Credit Card Payments

[maicoman]

What happens when you stop or only send in a very small payment to your credit card company's? I know you won't be able to use them any more and your credit rating wont be to good. So you pay with cash. Your credit rating will be the same as the million other people.It looks to me that only the people that cant make payments on mortgages, credit cards are going to get any help.

[marc]

From what I can see a lot of people bit off more than they could chew...My fathers philosophy was that if you can't pay cash don't buy it...Except for a house...He would buy a used car if he could not afford a new one...I'm glad I have followed his philosophy...

Seriously, try to make some kind of payment which shows good faith...You may want to call them too...

[HIPPO]

Credit ratings are used for lots of things, insurance, jobs, you name it.
If you can, make at least the minimum payments to avoid default rates.
If you can, pay them off in full and don't use them for anything other then what gets paid of in full every cycle.

[Jeffd]

hippo, is right makes a big difference on most insurance to have a credit rating of over 800.

[MrClean]

only the people that cant make payments on mortgages, credit cards are going to get any help.

Not sure about the last part of that statement.

Call them.  Better than just disappearing.  My work is seasonal.  When I get laid off for the winter I make a few calls and get most of my payments lowered.  The Hospital, clinic and one credit card.

[HDRDR]

The interest rate will go through the roof to boot, and you just get further behind...pay the minimum and nothing will happen to your credit or interest rate on the card.

[Phu Cat]

Marc's on the right page.  If you don't have the money to pay for a muffler bearing today, odds are you aren't going to have the money to pay for it tomorrow either.  Much of society has been programmed to accept the need for immediate gratification as normal.  It's good marketing on the sellers part, but poor money management on the buyers part.

PC

[tireater]

A couple months ago Chase lowered my available balances to what I owed...
They just sent me a notice that int is going to 13%...
I will be closing those cards to save my 7% rate on them...

[CraigArizona85248]

A couple months ago Chase lowered my available balances to what I owed...
They just sent me a notice that int is going to 13%...
I will be closing those cards to save my 7% rate on them...

Smart move!  I think a lot of people don't realize they can't change your credit card agreement (interest rate, grace period, etc.) unless you agree to it.  You signify your agreement by keeping your account open.  If you don't want to pay the higher rate, close the account before the deadline in the change notice that came in your bill.  Once the account is closed you can pay it off at the previously agreed to rate.

Better yet, as the others have said, don't buy optional items on credit.  Save your money and pay cash.  Give instant gratification the middle finger.  A big part of the troubles we are seeing today (not all of it) is caused by consumers over extending their credit to the point where they can't pay.

-Craig

[Six Blues]

If you can't make the minimum payment, you should call them before your payment is due and explain your situation and try to work out a payment schedule you can live with. Don't just stop paying or send in a partial minimum payment without first talking with them.

[Dakota]

A couple months ago Chase lowered my available balances to what I owed...
They just sent me a notice that int is going to 13%...
I will be closing those cards to save my 7% rate on them...

  I've been told by a couple different accountants that if you don't want to use a credit card anymore, just quit using it but don't cancel it.  I guess somehow if you close it, it affects your credit rating-for the worse. 
   I was raised that if I borrowed money then I paid it back.  So not paying is not an option, but I understand how it might be hard to keep up with bills if you've lost your job right now.  But if that's the case call the lender and explain-I think most would work with you.   Part of my thinking that if you borrow it you promised to pay it back, is that I've been on the non-receiving end of bankruptcies and it's no fun when someone doesn't pay you what they owe you and legally doesn't have to.

[hdpegscraper]

Canceling even payed off credit cards isnt a good idea, and hurts your credit rating... You have "X" amount of credit, and if you cancel a card, you lower it, and that says to credit people that you are only responsible for the lower amount. And they read that, as being more of a risk and lower your credit score. If you feel you must cancel a card, alwys do the newest one. As the payment history on the cards is also a big part of the credit rating.   

