Keeping up with finances

VR3

For me -

Being the age I am and having barely any bills...

Its better for me in my current state to limit my spending options as much as possible..

To me, a credit card, as I understand all its positives and negatives, to me - just would not be a wise move..

Now, in a year or so, once everything gets a little more settled from my truck and all the crap going on with Klaus --- I'll have more of a consistent spending arrangement and a lil more control over whats going on...

Checks are where its at for me right now...

Gaara

A few comments:

To Audio and Vr3, get a credit card ASAP. If you don't think you can handle it then get it and cut it up when you receive it. A larger portion of your credit score is the average age of your credit cards, you want to get a few ASAP, I would recommend one now, and then 1 in 6 months and 1 more in a year. This way when you need credit later in life you have 3 cards with years of credit history that you wouldn't have other wise.

Audio, I would recommend the Citi MTVu card. It is made for students and is easy to get, my sister with no credit history got one. The reason I say this card is they will give you around 6 months 0% interest financing, plus it has the best points around for student cards (~3% back on food, gas, books, etc). I personally got a basic Citi student card when I turned 18 no problem, then a 2nd with points 6 months later, and a Amex 6 months after that.

As for how to track money, I use a notepad in my pocket. Whenever I spend money i write down how I paid, how much, and for what. When I get home I add it into a excel spreadsheet that tracks balances for all my CC, my savings account, and my checking account. I also use it to track my CC limits, when I last asked for a limit increase, when 0% offers are done, and the interest rates.

Vr3, you will make much more money using a CC then using checks, and it is safer. Demi nailed this. Leave the money in the bank and earn interest then pay it off before it is due. You also get points back, for example I have Chase card giving back 1.25% on all purchases and 3.75% on gas, food, books, etc. CC are also much safer then writing a check. Think about it, every time you write a check you give out your name, address, phone #, signature, bank account #, and routing number. CC are much safer, you can remove fraudulent charges, you get points, plus other perks like ext warranties and such. As I said if you don't think you can handle it no biggie, get it and cut it up to build credit history.

As for having 30 cards, this will have no ill affect on your credit score. The credit utilization of each card will have an effect, the age of the cards, total credit utilization, and the type of credit it is all have an affect, but not the number off accounts.

audiobliss

Gaara wrote: »

Audio, I would recommend the Citi MTVu card. It is made for students and is easy to get, my sister with no credit history got one. The reason I say this card is they will give you around 6 months 0% interest financing, plus it has the best points around for student cards (~3% back on food, gas, books, etc). I personally got a basic Citi student card when I turned 18 no problem, then a 2nd with points 6 months later, and a Amex 6 months after that.

Sounds like a pretty awesome CC! Thanks for the info!

Gaara

Lots of good info over at FatWallet. Some people take a single course at a community college just to be able to get this card's rewards.

A couple more things:

If you aren't getting at least 4% back on your money in the bank something is wrong. Go get a high yeild online savings account like Emigrant Direct, or ING Direct.

You don't pay interest if you pay your bill in full each month. This seems to be a common misconception among people without CCs. I personally have had cards for about 4yrs and have never paid interest in my life.

In fact I have made well over $1000 off them in rewards and by spending money and keeping it in 5% yield accounts instead of paying them off. Think about it, instead of paying $5000 with a check put it on a 0% card for 12 months and leave it in your online savings account earning 5%. After a year pay it off and you just made $250...plus if you bought it with a 1% back card thats an additional $50...$300 back for using a CC

audiobliss

I guess it's widely accepted?

audiobliss

I see they're Visa or MC now.

audiobliss

I just checked out the Citi mtvU Student CC, and they don't mention anything about points back on gas. Points back on restaurants (including fast food), books, movies, and music, but not for gas.

The Dividend Platinum card offers cash back at supermarkets, gas stations, drugstores, and a few other places, and the Driver's Edge offers Rebates on purchases at those places. I bet the cash back would be nicer.

They both appear to be as easy to get as the mtvU CC.

McLoki

PolkThug wrote: »

Get rid of your debit card and start using cash again.

I would say opposite of this - stop using cash, start using checks and debit cards for everything. You will not neccesarily spend less, but you will know exactly where it is going.

Also get an online banking account for the checks and debit card. That way you can keep tabs of everything whenever you want to.

shack

TroyD wrote: »

A pencil and some graph paper ought to do.

