Credit Cards - any recommendations?

[dw316]

Yes.

For the sake of simplicity, you have two credit cards, both with $1,000 credit limits. On one card you have a zero balance, on the other you're carrying a balance of $500. Your debt to credit ratio is $500 to $2,000, or you're using 25% of your available credit.

You decide to cancel your card with no balance. You're debt to credit ratio is now $500 to $1,000, or 50% of your available credit. Your FICO score will adjust accordingly, downward.

Gotcha, I see. Crap, I was gonna cancel 2 of my old ones that I don't plan on using anymore. haha
This is all very educational you guys, thank you for explaining this stuff to me, btw!

 

[Skywalker(OG)Kush]

But for my past statements, I've been looking through them and they all show $0 int he interest on purchases and interest on transfers and fees categories since I paid each month in full on time. Does it get added somewhere else? My purchases listed seem to show the right amount after taxes and such.

Most cards accrue interest that way. American Express and other cards with annual fees sometimes don't. Does yours have an annual fee

 

[dw316]

Most cards accrue interest that way. American Express and other cards with annual fees sometimes don't. Does yours have an annual fee

I found out recently that it does, about $60. Maybe that's the reason? The ones I was considering have no annual fees.

 

[Skywalker(OG)Kush]

I found out recently that it does, about $60. Maybe that's the reason? The ones I was considering have no annual fees.

if it has no annual fees it will most likely accrue interest on a daily basis- Make sure you ask the cc company before choosing the card

 

[dw316]

if it has no annual fees it will most likely accrue interest on a daily basis- Make sure you ask the cc company before choosing the card

Cool, thanks for all the information! I'm still not quite sure if I should get one now after learning all this haha, but it's really informative and I'm glad to be on the know. What do you use to pay for online purchases where you don't have to worry about interest charges and hidden fees?

 

[Skywalker(OG)Kush]

Cool, thanks for all the information! I'm still not quite sure if I should get one now after learning all this haha, but it's really informative and I'm glad to be on the know. What do you use to pay for online purchases where you don't have to worry about interest charges and hidden fees?

I use paypal or my debit card

 

[The Ween]

I have quite a few cards but I never leave a balance. Unless you put everything on credit cards, cash back doesn't really pay you, but, IMO, I'd rather get a little back than none. I never do miles because I never fly anywhere.

I have an Amazon card, Best Buy, Target Red Card, Discover, Kroger, and Bank of America. All give me something. I really like store credit cards because they seem to give you the most incentives.

Whatever you do, DON'T pay to have a card, like some American Express cards. That's just downright stupid.

 

[MoMo]

Get an Amex card. Not the Amex Blue, like one that you have to pay off the whole balance every month.

Also Amex is very good with consumer protection. I once had an item that a retailer wouldn't take back even though it was defective. So I called Amex to dispute the charge and within 48 hours the retailer called me to set up a return for the item. When you realize the kind of service you're provided an annual fee doesn't seem so bad.

 

[Skywalker(OG)Kush]

Get an Amex card. Not the Amex Blue, like one that you have to pay off the whole balance every month.

Also Amex is very good with consumer protection. I once had an item that a retailer wouldn't take back even though it was defective. So I called Amex to dispute the charge and within 48 hours the retailer called me to set up a return for the item. When you realize the kind of service you're provided an annual fee doesn't seem so bad.

You got it!

Amex insures all of your purchases, if the product breaks, is defective, or your unhappy with the purchase they will give you your money back, even if the retailer wont help you. Charge backs are easier, and interest doesn't accrue on a daily basis.-payoff balance on monthly basis and you pay no interest. Obviously if you don't use the card very much then paying a fee isn't worth it, but these typically are the best cards to have as long as you plan on carrying no balance.

 

[DinoDB1975]

Technically, AMEX was originally a charge card, but they have since offered credit cards.

Had a AMEX Gold when I was younger and I loved it. I was paying $70 annually, if I recall correctly.

In addition to the consumer protection, I got concierge service and had access to ticket pre-sales. Also no predetermined purchase limit; of course, if you try to charge $10K in one setting, your transaction may be denied.

 

[dw316]

Okay, now I'm confused, because people are telling me as long as you pay your credit card bill in full every month, you don't pay any interest at all.

