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SYSV Fanfic
Sep 9, 2003

by Pragmatica
I am considering closing my only credit card. It has a $4,500 limit, and a lovely 18% interest rate (I have drat near perfect credit...). I tell myself its only for emergencies, and then once a year I charge up about $500-$600, swear I will never do it again, and pay it off in two or three months. At this point, I feel like the credit card just causes me to feel comfortable about making small impulsive purchases (electronics and games usually) that I otherwise shouldn't and wouldn't make.

This month I bought a $280 10" android tablet and a PS3. I still have 70 days to take the tablet back with no return fee, but the ps3 is permanent at this point. I particularly feel dumb about the ps3 as:

1. I have a three year old PC with around 100 games between steam and gog.com, a 3ds a friend gave me when he got an xl, and my brother's Wii U that he only uses when a new game comes out (lol wii u release schedule).
2. I play maybe an hour of video games every other day.

These purchases haven't wrecked me financially or anything, I just feel dumb and irresponsible about spending money on this poo poo when I don't have very much (monthly income is $1790).

I have $3,000 stashed in certificates of deposit, as well as having ~$350-$500 in income above my financial obligations per month. I know I would easily qualify for a credit card with a wayyy better rate if I actually needed it. My parents love me dearly and including their assets and retirement accounts are multi-millionaires, so I don't think they would flinch at lending me money, and I know they would trust me to pay them back. I just don't like asking them for money, and the most I have ever asked for was to stay in my old room rent free for awhile after my divorce.

Should I axe the card?

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Arkane
Dec 19, 2006

by R. Guyovich
If you mind sharing, what range are you considering to be "drat near perfect"? If it's 750+ you might be cool with doing this although there's really no point to it.

If it's not, I would say not only is there no point, but it could hurt your credit score (or at least diminish any increases to said credit score). This is especially true because it's your only revolving line of credit. Your best bet is to pay something with it each month: perhaps you subscribe to Netflix or whatever the PS3 equivalent of Xbox Live is. And pay it off IN FULL each month. Really the APR should never even enter into the equation, ever, unless you're in some dire real life scenario. Pay that poo poo off in full at the due date. Doing this will increase your credit score over time. Length of credit lines also factors into your score: the longer the better, so closing an account would again hurt you in some respects.

To be honest, if you can exert self-control over impulse purchases to the point where you eliminate them except what you can afford, I'd actually look at opening a new card in your spot. Specifically, something that offers 0% on purchases for X amount of time. This, in conjunction with a CD, would essentially earn you money (small amounts, but money!).

Also, completely unrelated to your question, if your parents are multi-millionaires, you should probably get your poo poo together, and head towards a path/career rather than whatever it is you're doing that is earning you 22k a year after taxes. You can put a sentence together without sounding like an idiot, so you're already a step ahead of half of the work force in this country.

AgrippaNothing
Feb 11, 2006

When flying, please wear a suit and tie just like me.
Just upholding the social conntract!
Take it easy on yourself, this isn't the worst thing I've ever heard. Then again I don't know your expenses vs income.

My advice is to throw it in a drawer and try to find something with a better rate. If you really do have good credit you should be able to find something better than 18% with a +5k credit line. If this is really for emergencies where you need 2-5k fast, you do not want to have that interest rate hanging over you. Put it in the drawer and get some discipline. Or store it at your parents place or trusted pal to keep you from buying crap with it.

Edit: Alternately I suppose you could find a better card and then cut it up. Most good cards will fedex you one in pretty short order.

AgrippaNothing fucked around with this message at 16:19 on Aug 2, 2014

dennyk
Jan 2, 2005

Cheese-Buyer's Remorse

Arkane posted:

To be honest, if you can exert self-control over impulse purchases to the point where you eliminate them except what you can afford, I'd actually look at opening a new card in your spot. Specifically, something that offers 0% on purchases for X amount of time. This, in conjunction with a CD, would essentially earn you money (small amounts, but money!).

Don't do this, just get a rewards card instead and pay it off in full every month. CD rates are so low right now that you aren't going to be able to beat the 1-2% you can get with a cash-back rewards card, much less make up for the time and effort that playing with the float will require, or the risk of loving it up and getting hit with an interest charge that wipes out all your profits and then some.

