Hi tcmtech... That younger person living in a $500,000 house has no clue it does not belong to him. Belongs to the mortgager, but hey! he lives in full luxury, comfort, all the toys and pleasures. Too many people living the 'American dream' = feeding bankers.
Too many saying "I bought a home" actually bought a debt.

That's how I look at it. When I heard what the house loan was and for how long it didn't take me 5 minutes to figure out he is screwed for the next 40 years.

"But it only $2000 a month for 40 years!" Um... yea. Late 20's wife and kids and everyone under a loan that won't end until he is in his 60's. WTF and then some.

I wouldn't have taken on a $2000 a month loan even when I was in the oilfields making 3+X that on take home simply due to the real life chance that a guy will never make it the full 40 years and never be out of a job or worse for more than a few months.

I know when I was married my Ex was pushing me to take out a big loan so that I could build her the dream house she always wanted. I told her, sure! No problem but you're signing for half the responsibility regardless of whether we are married or divorced for the run of the loan. She wouldn't do it and ~2 years later she was out of here anyway which saved me a load of money on living costs and I didn't have huge loan over my head to deal with anyway either.

 

Or, if you do pay by plastic, pay it off in total each and every month. The goal shouldn't be to just pay off the statement balance, but to have a zero statement balance by checking the outstanding balance a few days before the statement closing date and then making a payment that pays that, plus whatever you expect to charge before the closing date, right then.

But, whether you do this or use a debit card or even use checks (although those days are almost gone), you need to be aware of the natural tendency to be willing to pay more for something when you aren't paying with physical cash. Perhaps the best way to avoid this is to write out a detailed budget every month and then carefully track your spending against it. Another way is to plan out an overall budget and pay ahead to your credit card. Then if you have a balance owed at the end of the month you know you overspent and need to adjust next month.

The guy is in Romania. Credit cards, even know the well known Visa cards work much differently in most of the rest of the world. They are either like debit cards or they are paid off each month. They are not a credit vehicle but a simplified payment vehicle.

 

Or, if you do pay by plastic, pay it off in total each and every month. The goal shouldn't be to just pay off the statement balance, but to have a zero statement balance by checking the outstanding balance a few days before the statement closing date and then making a payment that pays that, plus whatever you expect to charge before the closing date, right then.

Actually now most credit card companies will dock you credit score points for paying off too much at once or even for not carrying enough of a balance is your credit limit is too high. Or at least I have yet to not have that done to me.

I have a capital one card, with a higher than I care for limit, that if I don't carry a $1000 - $1500 average on it I start losing 3 - 5 points a month and if I pay off more than ~1/4 of it in any month I get hit for another 10 - 25 points depending on how much over that ~1/4 level I take off it. As long as I stay above that ~$1000 balance I keep gaining 2 - 3 points a month.

 

Actually now most credit card companies will dock you credit score points for paying off too much at once or even for not carrying enough of a balance is your credit limit is too high. Or at least I have yet to not have that done to me.

Well, I must be using the wrong credit cards, because I have five active accounts and my FICO scores have always been the highest (typically in the 860 to 870 range) the month after I get all of my accounts zero balanced. In those months that I have a balance, no matter how small, I usually lose ten points or so, but that goes away soon after I get them all zero balanced again.

Even I ever do find that paying off a card in full and/or carrying a negative balance lowers my score, that account will get closed immediately. No matter how little they think they need my business, I need to do business with them even less. One thing I sure as hell am not going to do is carry a balance and pay interest on it just for the sake of a few extra points on my credit score. I've paid perhaps $20 in interest/fees on credit cards in the last 20+ years and I'm not gonna start doing it now.

 

The guy is in Romania. Credit cards, even know the well known Visa cards work much differently in most of the rest of the world. They are either like debit cards or they are paid off each month. They are not a credit vehicle but a simplified payment vehicle.

