Warning! College students and parents of college students

[gmblack3a]

Originally Posted by 35TH LE

Actually.. paying off your amount in full each time you use the card doesnt build credit at all. They want to be able to see that you can spend a larger amount of money then you can/want to spend in one time... and have the dicipline and responsibility to pay it off in multiple payments, basically show that youre mature enough to handle such a financial situation. Unfortunately you pay interest on the future payments but the rewards of great credit is well worth the interest you pay, trust me.

I pay off my CC every month, I guess thats why my credit sucks.

I am not sure that paying 12-18% interest is good financial advise.

[fdizzle]

Originally Posted by gmblack3a

I pay off my CC every month, I guess thats why my credit sucks.

I am not sure that paying 12-18% interest is good financial advise.

True . . . and many see it this way . . .

But the truth of the matter is, like 35thle said, if your not in debt, you CANNOT build credit.
Anyone dumb enough to pay that high a rate on a card is a fool anyway . . . I get credit apps in the mail weekely, and unless their 0% followed by lower than 8% it gets sent straight to the shreader. I have been in debt since I was 18, but I have a higher credit score than people who own houses.

Paying your bill in full every month is a smart tactic when you have other loans like a house or car . . . or even student loans - which will contribute to your credit . .But rule all that out . . your left with credit cards.

many students fall for these ploys at colleges, especially mine. here in the bay area it is just so expensive to live. it is sad to hear that certain companies pull shananagins like what schottwax is dealing with. I think its a crime, and should be treated as such . . .

[ebpcivicsi]

Our friends laugh at us because the only thing that we finance is the house--no cars, no TV's on 18 months no interest, nothing. We don't have credit cards, don't finance anything, and our credit is excellent. Why is it excellent? I have no idea, but I have never needed a credit card to build it--they are crooks IMO and this story doesn't surprise me at all.

Sorry to hear about it Scott. Good luck getting them to correct it.

[96snake]

I had problems with them and Bank of America out of STL. Bank of America used to charge me late fees all of the time. I would send them a money order from Decatur, IL to their PO Box in St. Louis(2 1/2 hours away) at least a week before it was due. I finally had to start sending my payment each month 2-3 day express with signature required so they could not lie about when it was recieved.

Lorne

[Joshua312]

I go in every week to make a payment on my credit card. To date I have never carried over a balance on my credit card, never missed an insurance payment due date, never been late on my car loan. This month will be the first month I carry over a balance...and I am terrified. I hate the feeling of not being able to pay it off in time but I just had emergencies this month that without the credit card I would not be able to be in school this coming semester. Thankfully though I will have the amount back to zero by early January. So the moral of this long boring story is to not let your credit card be played with as fake money. I have done it all too often but always pay it off. If I could do it over again I would start off with a lower maximum amount. In fact I am going in tomorrow to lower mine just so I do not have to have this feeling anymore of not being able to pay it off. Credit is everything in todays world and I am going to do whatever I can to keep my score where it is or go even higher. Will be looking for a house in the coming years and dont want to be stuck paying high interest on such an expensive investment.

Sorry to hear about you and your son's experience with this company. Sound like a bunch of crooks to me. Hopefully everything works out for you guys!

[BlackElantraGT]

By lowering your limit and still carrying a balance, you could possibly lower your credit.

There are many variables that come into play to determine your credit and just because one solution works for one person doesn't mean it applies to everyone.

Here's why you could possibly lower your score:

Let's say you have a credit limit of $1000. Due to emergencies this month, you charged up $400 on this credit card. If you don't change your limit, you're carrying a 40% balance of your credit limit. But let's say you change your limit to $500. Now the numbers are completely different. You're now carrying an 80% balance of your total limit. You're spending or paying hasn't changed, but your risk assessment according to the credit card company will. If you gave 2 teenagers $100, by the end of the week, one spent it all while the other only spent $10, which would you trust more next time with your money?

At the same time, if you're trying to build credit because you have none/newer credit, you have to show to the credit card companies that you're able to handle your money and debt, so it's not always best to pay in full every month. IMO, I think it would look bad to ask for your limit to be reduced. Not many people do this and you're showing a weakness. If you gave someone a PC as a gift, and a month down the line that person comes back and says "this is too hard to use, I'll just use ScratchX by hand" are you going to trust that person down the road when he says he wants to detail your car for you?

[Dom]

Originally Posted by 35TH LE

Actually.. paying off your amount in full each time you use the card doesnt build credit at all. They want to be able to see that you can spend a larger amount of money then you can/want to spend in one time... and have the dicipline and responsibility to pay it off in multiple payments, basically show that youre mature enough to handle such a financial situation. Unfortunately you pay interest on the future payments but the rewards of great credit is well worth the interest you pay, trust me.

NO NO NO NO.

Not True.

For more info on how credit is established, etc. , check out:

FatWallet Forums - FAQ & discussion : GETTING and KEEPING high credit scores. Now with TOC, Glossary, & more! Updated 7/23/06

4 steps to building great credit - MSN Money

[the other pc]

Originally Posted by Yal

... I believe this is normal and all credit card companies do it. Maybe not to the extent of this company you are dealing with but....

Sort of, but not exactly. All credit card companies charge exorbitant interest and make it easy for you to get into the debt spiral. But a handful of really slimy ones use dirty tricks that make it nearly impossible to get out.

Scottwax, sounds like you’re doing the right thing, contacting the government agencies and such. When the bank feels a little heat they’ll probably get all “oh gee whiz, we didn’t know, it must have been a clerical error, we’ll fix it” and then go look for somebody else to screw over.


PC.

[themightytimmah]

I know how your son feels - I'm a college student myself and the companies are all too happy to extend credit. I've got my limit on just one card up to half of my yearly income, and I get letters every week from other CC companies trying to give me a card.

See if you can close out the balance and get him a card with someone else, I go through MBNA personally and I've never had a problem, everything is online and they will decline my card if it goes over. Couldnt blame ya if you took the card away from him for a while though.

[torch02]

I've stopped using my credit cards, got myself into enough debt with them. Scott, have you considered transferring the balance on to another card, that's what I did.

[Spilchy]

That's why when I started college years ago, my father gave me a credit card in my name with a *stern* warning: The card is *ONLY* to be used for books, school supplies and emergencies...PERIOD. I complied and had to send home every receipt I got. I worked in the summer for money for all the other expenses.

Best thing to do is to find out the balance and transfer it over to another credit card and whack it down in clumps. Then close the account from the a-hole company and ask for a letter to be mailed that confirms the closing.

Chris is a good kid and I'm sure you taught him a good lesson about learning to live on a budget, within your means and the necessity of maintaing good credit. Credit cards are fine; its exercising self restraint and comprehending the concept of what you're doing!

My brother went haywire in college with his card. I was too scared of my old man!

[kompressornsc]

I was just reading a story about another trick they use. Give people a card with a really low limit, and when they max it out, offer them another one. This way, if the payment is late, they are over the limit, etc., they have the possibility of multiple fees from multiple cards.
I just got a card with a 5 figure limit, havne't even used it, but the same company keeps offering me another one with the same limit. Good thing is they're 0% for 18 months on purchases. Free money, baby!