BDT

I've been in the banking and finance industry for over 30 years and this was the first thing that came to mind.

YOU DO NOT NEED ALL KINDS OF SOFTWARE, COMPUTERS, ETC. to create and track a budget.

It's not that complicated. Write down how much you have to spend, write down how you think you'll spend it, then write down what you do spend. Add them up and adjust as necessary.

Software costs = $ -0-
Hardware costs = Price of a pencil and a piece of paper/notebook.
Time = Much less than it takes to download all the info into a spreadsheet.

cfrizz

You might not need a software program but once you have it you won't go back to doing it the long way!

I've been using Quicken since 1990, I upgrade it every 2 yrs. Well worth the 40-50 bucks that it cost to know exactly what my net worth is & for keeping track of expenses. Add in the convenience of online banking which saves you from writing checks, stamps etc. & it's a match made in heaven! All my bill paying chores are done in less than 5 minutes. Absolutely love it!

Gaara

audiobliss wrote: »

I just checked out the Citi mtvU Student CC, and they don't mention anything about points back on gas. Points back on restaurants (including fast food), books, movies, and music, but not for gas.

The Dividend Platinum card offers cash back at supermarkets, gas stations, drugstores, and a few other places, and the Driver's Edge offers Rebates on purchases at those places. I bet the cash back would be nicer.

They both appear to be as easy to get as the mtvU CC.

As long as they are student cards they should be easy to get. My first was a Platinum Select, 2nd was a Dividend Select, and 3rd was a 2nd Dividend Select (one was Visa one Mastercard). I would get another Citi but they limit you to 3 of their cards.

Strange about the MTVu, I could have sworn it include gas when my sis applied about 9 months ago. It may have changed or I could have read something wrong.

vlam

Too many credit card isn't bad if you carry a "good" balance. Having a lot of credit card is a product of playing the 0% BT game. You start out with a few card to get 0% interests for X number of months. When the promotion ends, you don't want to close the account.. Simply open new cards with other creditor or in some case, the same creditor. Over 20 of my credit cards are sitting in the desk drawer as they are not for everyday use. It takes some work and you are not going to make a living earning interests from BT but it supports my hobbies. With all those credit accounts and inquires my credit isn't perfect. It's a little over 750 but that's better than most.

audiobliss

Well, I finally decided on the Citi Dividend Platinum Select Visa Card for College Students. Then today I got an application in the mail for a AAA credit card. After looking over the info, I think I'm still going to go with the Citi CC.

Looks to be a pretty good card to me.

shack

vlam wrote:

Too many credit card isn't bad if you carry a "good" balance. Having a lot of credit card is a product of playing the 0% BT game. You start out with a few card to get 0% interests for X number of months. When the promotion ends, you don't want to close the account.. Simply open new cards with other creditor or in some case, the same creditor. Over 20 of my credit cards are sitting in the desk drawer as they are not for everyday use. It takes some work and you are not going to make a living earning interests from BT but it supports my hobbies. With all those credit accounts and inquires my credit isn't perfect. It's a little over 750 but that's better than most.

A recipe for disaster if I've ever heard one. I've seen quite a few try and play this game and it comes back to bite them in the **** almost every time.

I've seen a few credit scores over 800 and in each and every case the common thread was a little but perfect credit.

BT is stupid and no one should carry a balance on their credit cards. CC debt is absolutely the worst debt there is...regardless of the "rate". Pay them off every month. If you are carrying a credit card balance more that a month or maybe two you are living beyond your means.

audiobliss

Just applied.

Thanks to everyone who provided some information and advice in this thread! It was all very much appreciated and helpful!

Mike682

20 credit cards = too many open lines of credit that will hurt your credit score as well as have credit analysts reluctant to approve future loans

zombie boy 2000

I keep a pocket notebook with me at all times. Write down every payment. Every purchase. I balance my finances every single morning. You'd be surprised how much you get "double charged" for.
Know your bills. Pay 'em early. But basically, I keep all my receipts. Check 'em against my balance ONLINE. If everything's kosher, everything's kosher. The days of balancing your "checkbook" once a month have gone the way of the dodo. Keep on it. To a cent.

zombie boy 2000

McLoki wrote: »

I would say opposite of this - stop using cash, start using checks and debit cards for everything.