Which is the way they should be. But in that case he needs to check carefully to see under what conditions he has to pay fees/interest. He should not use any card in any manner that results in him paying a dime of either. That would include using it at places that charge more if a purchase is made by credit/debit card. Most places don't do this because they realize that the additional sales usually more than covers the merchant fees, particularly when spread out across all sales.

 

Which is the way they should be. But in that case he needs to check carefully to see under what conditions he has to pay fees/interest. He should not use any card in any manner that results in him paying a dime of either. That would include using it at places that charge more if a purchase is made by credit/debit card. Most places don't do this because they realize that the additional sales usually more than covers the merchant fees, particularly when spread out across all sales.

This feels way outside of the OP's question. You should stay on topic.

Why do some people to have money and others have no money?

 

my FICO scores have always been the highest (typically in the 860 to 870 range) the month after I get all of my accounts zero balanced

That's an outstanding score; considering the highest possible score is 850.

 

That's an outstanding score; considering the highest possible score is 850.

Yea. My score chart stops at 850 too.

 

That's an outstanding score; considering the highest possible score is 850.

Shhhhh. Don't tell that to Equifax!



It used to be 850, although the three main credit bureaus actually each had a different max, ranging from 830 to 850.

Now the max is 950 from some places (and still called a FICO score). It is 900 from Equifax and still 850 from Transunion.

 

He's a standup guy, I'm sure he'll step forward and admit he was making up the story.

Yep. I conned Equifax into making up a FICO score greater than 850 just so that I could make up a story for your benefit.

So go get Equifax to recant their score.

 

This feels way outside of the OP's question. You should stay on topic.

How is recommending that the TS avoid paying interest and fees on credit/debit card purchases not on topic of the TS's quest to do better at getting more money.

It is clear that you are going out of your way to go to other threads for the sole purpose of trolling me because you somehow got your feelings hurt in another thread. I thought you had gotten over going out of your way to troll me, but apparently not.

Here's a suggestion for you: Stop acting like a spoiled brat and grow up.

 

Why do some people to have money and others have no money?

Now I got to read the book:
https://en.wikipedia.org/wiki/The_Intelligent_Investor
The Intelligent Investor by Benjamin Graham.


Do you think a book can help you get out of poverty?
Or people with money talk about this book, just to hide their real business?

The book says that this success does not depend on school grades, maybe neither on the IQ: It would be a good chance for me ....

I read a part of this book, but my ability to earn money has not improved at all .......

Here's the best dissertation on the topic, by far. Read and do.

http://paulgraham.com/wealth.html

 

How is recommending that the TS avoid paying interest and fees on credit/debit card purchases not on topic of the TS's quest to do better at getting more money.

It is clear that you are going out of your way to go to other threads for the sole purpose of trolling me because you somehow got your feelings hurt in another thread. I thought you had gotten over going out of your way to troll me, but apparently not.

Here's a suggestion for you: Stop acting like a spoiled brat and grow up.

WBahn, some poor guy from Romania asks about investing (did you read the Wikipedia links from his only post?). You insist on talking about credit card usage and the US credit score system. Yes, spending and credit expenses do play a role in financial success BUT HE IS NOT ASKING ABOUT CREDIT CARDS.

But, if you cannot help yourself but keep blurting out how the US credit reporting system works, please continue. I am just surprised and still laughing that you believe you are on topic.

Sincerely,

Spoiled Brat.

 

WBahn, some poor guy from Romania asks about investing (did you read the Wikipedia links from his only post?). You insist on talking about credit card usage and the US credit score system. Yes, spending and credit expenses do play a role in financial success BUT HE IS NOT ASKING ABOUT CREDIT CARDS.

But, if you cannot help yourself but keep blurting out how the US credit reporting system works, please continue. I am just surprised and still laughing that you believe you are on topic.

Sincerely,

Spoiled Brat.

