Caution . . . Credit

[minaret]

Originally Posted by Mike OReilly

I agree that the wise use of credit cards can be individually useful (much like the wise use of technology). However, nearly 50% of card owners DO carry a balance. And last I saw, credit card balances were at an all-time high in Canada and the US.

Merchants all pay additional fees for every card used, and they pay even higher fees when people use these premium points cards. This added cost gets paid by everyone in the form of higher prices.

Most of the points cards also come with annual fees.

Credit cards produce large profits for the banks. Just like casinos, they've figured out how to win. And just like casinos, smart players can beat the house for a while.

There's nothing wrong with choosing not to play their game.

Exactly correct, IMO. It's a system which allows banks to make record profits year in and year out. And yes, some people can beat the system, but only on the backs of those who do not. Banks are in business to make a profit. If they were not making lots of money on credit cards they wouldn't do it. Just because using a credit card is not costing you money, it doesn't mean it isn't costing money to everyone you do business with using that card. The only right thing to do is not to play their immoral shell game. More and more local stores where I live are refusing to accept credit cards because the bank fees are taking all their profit. Very common with small mom and pops here. The banks love it this way because it closes small business down and leaves only the megacorps in business. If everyone keeps using cards, eventually Wal-Mart will be the only option...

[John A]

As a singlehandler returning from a life of adventure the US treats you somewhere between a homeless person and an ill legal alien.

When I returned to the US after ten years cruising, I founs that I had to re-establish my credit identity. I'd been using a Cash Management Account with Merriel Lynch with a debit card to access funds all over the place.

One of the first things I needed to do was replace my hearing aids, so I investigated Costcos offering. I could get an excellent deal but first needed to obtain a membership card and apply for a American Express card thru there store as they claimed they only dealt with AE. Costco was reluctant to accept a check from my debit account due to an address I'd not lived at for then years. At that point I could have gone to a local bank and using my passport as id, gotten the money using the debit card. Maybe.

AE denied the app. due to a lack of a local address or any history with a local bank.
When I went to DMV for a state id using my passport they refused without proof of residency.

So here's what I did. First I found an apartment complex that would rent to a person with only a passport, no car. no credit history, and no rental history. Next I had to have two months of utility bills to my new apartment to prove to DMV that I indeed lived in their state. Next I took the state-id to a local bank and opened an account. Meanwhile I bought hearing aids at a different place using my debit card. And I've since moved to an apartment that is 20 years newer.

I've since opened an additional credit card which I zero out each month and am a residence in good standing with a great credit score.

[Charlie]

Originally Posted by Palarran

I guess maybe your right. I'm almost 50. I've owned a fairly large business for 25 of them. I have a lot of assets and very few liablilities. My company has been with the same bank for almost 50 years. And I've never had an opertunity to just sign a piece of paper saying give me $10 and I'll pay it back (maybe). Read the fine print and I guarantee that you guaranteed that signature loan with pretty much everything you have.

You are probably right -- I never read the fine print but the few times I have done one they didn't lien my car or any other asset. They just said sign here and then we'll give you the money. My first born might be at stake but I did pay them off.

[goboatingnow]

Originally Posted by capngeo

I run into that all the time.... I owe nothing to anybody, and have no loans. I pay out the arse for insurance, cable, cell phone. EVEN WHEN I OFFER TO PAY IN FULL A YEAR IN ADVANCE!

Explain this to me slowly. Your credit rating affects buying cable ????

Dave

[Rhapsody-NS27]

Originally Posted by Don Lucas

If you have the cash, buy it with your credit card and then pay it off!

I do this myself. I took some time off from work and put a rental car and hotels on a card then took 3 or 4 months to pay it off to establish the payment history. I normally don't use the card otherwise and stick with cash but using it once in a while helps me from dropping off the grid entirely.

Originally Posted by perchance

If you pay cash for everything you are automatically suspected of doing something illegal to obtain your money.

Someone I work with mentioned this to me recently. He said if you buy a plane ticket with cash, then your baggage (checked) will go through extra screening during your trip because using cash is considered a suspicious activity. Some people always want to expect the worst in others.

I don't owe anything to anyone. I almost feel sorry for those who stacked up so much debt. Almost.

[DeepFrz]

The only right thing to do is not to play their immoral shell game. More and more local stores where I live are refusing to accept credit cards because the bank fees are taking all their profit. Very common with small mom and pops here. The banks love it this way because it closes small business down and leaves only the megacorps in business.

But this is the way the whole system is built. The land of free enterprise. If you think you are going to beat the banks, think again. Didn't a whole bunch of financial companies just bilk the American people out of billions of dollars with the aid of the elected elite? They have the power baby, and they ain't going to give it up.