I used to pay cash for everything until I moved to the inner city. Too many friends knocked upside the head leaving a bar. Wallet on the plane with Wonder Woman. At least I can cancel a card.
Plastic -1
Paper - 0

rskarvan

Microsoft Excel to track all my finances. Simple, powerful, and able to be customized any way you like.

audiobliss

rskarvan wrote: »

Microsoft Excel to track all my finances. Simple, powerful, and able to be customized any way you like.

Depends on the skill of the user, haha. But I do have a book on Excel...

vlam

BT is stupid and no one should carry a balance on their credit cards. CC debt is absolutely the worst debt there is...regardless of the "rate". Pay them off every month. If you are carrying a credit card balance more that a month or maybe two you are living beyond your means.

Do you even understand the concept of 0% credit card game? If creditor A is going to give you $10K of 0% interest loan for 12 months and the stipulation is that

1. You make the min payment every month (on time)
2. They can change the term with a given notice
3. Don't make any late payment on other credit account

You have to read the fine print of each creditor offers as there are other rules.

You take the $10K and deposit it into an online saving account earning 5% interests. DON'T TOUCH THAT MONEY. Don't spend it because it isn't yours. The Only withdrawal you should make is the one to pay the min payment each month. Again, don't buy CD or stocks or take a trip to vegas. This isn't your money.

Some may say that all this work for a few hundred dollars? How about having 5-10 $10K offer. For the big player, they may have as much as $200K-$300K in BT.

The people who are playing the 0% BT game are not those who are putting off the inevitable (they owe money but can't pay back thus floating from one credit card to another). What I mean by "good balance" is if I have a balance of $100K between the credit cards, I have the that much liquid cash in the high yield savings account to cover it.

BTW.. The BT game will hurt you when you try to get a mortgage. You don't wake up one day and decide to play the game. It takes preparation in know where you are with your finances. As a general rule, don't open up credit account prior to getting a mortgage but that's a given already as one should "clean up" their credit reports months before applying for a mortgage application.

Gaara

Audio,

The dividend select was the 2nd card I got, the 5% back is great and it is cash back, to bad it only lasts for 6 months.

Make sure to pay the minimum and keep the money in a high yeild savings account so you can pay off the entire balance after the 6 month 0% period. Also I would recommend asking for a credit increase on line after 4 months, this will help out your credit utilization ratio. Citi does a soft pull when doing limit increases, as long as they don't require you to fill out the form with your info, if so it will be a hard pull and is not worth it.

In 6 months try going for another card. In 6 months time the hard pull for this credit card will be off your report so it won't adversely affect your score. As I said earlier you want a few cards early on so you have a good amount of credit history later in life.

I would also recommend that you get your free credit report soon. You are allowed 1 free report from each of the 3 agencies each year. I personally pull 1 from each agency every 4 months instead of once a year. link to free credit report

Jared

Gaara

Shack,

I respectfully disagree. If you are living beyond your means there is a issue, but not carrying a balance on your card if you are getting 0% is foolish. If I can keep my money in the bank and earn 5% back for an additional year instead of paying the card what incentive is there to not carry a balance?

I completly agree with Vlam on this one, credit cards are a tool and can be used properly to make money, or can lead to ones credit ruin. Plenty of people play the BT game and make a lot of money doing so, others will try for AORs and can do these well and make a good amount doing so. My father did this a while back and made close to $3000 in one year off a smaller AOR.

Zombie,

I do the same, write down any money going in or coming in on a notepad and update my excel file weekly. I keep all receipts and reconcile them to my excel on the first sunday of every month.

Mike,

It is a myth that the number of cards that you have affects your credit score. According to Fair Issac Corp the only things that affect your credit score are Payment History, Length of Credit History, New Accounts, Credit Utilization, Type of Outstanding Credit.

Jared

audiobliss

Gaara wrote: »

Audio,

The dividend select was the 2nd card I got, the 5% back is great and it is cash back, to bad it only lasts for 6 months.

Make sure to pay the minimum and keep the money in a high yeild savings account so you can pay off the entire balance after the 6 month 0% period. Also I would recommend asking for a credit increase on line after 4 months, this will help out your credit utilization ratio. Citi does a soft pull when doing limit increases, as long as they don't require you to fill out the form with your info, if so it will be a hard pull and is not worth it.

In 6 months try going for another card. In 6 months time the hard pull for this credit card will be off your report so it won't adversely affect your score. As I said earlier you want a few cards early on so you have a good amount of credit history later in life.

