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My wife has two personal credit cards (as do I). Each of her cards has a limit of $2,000 exactly ($4,000 total). Knowing her habits, I do not let her touch one of them. I simply keep that card open so that she can never go over half of her total credit line if she were to max out one card - so that her credit score can stay decently good.
But her current balance on the one card she uses is approaching $1,400 - and it has me thinking about my theory.
Am I correct in assuming the following?:
If she were to max out this card at $2,000, it would still only be half of her total credit line when you take into account all cards. So, in this case, it would not hugely affect her credit score - but instead, she simply would not be able to use the maxed card at all until she pays it down some? - forcing her to budget and only spend what she makes.
If I am correct, this would be a financial lesson I would love for her to learn (being forced to only spend what you can pay and have to budget) and to me, it would be worth 2k ... but on the same hand, it is totally not worth sacrificing her credit rating if my "let her learn a lesson" theory is wrong. So, that is why I am asking for advice.
I have never maxed out a credit card or come anywhere close, so I do not know what happens with your score or credit standing if that happens ... even if it would not be near maxing out your overall credit.
You are wrong about this. If she maxes out only one credit card her credit score goes down south. I have maybe 25 000 Dollars in credit card limits. Maxed out one card once ( 1k ) and my score went down a lot.
My wife has two personal credit cards (as do I). Each of her cards has a limit of $2,000 exactly ($4,000 total). Knowing her habits, I do not let her touch one of them. I simply keep that card open so that she can never go over half of her total credit line if she were to max out one card - so that her credit score can stay decently good.
Is your wife young and doesn't really understand how credit cards work? Or is she just the type of person who has to have what she wants when she wants it?
If she doesn't understand how cc work then when the statement arrives set up a time to go over it with her. Don't just glance over it. Have her collect all the receipts and check off each one. This is important because when she actually looks at the receipts it will remind her of the purchase. She may not even remember how much she paid for that shirt she had to have. It may be in the closet long forgotten. After that add them all up and compare the number to her paycheck. Then look at how much money your interest and fees in the statement is. Say things like oh $50 we could've eaten at a nice restaurant with that. Maybe she will have a light bulb moment after that. If she is not good at math get actual cash to show her.
Ick. It sounds like you are talking about one of your children rather than a spouse. If she can't handle spending less than you guys make, maybe financial counseling is your best option.
Ick. It sounds like you are talking about one of your children rather than a spouse. If she can't handle spending less than you guys make, maybe financial counseling is your best option.
THANK YOU, may the gods save me from ever having a man in my life who thinks he has to teach me a lesson on any topic.
Why in the world would you just sit back smugly and watch while your wife digs herself into a financial hole she may never work her way out of? The time to show her how to manage her credit cards is right now, before that balance gets any higher and before the over the limit charges and interest rate increases happen. Her finances will effect you one way or another, you should deal with this now in a supportive way, working towards your common goals.
Thanks everyone. I appreciate the assumptions and speculation regarding the dynamics of our relationship ... instead of just simply answering my specific credit-based question.
I don't feel the need to defend myself by providing every backdrop detail of this situation, but let's just say that I am far from the mean, controlling guy some of you imply. Let's just say that the wife and I have very different philosophies on money. We used to have a joint account, but she was feeling "restricted" because I keep detailed records and made sure we did not spend more than we earned. She is a spender who lives for today and I am a saver who plans for tomorrow. So we decided to separate accounts, and split the bills based on income percentage (I make 3 times more than she does). Problem is, she doesn't keep receipts or records or live by debit ... but wants her own account. Instead, she wants to use credit and pay what she can on it each month. So I said fine, show me what you can do and don't build up much debt or we'll have to go back to a joint account. She agreed. Now she is also very, very independent and we are both somewhat young (I'm 28 and she is 24), so any lessons she learns on finances' will not come from my mouth as I am simply seen as the buzz-kill controlling man in that situation. So, she will have to learn the tough way ... as I did years ago. Luckily, her limit of $2,000 would not kill me to pay if I ever had to bail her out. I just don't want her credit rating to get hurt (hense my question) while life (the best teacher) teaches her about finances, as that would affect both of us down the road. My credit is great right now and hers is good, and it would be great if it stayed that way.
oscottscotto. you'd better take her cards away from her.....you know how the ladies are when they see that new pair of shoes....
Just joking Ladies.....
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