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I was wondering does the credit card company increase the APR if you only pay the minimum payment?
No... but make sure you understand the terms & conditions... there are some that if you miss a payment on ANOTHER (different) credit card with a totally different company that they will jump your APR to the max... they periodically pull a credit report and look for those... the idea is you start to go bad on a different card/loan that its a leading indicator of things going bad (and they might be next)... APR is a reflection of risk, so your "new" risk is higher based on that leading indicator.
A very controversial practice (and one I don't agree with), but it is current reality, so be careful. Not good to just pay the minimum as you will never get the card paid off, but its much much better than missing a payment on any card/loan.
Oh, I learn that from the documentary that I posted previously on this thread and it is call universal default and in addition, they can increase your APR if you get another loan that is unrelated to the credit card business itself!
1.If you want to buy something that is close or over your credit limit online, is there another method to pay online (if you already have the money in your checking account)?
2.So, even though I used more than 30% of my credit card limit in the past and paid it off on time, does my credit score go back up to where it was before I used more than 30% of the limit?
3.In addition, what subscription do you guys use when it comes to checking and monitoring your FICO score and checking your credit report? Should I buy a product from myFICO.com?
4.In addition, why does myFICO.com sell product that send you FICO score from the 3 major credit card bureaus, I thought the FICO score are the same from every bureau except that each credit card bureau send their own credit score that is based on their formula that differs from the FICO score? As a result, you would get have 4 different credit scores in total!
To answer some of these, #2 If you go over the 30% it won't always lower your score, it depends what formula is being used to score you and some other criteria at that time. I do have to say it's pretty sad that the best (almost only) way to maximize your fico score is to hold moderate balances on a couple of cards, in otherwords remain in debt for a while.
#3. I use myfico and no, all bureaus are not the same. FICO writes different formulas tailored to each company depending on what they specify they want used as criteria. When you run a report through myfico it'll tell you why your score is what it is.
What you have to remember is that a fico score has nothing to do with your ability to pay, it's just a predictor of the odds that you will pay.
1.So, I have to be in debt for a awhile in order to maximize my FICO score? Why is that the case? I thought that it would make me look risky to other lenders?
2.Are there one FICO score or are there multiple FICO scores in which I mean that a credit report from each credit card bureau will result in a FICO score for each bureau?
3.The credit score that I get from each credit card bureau, are they all different from each other including the FICO score?
4.Is it possible to change some of the terms in the cardholder's agreement before you apply for a credit card or will they say go apply for a card somewhere else?
[quote=mbuszu;4402419]I'll answer to the best of my ability...
3. You have a FICO score already established, but it likely isn't impressive. A big part of your score is length of time you've held credit. This is why you should keep your first credit card forever (or for at least 10 years)... if you cancel that account, you'll find your FICO score will take a dive unless you have another card which was started about the same time. Another big part of your FICO score is number of accounts and amount of balance you have vs available credit. If indeed you're a high school or college student, trust me, your score likely stinks, but there's no need to worry about it as everyone's score takes a while to work its way up.
A piece of advice from this college student is this:
Even if you have, say, a 3000 dollar credit line, you need to set your own personal limit.
Meaning that you decide how much you can afford to spend and stick to that number. No exceptions.
The second the balance hits your personal number, cut up the card until you have paid off that balance entirely. You can't swipe plastic thats in itty bitty pieces.
I have held a credit card for 3 years now, and this is the way that I am only about $200 in debt. Yes, this includes books and other such college-related things.
4.Is it possible to change some of the terms in the cardholder's agreement before you apply for a credit card or will they say go apply for a card somewhere else?
They won't negotiate on terms... if you counter with a change, they'll just throw it away. The only way to negotiate is to get onto a different standard program they have - once you have a track record with them and if you are a profitable customer, they might negotiate rate at that point, but only to keep you from a threat of leaving.
1.So, I have to be in debt for a awhile in order to maximize my FICO score? Why is that the case? I thought that it would make me look risky to other lenders?
2.Are there one FICO score or are there multiple FICO scores in which I mean that a credit report from each credit card bureau will result in a FICO score for each bureau?
3.The credit score that I get from each credit card bureau, are they all different from each other including the FICO score?
4.Is it possible to change some of the terms in the cardholder's agreement before you apply for a credit card or will they say go apply for a card somewhere else?
1. Yes, you have to show a repayment history in order to get a decent score. What they look for is something along the lines of if you have a $3000 limit on a credit card that you carry a $800 to $1500 balance for a few months and pay it off with no lates. They are not mind readers, they go by data and history so no history = no score.
2. There is only one FICO score but there are other scores like Beacon, Experian etc. These are scores that are custom written for those agencies.
3. Yes in most cases they are since they all look at different models to come up with the score.
4. Not to my knowledge. Look at bankrate.com and pick out the card that fits you the best. I also think clarkhoward.com goes into credit cards etc in pretty good detail.
Again, a high FICO or any other score doesn't mean a person will or can pay it's just a predictor of the odds that they will repay. I've seen many people who didn't have 2 nickels to rub together at the end of the month but had a high score.
When you say carry a $800 to $1,500 for a few months as in having a revolving balance? I thought that I should always pay off my balance in full, so I don't have a pay a cent of interest!
I didn't edit my previous post, but I was wondering if I did die, will my CC debt or any other debts will need to be pay off from my relative or significant other?
I didn't edit my previous post, but I was wondering if I did die, will my CC debt or any other debts will need to be pay off from my relative or significant other?
Just like with any liability, the first responsible party will be anyone else that actually signed the agreement, or who can be proven to be on the account (someone that regularly uses the card and makes payments)... second will be your estate - the assets you have will go to liquidate your liabilities... who controls the estate is determined by your will and if you don't have one then the state... absent any assets from the estate and no other liable parties, then its a loss for the company holding the debt.
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Yes, this includes books and other such college-related things.