I would also recommend that you get your free credit report soon. You are allowed 1 free report from each of the 3 agencies each year. I personally pull 1 from each agency every 4 months instead of once a year. link to free credit report

Thanks for all the info, Gaara; I appreciate it!

I don't have anything specifically to buy, so I'm not going to 'utilize' that 0% APR for the first 6 months; I'll just pay the entire bill every month. I'd rather do that and get into the groove of being on top of things than take advantage of that 0% APR for the first 6 months when I won't really be putting enough on the card for it to make much of a difference.

What's this deal with 'soft pulls' and 'hard pulls'? I have no clue what that's about...

Thanks again!

hockeyboy

I have one American Express that I put 95% of my bills and purchases on. I get mad points and never pay interest because I pay it off every month. I also have a MasterCard for emergencies, but rarely use it. I also pay that off every month, or at a minimum two or three months (for things such as car repair, dental, etc.).

Gaara

Audio,

If you aren't going to use the 0% APR for the first six months then just pay the balance in full each month to get used to doing so. If your expense each month are roughly the same you could also get it automated to pay the balance in full each month. This would be especially useful if you already have direct deposit.

As for hard vs soft pull a hard pull is when a bank or credit company pulls your report and it gets put on the report. A hard pull can be seen by other companies and hurts your credit score, but not usually by much. A lot of hard pulls hurt you alot more then if they were separate. Hard pulls are usually new lines of credit (your credit app for the Citi was a hard pull), a new bank account, or sometimes can be credit increases.

A soft pull is when a company looks at your report, but it is not put on your report that they do so. This is normally done periodically to send you new offers like credit line increases, new credit card offers (that AAA card) or sometimes these are done by banks and CC companies as regular inquires. These show up on your report for you to see but don't get shown to other companies.

If you have anymore questions feel free to ask. I am a recent college grad and went through the new credit card thing a few years back. I researched everything a ton before I got a card, including how they score, what affect your score, what credit cards are best, etc.

audiobliss

Oh ok, cool deal. Thanks for the explanation!

shack

Vlam and Gaara - I know what I am talking about. 30 years in banking (25 years as a Private Banker) and many years as a Director for Consumer Credit Counciling qualify me as somewhat of an expert. Don't throw your "big numbers" at me either. Until you have customers you can loan 7 figures on their signature alone, you don't know big numbers. I've seen plenty of "smart investors" (and I use the term investors very loosly) try an play the BT/0% game and it jumps up and bites them on the **** and it ends up costing them 3-4 times what they "made". There is a reason the big CC companies do this...they just hope there are lots of "smart" guys that are going to play the system. Guess who wins? :rolleyes:

Fair Issac does not publish their forumla for credit scoring and if you think the # of outstanding liabilities you have doesn't matter...you are foolish.

Gaara

Shack,

I think we have a miscommunication. If you do BT correctly they can really help. I personally have never paid a BT fee or interest fee, and have debt that I have been floating with BT since my first card. I have always had the money to pay it off kept in a high yeild online savings account.

I was going to college and working full time until last March, when I decided to take a break from work since I was taking a course overload and graduate courses. I took out a CC w/ 9 month 0% and used it for all my expenses during this time period and was able to continue my lifestyle for the 6 months while I didn't work by using the 0% card, and it didn't cost me a dime. Come September my real job started and I now have more then enough in my savings account to pay off the card when it comes due. This is a example of when 0% can really help a person out, and not cost a penny.

As for the 7 figure loans I know plenty of people who can do this on signature alone, my father being one example. In the last 10 years or so he has done this plenty of times to develop large areas of land, generally 50+ home developments. He does the BT/0% game all the time. His credit score is in the high 700s last I checked.

The Fair Issac information I gave was taken off their site. It is not the exact formula but is what they use in determining your credit score. As for the # of outstanding liabilities I never said it doesn't affect anything, but I said the number of cards does not have a direct correlation on your score. Many things can hurt your score like having high credit utilization, or having debt on many cards, but just having a lot of cards wont necessarily hurt you.

jflail2

For the OP, I would use excel. It's not really that hard to use once you get used to it, and there are literally millions of budget templates available for download online. Find a trustworthy excel template site, and then search for "budget".

Charting etc is a breeze, pivot tables help you analye tons of data, and it plays well with other MS Office programs.

Play the 0%/BT game if you wish; I've got better places to put my $$ (equity REITs come to mind.)