My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.


By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)



 

Cash Out Your Credit Score

Contributed by mm | June 1, 2005 11:56 AM PST

Congratulations, you have a fabulous credit score, and you can certainly benefit from it the next time you refinance or apply for a car loan. But how vigorously you will defend your high score?

I have been referring some amazing credit card offers to my colleagues, but more often than not, their reply was "yes, they are good, but a credit card application will hurt my credit score, so I'll not try."

Yes, they are right. A credit card application will hurt your score a bit, because recent credit inquiries are factored in the score calculation, but is this the right excuse to pass the next deal that will make you a few hundred dollars better off?

I am a firm believer that when it comes to personal finance, everything has a price. In the past, I had been cheap enough to apply a card for $25 gift certificate. Nowadays, my threshold is $100 -- below that, it might not be worth my time (and credit score). Last week, I took another 12-month 0% APR balance transfer offer from Discover Card for about $9,800. The transaction fee is $29, so I figured out I can count on at least $300, if not more, from interest income before I have to pay it off. I consider it a nice price to sell a few credit score points.

Think about it. A credit inquiry only hurts your score temporarily, and in the long run, because you have higher total credit line, your credit utilization will decline, which will actually help your credit score down the road. (Credit utilization is part of the credit score formula, too.) Plus, it probably does not make much difference as long as you keep your score above 700.

To draw an analogy, your credit score is like the gas level of your car. You can keep it high if you don't drive, but if you want to make meaningful use of your car, you have to tolerate a less-than-perfect in your gas level.

This Post Has Received 11 Comments. Share Your Opinions Too.


Dan Commented on June 1, 2005

If you only have a few cards, you'll also take a hit on the average length of open lines. That can have a bigger impact than a single inquiry.


Nathan Commented on June 2, 2005

In the grander scheme of things, singing up for multiple cards does help your credit score more than it hurts it, but it also leaves you more vulnerable to identity theft.


Jose Anes Commented on June 2, 2005

Defering debt at no interest is almost always a good idea.

My wife is good at finding 2.9% for the life of the loan type of cards. Right now about 70% of her car account is there, paying a few bucks a month :)


Jerry Kindall Commented on June 2, 2005

I had some problems with my credit a few years back (lots of personal debt, all paid off now) and I've recently, finally, started getting offers for better ones. It started with a platinum card from Bank of America which had a 0% intro rate (bought my new computer on that and didn't have to pay interest for six months). After I got that, I started getting offers. I didn't qualify for some of them (got rejected after sending the application back) but I kept trying and eventually got a State Farm Bank platinum rewards card, and now I earn 1% on everything I buy. (It's in "State Farm dollars" which means you have to apply it to a State Farm product like insurance, but it just so happens I have State Farm insurance, so it's cash as far as I'm concerned. You could also open a checking account with them and deposit it there -- their checking accounts are free, and they rebate up to 5 ATM fees a month.)

So yeah, keep applying for the good ones; I took a bit of a ding on my credit score trying to get a rewards card, but finally did get one and will probably make at least $100 off it in the first year. I'm not looking to buy a house or a car anytime soon, so I can certainly take the ding in the short term for that.


jim Commented on June 2, 2005

I think after you have purchased a home, the importance of your credit score drops considerably. I don't see adding a few credit cards really having enough of an impact to give up a few hundred bucks for signing up.


utkarsh Commented on August 21, 2005

well most of the financial advisors advise not to have more than 2 major credit cards so why do you say it otherwise. Also about the transaction fee you can ask them to waive it off one time giving you completely 0% on your balance, thus saving you more than 300


mm Commented on August 21, 2005

if you are not personal finance conscious, one cad may be already too much. Additional card means additional time to maintain or hefty fees will apply, so if you are not up to it, you should stay with two cards. Otherwise, what's the harm? It usually makes sense to ask these advisors why, instead of following blind suggestions, and especially in personal finance world, hardly any advice works for 100% of the population.


diane from pa Commented on August 23, 2005

This credit card thing reminds me of the long distance telephone offers a few years back. We made over $500 in just over 2 years changing back and forth. I never could figure out why they kept sending the offers when I would just switch in a few months.
Anyway thanks for all the info, I am now into accepting money from the card companies.


Sharon Coolidge Commented on April 10, 2016

Great thanks unto these great company who made it possible for me to upgrade my business i was stuck in a financial situation and i needed to refinance my business and pay my bills.Until i met this company who helped me out with the sum of [$100,000]. I'm very glad and happy because I tried seeking loans from various loan firms both private and corporate but never with success,and most banks declined my credit.Truly i want to thank Mr Barry More who seriously help me through and ensure i get the loan without delay.If you must contact any firm with reference to securing a loan with low interest rate of 3% and better repayment plans and schedule,please contact Mr Barry More at [barrymoreloans12@hotmail.com ] for a fast and safe loan.


Sharon Coolidge Commented on April 10, 2016

Great thanks unto these great company who made it possible for me to upgrade my business i was stuck in a financial situation and i needed to refinance my business and pay my bills.Until i met this company who helped me out with the sum of [$100,000]. I'm very glad and happy because I tried seeking loans from various loan firms both private and corporate but never with success,and most banks declined my credit.Truly i want to thank Mr Barry More who seriously help me through and ensure i get the loan without delay.If you must contact any firm with reference to securing a loan with low interest rate of 3% and better repayment plans and schedule,please contact Mr Barry More at [barrymoreloans12@hotmail.com ] for a fast and safe loan.


ADAM FRED LOAN FIRM Commented on January 8, 2017

Do you need an urgent loan to support your business or in any purpose?
we are certified and legitimate and international licensed loan lender We offer loans to Business firms, companies and individuals at an affordable interest rate of 3% , It might be a short or long term loan or even if you have poor credit, We shall process your loan as soon as we receive your application. we are an independent financial institution. We have built up an excellent reputation over the years in providing various types of loans to thousands of our customers. We Offer guaranteed loan services of any amount to citizens and non-citizens we offer easy

Personal loans,
Commercial/business loan,
Car loan
Leasing/equipment finance,
Debt consolidation loan,
Home loan,

for all citizens and non-citizens with either a good or bad credit history. If you are in need our company email (Adamfredloanfirm@gmail.com) you can email us with your information.
email us: Adamfredloanfirm@yahoo.com or Text or call us on +15017229938 OR +18144768385
Reply


Add Your Comments










Remember personal information?




(It will take a few moments for your comment to be published. Please do not close the window until then.)


Read More ... 138 Posts In The Same Category










This page was last rebuilt at January 08, 2017 03:43 PM PST. (338 Words)
 

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar






.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)