How People Manage Credit

Paid Twice discusses the reasons why she keeps her credit cards on her.

I do carry one credit card, but I never use it. I have a slew of credit cards in a drawer. Back in September, I ordered my credit scores. It was great to see all my open accounts in a list. I plan to get around to going through that list and closing a couple of accounts each month. Although I think I’ve heard that can hurt one’s credit, so I should research before I start doing that. I’ve also heard it can be detrimental to have too many open accounts with zero balances. Even though I have at least 25 open accounts, I only have balances on two cards. I am no longer using either card for credit purchases. One of the cards still has a monthly payment being withdrawn from it, which actually belongs to my sister, and she reimburses me for that. I am planning to move that deduction to my checking account and then that card won’t have any increases on it.

I played the “money back” game for a while, and it was working great. I mostly used my Amazon card and bought groceries, which we would normally purchase, and then I’d pay the balance in full each month. I would get a $25 gift certificate to use at Amazon every once in a while. But when we had to go into debt to make ends meet, it stopped being great. I have ceased using that card for anything, because it smarts to get a $25 gift certificate, when I just paid $145 in interest fees (which I plan to do something about very soon!!). It’s easier to just see the amount go down and keep going down.

My friend uses credit in an old fashioned way. She uses credit the way I think people used credit back in the 50s. She decided she wanted a couch and went to a shop that makes couches. She didn’t have any money but she went into the store and asked for a credit application. She applied and they gave her $1000 credit at the store. So she picked out a couch that cost just under $1000. She just made the last payment on the couch in December. Around Thanksgiving time, she decided her daughter needed a nice dining room table set, so she went to another store and applied for credit there. She paid around $1000 for that, too. I don’t know what the interest rates were, but I imagine they weren’t low.

I prefer to buy big dollar items like couches and tables second hand. My queen size box spring and mattress came from Goodwill and cost me only $12! I have heard of people spending as much as one thousand dollars on a bed. I just cannot imagine. I’d make my own mattress before I’d pay that kind of money.

Our dining room table set is a very nice quality, real wood table. It’s the kind that has a leaf in the middle which is attached and folds in half sideways when you tuck it under the table. I found it at a yard sale. The lady told me I HAD to take the chairs and she’d let me have it for $25. It needs to have the top sanded and revarnished, but with a table cloth on top, no one knows.

My youngest sister got into credit cards a couple of years ago. She is very foolish with credit cards. When she gets a new card she has actually gone on shopping sprees with the “free” money. After a while the payments became daunting and she signed up with a credit counseling company. My mom asked me which company my sister should use, but I kept forgetting to look into it for her, and finally my sister just chose a company. I had warned them both to make sure the company was not a scam. As it turns out, the first payment she sent to them was lost and she ended up with late fees on her credit cards, due to the credit counseling company.

When I signed up with consumer credit counseling, I also signed an agreement to not open any more credit accounts until I was finished paying for my debt.

My sister has already applied for more credit cards and is going into debt with these cards.

My mother, on the other hand, has no credit at all. I think it’s important to have a credit rating. My mother is in a position where she could not apply for a loan or credit card, due to the lack of credit rating. And she doesn’t have enough money to buy high dollar items out of pocket either.

I have another sister whose phone is in my name due to her bad credit. The bill is charged to one of my credit cards and I float her payments for several months at a time (she regularly insists she has the money, but keeps forgetting to get the money deposited into my account). In the beginning she was responsible for making the payments, but when she kept making late payments, I finally insisted on having the payment automatically withdrawn from my account. She was not happy about this; she felt it took the responsibility for making the payment on time away from her. Well, I was not happy that my credit rating was being affected by her late payments, so I set up the automatic payment. She had two phones in my name, and she recently got her land line phone into her own name. She promises to get the cell phone in her name soon. Initially she couldn’t get a phone in her name because she and her ex-husband had a cell phone about fifteen years ago when it was even more expensive than it is now, and ran up the bill to nearly $1000. About a year ago I co-signed for her again, for dental work for her son. That payment is taken automatically from her checking account. She is gaining some credit rating by making that payment on time.

She is trying to build her credit so she can eventually buy her own home. Although now I am now having serious doubts about buying a home since Millionaire Mommy Next Door’s series on renting vs. owning.

My husband has not used credit cards in twenty years, and we recently applied for an offer that came through the mail for him and he was denied because nothing is on record for him at the credit bureaus. I would like for him to use a credit card to purchase gasoline, since it is something we have to purchase and then we will make the payment in full.

Apparently we will have to build credit for him as I started building it for myself 23 years ago. I put $500 in a savings account, and my bank gave me a loan of $500 with that money in savings as secured funds. I made monthly payments until the loan was paid off.

I had hoped some of my good credit rating would rub off on my hubby, not the other way around… I don’t know yet if our getting married has affected my credit. I am hoping it hasn’t affected it at all, especially since I am trying work up my nerve to move our credit card debt over to a 0% interest card.

My commitment today: I will transfer our credit cards into one 0% interest card within the next 30 days.

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