MC Fiasco

[grandpacamper]

Going cash/debit card only since retirement has been a positive for me & mine.  Everybody claims that having a card is the only way to go, so I acquiesced got me a MasterCard with a $500 - low limit/low interest/zero fee/rewards card.  I have had it 3 months, paying the total every month.  So far no interest or fees.  This morning I was alerted to a change in my CreditKarma access that there was a change in my FICO score.  I had been using the card up to 70-80% of debt limit, then paying it off completely 10-15 days before due date.  My may bill was calculated & the payment date is the 22nd of May, I planned to pay it off on the 10th.  My debt 2 limit shows 74%.

Because it is my only revolving debt or loan payment my score dropped 24 points!  Alerts all over the page, it was the first time the issuer had reported anything about my card.  I have argued until I am blue in the face about the dangers of credit.  SO DON'T TELL ME THE GD CREDIT CARD COMPANIES ARE ON THE UP & UP!  I'm canceling the SOB after payment this month & NEVER EVER GETTING ANOTHER CARD!  It's not a secured card or prepaid card, it's from CitiBank.

 

[rvpopeye]

Remember those ads on TV ?
"At--insert name here--bank , we're always thinking about you !"

These days , not so much......

 

[Ballenxj]

Going cash/debit card only since retirement has been a positive for me & mine.  Everybody claims that having a card is the only way to go, so I acquiesced got me a MasterCard with a $500 - low limit/low interest/zero fee/rewards card.  
<-------->
  SO DON'T TELL ME THE GD CREDIT CARD COMPANIES ARE ON THE UP & UP!  I'm canceling the SOB after payment this month & NEVER EVER GETTING ANOTHER CARD!  It's not a secured card or prepaid card, it's from CitiBank.

Sorry to hear this happened to you, but you are now preaching to the choir. I have a friend that constantly uses a cc, but magically his finances seem to remain screwed up. For me it's usually cash only, with the exception of my phone bill. I'm constantly eyeing that warily. :dodgy:
I do make exceptions to that rule, but rarely.

 

[Ballenxj]

Remember those ads on TV ?
"At--insert name here--bank , we're always thinking about you !"

But they are thinking about you, um, I mean they are always thinking about your money.

 

[grandpacamper]

OTOH, I have made $14.27 in rewards, Yea me!

 

[lenny flank]

I'm cash-only, for a simple reason: I got tired of my cc company freezing my card every time I used it in another location. Even though I told them a bazillion times that I am traveling around the country.

Now I just use my debit card to ATM enough money for the month (so I only have to pay one withdrawal fee) and pay cash for everything.

 

[BradKW]

It sounds to me like nothing is wrong and you are misunderstanding the process. % of revolving credit used has a high impact on scores, and for very valid reasons.

It would appear that the date your bank sends report didn't coincide with your payment, which is perfectly normal. Your score will bounce back up fast...This isn't a reason to get rid of the card. If indeed this is what happened, ignore the anti-credit Nellies here, you're fine...

 

[grandpacamper]

Thanks, Brad I was floored but you are probably right (knee jerk reaction).

 

[Queen]

Gotta agree with Brad, one big thing they count is how much of your credit you're using. Biggest reason I keep a very old BOA card with a 25k limit, when I do use some credit I'm only using a tiny portion of it.

 

[VanKitten]

The reason your credit score dropped was because you were using more than 10% of your available credit. If you routinely use $150 a month on the card...then get a credit limit of $1500 and your score will not drop because of that use.

Accrual tables show cc companies that people who use more then 10% of their available credit are more likely to default on the debt.

 

[BradKW]

The primary magic numbers with utilization are: 1) over 50%, 2) under 50%, and 3) under 30%. Over 50% is going to hit hard the first time it's reported and will then slowly drop score to a median where it will stay stable provided other factors remain unchanged.

Since it will bounce back next month if you've paid it off (not next week, but in 30 days when bank submits monthly report again), you may or may not actually care to pay closer attention. Utilization is not a factor like late payments or hard inquiries which show their negative effects for a long time...it adjusts quickly, so unless you're building your score with a goal/timeline in mind, it really just doesn't matter much in your case.

But if you goto CreditKarma, click on one of the score graphs on first page, either Transunion or Equifax.
Then scroll to bottom of page and click "See Your Full Report".
Then click on Credit Cards link under "Account Mix"
Now click on your credit card.
You will see at top "Last Reported: x/xx/17". This is the date your bank sends reports, and it is usually consistent month to month, taking into account holidays and bankers' hours.
So if you wanted to time your payments, this would be how to see when to do it.

