- April 19, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Hesitation with Credit Cards
I have always been a bit wary of using credit cards excessively. My preferred method of payment is usually with a debit card, as I feel more comfortable knowing that I am only spending money that I actually have.
Despite my reservations, there are certain situations where using a credit card is necessary. For example, I do use my credit card to pay for larger expenses such as my car insurance for six months in advance and purchasing plane tickets.
## Potential for Financial Risks
While I understand the convenience and benefits of using a credit card, I am cautious due to the numerous horror stories I have heard about people falling into debt and financial trouble by overspending. This has made me very disciplined in managing my credit card usage and only using it when absolutely necessary.
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Anything above a 780 credit score will generally place you in the highest tier for lending so, assuming your above 780, having an 800 credit score will provide little benefit other than personal satisfaction.
A credit card is vastly superior to a debit card for everyday transactions so long as you pay off your balance every month. If your card info gets stolen and fraudulent purchases are made, they’re made using the CC companies money and 99% of the time you’ll get all the money returned to you. If your debit card info gets stolen, that’s your money disappearing. Even if the bank gives you your money back, it will take usually several weeks for it to happen. Meanwhile during that time you’re out of that money which if you need it for rent and groceries etc you’re SOL.
Pro tip: if you use your debit card for everything, just use your credit card as your debit card, and your debit card to pay your credit card in full every month or every week if you dont want to risk having too large a balance.
Use your credit cards!
As others have pointed out, credit cards are safer than debit cards. While both have some protections against fraudulent charges, the difference is in whose money is tied up. If, say, I manage to charge $1000 to your debit card, that’s $1000 missing from your checking account until your bank finishes investigating. That can take weeks. Hope you didn’t need that for rent tomorrow! If, however, I did that with your credit card, all your money is still in the bank while the credit card company investigates.
I joke that I have lots of credit cards but can’t afford to use them. What I mean is that I can’t afford to buy things I haven’t budgeted for. I do use them to buy groceries, gas, other bills, etc, but never more than I could afford to buy in cash. Then I pay them off *in full* each month. This way I never have credit card debt, no one skims my debit card, and I get all the cash back and points that save me money. If you don’t want debt, that’s how you do it.
it will save you thousands of dollars in interest when you borrow money. it’s really that simple.
My credit score is 828 and I just got rejected for a car loan from a credit union so there’s that 🙃
Are you asking what’s the benefit of a 800 score in particular, or simply “a good credit score” in general?
In general it’ll get you more favorable interest rates for a car, house, personal loan, etc, compared to if you have a mediocre or crappy score. So you’d pay less money than someone with a worse score.
I recently bought a used cheap truck and needed to finance $6000…. This is what one bank told me:
“Credit score 841. We regret to inform you we will not be accepting your finance offer due to you not living in your current residence long enough…”
I bought a home 1.5 years ago, in the same county Ive been in almost 40 years, spend less than 20% my income on mortgage, and have a 100% PERFECT credit report going back 21 years…. Not sure how they thought I couldn’t afford less than $200 a month, but yea, credit scores are pointless one you are above 700-750, the banks will do what they want. Use a rewards card for all your purchases, and pay it in 100% full every month 👍
Credit card for normal spending is beneficial for various reasons as long as you pay the statement balance in full each month to avoid interest:
1) you get an extra month to keep that money in a HYSA to earn a bit more in interest.
2) credit card rewards add up with regular use (I usually get around $400-$500 a year for free just by using my card.
3) Easier fraud protection since you’re spending the bank’s money and not your own.
800+ credit score is good for if your utilization or something else lowers your score a bit you’ve got wiggle room and can still be in the high/favorable score range if loans or something else requiring a credit check is being done. Otherwise, it’s nothing really necessary.
* Lower insurance rates
* More and better job opportunities
* Lower interest rates on loans
* Higher Security clearance
* Priority on rentals
* All the benefits of lower scores that are still “passing” (no deposits on utilities, etc.)
I get every rental I apply for. For as long as I’ve been in the 800s and had good income I’ve gotten every single property I’ve applied to rent, the one I just secured apparently had 300 applications. Kind of a tertiary benefit there.
i just got notification last weekof my credit score increase.. 810, felt really good considering i filed bankruptcy almost 20 yrs ago from bad divorce, Today i get a pre-approval letter for a new credit card line and they are offering me a rate of 32%…. NOT
still waiting to see any real benefits appear
Last week I got a $3500 fraudulent charge on my cc. Called my credit card company and it was taken off in 2 days. It wasn’t MY money and so I wasn’t sweating about a crazy big purchase. I think my information got stolen online or skimmed at a sketchy gas station. I have no true way of knowing. But I would be sweating bullets if someone used $3500 of my money. Also I have an 805 credit score, and I can’t say it’s done much for me but nice to know I have it.
