Denied!

[mojitochica]

The savings account is a great idea as others have said. ING is good, but HSBC Direct has a higher interest rate. ING has an easier interface I think, but HSBC's isn't that bad. Anyway, try to resist the temptation to buy now and save instead. I know it sucks , but you'll be better for in the long run.

 

[MacManTexas56]

I never or rarely use credit cards but I have done before when I was 19 or 20. Now I'm 24 and I live by the concept of "don't spend money you don't have"

I'll rather save an amount if I want to buy for example a Mac. Credit is a bad habbit don't get into it and if you are then try to make it your first priority to pay it of.

I keep one credit card on me for a rainy day or emergency circumstances (stranded in some European city and in need of hotel, food, women, internet, etc)

this is the concept that people seem to not understand. Credit cards aren't out there just to use bc it's other people's money. I put everything I buy on my credit card......because i get reward points. Just bc i put everything i buy on my credit card doesn't mean i don't have the money. It's just a lot more convenient and i'm protected more against fraud on credit card vs. bank.

Having that concept is how credit card companies get rich. I have a lot of friends that have credit cards and charge everything on them and don't have the money. I also have friends that don't ever use them and then get denied credit bc they aren't using their current credit. If you don't pay on something regularly you will never build more credit....bc you're not using the credit you have already. Use a credit card as much as possible, but be sure to pay it off each month...otherwise that's where you get into trouble.

Also, if you are wanting to purchase a brand new $2500 mac with money u saved up in ur checking acct....why not get some rewards back to you for spending that kind of money? Get american express or even citi credit cards where you get points and even money back on purchases. Credit is the best, most convenient thing out there if you use it like it's designed.

 

[MacManTexas56]

Pay off your credit cards then call each of them and demand the best fixed rate possible. Keep the card with the best rate and cancel the rest. Don't be afraid of these people either. Tell them what you plan on doing.

interest rates shouldn't matter at all if you pay off your credit card each month. Many of my friends are like yeah this is sweet i have a card with 5% interest rate.....ok that doesn't matter if you pay your balance off haha.

 

[bldgengineer]

interest rates shouldn't matter at all if you pay off your credit card each month. Many of my friends are like yeah this is sweet i have a card with 5% interest rate.....ok that doesn't matter if you pay your balance off haha.

thats true but only if you pay them off in full each in every month. I keep on credit card and use it for gas and only gas. Its a diamond rewards citi card with a fixed rated of 1.99%.

The thing about getting a "decent" rewards card is you have to have a good credit score to even be offered a decent one. The reason I told the guy that started this thread to drop all his cards except one with a good rate is because things can happen at anytime.

Some people just don't have the ability to handle their cards. Things go on in their mind like "oh i can pay it the next month" or "if I pay the minimum for a couple of months, I can save enough to pay it in full later." Then it just escalates into a bad habit that can get real bad, real deep, real quick.

 

[MarkCollette]

Grrr, so many people here with such bad advice.

Here's what you do:

1. Get at many credit cards as you can. Don't wait for one to fill up before getting the next, but rather get them at the same time.

2. Go three months with moderately using every single card, and paying them all off immediately. I don't mean by the end of the month, I mean the next day via internet banking.

3. After the 3 months, call up each of the credit card companies, and ask them to increase your limit.

4. Use the highest limit credit card to set yourself up in a hotel, and then next highest to rent a sports car. Use the next two to take out as much cash advances as you can, every day. Use the rest for champagne.

5. Spend two nights at the hotel, buying a lot of unnecessary consummables, and tipping the belhop gratuitously. After you've built up a rapport, ask him to hook you up with cocaine and prostitutes.

6. Spend the next month embroiled in the most soul sucking depravity you can muster.

7. Fly away to a non-extradition treaty country with the emergency money you set aside. A ****, you did set some aside, right?

 

[MacManTexas56]

thats true but only if you pay them off in full each in every month. I keep on credit card and use it for gas and only gas. Its a diamond rewards citi card with a fixed rated of 1.99%.

The thing about getting a "decent" rewards card is you have to have a good credit score to even be offered a decent one. The reason I told the guy that started this thread to drop all his cards except one with a good rate is because things can happen at anytime.

Some people just don't have the ability to handle their cards. Things go on in their mind like "oh i can pay it the next month" or "if I pay the minimum for a couple of months, I can save enough to pay it in full later." Then it just escalates into a bad habit that can get real bad, real deep, real quick.

oh yeah i totally know what you mean. and that's the problem. a lot of people don't understand the concept of credit cards...they think it's free money. A lady i work with was talking about this new guy she was dating was so rich he didn't have to use a credit card bc he carried all cash. I was like that doesn't mean he's rich bc he's not using a credit card.....she thought a credit card was bc u were poor and had to borrow money from someone else to buy ur stuff. these are the type of people that credit card companies LOVE. they hate people like me bc i pay off my bills immediately and don't even wait for my monthly statement.....