 

[BradKW]

The reason your credit score dropped was because you were using more than 10% of your available credit.    If you routinely use $150 a month on the card...then get a credit limit of $1500 and your score will not drop because of that use.

Accrual tables show cc companies that people who use more then 10% of their available credit are more likely to default on the debt.

In principle this is true, however the 10% is not...your score can easily climb near 800 with 29% utilization, and as long as it's under 50% it can climb to 740's best I can tell...

 

[grandpacamper]

Looking at ..Karma.. it shows the 25th as last reporting date. So, if I pay the accumulated balance (not wait until they show a payment) off by say the 20th & not start running my reward goal up until after the 30th I'll start to recover my FICO score, correct? So I have basically a 20 day window to utilize the card for the rewards, pay it off & be billed for a zero balance. I'll pay it next month on the 10th as planned then hold off charging until after the 30th & shoot for a zero balance before the 25th, Can do, now that I know the ins & outs.

I got the thing for van dwelling emergencies but thought I could use it for my utilities during the month in the meantime. Timing is the game with them huh?

 

[IanC]

I'm cash-only, for a simple reason: I got tired of my cc company freezing my card every time I used it in another location. Even though I told them a bazillion times that I am traveling around the country.

Now I just use my debit card to ATM enough money for the month (so I only have to pay one withdrawal fee) and pay cash for everything.

with BOA you have to go to their website and enter the states you'll be using your debit card in.  There's also a box for explanation, so I just wrote that I'll be travel ling without a set itinerary.  They told me that before they suspend the card they will check the explanation.  So far so good.

 

[Sabatical]

Do any of the "cash only" folks ever get concerned over the possibility of law enforcement confiscation of their legally earned cash in a traffic stop "investigation"? I've never had a bad experience, but there seems to be plenty of negative press on the subject. Could be all internet hype I suppose.


Sent from my SCH-I435 using Tapatalk

 

[VanKitten]

Credit karma is well known for having it wrong.

Compare their reported Scores to the one you get from you bank and credit union.

It is OK for a ball park...but for accuracy don't go to Credit Karma

 

[DannyB1954]

I had a Sears card, (through Citi Bank). limit was $16,000. Balance was Zero. I needed to make a co payment at a hospital $2,500. Because I was carrying an old card, the 3 digit code on the back was not current. I called the card company and gave them all my secret codes and pins, (I verified that I was me). They refused to tell me what the 3 digit code was or to approve the transaction. I fired them on the spot and used a different card.
It probably hurt my FICO, ( one calculation they make is, your credit limit to what you owe. Having $16k limit and 0 balance helps the score).

 

[BradKW]

Credit karma is well known for having it wrong.

Compare their reported Scores to the one you get from you bank and credit union.    

It is OK for a ball park...but for accuracy don't go to Credit Karma

It really depends more on what type of credit user you are...the more "normal" the better the accuracy, while atypical circumstances can create differences between CK and true FICO. I have found CK reporting to accurately reflect my FICO scores, within 10 points, for past 3 years. But regardless, free services like CK provide accurate monitoring and +/- trending information.

It doesn't help that there are many type of scoring systems. For example, a car dealer that advertises 0% financing for approved credit (usually 740+ ) creates their own scoring system that unfairly penalizes most customers for things a bank mortgage would never consider. This is obviously self serving, an attempt to push people into higher financing rates.

This is a worthwhile read for anyone interested...it is a short article about CW accuracy, but provides a good overview of how scores get generated: 

 Credit Karma Accuracy

 

[Dgorila1]

Use a credit union instead of a bank, and get a debit card for your accounts. You can use the debit card as a credit card and it just debits the money from your account when you make the purchase . We have our paychecks direct deposit into one checking account, then transfer some of the money into a second checking account that we use as the primary "credit card".  This way if someone steals the card info they can't clean out our primary account. Have been doing this for years and it works great Screw banks, credit unions are the way to go!

 

[grandpacamper]

Monitoring CK this morning I found that nothing has changed as far as debt or payments. But my FICO went up 44 points even though it still shows 74% of limit. I gained 20 points but still can't figure out the timing. Today's the 3rd my last report day was Apr 25th, my last post on my card was the 26th. I plan to pay it completely on the 10th & wasn't going to run the account with utility payments until the 30th. But now, I think I'll just better keep it in reserve for emergencies only.

Yes, I do have a CU account (no fees ever) a debit card but decided that I'm still mentally aware of the dangers of trying to beat the rewards game. Little did I know! Had two CU accounts but one was from Utah & was inconvenient to address any problems. When we were @ a funeral in Aug '16 I was finally able to close it, they needed a witnessed notarized signature, I guess I could have played mail tag but walking in was easier.