Also I get a ton of benefits from a CC, I have used my points to purchase miles and have gone on several trips where I didn’t use money to buy tickets. This is just from spending my money on what I usually would have.
Never ever worrying about a credit check or even credit pull.
Not really anything past like a 780 other than buffer so if you have a hard pull or something that drops your score 20 points youll still have a 780..
The 1-2% back from a credit card is already built into the price of basically all goods. So effectively using a credit card responsibly is saving you 1-2% on every single item… doesn’t seem like a lot but do that year over year and it’ll be tens if not hundreds of thousands of dollars.
I’m sure I’ll get pushback but debit cards are for the financial illiterate. If you understand money in has to be greater than money out switch to a credit card. Stop using a debit card. For safety reasons too as debit cards aren’t protected for theft like a credit card is.
My rejection for a loan I was going to use to pay off my partner’s credit card debt showed I have a 799 credit score (was rejected because of not being at my current employer long enough).
I assume once I receive that final, delectable point, no bank can ever refuse me again.
A high credit limit often means you will qualify for lower interest rates and it also means lenders will allow you to borrow more money than someone with a lower credit score.
It helps alot with car insurance rates also
Credit score aside, just using a debit card for everything isn’t a great idea, primarily for the added layer of fraud protection that credit cards provide. It’s easier to deal with fraudulent charges on a credit card, whereas fraudulent charges in a debit card can potentially drain your bank account, and depending on the bank this may take time to resolve, leaving you drained in the interim.
Just use a credit card, religiously pay it off every month and you’ll be golden.
When you have an 800 credit score, it becomes irrelevant and you never have to think about it again.
You get the best interest rate available when going for a loan. Also you will easily qualify.
Basically it gives you access to cash via credit/loans if you need it.
I only use a credit card after having a fraud issue with a debit card way back when. When you use debit that is your money that gets taken and it’s a pain in the ass to get it back. I’ve had fraud with a cc and they just cancel the charge and my hands are wiped of it. A little better security that way.
Anything above mid 700’s usually doesn’t improve your interest rate. It’s more for bragging rights or for those that are ultra competitive. I have people I compete against just for fun.
It got me a 3.5% interest rate on my house a couple years ago. 800+ credit scores will only make your life better.
You actually qualify for those rates you see on commercials.
Edit: Also, some apartments will run a credit check. You could get more favorable lease, or deposit terms based on a high score. Some apartment’s will even reject your application for too low of a score.
An 800 FICO is nothing to write home about. What it means is you get offered the best rates for loans you may want to take out in the future. It means you look better to landlords if they do credit checks and may give you an edge. It means when employers run credit checks (which they do for some jobs), it could make you look better than other candidates everything else being equal.
What an 800 score tells people is that you’re meeting all your debt obligations. And people who pay their bills on time are likely also generally trustworthy and don’t have to be reminded to show up to work on time.. in other words, a reliable citizen.
That said, don’t be afraid of credit. Just pay your statement in full every month by the stipulated date. Credit cards have a lot of advantages over debit cards.
Extreme disappointment every time it drops. Source have a 830 credit score that I’ve worked so hard for only to be disappointed every time it drops.
Having an 800 credit score has monay benefits:
1. Access to premium credit cards with generous rewards and perks.
2. Lower interest rates on loans, saving you thousands of dollars over time.
3. Higher credit limits, providing greater financial flexibility.
4. Potentially lower car insurance rates in many states.
5. Easier approval for rental applications and possibly avoiding security deposits.
While it’s good to be cautious about credit card use to avoid overspending, responsible use is one of the best ways to build and maintain a high credit score. Consider using your credit card for everyday purchases and paying off the balance in full each month to establish a positive payment history and earn rewards without accruing interest.
You can look at the tallest building in your state and know you helped the bank put their name at the top
Companies know that you’re a juicy bug to chew on… Hakuna matata.
When you need an emergency personal loan or a mortgage you’ll find out.
