Building Credit...the More Credit Cards the Better?

[Oxide]

Seems like some of you should learn how your score is calculated.

Im trying to get 25k on ONE card .. something from the STR8UP's lectures is telling me this is a good idea.

 

[Throttle]

Personally, I'm getting ONE credit card. Only one. If all goes well, I'll only be using it to charge stuff that I've already got the money for. That way, when the bill comes. Bam. Paid off well before the due date.

to me that's the only way to use a credit card...the amount of interest charged (even with a low APR) makes carrying a balance even one month a rip off.

Best way to get improved credit. Pay things off BEFORE they're due, IN FULL.

Absolutely. BUT always wait until the bill comes, then pay (you should still have several weeks at that point). why? b/c your credit report (and you're entitled to free ones now no matter where you live and should pull it occasionally just to have a look) is full of whatever your lenders report. and generally they report once a month, and you have no control over what day they take that snapshot, so you want the full balance to sit there for a few days, to increase the odds that they're showing your credit use.

The more CC's you have, the more temptation there is to use them all. Plus, if you've got 6 of them, whos to say you'll notice is somebody such as myself swipes one?

also a good point. and you can never forget to pay a random one off if you only use one... i've consolidated to one myself.

 

[Throttle]

Seems like some of you should learn how your score is calculated.

Im trying to get 25k on ONE card .. something from the STR8UP's lectures is telling me this is a good idea.

shouldn't be too hard if you make at least $40k and channel most of your expenditures though the one card. i pay nearly all my bills (phone, cable, etc) through my m.c. and a few years ago I even paid rent with a credit card. never make a late payment, and they should be bumping your credit line regularly. if you're not worried about them making a credit inquiry (you don't plan to borrow for anything else in the near future), you could even ask for a raised credit line right now, and if you've been a regular customer a while they're pretty pliant.

 

[Francisco d'Anconia]

... But the scoring model itself is "dumb": it has no component to account for one's assets or their liquidity....

True, it's not used in determining your score but it is used by lenders (at least when securing a mortgage) to assure that you have funds available to make the initial payments on a mortgage.

I haven't considered liquidity as being a determiner in credit worthiness. How do you feel that it would be advantageous?

 

[Oxide]

More assets - worse score.

Score = is this person honest

Doesnt have to deal with much of else.

 

[Francisco d'Anconia]

...The more CC's you have, the more temptation there is to use them all.

Sounds like a personal thing. I have a bunch of credit cards with zero balances that never see the light of day.

Plus, if you've got 6 of them, whos to say you'll notice is somebody such as myself swipes one?

This is true. I only carry one credit card (for emergencies and large purchases) and one debit card for daily use. The rest of my cards are locked up.

 

[Francisco d'Anconia]

More assets - worse score.

How?

 

[Oxide]

You have more to loose.

Millionares I know are in the 600;s

 

[Francisco d'Anconia]

You have more to loose.

Millionares I know are in the 600;s

I don't think it's necessarily because of the amount of assets they have. I'd hate to think that Bill Gates couldn't get a secured Capital One card.

 

[Bonhomme]

I haven't considered liquidity as being a determiner in credit worthiness. How do you feel that it would be advantageous?

Dangling modifier -- my bad. I was referring to the liquidity of the assets. Obviously the more easily and quickly one can get money for them, the more easily they could be utilized to pay off debt. Therefore, one who has more liquid assets is less likely to default on a loan, all other things being equal.

I think my millionaire acquaintance was in the low to mid 600s. Probably because he used too much credit for scoring optimization and was always getting new credit (for investment purposes).

As a side note, he was living in a house valued at about 200K in an ordinary suburb, and drives a nice, but not super-expensive car. Just to give you guys an idea into the sort of frugal mindset that most millionaires tend to have...

 

[Skilla_Staz]

Sounds like a personal thing. I have a bunch of credit cards with zero balances that never see the light of day.

I suppose that is true. I know plenty of people who would spend just because they "can"


You're also a day or two older than most people I associate with, and presumably a little more wise to the financial workings of America.

 

[STR8UP]

Maaaaan.....I'm not even gonna get started in this thread......

 

[Francisco d'Anconia]

...You're also a day or two older than most people I associate with, and presumably a little more wise to the financial workings of America.

