Sgt.Sausage wrote:
- quote -

Creatively quoting Chris hopefully will not change readers
interpretation of his intent.

- quote -

Chris was not speaking to the average American, but to judicious use of
credit. Why aren't you?

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The same can be said for individuals. I have a mortgage and I invest
potential extra principal payments. I had a car payment, ditto. You
can do the same with margin accounts or rental property.

You're pretty fiesty today. Did Santa leave coal in your stocking?

-Will

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:c10bf$459b4826$42a1e606$18347[at]FUSE.NET...

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And this has what to do with the topic? You mean using credit cards to pay
for a meal at McDonalds? I do it all the time, and pay it off at the end of
the month. So what? Do you assume that everyone who buys consumer products
with a credit card is wallowing in outrageous debt, a bankruptcy waiting to
happen?

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And I do not condone that. My statements refer to individuals with debt
that IS a reasonable proportion of their predictable income. If you think a
reasonable proportion is and always will be zero, we never will agree.
Please be clear on that point so I can avoid the argument.

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I, personally, feel rather secure. My wife and I both hold salaried
positions in separate large healthcare organizations. I've survived 3
rounds of layoffs over the past several decades. We easily could work for
the same employer but make a point of not doing that, purely to mitigate
risk to our family income. There is risk in employment, just as there is
risk in investment. You have to manage it.

- quote -

Again, you describe what you believe is how Average Joe American handles
his money. I have no idea what you consider average, nor do we have to
agree that they handle it correctly or not. My statements apply to people
to DO manage debt with intelligence and balance.

- quote -

Again, 'average American'. Again, I'm not opining about whether an Average
American handles debt properly. Only that debt, handled properly, is not
evil and can be advantageous.

- quote -

Individuals use debt to help with cash flow. If it's beneficial for me to
have a tax-deductible mortgage on a home that reasonable advisers agree is
within my means, and I invest the cash that I would otherwise have to have
paid to buy the house outright, I'm financing "consumption" (housing) by
your definition, why would I not do that? Is debt to be avoided at all
costs, including reducing my future net worth? That doesn't make sense.
--
Chris Cowles
Gainesville, FL

"Chris Cowles" <spam_magnet[at]remove-me-bellsouth.net> wrote in message
news:SS1ih.2252$%e7.1378[at]bignews2.bellsouth.net...
- quote -

Not likely. I see folks "supersizing it" with the McBurger and McFries
at the local McDriveThru. Hardly lasts 10 minutes.

- quote -

Not likely. Average income? What ... on the order of $40K?
Average CC debt? On the order of $9K. Do the math. That
ain't "reasonable" by anyone's definition.


- quote -

Maybe ... but increasingly rare.

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Not on your life. Average Joe American doesn't have plans
for what he'll make for dinner, let alone what he'll do for
debt management.

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Judicious and credit card debt just don't match up with
the average American.

- quote -

No. The same can't be said for individuals.

Businesses finance *production*.
Individuals finance *consumption*.

See the difference?

We use 2-3 credit cards for almost all our expenses (from a stick of
gum to large remodelling projects, as well as monthly bills), and pay
off the balance on those cards completely (so never pay interest on
them). I find them very convenient. So I just transfer a credit
balance that lasts a month or two to my main cards.

These are rewards cards so, I get another 1-5% returned based on what
I purchase.

--Ram

Elizabeth Richardson <erichktn[at]worldnet.att.net> wrote:

- quote -

"Elizabeth Richardson" wrote:

- quote -

Some banks (Citibank and Chase are two of them) will send a check directly
to you. Others send out blank checks with the BT offer (not the same thing
as the cash advance checks).

"Chris Cowles" <spam_magnet[at]remove-me-bellsouth.net> wrote in message
news:MN1ih.2250$%e7.2115[at]bignews2.bellsouth.net...

- quote -

I don't want to live in Alaska, but come to think of it, it might be a good
idea to bury them there. Then, if I wanted to use one impulsively I would
have to travel to Alaska to get it.

"Ram Samudrala" <ram[at]sp1.compbio.washington.edu> wrote in message
news:emaasu$pk1$1[at]gnus01.u.washington.edu...