In all seriousness – when you’re 780 or over people will pay you to use their services or for them to use your money.
I get credit card offers all the time and could easily churn $4k a year on just credit card or bank offers. Instead I have a Chase Sapphire Reserve and I make about $3-4k a year on points on that card – I’ve already earned $1500 this year after spending $500 on hotels for 4 nights for an upcoming trip.
There is a club for people with 800 credit score. Its called the best debt deal club.
Mines 827 per credit karma right now. No real benefits over 780. I remember for a 6 month period wells Fargo had me as an 850. I took screen shots. I assume I’ll never get back to that.
Not sure about >800, but I can tell you from very recent experience that >700 means you might not need to pay last month’s rent up front when you sign a new apartment lease
Build your credit and use it as a Tool. Control it, dont let it control you. As long as you pay it off monthly, you are benefitting from it. Dont just use the debit card
Interest rate will be lower, insurance may be cheaper, some jobs consider it as well. It’s more a byproduct of being good to future-you financially. Past-me was a dick.
– Can’t be said enough, you can borrow money and you’ll pay less interest.
Couple other benefits no one’s mentioning,
– Get 0% financing. I haven’t paid in full for furniture or a car or a mattress in years. We put a little down and stretch the payments out at 0%. It’s handy.
– Don’t have to worry about hard or soft credit checks. Get store cards all the time to take advantage of deals, then cancel. It’ll cause your score to fluctuate by a few points, but with a high score the fluctuations don’t matter.
– We get judged by our credit scores for so many things that are not purchasing-related: job applications, rental applications, insurance quotes. A high score makes you look “responsible.”
– Free stuff through rewards programs. You can earn thousands per year in anything from Amazon credit to hotel stays by routing all your purchasing through cards.
– Peace of mind. I’ve got a million things to think about but this is never one of them.
I’m at 810 which is awesome because I’m in the excellent credit score category but honestly once you are in that range at 780 or higher there is no benefit.
Realistically, the only benefit to having good credit is not having to worry about being credit worthy. It’s not like it magically unlocks new perks.
Perfect credit is only useful if you need to borrow money.
If you’re managing money properly. Put everything on a credit with cash back and pay it off each month. I get like 1200 a year back just from buying things I would buy anyways. Also, fraud is so much easier to manage on a CC vs a debit card
800 means you will get the best mortgage offers if you decide to get one some day.
In 2019 I was able to walk out of the dealership with a new truck and sub 4% interest rate with almost no income history.
Unless you want to be in debt, an 800 score is useless. I get credit card offers all the time. I don’t need them.
I just bought a $100k new car with 800+ credit. Not only did I get the lowest rate, I didn’t have to provide any documentation.
No pay stubs, no tax return, no proof of my ability to pay. I was shocked to be honest. I filled out an app online, they asked for the car invoice and a check was overnighted for the full amount.
You will recieve the lowest interest rates on loans and credit cards. You can also get a credit card which rewards you with points or cash back. I would recommend switching to credit cards instead of debit cards for purchases because the fraud protection is much better. There are lots of great no-annual-fee cards out there.
All expenses, other than cash purchases, go on to a credit card. I have one checking account with a small amount of money specifically for cash access linked to a debit card I carry. My operating checking account at a separate bank has a higher balance and I don’t carry a debit card around for it. If someone steals my cash access debit card and successfully visits an ATM with it or makes a purchase, my exposure is much lower than if it happened with my operating account.
Fraud and theft are commonplace where I live. My last round of replacement credit cards were stolen from the USPS before I got them and used to make fraudulent purchases which were all blocked and voided by my bank. Its much easier to recover from fraudulent credit card purchases than if someone steals money directly from your account. This is more information than you were looking for, but since you mentioned debit card usage I thought I would share my two cents.
If you have a high score then it gives you more wiggle room to borrow or open up credit cards. Each one of these will drop your score. Your credit can increase by having more outstanding but each time you open a new credit card or get uour credit checked it can drop it.
If you like to take advantage of getting free miles or hotel stays then you can open a credit with one of those special offers that require you to spend $1k or $3k in 3 months for 100k miles or something. It’s a good way to make some extra money ornget free vacations. It will ruin your credit if you abuse it but if you have a good score then you can mitigate the damage.
A higher credit score means better rates on loans, and access to loans that might be unavailable to someone with a lower score. There are some types of loans, like auto loans, that take other factors to account, like length of credit history and size of previous loans.