You really need to try to get a handle on your impulse spending. If you truly don't have the discipline to use a credit card as an extension of your bank account instead of as a loan, then you probably would be better off without one. Close the credit card account and get used to only being able to buy stuff when you actually have the money for it. Also, work on building up an emergency fund so that you don't need to rely on a credit card for an actual emergency.

Once you've gotten control of your spending habits, though, go ahead and get a new card, one with a decent rewards program, use it for as many daily expenses as possible to maximize your rewards, and pay it off in full every month. Don't worry about the interest rate, because you're never going to pay interest, and always think of it as *money*, not credit.

Arkane
Dec 19, 2006

by R. Guyovich
Yeah good point, a rewards card would trump a CD.

e: Overall I was pretty enamored with the 0% stuff when I was younger...between purchases and balance transfers, I think I rolled over a 0% balance for like 4 or 5 years before I finally had to pay it off. It's less advantageous to do the balance transfer 0% offers now, because they've gotten wise to it and charge you 3-5%. But 0% purchases are still a good way to go.

Arkane fucked around with this message at 17:11 on Aug 2, 2014

SYSV Fanfic
Sep 9, 2003

by Pragmatica

Arkane posted:

If you mind sharing, what range are you considering to be "drat near perfect"? If it's 750+ you might be cool with doing this although there's really no point to it.

If it's not, I would say not only is there no point, but it could hurt your credit score (or at least diminish any increases to said credit score). This is especially true because it's your only revolving line of credit. Your best bet is to pay something with it each month: perhaps you subscribe to Netflix or whatever the PS3 equivalent of Xbox Live is. And pay it off IN FULL each month. Really the APR should never even enter into the equation, ever, unless you're in some dire real life scenario. Pay that poo poo off in full at the due date. Doing this will increase your credit score over time. Length of credit lines also factors into your score: the longer the better, so closing an account would again hurt you in some respects.

Credit score was 798 when I refinanced my car to take my ex wife off the title.

Arkane posted:

To be honest, if you can exert self-control over impulse purchases to the point where you eliminate them except what you can afford, I'd actually look at opening a new card in your spot. Specifically, something that offers 0% on purchases for X amount of time. This, in conjunction with a CD, would essentially earn you money (small amounts, but money!).

Impulsivity is a real problem for me.

Arkane posted:

Also, completely unrelated to your question, if your parents are multi-millionaires, you should probably get your poo poo together, and head towards a path/career rather than whatever it is you're doing that is earning you 22k a year after taxes. You can put a sentence together without sounding like an idiot, so you're already a step ahead of half of the work force in this country.

I used to make 100k+ a year in flyover country as an engineer before I got right and properly hosed by the genes my parents passed on to me. I got hosed again by my employer dropping LTDE two months before the onset of my medical problems. I'm on SSDI and I see seven medical specialists a year. At this point I am just taking good care of myself and making the most of what is left of my life through volunteering.


dennyk posted:

You really need to try to get a handle on your impulse spending. If you truly don't have the discipline to use a credit card as an extension of your bank account instead of as a loan, then you probably would be better off without one. Close the credit card account and get used to only being able to buy stuff when you actually have the money for it. Also, work on building up an emergency fund so that you don't need to rely on a credit card for an actual emergency.

Yeah... The CDs I have are my emergency fund. Being on SSDI, my income is pretty secure, barring a change in the law or some other governmental problem. My housing is rock solid, and as far as transportation I am getting close to being unable to drive.

I've done this the past three years. Usually it is sparked by receiving more really lovely medical news. I spend money to buy poo poo, and I know drat well it never makes me feel any better. Two years ago I found out I had an ascending aortic aneurysm. Last year I had another stroke, this year I found out not only do I have a very physically limiting problem with my left knee - but I can expect to have trouble with the rest of my joints. To add to this, orthopaedic surgery almost never works out well for people with my genetic problem. Donjoy is going to make a fortune off of me.


I talked to my bank and they can get me a 8.9% APR card, although with only a $2,500 limit. As far as other existing lines of credit, I have two more years on my auto loan and I am still on a 30 year mortgage for the house my ex wife kept. This sounds bad, but I got divorced post bubble and was upside down on the house. If I am still alive when she elects to sell the house, I am entitled to 50% of the equity, as opposed to declaring bankruptcy by selling as part of the divorce.