I love it. I respond to a YOUR post saying how, if I'm a stand up guy, I'll tell you that I made up my credit score (and making that post was apparently on topic in your view). Then when I show you my credit score, now not only am I not supposed to have responded to your request for a response, but you (being the stand up guy that we all know you are) delete your post instead of admitting that you were off base. But that just pretty well confirms the spoiled brat status that you've at least acknowledged, as well as the fact that you are, once again, just going out of your way to troll me. So congratulations on succeeding on one of your many recent attempts at that, and that's the last I'm going to say on the matter.

 

Actually now most credit card companies will dock you credit score points for paying off too much at once or even for not carrying enough of a balance is your credit limit is too high.

Credit card companies will cancel cards if they don't think you use them enough or lower your credit limit if you don't utilize enough of it. I've had companies do both. They can report derogatory or complementary credit behavior, but it's the credit bureaus that grade you.

Cancelling cards or lowering limits lowers your available credit, which could change your score up or down depending on how it affects percent utilization and potential debt .

We have unreliable mail delivery (our carrier is a contractor and the postmaster is incompetent) and had some bills lost. Some creditors will make attempts to contact you if it's unusual for you to have a late payment. Others (like Costco) won't. One 30 day past due cost me 100 points. Costco wouldn't take into consideration that we had never had a late payment for the 20 years prior and wouldn't work with us. Now we have one 30 day past due on our 40 year credit history. It took a year to recover from the score drop, but the bad mark is still there. Now we only use our Costco card for entry.

One credit bureau dropped a few of my closed/cancelled accounts and docked me some points because I no longer had their "good" number of opened+closed accounts. It just isn't worth my time to correct their data. If I was in the market for loans or shopping credit card rates, I might think differently.

 

How is recommending that the TS avoid paying interest and fees on credit/debit card purchases not on topic of the TS's quest to do better at getting more money.

That rather how most people see it as well. I think most people who are financially responsible look at becoming financially responsible and financially well off in life as something that takes way more work and focus than just following what one or even a few books say.

It's an all life encompassing mindset of making an active effort to keep track of all financial and personal responsibility aspects of one life and setting standards towards what limits need to apply to every individual case or area of ones life.
Then beyond that putting an active effort into looking for, and if need be, implementing personal adjustments or life changes to keep things within ones defined limits under all reasonable life operations by either adding to one personal resources to cut down on certain life operating costs or changing one lifestyle to reduce operational overhead.

I for one have built boiler systems for heating my home and workshop and thusly have cut about $3000 (or more) a year off my winter heating costs. Multiply that out with inflation over the last 16 years and that a savings of around $50,000!

Beyond that, years ago I started converting my my daily driver pickups to on propane which costs on average 1/2 - 1/3 as much per mile to drive on which over the last near 15 years has cut a good $20,000 more off my life operating expenses over the years.

And from the money those things have I put a lot of it int buying older used equipment and machinery that I fixed up and either still have and use regularly or sold for profit so that now I have enough personal equipment that I can do any work I need to around home and for friends and family for next to nothing when compared to hiring contractors to do it.
Something that over the years has not only saved me and others likely $100's of thousands of dollars but also now brings me in enough residual income to live well within my life standards with and still be moving forward in life.

That's what I see in the expansion on the replies to the OP regarding financial and general life choice decision making in other areas is about and well fitting advice to anyone who is looking to find a way to live in a more economically conservative and self suficient fashion.

 

Credit card companies will cancel cards if they don't think you use them enough or lower your credit limit if you don't utilize enough of it. I've had companies do both. They can report derogatory or complementary credit behavior, but it's the credit bureaus that grade you.

Cancelling cards or lowering limits lowers your available credit, which could change your score up or down depending on how it affects percent utilization and potential debt .

We have unreliable mail delivery (our carrier is a contractor and the postmaster is incompetent) and had some bills lost. Some creditors will make attempts to contact you if it's unusual for you to have a late payment. Others (like Costco) won't. One 30 day past due cost me 100 points. Costco wouldn't take into consideration that we had never had a late payment for the 20 years prior and wouldn't work with us. Now we have one 30 day past due on our 40 year credit history. It took a year to recover from the score drop, but the bad mark is still there. Now we only use our Costco card for entry.