- quote -

Just an observation. I get less than one offer per month and never open the
envelope. How do you do a balance transfer if you don't carry a balance?

Elizabeth Richardson

- quote -

It has been mentioned before, but credit rating is used more than to
get debt/loans.

I have had credit reports pulled:

1) when getting a government security clearence
2) prior to employment
3) prior to purchasing life insurance/ switching insurance agents

<BreadWithSpam[at]fractious.net> wrote in message
news:yobwt4oawyg.fsf[at]panix1.panix.com...
- quote -

Judicious use of debt is a good way to improve your standard of living
through leverage. Businesses that finance projects through debt gain by
maximizing return on investment, assuming the cash flow of the investment
supports the debt. The same can be said for individuals, as long as (in my
opinion) the debt is for assets that outlast the debt, it's a reasonable
proportion of their wealth, their income is predictable, and they have
plans to manage the debt should their income change.

Note that the first word in my reply is "judicious".
--
Chris Cowles
Gainesville, FL

On the other hand, there is something about using other people's money
to work for you. I'm not money oriented or anything, but let's say you
get a $20,000 card, with a 0% balance transfer offer for two years,
without a transfer fee (or a maximum transfer fee of $75, though the
cards have started increasing this now). I take this offer, set up
automatic payments, keep a tab on when it needs to be paid off, and
then transfer it to a savings account which gives me 5% interest.
That's $2000 extra dollars for two years for what I consider close to
zero effort (and I'm a busy person). In today's climate, depending on
your income and credit score, you can easily go ten times that
amount. I can tell you that I get more offers in a given week than I
have time to deal with.

Now you would argue that's a recipe for disaster for most people in
the sense that they'd misuse the $20,000 (or x10 that number). I can
understand that point (in the sense that people misuse/abuse
alcohol/drugs, gamble too much, etc.). So it's a question of
discipline and self-control. There's also a risk factor (in the sense
you miss a payment and they jack the interest rate to 35%), but again,
it's about keeping tabs and being able to pay off the balance in full
when necessary. But until then, you're making 5% interest from the
card companies (which is of course being paid for by people who don't
manage their credit wisely).

I think both options need to be presented, but also is a function of
the personality of the individual involved.

--Ram


"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> wrote:
- quote -


- quote -

"Don" <dwzimm[at]telus.net> wrote in message
news:0vYhh.90471$rv4.76391[at]edtnps90...
- quote -

Maybe it would be best to live in Alaska, and bury them in summer? You'd
have to wait for the ground to thaw if you wanted to use it impulsively in
winter.
--
Chris Cowles
Gainesville, FL

BRH <BRH[at]giganews.com> wrote:

- quote -

In my personal experience, depending on the length you've owned the
card, doing the first two would be a bad option--unless you've had
this account for only a few years. I normally don't cancel anymore and
just don't "validate" the card. The card (and account #) isn't usable
and it just stays on your report unused. Having held accounts for a
long time I've found this to be useful.

My credit scores (when manipulated, meaning I have these 0% VERY LARGE
"debts" that I'm getting 5.15% on per year in Emigrant Direct, which
go over the 50% limit, which lower my scores) can near 800 and hover
around 750 right now.

I monitor all scores from all three reports any time I want (I pay
$10/month for this, but this is something I can afford if you even
just consider my cash back cards) and also for identity theft. Having
a very unique name helps a lot in this regard I think. (Crossed
fingers.

The other viewpoint is that the whole credit score thing is a
sham--why play this game at all? You can choose not to and live
happily but I have chosen to (this is why the monitoring service
helps--but you need to be able pull up your CR anytime).

--Ram

"jIM" <noreplysoccer[at]hotmail.com> wrote in message
news:1166554162.360498.16380[at]80g2000cwy.googlegroups.com...

- quote -

Ice melts too fast if you put it under hot water. But you could put them in
a big jar of molasses and bury it in your back yard. Take your time digging
so it is down very deep. Deep enough so it would take hours to get to it,
and you still would need to get the molasses off.

jIM wrote:
- quote -

Seems there's a limit that makes any sense. As far as available credit
is concerned, the cheapest would be a home equity line. The objection is
that one's house is then at risk. What is the point for anyone to
accumulate CC available credit as high as one's annual income? Years
ago, when applying for a mortgage, I had a rejection based on "too much
available credit". I got the mortgage however. I had to go to the bank
with a number of the cards (all zero balance) cut in half along with a
letter of cancellation.