Don't let youth ever hold you back from understanding how money works. Don't let a length of bad experiences be your teacher. Get out there and learn how to make the system work for you.

 

[Calypzo]

Don't let youth ever hold you back from understanding how money works. Don't let a length of bad experiences be your teacher. Get out there and learn how to make the system work for you.

How would you recommend learning how money works?

 

[Francisco d'Anconia]

How would you recommend learning how money works?

Believe it or not, a decent economics course is a very good place to start. Add to that a myriad of financial/wealth management books including books by The Motley Fool's, Robert Kiyosaki's "Rich Dad," "The Undercover Economist" (sorry, I can't remember the author's name) and the ever popular "Think and Grow Rich" by Napoleon Hill. Not all of these books will tell you the steps to make a fortune, they will however teach you the mentality of people who understand money which is entirely different than what 90% of America realizes. In my opinion that is more important than knowing specific steps.

 

[Calypzo]

Believe it or not, a decent economics course is a very good place to start. Add to that a myriad of financial/wealth management books including books by The Motley Fool's, Robert Kiyosaki's "Rich Dad," "The Undercover Economist" (sorry, I can't remember the author's name) and the ever popular "Think and Grow Rich" by Napoleon Hill. Not all of these books will tell you the steps to make a fortune, they will however teach you the mentality of people who understand money which is entirely different than what 90% of America realizes. In my opinion that is more important than knowing specific steps.

That's the funny part.

I know a couple of "rich" people, and they will blow it off on cars and boats.

So far, my only financial wisdom is to put money in a savings account. I don't know anything about stocks, money marketing, etc.

Unfortunately they do not teach these type of things in high schools.

 

[Docs]

Unfortunately they do not teach these type of things in high schools.

Why should they? Schools are meant to ensure gradulates leave with a BASIC level of knowledge. You want more knowledge, you have to pay for it at a higher institution, you have to ask the right people the right questions, and/or you have to experience it yourself.

If the majority knew how to become a millionaire in a year, we'd have some serious problems in this world.

 

[Francisco d'Anconia]

That's the funny part.

I know a couple of "rich" people, and they will blow it off on cars and boats.

So far, my only financial wisdom is to put money in a savings account. I don't know anything about stocks, money marketing, etc.

Unfortunately they do not teach these type of things in high schools.

I suggest reading the original Rich Dad book. It tells the story about a highly educaded (college) guy who followed the norm and a highly successful guy (real world experience) and how they influened Robert Kiyosaki. It's a good (true) story that explains the difference between people who earn money and people who make money.​

 

[Francisco d'Anconia]

Why should they? Schools are meant to ensure gradulates leave with a BASIC level of knowledge. You want more knowledge, you have to pay for it at a higher institution, you have to ask the right people the right questions, and/or you have to experience it yourself.

If the majority knew how to become a millionaire in a year, we'd have some serious problems in this world.

Which reminds me of another really good book, "What they Don't Teach You at Harvard Business School."

 

[Page]

That's the funny part.

I know a couple of "rich" people, and they will blow it off on cars and boats.

How do you define "rich"? Just because people have boats, a big house, and a expensive car means nothing in and of itself. The real difference is if they have positive cashflow to support the cost of these things or if they're sinking themselves in debt just to look rich.

The latter type of people are the kind who own a Ferrari but can't afford to fill it up every week. They're not rich, they're just going after the lifestyle with nothing to back it up.

The REAL rich people spent their time building a solid foundation of business and investments so they are *constantly* making money even when they aren't working. Many of them don't have to hold a job-- they are making enough passive income to offset the need and they value freedom from a job more than they value the extra cash they would make from it. These people understand that debt should primarily be used to accumulate wealth. Any luxury items they have they bought because they can legitimately afford them.

See the difference?

So far, my only financial wisdom is to put money in a savings account. I don't know anything about stocks, money marketing, etc.

LEARN. LEARN WHILE YOU ARE YOUNG.

Don't bother with long-term savings-- inflation is your enemy.

Instead, learn stocks, particularly technical analysis. It couldn't hurt to learn some basic candlestick patterns and what they mean, either.

Start by reading:

http://www.amazon.com/Essential-Tec...9777520?ie=UTF8&s=books&qid=1176538966&sr=8-1

I highly recommend this book, it taught me a LOT.