One credit bureau dropped a few of my closed/cancelled accounts and docked me some points because I no longer had their "good" number of opened+closed accounts. It just isn't worth my time to correct their data. If I was in the market for loans or shopping credit card rates, I might think differently.

Underutilization of credit has been my #1 issue all my life. I just don't care for using credit cards (or loans) but I am at the point in life I am comfortable with having and using them now as a sort of cheap safety net for above and beyond normal emergency or 'too good to pass up deal of the moment' type events.

I've never been comfortable with pulling several thousand dollars out of emergency funds just to buy a piece of machinery or heavy equipment or a bunch of smaller items at a auction or the like when I do come across a buy that's too good to pass up (moderate up front investment for a hugely better long term payback type purchases) but being able to toss that stuff on a credit card and pay it off over a few months is trivial because it doesn't cut into my day to day cash outlay deep enough to matter when spread out over a longer time frame.

 

I've never been comfortable with pulling several thousand dollars out of emergency funds just to buy a piece of machinery or heavy equipment or a bunch of smaller items at a auction or the like when I do come across a buy that's too good to pass up (moderate up front investment for a hugely better long term payback type purchases) but being able to toss that stuff on a credit card and pay it off over a few months is trivial because it doesn't cut into my day to day cash outlay deep enough to matter when spread out over a longer time frame.

My Wife writes the checks to pay the bills. That was her responsibility when I worked and continues now that I'm retired.

I can't convince her that it doesn't make much financial sense to carry a credit card balance with an interest rate in the teens when we have money in savings to pay it off and the interest we receive on savings is insignificant. I keep suggesting it but, in the interests of domestic tranquility, I don't make demands; it's not worth the few dollars we'd save interest and the few points that it would add to our credit score.

I use credit cards whenever I can so the issuers won't cancel them. I wouldn't revolve them, but that's not a battle I choose to engage in; it's just not worth it to me. It makes her feel better to see balances in accounts that she controls and I'll make that concession.

 

It used to be 850, although the three main credit bureaus actually each had a different max, ranging from 830 to 850.

Now the max is 950 from some places (and still called a FICO score). It is 900 from Equifax and still 850 from Transunion.

Learned something new, but I think that's dumb. Now we have to start asking if it's 850 out of 850 or 850 out of 950; that's just great...

 

Credit card companies will cancel cards if they don't think you use them enough or lower your credit limit if you don't utilize enough of it. I've had companies do both. They can report derogatory or complementary credit behavior, but it's the credit bureaus that grade you.

I've never had credit limits lowered, though I know the can and do do it. I have had several cards canceled for non use back when they first started doing that. My total revolving credit limit dropped from somewhere north of $150,000 to about a third of that. But since I was completely debt free by then I was only using the one or two of the eight or nine cards I had and only charging about $2000 a month, I didn't care. A couple years earlier I paid of my house using balance transfers onto my credit cards, saving a little over $800 in interest in the process. But it also put me at significant risk because if I hadn't gotten them paid off before the teaser rates expired I would have gotten quickly reamed -- but I saw that as Cortez-style motivation and it worked.

@Motanache : Hopefully you are getting a sense that one of the greatest wealth building tools is your income (that's a favorite catch phrase of Dave Ramsey), so don't dilute it by paying interest on anything. You might check out Dave's website or see if you can find his original book, The Total Money Makeover. You can find his Baby Steps on his website. They work. They are similar to the ad-hoc approach I took when I first went down the debt-free road. I don't agree with Dave on a couple of points, particularly have to do with Roth IRAs, but those are U.S. issues and I have no idea what similar tax/investment options you might face. Dave's Baby Steps are not mathematically optimal, and he admits this, but they are very arguably more effective for most people because they contain elements more likely to keep you on track.

How old are you? What kind of annual income (in whatever denomination you like) do you think you could live on. Keep in pretty basic. The initial idea is to set yourself up so that you can survive without working. Once you reach that point then you can focus on securing an income that let's you thrive instead of just survive?