I'll look into AMEX, I've heard good things about them as well. I'll try to see how $0 annual rate ones are.

 

[Jeff12burq]

I have never heard of a credit card that you pay interest daily. Whatever you do, don't get one with a policy like that....if they even exist.

I have American Express. No annual membership fees and I receive 1% back on all purchases. Pay it off at the end of every month and mainly use it for online purchases. I've never paid a cent of interest in my life as far as credit cards go.

 

[The Ween]

Okay, now I'm confused, because people are telling me as long as you pay your credit card bill in full every month, you don't pay any interest at all.

I'll look into AMEX, I've heard good things about them as well. I'll try to see how $0 annual rate ones are.

If you pay your balance off every month, you shouldn't have a bit of interest. I never have. I'd stay away from cards that do, but then, I won't pay a yearly fee to have one either.

 

[Skywalker(OG)Kush]

I have never heard of a credit card that you pay interest daily. Whatever you do, don't get one with a policy like that....if they even exist.

lol most all credit card companies calculate interest that way... just google "how is credit card interest calculated".

"When you’re carrying a balance on your credit card, you probably focus most of your attention on your card’s APR, or annual percentage rate. Although that’s a decent way to figure out how much you’ll pay over time, it’s not the best.

Why? Because credit cards don’t add interest to your account annually as the name suggests – they actually charge interest every day.

This daily interest calculation is decided on using your cards DPR, or daily periodic rate. You can figure out your DPR by taking your APR and dividing it by the number of days in the year.

One caveat, though: Some banks divide by 365, while others divide by 360. Confused yet? We thought so.

Here’s an example that shows how it works:

Let’s say your credit card’s APR is 11%. Divide that number by 365, and you’ll discover that your daily periodic rate is 0.03%.

Here’s where things get even trickier. When credit card issuers charge interest using your DPR, they figure how much you owe using your average daily balance. This is because your credit card balance can vary widely throughout the month as you make partial payments or more purchases.

Here’s an example to illustrate how this works:

Let’s say you owe $500 on your credit card at the beginning of the month. Fifteen days after the new billing period begins, you charge another $500 on your card. Your card issuer determines your average daily balance for the month by multiplying each balance by the number of days you carried it, then combining them and dividing by the total number of days in the month:

($500 * 15 days) + ($1,000 * 15 days) = $22,500/30 days = $750

Using the daily periodic rate above, you’ll be charged $6.75 in credit card interest that month:

$750 * 0.0003 * 30 days = $6.75"

 

[Jeff12burq]

Thanks for the information.

Well the way I always understood it was whatever balance you have at the end of the month left on the card, the interest rate is charged to that amount and carries over to the next month. But like I said, I've never paid interest on anything. So, I'll try and keep it that way lol

I have a question...my monthly billing cycle ends on the 10th day of each month and the due date is always the 4th day of each month. So let's say I have $200 of charges and I wait to pay the bill on the 2nd day of the month versus paying it off the day of or a couple of days after receiving the bill, so that monthly credit reports reflect I have a balance and there has been activity, rather than having a Zero balance. Is that good for my credit score?

The reason that I ask is because I read it helps your credit score. Along with increasing your credit limit on occasion (2 years or so).

 

[Skywalker(OG)Kush]

The six factors that impact your credit score (from highest to lowest)

1)On time payments- perfect payment record, no late payments no defaults & paying off balances.

2)Oldest Crédit Line- the length of time you have had the credit card act in good standing (no defaults or late pmts). The longer the better, zero balances count so don't close accounts or lines of credit just don't use them

3)Credit utilization- total amount owed all credit cards +lines of credit/total available credit (all credit cards+lines of credit @ b&m stores). 0% is a perfect score.. the higher the percentage the worst your credit rating.

4) Recent Inquiries-refer to credit inquiries in the last two years. The more inquiries (attempts to go get credit) the lower your credit rating will be

5) New Accounts -From a lender’s perspective, opening too many new accounts in a short window of time points to possible credit problems. It’s important to establish consistent credit behavior for an excellent score.

6) Available Credit- exactly that, the sum of all your unused credit card & line of credit balances. The bigger the better.

 

[WWEJedi]

Don't get a credit card unless you can pay off what you spend in a month. Depending on the card, no interest would be charged (well... minimal interest of like $10, depends on what you spend) and you will stay out of potential debt.