[Dennis The Menace]

As has been said, keep an account open rather than close, unless you really dont want it or need to have it longterm.  BUT, just because you have an unused account doesnt mean you can forget about it.  Check your credit report often and look at the monthly statement for the account.  Identify theft is on the rise even more now, and you want to always keep track of your accounts.  Even those that you use.

Sorry, off topic a bit, but very relevant to keeping that hard earned credit rating.

menace

[Phu Cat]

hdpegscraper,  I cosigned a loan for my daughter a couple years ago.  She's been on time with all her payments.  Does my cosigning lower my credit score?

PC 

[HIPPO]

A couple months ago Chase lowered my available balances to what I owed...
They just sent me a notice that int is going to 13%...
I will be closing those cards to save my 7% rate on them...

  I've been told by a couple different accountants that if you don't want to use a credit card anymore, just quit using it but don't cancel it.  I guess somehow if you close it, it affects your credit rating-for the worse. 

If you have old credit cards (had them for many years) that have high lines of credit, they are very favorable for your rating and you want to keep them. If you never use them they will likely cancel them now with the bank troubles. You want to make sure to keep them active. Charge a tank of gas ot other trivial expense every month and pay it off. Keeps it active and makes the credit utilization ratio (one  factor for scoring) looking good.
Interest rates are irrelevant if you pay them off every cycle, and many of the cards save you a few $$$ with cash rebates.

[autoworker]

I dumped my Bank Of America card.It used to be MBNA and never a problem with them and I had it over 10yrs.Now BOA.....thieving bastards tried to make my payments late by taking their time processing them.I have an excellent score despite canceling.Don't carry a balance and if you have one concentrate on paying it off.It's hard to get ahead owing banks money.

[98roadking]

Another option is go to your bank or credit union and get a loan to pay off the card. It will usually be at a lower interest rate and monthly payment. Paying it off on time will help your credit. Just don't keep using the card until you pay off the loan.

[Scooterfish]

I may be reading to much into your statement, but if you are thinking of just stopping payments in  order to maybe get some Gov`t help or write down the pain will be more and last longer than any small credit or  help.

[tireater]

I just closed 2 of my cards due to int. rate hikes...5.74% to 13%...and 8% to 13%...So my question is...
If I lose my other 2 cards...I will have no credit as I have no bank loans...Is it bad to have bad credit if you have no credit...?
If I have no accounts open...What can they do if I just don't pay them...? I don't think they could even serve me in a lawsuit...

[apes]

I had a credit check report a while back and it came back at 820.  I have no bills at all other than the month to month utilities and Mortgage.  I pay everything off as the bill comes in.  As others have mentioned, I keep the Bling to a minimum, if I can't pay it off by the end of the billing cycle I don't buy it, drive POS cars, etc  I went to my bank to ask why I couldn't get my score any higher and they said it was because I had poor credit history ( making payments ) and as a suggestion they said ( as mentioned), I got another credit card and I just put a single tank of gas on it every month and make a payment.  There is just too much riding on credit reports these days, insurance premiums, possible employment, etc...to let it get the best of you....Of course I don't do much to boost the American economy because I do not buy things I do not need. I am the sole occupant of my castle so I do not have the responsibilities or pressures that accompany supporting a family.

[Jim Bronson]

If you cancel cards, it looks like you are using a credit rescue agency. These agencies usually pay off and cancel outstanding cards and consolidate the payments with a lower interest rate and leave you with one card with a low limit.

Bad credit is worse than no credit. It isn't hard to establish credit with a low limit credit card with a bank account deposit that can cover the balance. Once you accumulate a good payment history, the bank will release the deposit. But it's hard to repair bad credit, and it takes a long time, and you can expect much higher rates if you have a lot of blemishes on your report. It can also affect your insurance rates and employability.

Just not paying is the worst thing you can do. The bank will eventually sell the receivable to a collection agency at a discount, and they will hound you until you pay, garnish your wages (depending on the state). etc. Collection agencies are very aggressive (to use a nice word). It would be unlikely that the bank would sue unless the balance is very high. If you just can't pay the minimum, save yourself a big headache and just call the card company and work something out.