JOE

BRH wrote:
- quote -

I've heard of putting CC in water, then putting it in freezer,
preventing impulse purchases (you have to wait as long as it takes to
melt the ice before using card).

While I don't have any cards in my freezer, I have several cards
companies gave me, all safely stashed away. I believe my annual credit
card limit is well above my annual income.

use judiciously and you will be OK.

"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> writes:

- quote -

Most of us *are* in debt (ie. mortgage). A good credit
rating and credit score is important even if we are not
carrying "bad" debt (ie. consumer debt). Credit ratings
affect mortgage rates, they are reviewed often as due
diligence when folks are renting out property, they are
even reviewed. Insurance companies may review your credit
rating before offering you policies (ie. for your car).
Living within one's means, in modern society, one is still
substantially affected by one's credit rating and use of
credit.

That all said, to the OP - closing a credit card may
negatively affect your credit rating if doing so leaves
your use of other credit such that you are carrying a debt
which is a substantial proportion of your available credit.
Example - you have two credit cards, both with $20k limits.
One's got $18k balance and the other has no balance. You
are using 45% of your available credit - a lot (IMHO) but
if you close off that card which has no balance, you are
suddenly using 90% of your limit - which will probably
affect your score negatively.

If you have, say, *5* cards, four of which have no balance
and one card which does, closing down a couple of the balance
free cards probably won't affect you, so long as you have
plenty of available credit remaining on the cards you do keep
open.

Also, the longevity of a credit account helps - if you have
to credit accounts, one of which has been open and in good
standing for 10 years and one of which has only been open
for 1 year, both of which have zero balances - close the
new one, not the old one.

That all said, Skip's right that too many of us (probably
not a lot of us here on mif-p) buy consumer goods and
depreciating things on credit - "bad" debt. "bad" debt
is a way of life for lots of Americans - and that's
unfortunate. If you can't pay your credit card off at
the end of the month - ie. if you care about your credit
card's interest rate because you are going to be paying
that absurd rate! - you're spending too much. (exception,
of course, for emergency circumstances like job loss or
health crisis or the like).


References:
How credit rating affects your life:

<http://www.lendingtree.com/smartborr...affect-me.aspx
Closing credit cards:

<http://articles.moneycentral.msn.com...eIn5steps.aspx
<http://articles.moneycentral.msn.com...ringMyths.aspx
<http://www.thinkglink.com/Canceling_Credit_Cards.htm


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

Ernie Klein wrote:
- quote -

Thanks to all who responded to the original question. I decided to
renew the card at a much lowered credit limit, and have stashed it away
for limited usage.

Hi,
I will speak directly to the ?s you asked and leave my opinions of how
to live and spend aside.Those who told you that it would hurt to cancel
are right.I heard a very good talk on this last thur.by Michael
Ciavarini,of Mortgage Tree Lending.He also gave out a cd that has some
great info on it.He may send you one if you contact him,at
WWW.mtlhomes.net or 1-800-785-1685.Let us know what you did.dale
BRH wrote:
- quote -

"nospam" <nospam[at]atall.xatt.net> wrote in message
news:sZdhh.222564$Fi1.13555[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

I do the same thing, and just paid back > $20,000 borrowed without interest
for 1 year. The profits are in the MMF where I had stashed it. Those offers
aren't so common anymore, with interest rates a little higher.
--
Chris Cowles
Gainesville, FL

Balance Transfer. Those unsolicited teaser offers you get in the mail. Some
are 0 or very low interest, with 0 or low transfer fee, for an extended
duration. Take the money, park it in a CD with expiration lower than the
duration. Pay the minimum monthly, pay the balance back before the due date
by cashing in the CD, and pocket the profits.

If you set up automatic payments with the lending bank, it's automatic
money.
--
Chris Cowles
Gainesville, FL


"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:dBjhh.224040$Fi1.79412[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -