Credit Card Application WTF



  • I have had a credit card with a $30K line of credit at Citi for 10 years - always paid in full and on-time. My FICO score is > 800. I paid my house off 10 years ago. I bought my car for cash. My credit history has been rock solid for 35 years. I have absolutely no debts whatsoever.

    I am an employee of Chase. Given what's going on at Citi, we decided that it might be prudent to get another credit card as a backup, so we apply at Chase, and get turned down - because we don't have enough open lines of credit. Wha..? On inquiring, Chase first blames Experian (the rejection letter explicitly states that Experian didn't make the decision; Chase did). We're told that because we don't have at least 5 credit cards, we can't get a second. I ask for a manager. You can't speak to a manager; you have to follow procedure (this is definitely a JP Morgan Chase drone) and write a letter. I push and get through to a manager.

    Then I inform them that I happen to be an employee of JP Morgan Chase. Oh, that's different. As an employee, they don't care about your credit report; you can just have credit.

    So, with the exact same credit report, I am both entitled AND not entitled to a credit card?

    I told them to shove their credit and that I'd just stay with Citi; given the $50B the government just gave them, it's unlikely they will be going away any time soon.

    God, my employer sucks!

     



  • @Laughing said:

    I have absolutely no debts whatsoever.

    There's your problem. They make money when you're in debt. If you're one of those deadbeats who pays everything off on time, they won't make anything from you, so why should they extend additional credit on the chance that just maybe you'll forget to put enough postage on the envelope one month?


  • Discourse touched me in a no-no place

    @Laughing said:

    I have absolutely no debts whatsoever.
    Not technically true - you have a rolling credit balance with that (single) credit card of yours.

    It also sounds like (apart from that single credit card) you have absolutely no record of credit on your file (in .uk everything falls off your report after 6 years - unsure about .us.)

    @Laughing said:

    and get turned down - because we don't have enough open lines of credit. Wha..?
    Again, because your only credit history is a single credit card, there is insufficient data on which to base your credit worthiness. Not quite the WTF it first appears to be, but does raise the reason for a common view of banks as institutions that lend you an umbrella when it's sunny, then asks for it back when it starts raining.

     @Laughing said:

    Then I inform them that I happen to be an employee of JP Morgan Chase. Oh, that's different. As an employee, they don't care about your credit report; you can just have credit.

    So, with the exact same credit report, I am both entitled AND not entitled to a credit card?

    It's not your credit report that determines whether or not you get credit, it's the credit company's scoring procedure using that data (amongst other data.)

    You simply provided them with an extra piece of data which changed your credit score. In your case, for the better.

    @Laughing said:

    I told them to shove their credit and that I'd just stay with Citi;

    And since it would have been another line of credit, to add more data to your credit record, it may have upped your score with other companies as a result. You're simply cutting your nose off to spite your face.


  • Discourse touched me in a no-no place

    @anothercontractor said:

    @Laughing said:
    I have absolutely no debts whatsoever.

    There's your problem. They make money when you're in debt.

    Not the reason. They also make money (but less) when you use your credit. The OP's problem is they have little history of debt, so the company can't guage what risk they may be.


  • @PJH said:

    @anothercontractor said:

    @Laughing said:
    I have absolutely no debts whatsoever.

    There's your problem. They make money when you're in debt.

    Not the reason. They also make money (but less) when you use your credit. The OP's problem is they have little history of debt, so the company can't guage what risk they may be.
     

    "not having enough history" is such BS.  Had that crap thrown at me when I got out of college and needed to buy a car to get to work."Look guys, I make plenty of money, I just don't have it upfront.  Come repossess the car if you need to."

    Looking into buying a house now, so I ran my credit report and one of those "how to improve your score" tips.  "You haven't had any credit cards open long enough.  To get a good credit rating, you should have a credit card open for at least 10 years!"  What was I thinking, not getting a credit card when I was 15 years old?



  • @vt_mruhlin said:

    Looking into buying a house now, so I ran my credit report and one of those "how to improve your score" tips.  "You haven't had any credit cards open long enough.  To get a good credit rating, you should have a credit card open for at least 10 years!"  What was I thinking, not getting a credit card when I was 15 years old?
    And yet you still haven't learned your lesson. Do you have credit cards ready for your unborn children??



  • @vt_mruhlin said:

    Looking into buying a house now, so I ran my credit report and one of those "how to improve your score" tips.  "You haven't had any credit cards open long enough.  To get a good credit rating, you should have a credit card open for at least 10 years!"  What was I thinking, not getting a credit card when I was 15 years old?
     

    We have never had a credit card but the wife and I had no problems what-so-ever getting a home loan just over a year ago. But we did pay rent and phone/electricity/etc bills on time and held steady jobs so we weren't expecting any trouble. We were actually offered a lot more than we expected, although the repayments would have been more than we would have been prepared to pay.

    Though in the last six or so months a lot has changed...



  • @vt_mruhlin said:

    What was I thinking, not getting a credit card when I was 15 years old?
     

    Actually, from ages 12 to 15 I was getting personally-addressed mail about every three months offering me a Diners Club card. And this was back in the early 1980s, when banks mostly made you jump through hoops to get credit instead of handing it out like three-day-old bread. (ObWTF: About the only place they could have got my personal details from knew that I was that young.)

    I never did apply for one - partly too responsible, partly not knowing how I'd pay the annual fee after one year, and partly because Diners Club was pretty useless in terms of being accepted anywhere I'd be going.



  •  TRWTF is calculating your credit score.  If you pay off your debts, that's bad for your score.  Not paying them is even worse.  You need to have lots of credit accounts to have a good score - but applying for a new account lowers your score.  If you have a lot of credit you don't use, you can easily get more.  But if you actually have balances on your accounts, you can't.

     If you have only one credit card and have been out of debt for years, you have a poor credit score.  Once again, it's the responsible people who are screwed.



  • @vt_mruhlin said:

    "not having enough history" is such BS.  Had that crap thrown at me when I got out of college and needed to buy a car to get to work."Look guys, I make plenty of money, I just don't have it upfront.  Come repossess the car if you need to."

    Looking into buying a house now, so I ran my credit report and one of those "how to improve your score" tips.  "You haven't had any credit cards open long enough.  To get a good credit rating, you should have a credit card open for at least 10 years!"  What was I thinking, not getting a credit card when I was 15 years old?

     Statistics are funny like that. The less data you have, the less accurate your results will be. You're in luck, actually, at least if you live in the USA- The US Government is forcing banks to give a certain number of loans to people with bad or insufficent credit to protect their chaters.

     Well, unless something has changed in the last year or so, it's been a while since I checked the news on this.... What could possibly go wrong?



  • @Laughing said:

    I have had a credit card with a $30K line of credit at Citi for 10 years - always paid in full and on-time. My FICO score is > 800. I paid my house off 10 years ago. I bought my car for cash. My credit history has been rock solid for 35 years. I have absolutely no debts whatsoever.

    I am an employee of Chase. Given what's going on at Citi, we decided that it might be prudent to get another credit card as a backup, so we apply at Chase, and get turned down - because we don't have enough open lines of credit. Wha..? On inquiring, Chase first blames Experian (the rejection letter explicitly states that Experian didn't make the decision; Chase did). We're told that because we don't have at least 5 credit cards, we can't get a second. I ask for a manager. You can't speak to a manager; you have to follow procedure (this is definitely a JP Morgan Chase drone) and write a letter. I push and get through to a manager.

    Then I inform them that I happen to be an employee of JP Morgan Chase. Oh, that's different. As an employee, they don't care about your credit report; you can just have credit.

    So, with the exact same credit report, I am both entitled AND not entitled to a credit card?

    I told them to shove their credit and that I'd just stay with Citi; given the $50B the government just gave them, it's unlikely they will be going away any time soon.

    God, my employer sucks!

     

     

    TRWTF is that you have a credit card at all.  Cut it up and cancel the account.  I got out of the credit card game three years ago and life has been much better ever since.


  • Discourse touched me in a no-no place

    @vt_mruhlin said:

    "not having enough history" is such BS.
    Not from the credit companies' point of view. Put yourself in their shoes (if you're able) and compare:

    #1: Person with 6 years worth of 0's on their credit file, on numerous sources of credit.

    #2: Person with no history of credit

    As a company supplying credit, to which of these people are you more likely to lend money? How far along the scale between them do you start saying no?

     @vt_mruhlin said:

    Had that crap thrown at me when I got out of college and needed to buy a car to get to work."Look guys, I make plenty of money, I just don't have it upfront.  Come repossess the car if you need to."
    I'm not sure the cost of a repossed car is likely to even cover the cost of any outstanding debt, especially in the early part of the term.

    @vt_mruhlin said:

    To get a good credit rating, you should have a credit card open for at least 10 years!"  What was I thinking, not getting a credit card when I was 15 years old?
    You appear to be assuming that the advice is either correct or applicable. Neither is a given. (And I'm dubious about that 10 years bit since, certainly in .uk, the longest any of the companies can tell you've held a card for is 6 years.)

     

     

     



  • @vt_mruhlin said:

    What was I thinking, not getting a credit card when I was 15 years old?
     

    Can you actually get one in the US if you're under 18? In Holland you can't. I requested mine (and got one) the day I turned 18 so I could finally buy games with steam. Next time I checked they had started accepting paypal...



  • @campkev said:

    TRWTF is that you have a credit card at all.  Cut it up and cancel the account.  I got out of the credit card game three years ago and life has been much better ever since.

     

    Isn't a credit card about the only way in the US you can pay electronically in stores? In Holland only a small percentage of the people have credit card because we have our own debit card system (called "PIN") which is accepted everywhere and is issued standardly by banks on all of it's cards of which you get one as soon as you turn 12.



  • @dtech said:

    Can you actually get one in the US if you're under 18? In Holland you can't. I requested mine (and got one) the day I turned 18 so I could finally buy games with steam. Next time I checked they had started accepting paypal...

     

    Sort of.  You can buy a prepaid "Credit Card" at some convenience stores.  I don't think they'd have a problem with someone 15 years old buying one.


  • Discourse touched me in a no-no place

    @rodspade said:

    TRWTF is calculating your credit score.
    There is no 'universal credit score.' OK Experian/Equifax/whoever will gladly take your money and provide you with one, but it means bugger all unless:

    1) Experian (or whoever) supply lines of credit or

    2) Other comanies use Experian's (or whoever's) exact credit scoring algorithm.

    Should Experian start supplying credit cards, look forward to them either withdrawing credit scores, or small print indicating that your acceptance is not dependant on such a score.

    Other companies are not going to use Experian's algorithm to stop gaming of the system.

    @rodspade said:

    If you pay off your debts, that's bad for your score.
    Only if (1) you have those lines of credit still open to you (think clearing off CC debt) and (2) the next company you apply to sees lots of potential unused credit as a bad thing.

    @rodspade said:

    Not paying them is even worse
    If the company you're applying to sees a 'high' amount of used credit compared to your credit limit.

    @rodspade said:

    You need to have lots of credit accounts to have a good score
    Debateable. Applying for any line of credit, when it's clear you already have 10  credit cards is hardly likely to result in a successful application, for example.

    @rodspade said:

    but applying for a new account lowers your score.
    A single application in (say) 6 months is unlikely to affect your 'score' either way. Applying for 10 credit cards in the space of 3 months will.

    @rodspade said:

    If you have a lot of credit you don't use, you can easily get more.
    Unlikely, since you have lots of credit available, there's (1) littlereason for another comapny to give you more and (2) there'sthe risk you may use up all that credit in a short time. I fail to see how this is actually a positive for any credit comapny.

     @rodspade said:

     If you have only one credit card and have been out of debt for years, you have a poor credit score.
    Because you've had little credit, and no real 'history' to show how you'd handle a (lot) more.

     

     

     

     

     

     



  • @dtech said:

    @campkev said:

    TRWTF is that you have a credit card at all.  Cut it up and cancel the account.  I got out of the credit card game three years ago and life has been much better ever since.

     

    Isn't a credit card about the only way in the US you can pay electronically in stores? In Holland only a small percentage of the people have credit card because we have our own debit card system (called "PIN") which is accepted everywhere and is issued standardly by banks on all of it's cards of which you get one as soon as you turn 12.

     

    No, I use a debit card with a PIN for almost all of my purchases.  Unless I'm buying something large (over a couple of hundred dollars), then I bring cash.



  • Addendum:

    I called the corporate office responsible for employee accounts. They looked at my application and decided that I could have the credit card - at the limit I wanted. I then told them to shove it as the company was billions in debt (TARP) to the US govt and I only wanted to do business with a solvent company (I know, it's pointless, but it FELT good :)



  • @dtech said:

    @vt_mruhlin said:

    What was I thinking, not getting a credit card when I was 15 years old?
     

    Can you actually get one in the US if you're under 18? In Holland you can't. I requested mine (and got one) the day I turned 18 so I could finally buy games with steam. Next time I checked they had started accepting paypal...

     

    All the stuck up rich kids at my high school had them (and dad footed the bill).  They got it as a second card on dad's account, but it was in their name.  I should have done that, even if not spending anything on it.

    As far as other methods of paying electronically, US banks will give you a "check card" now, which worksjust like a regular credit card except it withdraws the money directly from your checking account.  I used one of those all through college and therefore wasn't building any credit history...



  •  @Zemm said:

    @vt_mruhlin said:

    Looking into buying a house now, so I ran my credit report and one of those "how to improve your score" tips.  "You haven't had any credit cards open long enough.  To get a good credit rating, you should have a credit card open for at least 10 years!"  What was I thinking, not getting a credit card when I was 15 years old?
     

    We have never had a credit card but the wife and I had no problems what-so-ever getting a home loan just over a year ago. But we did pay rent and phone/electricity/etc bills on time and held steady jobs so we weren't expecting any trouble. We were actually offered a lot more than we expected, although the repayments would have been more than we would have been prepared to pay.

    Though in the last six or so months a lot has changed...

    Yeah, I'm not saying there would be "problems", but I'd get a lower interest rate than others.  I also got screwed a while back with a card that I don't use anymore (and just keeo around because it's older and will therefore be the card that breaks that 10 year mark).  I forgot that my Playstation store account was linked to automatically pay from that card.  Bought some cheap game for like $5 right near the end of a billing cycle, didn't realize it went to that card.  Before I knew it, the bill was "30 days past due!" and they were calling me threatening to take me to court, sick collection agencies on me, etc.  So now "ONE BILL 30 DAYS PAST DUE!" shows up on my credit report, because of $5.



  • @Laughing said:

    Given what's going on at Citi, we decided that it might be prudent to get another credit card as a backup

    Ooooh, Citibank. My main bank over here (Banamex) is owned by Citi, and right now people are even more scared about the bank, because Mexican law forbids banks from being owned by foreign governments ... and now the US Gov technically owns 40% of Banamex.

    I doubt they'll go down; but if they do, I'll lose about $400 in savings balance, but also about $4000 in debt.

    Dude, you really should've taken the Chase credit card; then if Citi looks like its going down, top up your Citi CC. Dead banks can't bill you ;)



  • @vt_mruhlin said:

    "not having enough history" is such BS.  Had that crap thrown at me when I got out of college and needed to buy a car to get to work."Look guys, I make plenty of money, I just don't have it upfront.  Come repossess the car if you need to."

    They have no idea if you're going to keep your job or not. That makes you a risk. The logic seems pretty obvious to me.

    A car loses value very quickly, ESPECIALLY when it is traded. Even if you bought a used car, it would instantly lose considerable value because it is now a twice-owned car.



  • @danixdefcon5 said:

    I doubt they'll go down; but if they do, I'll lose about $400 in savings balance, but also about $4000 in debt.

    Dude, you really should've taken the Chase credit card; then if Citi looks like its going down, top up your Citi CC. Dead banks can't bill you ;)

    What color is the sky in your world???

    Consumer debt is an asset for these companies. If the company folds, then they will sell their assets to some other company at a discount. That includes your debt. In short, dead banks CAN bill you.

    Why don't all the programmers stick to what they know best... whatever that is...



  • @danixdefcon5 said:

    I doubt they'll (Citi) go down; but if they do, I'll lose about $400 in savings balance, but also about $4000 in debt.

    I've already lost more than $5000 in Citi STOCK, but what the hell, I've lost less (percentage wise) than the market so I'm just hoping to ride it out til it comes back (!) and this will just be headaches about (mostly) paper losses.

    *crosses fingers*



  • @savar said:

    Why don't all the programmers stick to what they know best... whatever that is...
    But prattling on ignorantly IS what they do best!



  • @savar said:

    @danixdefcon5 said:

    I doubt they'll go down; but if they do, I'll lose about $400 in savings balance, but also about $4000 in debt.

    Dude, you really should've taken the Chase credit card; then if Citi looks like its going down, top up your Citi CC. Dead banks can't bill you ;)

    What color is the sky in your world???

    Consumer debt is an asset for these companies. If the company folds, then they will sell their assets to some other company at a discount. That includes your debt. In short, dead banks CAN bill you.

    Why don't all the programmers stick to what they know best... whatever that is...

    Note my location. I've already seen one bank collapse back in '94/'95 (Banca Confia); assets were sold, but Credit Card debts went poof.

    In fact, our Mexican 1995 crash looks a lot like the recent credit crunch; just adding that most people who defaulted their car or mortgage payments were let go for a measly 10,000 MXN fee (about $1666 USD back then). So it would either slash down my debt and interest rate (about 43% last time I checked), or send it to some symbolic amount.

    Of course, it would also leave me without my two strongest credit cards as well. Not to mention that there's where I have my main savings account. Anyway, as I said before, I doubt either Citi or Banamex will go down. In fact, those banks that have Mexican branches have been kept afloat in no small part because of those branches!


  • Discourse touched me in a no-no place

    @vt_mruhlin said:

    All the stuck up rich kids at my high school had them (and dad footed the bill).  They got it as a second card on dad's account, but it was in their name.  I should have done that, even if not spending anything on it.

    Would have done nothing (I mean absolutely nothing) for or against your credit record. All a 2nd card holder is, is an 'officially cloned card on the account.' i.e the most you'd be doing is affecting the score of the owner of the account (due to amounts spent on the rolling credit on the account.)

    2nd card holders are not liable for any debts raised, even (occasionally) to the point where protection offered to the principle card holder is not offered to purchases made by the 2nd cardholder. (Few cases in the UK (where if the supplier goes bust before your receive goods paid for, the card company and supplier are held jointly liable. No goods, you get the money back (between #100 and #30,000(?))) Occasionally the card companies have turned round and told their clients to fuck off because it was the second card holder who bought it. 'Section 75' for those inclined to google such stuff.)



  • @PJH said:

    @vt_mruhlin said:

    All the stuck up rich kids at my high school had them (and dad footed the bill).  They got it as a second card on dad's account, but it was in their name.  I should have done that, even if not spending anything on it.

    Would have done nothing (I mean absolutely nothing) for or against your credit record. All a 2nd card holder is, is an 'officially cloned card on the account.' i.e the most you'd be doing is affecting the score of the owner of the account (due to amounts spent on the rolling credit on the account.)

    2nd card holders are not liable for any debts raised, even (occasionally) to the point where protection offered to the principle card holder is not offered to purchases made by the 2nd cardholder. (Few cases in the UK (where if the supplier goes bust before your receive goods paid for, the card company and supplier are held jointly liable. No goods, you get the money back (between #100 and #30,000(?))) Occasionally the card companies have turned round and told their clients to fuck off because it was the second card holder who bought it. 'Section 75' for those inclined to google such stuff.)

    It used to help (in America).  They stopped because of some people gamingthe system.  Deadbeat with bad credit goes to the internet, gives a responsible person a few bucks.  Responsible person adds deadbeat as authorized cardholder, but never gives him the card info.  Deadbeat looks better over time.

    It wouldn't work now, but it would have 10 years ago.




  • @anothercontractor said:

    There's your problem. They make money when you're in debt. If you're one of those deadbeats who pays everything off on time, they won't make anything from you...


    Transaction fees. They charge them. (To the merchant.) 3%ish or so.



  • @fennec said:

    @anothercontractor said:

    There's your problem. They make money when you're in debt. If you're one of those deadbeats who pays everything off on time, they won't make anything from you...


    Transaction fees. They charge them. (To the merchant.) 3%ish or so.
     

    Doesn't VISA charge those to cover the network to push transactions around and what not?  Not the actual banks?



  • @vt_mruhlin said:

    @fennec said:

    @anothercontractor said:

    There's your problem. They make money when you're in debt. If you're one of those deadbeats who pays everything off on time, they won't make anything from you...


    Transaction fees. They charge them. (To the merchant.) 3%ish or so.
     

    Doesn't VISA charge those to cover the network to push transactions around and what not?  Not the actual banks?

    Part of that % goes to VISA, another part goes to the issuing entity. It's a win-win scenario ... for Mastercard/VISA and banks, that is. Of course, the real juicy profits come from interest rates.



  • @danixdefcon5 said:

    Of course, the real juicy profits come from interest rates.

     

    Actually, that's debateable.

    If you have a $1000 credit limit. Say there are two options:

    - The well-off person who spends $1000 a month and pays it back. They generate, say, $30 a month in merchant fees. That's $360 a year, with low risk.

    - The poorer person who spends $1000 initially, then just pays as little as he can, say just the interest at 15%. They generate $30 in merchant fees and $150 in interest. $180 in total for the first year ($150 for subsequent years), with a higher risk.

    The myth is that the bank prefers the second of these, however, if you look at the details, it's not that convincing. OK, there's less work to do to get the interest, and it depends on the splits between VISA and the issuer for the merchant fees and interest, but it is by no means 'obvious' that the best profits come from the interest rates...

    I have always paid off credit cards in full (well, ever since I stopped being a student 20 years ago), and have no problem getting new credit cards if I need them. I think what the credit companies want to know is how well you manage your debt. If you don't have debt, they just can't tell how well you manage it.




  • @pscs said:

    If you have a $1000 credit limit. Say there are two options:

    - The well-off person who spends $1000 a month and pays it back. They generate, say, $30 a month in merchant fees. That's $360 a year, with low risk.

    - The poorer person who spends $1000 initially, then just pays as little as he can, say just the interest at 15%. They generate $30 in merchant fees and $150 in interest. $180 in total for the first year ($150 for subsequent years), with a higher risk.

    The myth is that the bank prefers the second of these, however, if you look at the details, it's not that convincing. OK, there's less work to do to get the interest, and it depends on the splits between VISA and the issuer for the merchant fees and interest, but it is by no means 'obvious' that the best profits come from the interest rates...

    So long as that poorer person pays the minimum each month, the bank would rather have it.  That debt is a tangible asset for the bank which can be bought and sold, and so long as the payments come consistently, the risk is relatively low.



  • @campkev said:

    TRWTF is that you have a credit card at all.  Cut it up and cancel the account.  I got out of the credit card game three years ago and life has been much better ever since

    Try renting a car without a credit card.  Ditto with reserving a hotel room.  Buying an airline ticket is also kind of difficult.

    If you have a debit card through your bank you generally have a credit card too.  Look at the little logo in the corner.  It isn't there just for decoration.  If it's there, you have what amounts to a credit card even if the money is taken out of your account just like when you use a PIN.

     Keeping a credit card for emergencies makes good sense.  What are you going to do when your car needs $2,500 in repairs and you don't have the cash?  Think about it.



  • @MrsPost said:

    Try renting a car without a credit card. 

    I have with no problems. 

     Ditto with reserving a hotel room. 

    Ditto. 

    Buying an airline ticket is also kind of difficult.

    Not even remotely difficult. 

    If you have a debit card through your bank you generally have a credit card too.  Look at the little logo in the corner.  It isn't there just for decoration.  If it's there, you have what amounts to a credit card even if the money is taken out of your account just like when you use a PIN.

     Keeping a credit card for emergencies makes good sense.  What are you going to do when your car needs $2,500 in repairs and you don't have the cash?  Think about it.

     

    A debit card is not the same thing as a credit card.  One allows you to spend money you don't have, the other doesn't.

    Keeping a credit card for emergencies makes <b>NO</b> sense.  If I have an emergency and I need $2500 to repair my car, then I take the money out of my savings account and get my car fixed.



  • @danixdefcon5 said:

    Note my location. I've already seen one bank collapse back in '94/'95 (Banca Confia); assets were sold, but Credit Card debts went poof.

    Are Mexican bankers really that stupid? Debts are a bank's most valuable assets. If credit card debts are cancelled when a bank goes under, somebody's letting a hell of a lot of money slip through their fingers.


  • Discourse touched me in a no-no place

    @campkev said:

    A debit card is not the same thing as a credit card.
    Indeed, however...

    @campkev said:

    One allows you to spend money you don't have, the other doesn't.
    Not true. You can spend money you do have on a credit card (you just don't have to give it up as soon - all the people who clear their credit cards every month e.g.) and you can spend money you don't have on a debit card if you end up using an overdraft.

    Or at least I'm assuming you were talking about credit and debit cards in that order.

     



  • @PJH said:

    @campkev said:

    One allows you to spend money you don't have, the other doesn't.
    Not true. You can spend money you do have on a credit card (you just don't have to give it up as soon - all the people who clear their credit cards every month e.g.) and you can spend money you don't have on a debit card if you end up using an overdraft.

    Or at least I'm assuming you were talking about credit and debit cards in that order.

     

     

    I never said you can't spend money you do have on credit card, I said it allows you to spend money you don't have, which is true.  As for the second part, I don't have mine tied to an overdraft account, which is essentially just a high interest credit card.



  • @PJH said:

    you can spend money you don't have on a debit card if you end up using an overdraft.
     

    The way my bank works, the overdraft from my checking account goes to my credit card.  If I didn't have a credit card, no overdraft.

     


  • Discourse touched me in a no-no place

    @vt_mruhlin said:

    The way my bank works, the overdraft from my checking account goes to my credit card.  If I didn't have a credit card, no overdraft.
    Nothing like that exists in .uk.

    The only connection between current (checking?) accountsand credit cards held with the same institution is, if you default on a CC payment, they can arbitrarily remove the money from your current account (which may or may not have an overdraft) if it has a positive balance ('right of offset.')

    Using your credit card as funding in the manner you describe over here has to be instigated deliberately by the customer, and usually incurs a fee of 3% or more of the value of the amount.

     



  • @Carnildo said:

    @danixdefcon5 said:
    Note my location. I've already seen one bank collapse back in '94/'95 (Banca Confia); assets were sold, but Credit Card debts went poof.

    Are Mexicans bankers really that stupid? Debts are a bank's most valuable assets. If credit card debts are cancelled when a bank goes under, somebody's letting a hell of a lot of money slip through their fingers.

     

    FTFY, and did you really have to ask...

    Good painters? Yes, Bankers? Not so much.

    Just immagine driving by the local Home Depot with your pickup truck and yelling "TRABAJAR PARA LA BANK!!"   See how many jump in.



  • I had an excellent credit score (above 720), then bought a house 2.5 years ago and was never late or missed a payment.  After I got the mortgage, my "percentage of total credit capacity used" went from about 15-20% (on a few credit cards) to about 90% (the mortgage balance is much larger than the available unused credit on the cards).  I have read that "percentage of total credit capacity used" is a large factor in your FICO score.

    I'm still paying everything, but now some of my cards are raising my interest rates, so I'm making sure not to use those cards.  (I still have one card at a fixed 7.99% rate, and one at 8.99%.)

    It doesn't sound logical that getting a mortgage and never being late on a single payment, on the mortgage or any credit cards, should lower your credit score by 75 points!



  • @DWalker59 said:

    It doesn't sound logical that getting a mortgage and never being late on a single payment, on the mortgage or any credit cards, should lower your credit score by 75 points!

     

    No, it doesn't.  I thought that getting a mortgage actually raised your credit score (being as you now have actual capital as oposed to revolving outstanding credit).  



  • @DWalker59 said:

    I had an excellent credit score (above 720), then bought a house 2.5 years ago and was never late or missed a payment.  After I got the mortgage, my "percentage of total credit capacity used" went from about 15-20% (on a few credit cards) to about 90% (the mortgage balance is much larger than the available unused credit on the cards).  I have read that "percentage of total credit capacity used" is a large factor in your FICO score.

    I'm still paying everything, but now some of my cards are raising my interest rates, so I'm making sure not to use those cards.  (I still have one card at a fixed 7.99% rate, and one at 8.99%.)

    It doesn't sound logical that getting a mortgage and never being late on a single payment, on the mortgage or any credit cards, should lower your credit score by 75 points!

     

    exactly why I got out of that game



  • @amischiefr said:

    No, it doesn't.  I thought that getting a mortgage actually raised your credit score (being as you now have actual capital as oposed to revolving outstanding credit).  

     

    You have actual capital, but at the beginning of the mortgage, it's completely offset by the debt, plus interest (which is massive).  Depending on the cost of the property and the size of your down payment, I could definitely see it lowering a credit score.

    If you actually have significant equity and the credit rating still tanked, that would be strange.  A mortgage is technically a wash, credit-wise; it's secured against the property itself, and in most cases the property value is slightly or significantly higher than the debt value.  If that's really the case, I'd probably be demanding an explanation from whatever credit agency was responsible.

    Mind you, I'm not an authority on mortgages or credit, and I also live in Canada where the markets are a bit different, so take that with a grain of salt.



  • @campkev said:

    No, I use a debit card

    Debit cards do not (or, at least, did not - it's possible something changed recently) offer the same protections as credit cards.  And, as they give direct access to your money, that protection is even more important...



  • @tgape said:

    @campkev said:
    No, I use a debit card

    Debit cards do not (or, at least, did not - it's possible something changed recently) offer the same protections as credit cards.  And, as they give direct access to your money, that protection is even more important...

    Things have changed recently.  They offer the same protection as credit cards now



  • @Carnildo said:

    @danixdefcon5 said:
    Note my location. I've already seen one bank collapse back in '94/'95 (Banca Confia); assets were sold, but Credit Card debts went poof.

    Are Mexican bankers really that stupid? Debts are a bank's most valuable assets. If credit card debts are cancelled when a bank goes under, somebody's letting a hell of a lot of money slip through their fingers.

    Maybe it is because of this specific case, but the 1994-95 crash made most debts "unpayable". Think among the lines of "Mortgage-backed securities". Those banks that did survive found that it was cheaper to just write off the outstanding debt and ask for a fixed 10k MXN fee than repossessing stuff, as a crapload of people were unable to pay. This also applied to "secured" loans such as car payments and mortgages; buying debt is toxic when no-one is willing to pay it.

    Banks did learn the lesson though; credit requirements are stricter since those days; there are still high-risk lenders, but they usually have 60%+ interest rates that cover the risks associated with risky credit.


  • Discourse touched me in a no-no place

    @DWalker59 said:

    but now some of my cards are raising my interest rates,
    Over here most of the CC companies are raising interest rates.

    Something to do with the credit crunch I believe.


  • Discourse touched me in a no-no place

    @campkev said:

    Things have changed recently.  They offer the same protection as credit cards now
    In the US maybe, but certainly not in the UK: Credit cards offer far more protection than Debit cards. For example if the company you've bought from has gone bust, and you haven't had your goods, in the case of a credit card, the CC company refunds you the money (Section 75.) Buy on an debit card and you're basically SOL.


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