Arkane
Dec 19, 2006

by R. Guyovich
Sorry to hear that about the medical issues; best of luck man. Life is truly a precious gift. An impulse purchase is normal, within limitations...perhaps just time it so that you can pay it off in full by the 30-day due date of the credit card. Really, the important thing is that APR should never, ever enter into the equation except in emergencies. That is gobs of money down the drain.

That is a pretty terrible credit card for someone with an 800 FICO, which implies a stellar track record. The 8.9% is good, but the $2500 limit is pretty bad (although perhaps good if you're worried about your own spending!).

If you've ever served in the military or your parents ever have, I'd recommend looking into USAA. Their banking services are impressive, no nickel and dime poo poo, their credit cards are very good, and their auto insurance is pretty much unbeatable.

Nocheez
Sep 5, 2000

Can you spare a little cheddar?
Nap Ghost
You sound like the perfect candidate for freezing your credit card in a literal block of ice. You'll have to wait for it to thaw before you can use it, which gives you time to think about whether you really want to spend the money or not.

alwayslost
May 17, 2007
and never found

Nocheez posted:

You sound like the perfect candidate for freezing your credit card in a literal block of ice. You'll have to wait for it to thaw before you can use it, which gives you time to think about whether you really want to spend the money or not.

He was an engineer, you think a block of ice will stop him from buying the next ipad?

SYSV Fanfic
Sep 9, 2003

by Pragmatica

alwayslost posted:

He was an engineer, you think a block of ice will stop him from buying the next ipad?

Don't know the exact melting point of PVCA off the top of my head, but I am willing to bet it is at least a few degrees over 100C. Also, gently caress Apple.

I was approved for the card through my credit union, closed the Amazon card with Chase. I am going to activate the card, and then have my girlfriend hold on to it for me. Thanks for the advice all. As a bonus, by signing up for the card my checking account now accrues .5% interest (same as a 12 month CD).

SYSV Fanfic
Sep 9, 2003

by Pragmatica
I turned down the card from my credit union.

Just want to say this has been a great move for me financially. Not having access to credit has made me take my finances *much* more seriously. I cashed out a CD to keep a $1,000 reserve, and when I have to dip into it, the pay yourself first principle kicks in to refill it. Doctors I am not going to see again get paid when I have the money, I set up really low payments for some ER visits I had telling them they could take $10 a month or get nothing till I felt like paying them (I'm completely uncollectable at the moment). I am paying extra on them when I can. The collection agency that a provider turned me over to for a gene sequencing test (My 20% was about $800) was told to go pound sand by my bank after they got a judgement (because I'm uncollectable). I refinanced my car to get my exwife off the title, and found out my credit union puts about 0 weight on medical collections in their lending deciscions which is also nice to know if I do need credit for some reason.

Every day, I rectify my receipts against the balance of my bank account. I track receipts for the things I pay cash for and give myself a set ammount of cash for the month. I sold my game consoles because I realized I could only enjoy them by spending money on them. I was saving to upgrade my computer in another year, but I realized that it was another black pit of spending for me, and I took what I had saved and paid it on the principle of my car. I'll upgrade it as parts break (I think that could be awhile. My brother is using a computer I built seven years agpo, and my parents are using a computer I built four years ago.).

Basically, not having a credit card to gently caress around with, and borrowing from myself in emergencies has made me three times more financially responsible. I've talked to the SSA, and I'm working with SBA to 100% legally and above the board fix laptops, PCs, and software fixes for macs cheaply as a part time occupation while being on SSDI. My church is going to rent me a room in their old school as office space for 15% of what I take in, or $250/month as a max. Since I have income and this is a side thing, I am just going to rely on word of mouth for advertising and business cards. Possibly when I have income from it (if ever), I will explore advertising.

For anyone on a fixed income that can meet their necessary expenses (heating/electricity, food, rent), credit cards are a debt trap.

melon cat
Jan 21, 2010

Nap Ghost
Glad to hear that you've taken charge of your situation. Just some advice for the future- if you DO take on a credit card in the future, set it up with the lowest limit possible (usually $1000), and keep it there. Even if your credit card issuer offers you pre-approved limit increases (which they will), keep it low.

melon cat fucked around with this message at 02:30 on Sep 23, 2014

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SpelledBackwards
Jan 7, 2001

I found this image on the Internet, perhaps you've heard of it? It's been around for a while I hear.

This is great news, glad to see a huge turnaround. It's more than incremental improvement, but you should crosspost it to that thread anyway!

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