[sailorboy1]

Originally Posted by goboatingnow

Explain this to me slowly. Your credit rating affects buying cable ????

Dave

Cable is like any other utility like electric, you basically pay at the end of the month after you used it. So it is directlty related to your credit worthness.

There are a lot of industries that have some formula to determine your rates etc that are based in some way to your credit score.

The bottom line and I believe the point to the OP is you need to maintain and use your credit while cruising because there is life afterwards to be considered.

[bella]

Originally Posted by goboatingnow

Explain this to me slowly. Your credit rating affects buying cable ????

Dave

Yes in a manner of speaking... they actualy do a credit check. DirectTV and the other satellite company do as well. I have a friend that had lived outside the US working for the Fed Gov't at an overseas embassy for ten yrs.. he ran into much of the same problems you guys did.. and he actualy had a directtv acct in south america for the entire time and yet when he moved from that 'region' into the north america region - puerto rico.. he ended up having to buy the monthly cards because DirectTv had no record up him up here..

Just a small FYI - back in 2008 I got laid off... I asked for and recieved a 2 month forbearance on my two credit cards. I caught up and paid them off entirely the 3rd month, Dec. My car insurance came due, like always, in Jan.. no big deal... same rate $860 for 6 mos full coverage (fla). In July when it rolled over again... my rates jumped from $860 to 1150. NO tickets, accidents, nada... the letter, which I still have in my files.. clearly stated that my credit rating had gone down and therefore I was now a bad risk. The actuaries that _all_ insurance company's use state that anyone with lower than xxxx credit will make more claims. I have made exactly 3 claims in 16 yrs with this company... tires slashed in a marina - we all had that done, ALL the liveaboards banded together to get rid of a couple who did drugs, booze and fought constantly.. My minivan was stolen off the street in DC and then someone backended me on my way to work at walter reed. not my fault...
IN the US your insurance, boat, car or otherwise is based on your credit rating far more t han you driving record or claims record.
Also IF you don't have a drivers license many compnays won't give you boat insurance.. now that makes NO sense to me whatsoever.. but its the way they roll.

I have credit cards... rarely ever use them, pay them off when I do the second the bill comes due. I have a trust income that I use with my debit card for everything. I have yet to find anyone that won't take my debit card for whatever I want to use it for. Budget/Enterprise/hertz... offbrand local rentals in Belize and the Dominican Republic. I was in Thailand recently for a week.. NO problems with the debit card. It is treated like a credit card.

I tend to pay my bills via money order. My record keeping system is pretty simple...for me at least.. check register that _all_ reciepts go into each month. Excel spreadsheet that income and outgo is entered into. At the end of each month I scan all the reciepts and bills and money order stuff into a file and save it, labeled with month and yr.. At the end of the yr I burn two cd's.one for records and one for the accountant. At the same time I pull out yr 11 of my check registers and toss all the reciepts.. works for me.. I started the CD thing a few yrs back, accountant loves it.. he even gets to see grocery reciepts..

for the record for those of you reading this in DomRep... they just signed an agreement to turn over American Citizens bank records to the IRS starting in Jan 2012 I believe. Sucks... retirees not paying income tax on US income are going to see big tax bills I guess. No place a poor retiree can keep any income these days.. lol...

[travler37]

Originally Posted by Randyonr3

Just a word of wisdom from experance.....
About 10 years ago we sold our two homes, put the other in my sons name and paid off all our bills, owning no-one and headed out for the high seas..
With the goal that we were dropping off the grid.. a common goal for cruisers..
So for over the last 10 years we've toured the west coast of the US, Canada and Mexico..
Been back for a year or so now and havent given it much thought but recently we stopped in a local car dealership to purchase a car......
"SURPRISE, SURPRISE"
Over the last few years weve dropped off the grid, our credit has also dropped..
Being its only on the papers for 7 years, we've found ourselves at the point where we need a co-signer tp purchase a piece of buble gum..
We were told that our credit is worse than Bad as we have none, and were told we were Ghosts....and it dosent look good when you're 60 years old and have no credit history............
So up until 10 years ago, our credit was perfect and had the credit to pick up a signiture loan for 50K, today its de-funk and we have to start all over..

Even thou we plan on going out again, we're finding the hardships of starting over once you get back.......
With those dreaming of heading out for any length of time, you might concider the pitfalls of the point where you come back..

I have not read the whole,
Can you tell us why you came back instead of .....escaping is the best word i can come up with.Why did you come back to the states?
Mark

[Cowboy Sailer]

We only have and use Debit cards. We use one for living expenses, one for boat expenses and one for medical expenses. In all cases we keep the balance of the account very low and transfer in just enough to never go overdrawn.
Now to my questions: If we only use debit cards does that mean that we are not maintaining a good credit history?
Sometimes the merchant asks, "Credit or debit?" Sometimes they don't ask, they just run it as credit. Why? Does it make any difference in my credit history?

