Credit Crunch?

gprsh924 · 11-21-2008, 08:21 AM

So I go to the bank this morning to take out some cash because I'm buying a set of winter wheels/tires for my dad's M3 tomorrow in Indianapolis on my way home for Thanksgiving. As I am doing the transaction, the teller informs me that a banker would like to talk to me for a few minutes because my account has reached the "Gold" level.

The banker then informs me that I have qualified for a reward and a new credit card. The new CC would be an upgrade to my current student card that has a measly $800 limit. I asked her if my limit would go up at all and she told me it would...to $15,000.

That pretty much explains why our economy is going to hell. There is absolutely no reason that someone in my position should be given access to that much money. I am a 20 year old student with no job and no income. Granted, I have always paid my balance in full and have good credit, but still. $15 grand is asinine. When I get my card, I am going to lower my limit to a more reasonable $4-$5k.

On the other hand, I wonder if any cal dealers will take a credit card?

lendaddy · 11-21-2008, 08:45 AM

Never lower your limit, just don't use it. Having a better ratio of unused revolving credit will help your score.

competentone · 11-21-2008, 09:10 AM

Quote:

Originally Posted by lendaddy

never lower your limit, just don't use it. Having a better ratio of unused revolving credit will help your score.

+100

rammstein · 11-21-2008, 10:07 AM

Come on- you DESERVE it!!!!

scottmandue · 11-21-2008, 10:56 AM

Oh sure the first CC is free... but then you have to pay.

Might want to check on what the interest rate is on you "gold" account.

My friends daughters were given "free" CC that were being handed out at the college campus... they ran up a couple hundred bucks and had to quit college to get jobs and pay them off.

RWebb · RWebb's Garage

upgrade = hidden fees - be real careful

Porsche-O-Phile · Porsche-O-Phile's Garage

What lendaddy said. Having a lot of credit lines is not a bad thing. Using them is.

gprsh924 · 11-21-2008, 11:17 AM

Quote:

Originally Posted by scottmandue

Oh sure the first CC is free... but then you have to pay.

Might want to check on what the interest rate is on you "gold" account.

My friends daughters were given "free" CC that were being handed out at the college campus... they ran up a couple hundred bucks and had to quit college to get jobs and pay them off.

I am going to be careful. The banker wanted me to upgrade right there on the spot, but I am waiting until I get home so that I can look over everything with my parents first. That being said, I looked over the offer and it truly is supposed to be a free card with no hidden fees.

As far as spending on the card, I have had a credit card for almost 3 years so I well aware of the pitfalls. I only spend what I can afford to pay for in cash. I use the card for convenience and to help build my credit rating.

Also, thanks for the advice about the limit...I will talk it over, but probably just keep the limit high and not use it.

onewhippedpuppy · 11-21-2008, 11:20 AM

Is your current card working for you? If so, why mess with it? Not even having the OPTION of charging up $15k of debt is a bonus. We'd all be better off if the only card offered was a debit card.

Nothing personal, I wish everyone your age had your responsible attitude. When I was in college I knew way too many people that took their "free money card" shopping and ended up at home with mom and dad to pay off their shopping spree.

Gogar · 11:38 AM

As long as you know it's not really your money, you should have no problem.

As far as credit ratings and scores and limits go, you will do the best for your credit rating if you carry a balance that is about 20-25% of your available credit. It shows that you are a responsible borrower, but one that the bank will make money from. So maybe you could set your limit so that you will use the card to that 20-25% amount occasionally and then pay it off.

People who have a lot of available credit but never ever use it don't necessarily have better credit scores than responsible borrowers.

HardDrive · 11-21-2008, 01:40 PM

Quote:

Originally Posted by gprsh924

There is absolutely no reason....

Reason? REASON? Thats a bunch of commie talk!

Now march you rear down to the Hummer dealership and buy yourself an H2 with 24inch spinners young man! It your right, nay, your obligation as an American!

gprsh924 · 11-21-2008, 02:09 PM

Quote:

Originally Posted by onewhippedpuppy

Is your current card working for you? If so, why mess with it? Not even having the OPTION of charging up $15k of debt is a bonus. We'd all be better off if the only card offered was a debit card.