[Tsani]

I am working class. I don't come anywhere near the new definition of middle class. I have no credit card debt now. My mortgage is one weekly paycheck of the job I use to have and always has been. I pay my bills. Always did. But this economy is going to run me over. Whats going to kill me is the cost of sending my daughter to college. If you want to educate your children it's down right criminal what they shove down your throat. The average kid doesn't stand a chance. You have a better chance of getting an education in this country if you are a foreiner, prisoner or drug user. And when did it become my patiotic duty to bail out the economy and the fatcats that screwed it up? If you want a bailout ya better be a fatcat on wallstreet cause that's the only way that will happen. Work on paying your cards down. It won't be easy. Then watch how you use em. Funny thing, the worse my credit was, the more card offers I got. Ya throw a steak in front of a starving dog and most times he will eat. I am glad I didn't take em. You can't do anything without credit and a good rating. I was raised to believe cash was king, but it ain't so. Rude awaking when I had a family and needed things that go along with it. Good luck.

[hdpegscraper]

  Phu Cat,    Im not smart enuf to answer your question. Although, I dont think it would hurt yours unless she missed a payment.

[PoorUB]

 If you have old credit cards (had them for many years) that have high lines of credit, they are very favorable for your rating and you want to keep them. If you never use them they will likely cancel them now with the bank troubles. You want to make sure to keep them active. Charge a tank of gas ot other trivial expense every month and pay it off. Keeps it active and makes the credit utilization ratio (one  factor for scoring) looking good.
Interest rates are irrelevant if you pay them off every cycle, and many of the cards save you a few $$$ with cash rebates.

Correct! I refinanced my house a few years back. The bank noticed I have quite a few credit cards from differant retailers, plus a couple CC companies. I use only one of the CC companies and cut up the others when they send me new cards. I mentioned closing the accounts to the banker and was told that it was a bad idea. It looked very favorable on my credit report to have all that available credit, with zero balance. If you can control it, more is better. If not, use cash!!

[wayzalot]

I am a little confused with credit rating.  My house is paid for.  My car is paid for.  My harley is paid for. I have one credit card and pay the balance every month.  My insurance company said I had a low credit rating.  When inquired why they said we had too many accounts. Inactive penny's sears etc cards and our bank had changed hands (names a few times) and the fact that we did not have a gas card. ?   OL  check into it and clean it up. Got rid of the cards we had in the drawer.  Dont just assume you have a high credit score I guess.  Go figure. 

[PoorUB]

I am a little confused with credit rating.  My house is paid for.  My car is paid for.  My harley is paid for. I have one credit card and pay the balance every month.  My insurance company said I had a low credit rating. 

It can go the other way if you do not use your "credit" too. I have a friend with poor credit, that could buy and sell me many times over. He pays cash for everything so he has a low rating. You need to exercise your credit once in a while to keep it current. Next time you buy a car, even if you can afford to pay cash, borrow the money.

[adayrider]

Correct! I refinanced my house a few years back. The bank noticed I have quite a few credit cards from differant retailers, plus a couple CC companies. I use only one of the CC companies and cut up the others when they send me new cards. I mentioned closing the accounts to the banker and was told that it was a bad idea. It looked very favorable on my credit report to have all that available credit, with zero balance. If you can control it, more is better. If not, use cash!!
[/quote]





Asking a Banker about finacial (credit) advice is like asking a dealer if he thinks you need a new bike. HE makes his living loaning money what do you think he's going to tell you. 
No offense but that is not very smart. Just like asking my dog if he is hungry as I hold a new york strip just above his head.
Yeah right finance a car even if you have the cash. Let me get this straight he wants you to take out a loan at 6-8-10-12-18% interest as the value of the car goes down the drain And then put your money in a savings account at 3%. I wonder who is making out on this one. LOL Do what you like but this is a stupid move. This one of the reasons this country is in the mess it is in. People actually listen to this crap.