[travler37]

Originally Posted by goboatingnow

Explain this to me slowly. Your credit rating affects buying cable ????

Dave

NY,
Oldest daughter is in her first apt.
Cable/net company that i will not say begins with V wants 6 months payments up front plus $135 for instalation for a click of the mouse.Cable was allready installed and running.
When i moved to same basic location 5 years earlier was no charge.i can buy a Humvee on my card.....
Vote with your feet and leave...Is all we have left.
Mark

[svBeBe]

Originally Posted by Don Lucas

Not really true. You get the best rating for having had open accounts a long time, having a high credit limit but low balance, have had big loans and paid them off.

I use credit all the time. In fact I buy almost everything with my credit cards every month (probably 80-90% of the money I spend each month). But I pay it off each month from the same checking account I used to use to buy the stuff to start with. Less paperwork for me and I make $200/mo on the card rewards (they pay me to use the cards). Aren't paid any credit card interest in years!

You guys without credit history are cutting your noses off to spite your face. Just because you have good credit doesn't mean you have a lot of debt. Learn to play the credit game to your benefit. If you have the cash, buy it with your credit card and then pay it off!

PS - note to self, buy something this month with the cards don't normally use so they stay current

Ditto with us.

The complainers should learn to play the game to their benefit rather than to the banks' benefit.

Judy

[svBeBe]

Originally Posted by Cowboy Sailer

We only have and use Debit cards. We use one for living expenses, one for boat expenses and one for medical expenses. In all cases we keep the balance of the account very low and transfer in just enough to never go overdrawn.
Now to my questions: If we only use debit cards does that mean that we are not maintaining a good credit history?
Sometimes the merchant asks, "Credit or debit?" Sometimes they don't ask, they just run it as credit. Why? Does it make any difference in my credit history?

Of course it makes a difference in your credit history. Debit cards are same as writing old fashioned paper checks.....except the funds transfer electronically within seconds rather than taking days. A debit card transaction could not be considered issuing credit to you because it is immediately withdrawn from your checking account. If you want to maintain or establish a credit history, get a credit card (such as a Visa). Keep sufficient funds in your checking account to pay the Visa statement each month and set it up to automatically pay from your checking account. Amazingly easy to deal with and you will maintain excellent credit rating with no effort on your part....the bank and Visa handle everything. We check the Visa account online several times monthly to verify charges. During our 6 years of cruising this has worked flawlessly.

If you are leery of allowing automatic payment from your checking account, you can always handle payments manually online....but only if you know for certain that you will be somewhere with internet access to handle payment by the due dates. Personally, I love the convenience of automatic payments. It isn't like the money in CDs or savings or any interest bearing account is really earning enough in interest these days to worry about keeping the checking account balance as low as possible. Those days are over.

BTW, someone if this thread said that debit cards are treated same as credit cards. That is not always true. Our USA debit cards could not be used in New Zealand for purchases. Only credit cards worked there for purchases. We opened a NZ checking account and used NZ debit cards for purchases in NZ. They call it an EFPOS card (electronic funds point of sale)

Judy

[travler37]

Originally Posted by svBeBe

Ditto with us.

The complainers should learn to play the game to their benefit rather than to the banks' benefit.

Judy

Or plan B,
Reminds self that the american dream is gone and you will work till your dead if you stay here unless your a government worker.
reminds self the the difference between Ss and a Ponzie scheme is.....cant figure that out.Take my money and leave a IOU...But still am taxed 13% for a broke sysetem....if you dont understand that ask yourself why when i statrted paying into it i could draw a partial at age 52.....full at 55.Now i can not draw till age 67.
yup,i complain since i was first introduced to the said scheme.And have built my credit rating,learning how to play the system.and when i nail my card to the dock i hope they spen alot trying to find me.
Yup,
I am COMPLAINER for my entire life.Since my first on the table job at age 15.Never drawing unimployment but still being TAXED for it so government contracted road workers coul draw it and go south for the winter because they worked ther 39 weeks and had a rehire slip.....
yes i have ben a COMPLAINER for my entire life.and now watch the country of my birth disolve.As the players of the system wonder what happened and why there kids life SUCK......
A rant....thank you for letting me vent.
Mark

[Kettlewell]

My personal opinion is that when you go cruising you should maintain your financial life so that it basically looks like anyone else's. In other words, the stealth way to be a cruiser is to look no different on a credit report. Use credit cards, keep a bank account or two open, use a normal street address someplace as your "home" address, etc. I like to be able to come and go from the land world to the water world with the minimum amount of hassle, and that means having bank accounts, credit cards, etc. all working for me all the time. Why make more hassles for yourself by trying to live off the financial grid?