Nothing personal, I wish everyone your age had your responsible attitude. When I was in college I knew way too many people that took their "free money card" shopping and ended up at home with mom and dad to pay off their shopping spree.

My current card is ok, but the $800 limit is kind of a pain. I try to for as much as possible with the card, but I sometimes have to pay close attention to how I distribute my money across credit and debit because I will go over the $800. It will be much more convenient that when I make the occasional big purchase, I can just put it on one card.

I probably average about $200-250 a month in card activity. The only reason that it would potentially increase with the new card is that if I make a big purchase, it will go on that instead of the debit card (or my parent's credit card). I've always had plenty of cash in the bank and am frequently tempted with new and exciting ways to spend it, but I typically resist. I was all set to buy an HDTV this christmas, but now I am going skiing in Canada with my buddies. The $500-$600 allotted for the tv just got claimed by the ski trip. I have enough to do both, but I don't believe it is prudent for me to drop over $1000 at Christmas.

scottmandue · 11-21-2008, 03:44 PM

Quote:

Originally Posted by HardDrive

Reason? REASON? Thats a bunch of commie talk!

Now march you rear down to the Hummer dealership and buy yourself an H2 with 24inch spinners young man! It your right, nay, your obligation as an American!

I can stop anytime!

Really!

And spinners are so last year.

Tishabet · 11-21-2008, 04:48 PM

Check the card terms out with your parents. As long as you're not paying some insane fee just to have the card, get it (with the 15k limit) and then cut it up. Don't use it. Your credit is calculated partially on how much you owe vs your total potential lines of credit... at your age (if you're disciplined enough to not use the card) this could be a very positive thing.

competentone · 11-21-2008, 05:48 PM

Quote:

Originally Posted by Tishabet

Check the card terms out with your parents. As long as you're not paying some insane fee just to have the card, get it (with the 15k limit) and then cut it up. Don't use it. Your credit is calculated partially on how much you owe vs your total potential lines of credit... at your age (if you're disciplined enough to not use the card) this could be a very positive thing.

You actually will probably want to use the card -- at least a few times a year. If you just have a card and don't use it, there is a chance the company could close the account. My brother recently had this happen with a card which he hadn't used for some time. (He called them and they re-instated the card, which he now uses occasionally to be sure they don't try to close the account again.)

SlowToady · 11-22-2008, 08:47 AM

I was depositing money in the bank the other day, when the teller asked if I had setup online banking. Told her no, I hadn't, and one of the bank guys (Asst. Manager?) offered to do it. Told him sure why not. So as we're setting this up, we set one up for my CC also. He notices it's a rewards card, and asks how much I use it. I tell him not often and he says "oh yea, you don't...at all...really" and goes on to explain how the rewards card has a higher interest rate because of the rewards. (It is 15%.) He offers to switch it to regular "platinum" card. At 7% interest. With a $11,000 credit limit! I'm also a college student, with no (reported) income. Why the **** would they make $11,000 available to me? I thought the $3,000 of the rewards card was even a bit much. Chase probably knows something I don't....

turbo6bar · 11-22-2008, 09:09 AM

Quote:

Originally Posted by SlowToady

Why the **** would they make $11,000 available to me? I thought the $3,000 of the rewards card was even a bit much. Chase probably knows something I don't....

Chase may know something... They're trying to get you addicted to easy money.

Soon, millions of Boomers will be relying on easy dividends doled out by financial juggernauts on Wall St. You wouldn't want to disappoint them, would you?

SlowToady · 11-22-2008, 09:50 AM

Why most certainly not! Spend spend spend!!

(I was going to put a HAHA after that...and then realized it wasn't that funny, because people actually do live in that fashion...)

Quote:

Originally Posted by turbo6bar

Chase may know something... They're trying to get you addicted to easy money.

Soon, millions of Boomers will be relying on easy dividends doled out by financial juggernauts on Wall St. You wouldn't want to disappoint them, would you?

Langers · 11-22-2008, 11:11 PM

Quote:

Originally Posted by scottmandue

Oh sure the first CC is free... but then you have to pay.

Might want to check on what the interest rate is on you "gold" account.

My friends daughters were given "free" CC that were being handed out at the college campus... they ran up a couple hundred bucks and had to quit college to get jobs and pay them off.

They quit college over a $200 bill?!