,000 to $300. So if I needed more than $300 at any time I had to physically walk into my home branch of the bank to get it.
W
People that understand interest, EARN interest.
People that do not understand interest, PAY interest.
Yup! Last year I actually did earn more in interest than I paid.
The reason I pride myself on this so much is because years back I had buried myself in debt (started a business on CCs - bad idea). It took about 7 years to pay it all off. By the time all was said and done I had paid an enormous amount of interest... even with 100% on-time payments. Even though I was deep in debt, I did not allow it to hurt my credit.
After going through that I decided I would only used credit if it was to my advantage. As an example... when I bought my last car I decided to finance more of the price because my car loan interest rate is lower than my savings account interest rate. Basically I am making money off of financing my car.
My bank, the same day, cancelled my line of credit and lowered the limit on my ATM card. Imagine my embarrassment when I went to buy a new hard drive for my computer - there was plenty of money in the bank - and the transaction was declined. The bank had lowered my debit card limit from $1,000 to $300. So if I needed more than $300 at any time I had to physically walk into my home branch of the bank to get it.
Time to drop their ass and get a new bank! It pisses me off the way banks are more than eager to screw someone over by trapping them in debit with high interest payments... but the moment you turn the game around on them they get pissed.
Some frugal friends of mine got 'caught out' for having too much good credit. They nearly always purchase cash. They have no large debts. The wife applied for a credit card and she was turned down! The reason? They had large amounts of unspent credit (mostly a line of credit attached to their home). They will have to reduce the line of credit and make some other changes, just so she could get a credit card!
My dad (the most frugal man I know) also had trouble when he "bought down" from one house to another last fall. Since all was paid for (no mortgage) he nearly had to sign his life away for the short time both homes were in escrow. The trouble? There were no assets for the bank in the transaction.
I do car loans for an Insurance & Financial Co. I see a lot of customers that do like you do, save up money for large purchases and pay them off or they just simply only use cash to make purchases. This actually can hurt your credit almost as much as having no/bad credit. There is no "credit history" for the loan companies to go by to see how you can handle credit or can pay in a timely manner. I would suggest you have a small credit card, maybe one with a $300 or $500 credit limit, and of course with a small interest rate, and make regular monthly payments to help boost your credit history.
babygirl, that happened to my father last year. He was in Sears to buying something that was several hundred dollars and they asked if he wanted a credit card so he could get an extra discount.
He accepted & applied & was denied. He was still upset when he got home and I explained to him it wasn't because he had bad credit - it was because he had NO credit history.
He has always paid cash for everything.