 

[jessep28]

oh yeah i totally know what you mean. and that's the problem. a lot of people don't understand the concept of credit cards...they think it's free money. A lady i work with was talking about this new guy she was dating was so rich he didn't have to use a credit card bc he carried all cash. I was like that doesn't mean he's rich bc he's not using a credit card.....she thought a credit card was bc u were poor and had to borrow money from someone else to buy ur stuff. these are the type of people that credit card companies LOVE. they hate people like me bc i pay off my bills immediately and don't even wait for my monthly statement.....

Banks and Credit Card companies are still making money regardless of whether the user is paying off the balance or not. They still make money in terms of processing/merchant fees. They just make a lot more on people carrying balances.

Earlier poster made a good point that just becuase you can get in trouble doesn't mean you shouldn't utilize credit. I have a card I use for gas that earns 5% at those establishments. When Rebate = $50 then they cut me a check. Not very much considering I need to spend $1000 to get $50, but I would have spent the money on food and gas regardless.

Cards are also good payment deferral tools. If I am making a purchase I don't feel like paying for (not that I don't have the cash) right away, if you time your purcahase right after the statement close date, you can have two months of interest free financing.

For instance:

Say your statement closing date is Feb 20th.
You then make your purchase on Feb 21st.
It won't be until approx. March 22nd until the statement closes
Then you have the 20 day or so grace period to pay off that balance.

 

[shikimo]

interest rates shouldn't matter at all if you pay off your credit card each month. Many of my friends are like yeah this is sweet i have a card with 5% interest rate.....ok that doesn't matter if you pay your balance off haha.

haha?? We're all very happy for you and your financial security, but this is serious business for lots of people.

The thing about getting a "decent" rewards card is you have to have a good credit score to even be offered a decent one. The reason I told the guy that started this thread to drop all his cards except one with a good rate is because things can happen at anytime.

Some people just don't have the ability to handle their cards. Things go on in their mind like "oh i can pay it the next month" or "if I pay the minimum for a couple of months, I can save enough to pay it in full later." Then it just escalates into a bad habit that can get real bad, real deep, real quick.

This is spot-on commentary, bldg, two great points...of course, rmhop81, you are quite correct to say that having and using credit is important; in fact, no credit is only slightly less of a problem than bad credit. However, it's the way of thinking that has to change before those who misunderstand and misuse credit can learn to handle it properly, and often that requires a period of not using it at all to learn to manage a budget the old fashioned way. It's just not good enough to tell someone who is in a bad spot to "use your cards, but just pay them off every month like me," especially whey they already have balances that are disproportionate to their income. These folks need education and long-term plans for erasing the existing debt without acrruing more, not smug comments from people further along in the development of their financial security.

 

[Sun Baked]

Grrr, so many people here with such bad advice.

Here's what you do:...

Watched one of the, how to steal shows -- somebody did that by filing out the "pre appoved credit card" offers.

Sent in the fees, maxed the cards out a couple times, paid off quicks -- and them cash advanced the hell out of them.

There was loads cash in his house, a couple hundred credit cards, crap everywhere -- and more cash in safety deposit boxes (hundreds of thousands of cash stashed in the house and bank boxes.)

Not a bad deal for the cost of a card fee & credit report. A $100 nets you several thousand.

 

[j26]

Here's one way to get the computer

When debt becomes a problem is when debt eats up so much in servicing costs that it actually reduces your current living standards. It would seem the OP can afford to cover his bills each month, he can afford a computer apart from the overhanging debts.
They need to be cleared off.
I'm guessing that most of them are short term debt at crazy interest rates. Have you thought about consolidating them into one longer term debt with one repayment that will deal with them over a fixed period of time (say 3-5 years). If you want the computer, add in the cost of the computer and see if you can realistically afford the price of the loan.

If you walk into a bank with your sums done and nicely printed out (Income, outgoings, how you intend to pay) and have a plan to show the bank you will not be taking on other debt for at least 1/2 of the term of the loan, you have a strong chance of geting it. If that means opening a savings account and throwing in a couple of quid a month, the net result is you get your loans paid off and build some savings for the extra treats.
If you stick with that plan for a while you will see your credit rating move up very quickly. Banks love people who save and borrow at the same time (within their means).

If you do this, lose the credit cards for a while. They'll kill you - you'll end up in a worse position in a year, but with an added loan to deal with. I made that mistake and it took me a while to get over it but I'm really sorted now because I eventually stuck to the plan.

