Author Topic: I no longer owe anything to credit cards!  (Read 3895 times)

Mr. Moneymustcash

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I no longer owe anything to credit cards!
« on: July 18, 2013, 07:54:08 AM »
I am excited to say that today I officially paid off that monster of a credit card I had.  I owed $1700 on that bad boy and decided that today was the day I took a risk and I wiped it out. Who cares if I have to eat ramen for an entire month, at least I dont have this monkey on my back anymore! W00T!

Now my question...

Since I dont have anything on this card, does it even make sense to try to build credit with it? If so, I have $1800 limit on it. What is a safe practice to maintain some financial facial hair, while also building/maintaining credit?

Phoebe

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Re: I no longer owe anything to credit cards!
« Reply #1 on: July 18, 2013, 07:57:03 AM »
Woohoo!! Configurations!

One way that we keep our credit intact without going into CC debt is to have a couple small bills automatically hit it each month (i.e. our Hulu plus subscription for 7.99/month).  We then have an auto pay that pays it in full without me having to worry about it.  I still check it just in case, but this small charge keeps my card open and my credit strong.

TrulyStashin

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Re: I no longer owe anything to credit cards!
« Reply #2 on: July 18, 2013, 09:52:13 AM »
By paying it in full, you just built your credit score.  There really isn't a need to continually charge stuff to keep building.

That said, so long as you have sufficient discipline to pay it in full every month as Phoebe described, you will be fine.

Congrats!

CorpRaider

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Re: I no longer owe anything to credit cards!
« Reply #3 on: July 22, 2013, 12:37:22 PM »
Me too.  Boom!

superheropunk

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Re: I no longer owe anything to credit cards!
« Reply #4 on: July 22, 2013, 02:31:18 PM »
I would not use the card. You just paid it off and unless it is sometype of Rewards card which doesn't sound like it I would cut it up and erase all known contact information so you never can use the card again nor have it replaced.

olivia

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Re: I no longer owe anything to credit cards!
« Reply #5 on: July 22, 2013, 04:04:09 PM »
Awesome, congratulations!  Not sure what the right answer is as far as using it and paying it off monthly.  I hope to have ours paid off by the end of the year, and 2 of them currently have zero balances, but I haven't been using them at all, just keeping them at zero.

MoneyLifeandMore

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Re: I no longer owe anything to credit cards!
« Reply #6 on: July 22, 2013, 08:21:46 PM »
Congrats! If you're going to be tempted to use the card you need to hide it and make it impossible to use. However, I'd leave the card open for credit purposes if you ever plan on buying a house with a mortgage. Length of credit history is a part of your score, so keeping an account open for a long period of time helps out. Just make sure it doesn't tempt you to use the card. If it does, cancel it and find another way to build credit that you can handle.

a.g

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Re: I no longer owe anything to credit cards!
« Reply #7 on: July 22, 2013, 08:40:00 PM »
I would not use the card. You just paid it off and unless it is sometype of Rewards card which doesn't sound like it I would cut it up and erase all known contact information so you never can use the card again nor have it replaced.

I don't know if I agree with this advice. Using it sparingly, yes, but to all together eliminate it? Having a long credit history is part of whats gonna get you a cheap rate on your mortgage. If your very concerned about racking it up again, why not lower the limit? That's what I did when I finally got mine under control. Took it from a $7500 limit down to $3000. You should have seen the tellers face! It was like nobody have ever wanted to do that before. She actually called the manager over to try to explain to me about having to re-apply to raise the limit blah blah blah. But yeah, I think keeping it open is important too.

SEAKSR

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Re: I no longer owe anything to credit cards!
« Reply #8 on: August 02, 2013, 11:51:04 AM »
My understanding of credit scores is that open available credit helps immensely. If you set up some bills you pay regardless to be paid by this card, you keep it open. I had a 2000 line on a card that I only used in emergencies that was closed due to non use by the creditor. That killed my credit score, and when I got laid off two weeks later, nearly prevented me fom getting another job. Employers do look at credit scores sometimes, and this one did, especially because the job required handling large sums of cash.

My recommendation: have your cell phone, Netflix, Hulu, and any other subscription type services come on that card and then treat the card like a utility payment. Now, take the card out of your wallet and make it inconvienent to get at... Ie put it in your safe deposit box, or (I actually have done this) put the card in a ziplock bag, put that zip bag inside another larger one, add water to the second one, and stick it in the freezer.  That way, if there is a true emergency, it is available, but you have to really have a true emergency in order to get at it.

 

Wow, a phone plan for fifteen bucks!