 

[notjustjay]

It's just not good enough to tell someone who is in a bad spot to "use your cards, but just pay them off every month like me," especially whey they already have balances that are disproportionate to their income. These folks need education and long-term plans for erasing the existing debt without acrruing more, not smug comments from people further along in the development of their financial security.

For sure. But some people need to learn to live within their means, or else the credit card lifestyle is never going to go away even if they try.

I know a guy who lost his job (high-tech company layoff) last June, and has been living on severance and employment insurance since then. He's been taking it easy all this time, but told me his free ride ends this month, and he's going to have to start looking for a job soon.

... Meanwhile, they went on a trip to Mexico in August, they're renovating their kitchen this month, ...

Me, I was in the smug people category. I paid off all my credit card bills every month, inwardly laughing at people who didn't and got themselves into credit card debt. I couldn't imagine how people could be so stupid as to being suckered into paying in a never-ending cycle of 18-28% credit card debt.

That is, until I made that one tiny little mistake myself. The one where you say "Well, I can't afford to pay off the whole balance this month, but next month I've got some money coming, and I should be able to pay it off then..."

That was in 2003. (Roughly around the time I tried to finance the PowerBook).

If all goes well, the last $1000 of that debt will finally, FINALLY be paid off by the end of this month.

Then I intend to go back to "pay off every bill in full every month". Really.

(The real irony is, the constant activity on my cards, as I pay off as much as I can every month, has gotten me a high credit rating, and the companies keep increasing my limit. Both my credit cards now have limits in the $12,000 to $15,000 range. Yikes!)

 

[phillipjfry]

Well on the one hand, I can afford to pay off my debts and be 100% debt free (excluding the neverending college loans...) by march...
On the other hand, thinking like that ("well, in March I'll be able to charge my card again with a semi-clean conscience") makes me want to make one big payment this month and buy all my goodies and put me back to where I was about a month ago and continue from there.
I don't like the credit card I am currently using and hopefully in march I can apply for the juniper again.
I really wanna try to use this itunes points thing, my current card gives me nothing in terms of "goodies" for using their card, only high interest that has never really went above or below 24.99%...I didn't know any better when I first got the card.
So I'm stuck between "pay off your debts, use the charge card and pay it off in a month or two" and "if I pay the card off by March, save up for the "list of things from Apple", then by the time I get the money saved up, things will be updated and software will be improved"
Arguably I am no longer in the position where I fear my monthly statements and bills and can spend semi-freely.

 

[MarkCollette]

(The real irony is, the constant activity on my cards, as I pay off as much as I can every month, has gotten me a high credit rating, and the companies keep increasing my limit. Both my credit cards now have limits in the $12,000 to $15,000 range. Yikes!)

There's a downside to that though. If someone steals your identity, there's all that much more damage they can do, with such high credit card limits. Plus, after a while, those large limits hurt your credit rating, because your potential endebtedness value is that high. In the last year or so, I called up my two credit card companies, and got them to lower them back to more sane limits in the 4k to 5k range. Although, I think you can only do that once every six months or so. Not sure if that's a generic rule, or specific to my credit card companies.

 

[MarkCollette]

So I'm stuck between "pay off your debts, use the charge card and pay it off in a month or two" and "if I pay the card off by March, save up for the "list of things from Apple", then by the time I get the money saved up, things will be updated and software will be improved"
Arguably I am no longer in the position where I fear my monthly statements and bills and can spend semi-freely.

There's a lot of credit cards that give a low introductory rate on balance transfers. One approach you can take, is to get one of those cards, transfer the balance over, and then only use the old card for monthly purchases that you immediately pay off, while the new card holds the standing debt. The reason to do this, instead of just using one card, is that new purchases are at the high interest rate, while the transfered balance is at the low interest rate, but any payments go towards the low interest stuff first, which means that effectively your balance becomes the high interest stuff anyway. Whereas with two cards, you always pay off the high interest purchases, so there is no interest at all on them, and then the rest goes towards paying down the standing debt.

 

[Swarmlord]

I use credit cards for everything just so I don't have to carry cash and I get a nice statement to keep track of my outlays. Then I pay off the balances every month.

 

[JAT]

Stop looking at all the "store" cards (like Apple credit) and fly-by-night banks. Get set up with AmEx or a serious bank like Capital One. The best way is a credit union. They offer much lower rates on credit cards and are easier to work with than the big banks.

And yes, dude. If you can pay off your debt by March, do it. Then save for a couple more months to get your computer not on credit. 5 months is barely any time at all, although in your teens it may seem like eternity. It will be much better to be debt free.

 

[bldgengineer]

So I'm stuck between "pay off your debts, use the charge card and pay it off in a month or two" and "if I pay the card off by March, save up for the "list of things from Apple", then by the time I get the money saved up, things will be updated and software will be improved"
Arguably I am no longer in the position where I fear my monthly statements and bills and can spend semi-freely.

Let me tell you, just because you paid off your cards in march doesn' mean your credit will be great in april. It normally take a couple of months for all three of the big agencies to catch up to your credit.

I would suggest this, once your cards are paid up in april, get your credit report, if its below 600(at 20 yrs old I had a rating of 540), get rid of all your credit cards except the one I talked about earlier. Do you have a car payment? If so, do not use that card at all except for emergencies. By emergency I mean your brother died in a horrible accident and your parents need help to bury him, not, oh damn! I just ran out of milk and I need my breakfast tomorrow! Your car payment, plus the fact that you have a credit card w/o a balance on it will be good enough credit builders for right now.

While you are building credit, you should be saving money. This should be an emergency fund so you no long need that card for emergencies. This fund is typically your take home monthly income times 3 (I feel more comfortable with 6 months but given your situation 3 should be fine). This money should be kept in an easily liquidable account with decent interest rate(ING, Citi, HSBC). After that your retirement should be set. Does your company offer a 401k or 403b? If so, pay into it only up to as much as the company matches. Then you should be maxing out an IRA every year(I'd suggest a Roth). Then, find a nice mutual fund or good stable stock to invest into(TRowePrice has some great no-load funds or you could invest in GE or ExxonMobil to start with). You should only do this if you happen to receive any extra income (O/T, bonus, tax return)and then you should only apply half of that toward investing and have fun with the rest. Don't forget this should all be happening at the sametime.

More than likely at your age you probably can't do all of this. Maybe you don't have a 401k or 403b to invest in. Maybe you don't make enough to max out your IRA. Regardless of your situation, ideally you should be putting at least 30% of your take home pay away into savings. If you have none of the above right now you should at least get your emergency fund in place. HSBC has no minimum and doesn't max out. Then, after you have 3 months worth of savings in place, take 30% of your take home and start an IRA with 20% (You can start a TRowePrice IRA with $50 and have $50 taken out each month automatically) and keep putting the other 10% into the emergency fund. Compounding interest is a wonderful thing.

This should all be happening before you even think of buying something as mundane as another computer. You obviously already have one or easy access to one. Wanting the "next big thing" is what gets most people into trouble in the first place. You don't "need" it, you just want it. You need food and water, you need a roof over your head.

Like all things in life, work comes before fun. You work hard for your money, make your money work hard for you before you have fun with it.

There are only 2 things in life you should be borrowing for: A house, and a car (if really needed).


(WHOA! That was more than I thought Sorry about that)

 

[shikimo]

Phillip, although bldg has given you a VERY accurate roadmap for lifelong financial stability, perhaps for right now what you need to focus on is "100% debt free by march." This is a beautiful phrase...without knowing your situation better there's no way to comment on how well you can follow all bldg's recommendations, and all I can really say for sure is that "100% debt free by March" is what is best for you right now. Really, man, this is the truth: if you follow this advice, and then afterwards only buy things that you can pay for at the time you buy them, it will be much easier to start taking care of the things bldg mentions when the time is right for you, even if they don't seem like much of a priority to you now.

And one last thing: Your students, while not bad debt, are still debt, still count on your credit report, and still need to be repaid starting 6 months after you finish your education. I'm still paying mine, 10 years later. They were worth it--in fact they've been quite good for my tax load--and my degrees got me where I wanted to be, but it's still damn annoying paying them every month, and it was really tough going when they first kicked in, cuz I had pretty much forgotten about them. Not a problem for you now, I realize, but borrow as little as possible and don't forget to plan for paying them when you make your after-school plans...and to return to the subject at hand, this is all the more reason to not have any other debt to worry about when the DOE or whoever it is come looking for the student loans .

 

[direzz]

do not buy a computer on credit - by the time it's paid off, you've paid WAY more than what the computer's worth.

just save up and then buy with cash.

thats what i always do

 

[xtopher]

what i did was save up all the money for my laptop then use my credit card so i could get a BTO online then same day, just paid it off. got the macbook, got the points, got none of the debt!

 

[shecky]

There are only 2 things in life you should be borrowing for: A house, and a car (if really needed).

3 things: college

 

[shikimo]

3 things: college

Good point...as long as it's done sparingly. Everybody who ever used college loan money for beer, pizza or an impromtu roadtrip raise your hand .

 

[andiwm2003]

.......................................................

There are only 2 things in life you should be borrowing for: A house, and a car (if really needed).


...................................................

your post is one of the best on this board ever. except of this part: you also can borrow money for a fridge. that's the one item you need immediately

aside of that never buy anything on credit. ever.

 

[xtopher]

ah but somethings you can ONLY get online therefore credit card...then what do you do?

 

[shecky]

use your check card. anyplace that takes a visa/mastercard will take that