Avoid Credit One Like The Plague!

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Because of this statement, I’m guessing that you understand some things beyond basic credit management (aka: pay off what you borrow). I’m going to go against the grain on this thread and say to disregard the folks preaching “pay off every balance” and the like. (No offense everyone)

Start researching how to leverage unsecured credit lines for cash to invest. In short, put all your USUAL expenditures on credit cards that you can (up to 30% total limit), pay them off by doing a balance transfer to a 0% card (pay the 2-4% transfer fee). Use the cash that you would have paid off your balances to dump money into a Roth IRA, 401K, etc. or into a brokerage account (watch out for taxes on this one!). Then just pay the minimum due on your credit card (typically 1-2% of your balance, at 0% APR).

As your credit history advances and the companies see you “carrying a balance” (remember, at 0% APR!). More companies will offer you higher limits. Rinse and repeat. I have many colleagues that do this and we all carry 0% APR balances of roughly $10-80K (depending on the investor’s aggressiveness) and just pay the 2-4% transfer fees each year. For each year that their accounts are yielding higher than 2-4% (which is most years), they are earning profit.

You could start now if you want. Based on your listed credit limits, you should have $2300 or so that you could play with, without negatively affecting your score. Remember, you are young and have time on your side. Stick to index ETFs and mutual funds, they are cheap and good for long term average growth (research SPY, XLY, VTSAX). S&P 500 has yielded on average 10.49% since the 1920s; if that continues, your $2300 would be about $124K when you are 60. The trick would be having a good balance transfer card acquired BEFORE initiating the overall plan and DO NOT fall into the trap of spending extra just because it appears that you have more cash on hand for a few months.

Good luck kid.
OP, don’t do this. You are 20 and have 5 credit cards presumably with balances. IMO, you are on a very slippery slope of being a lifetime debtor to the credit card companies. Find a card with a 0% intro rate, transfer all balances and get it paid off. Invest or save the payments once you are out of debt. I don’t want to sound like my parents but it’s good advice.
 

cwilliamsws6

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OP, don’t do this. You are 20 and have 5 credit cards presumably with balances. IMO, you are on a very slippery slope of being a lifetime debtor to the credit card companies. Find a card with a 0% intro rate, transfer all balances and get it paid off. Invest or save the payments once you are out of debt. I don’t want to sound like my parents but it’s good advice.
Only 3 of the cards have balances and the one card is ONLY for my SiriusXM subscription so that one get paid in full every month anyways and the other one I use for the vending machine at work and also pay in full each month as well.

I've only ever carried a balance over a month maybe once.
 

manicrodder

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I closed my Credit One card today because it has the lowest limits out of all the cards I have ($300 vs my other cards which are $550, $1600, $1800 and $4000), it's the only card I had that has an annual fee, and I barely used it as it is. And let me tell y'all, that was a chore and a half!

Every single phone number on their website goes to the exact same automated system which has no menu option to speak to a live representative or make account changes. I had to find out from a forum elsewhere that in order to reach a real person at Credit One, you have to spam 0*0# on the dialpad and eventually you get connected to a real person.

The guy I talked to on the phone, couldn't hardly understand a word he said and his name definitely was NOT "James", kept interrupting me while I was talking and threatened to disconnect the call, citing their policy apparently which is that if the call drops then the account remains open. He also tried baiting me to stay by offering to remove the annual fee and give me a lower APR.

Got put on hold and bounced between 2 or 3 different people before I finally talked to someone who actually helped me close my account, and I made sure to request confirmation via mail.

Credit One, super predatory and super scummy lender. Don't go through them!
We have never had any trouble with them but haven’t closed an account either.
 
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Read Dave Ramsey's Total Money Makeover and live it. You are 20, live like no one else today so when you are older (40s) you can live like no one else. I have credit cards, but I pay the balance in full each and every month. I am basically debt free, except a very small balance on my Mach E loan at .9% APR because the loan was easier than transferring money from an online savings account. (I bought it in December and will have it paid off in March.) My credit rating is always in the 800s, which means I always qualify for the best interest rates.

Fund your Roth IRA every year, starting now. Even if you only put $100 a month into it, you will not believe the results 45 years from now. Have a rainy day fund so you do not need to borrow for some little "disaster." How do you fund that? Quit wasting your money on the snack machine and constant meals out. It does not have to be rice and beans, just reasonable shopping and meal planning. My rainy day fund, which is not my only savings, has $65,000 in it.

No debt except the home mortgage that you pay off faster than its term. (As you can see, I will also allow a controlled amount of debt to purchase a car, if you get a really good interest rate.)

"Live like no else today so you can live like no one else tomorrow."
 
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Read Dave Ramsey's Total Money Makeover and live it. You are 20, live like no one else today so when you are older (40s) you can live like no one else. I have credit cards, but I pay the balance in full each and every month. I am basically debt free, except a very small balance on my Mach E loan at .9% APR because the loan was easier than transferring money from an online savings account. (I bought it in December and will have it paid off in March.) My credit rating is always in the 800s, which means I always qualify for the best interest rates.

Fund your Roth IRA every year, starting now. Even if you only put $100 a month into it, you will not believe the results 45 years from now. Have a rainy day fund so you do not need to borrow for some little "disaster." How do you fund that? Quit wasting your money on the snack machine and constant meals out. It does not have to be rice and beans, just reasonable shopping and meal planning. My rainy day fund, which is not my only savings, has $65,000 in it.

No debt except the home mortgage that you pay off faster than its term. (As you can see, I will also allow a controlled amount of debt to purchase a car, if you get a really good interest rate.)

"Live like no else today so you can live like no one else tomorrow."
^^^ Great post ^^^ no wait ^^ Real Great Post ^^
Dave Ramsey should be a required course in every high school but the bank lobby way too powerful.
Banks profits would go into the gutter.
So best one can do is use the banks to your full potential but never allow them interest payments. (except home mortgage)
By this I mean, take their cash back as long as you are mature enough to pay it in full every month. (I know this goes a little against Daves advice)

Freaking scary reading some of these posts, they dont have any of their own money to invest so they take out limited time interest free credit card loans due to increase to loan shark rates if you don pay it back in time and make short term gambles on the stock market... Good god ... amazing, there is a certain generation that has no idea what a stock market downturn can mean.
But never mind that, the mindset to borrow money from other people in the hopes of making money on the borrowed money is flawed thinking. On top of that, they dont even know the meaning of word "loan shark" which is what modern day credit card companies are.
Just freaking amazing, Im kind of passionate about things and its the dumbest thing in the world to resign yourself, too immature to save your own money to invest, so borrow it from a credit card company. *LOL* cant make this stuff up.
 
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Freaking scary reading some of these posts, they dont have any of their own money to invest so they take out limited time interest free credit card loans due to increase to loan shark rates if you don pay it back in time and make short term gambles on the stock market... Good god ... amazing, there is a certain generation that has no idea what a stock market downturn can mean.
But never mind that, the mindset to borrow money from other people in the hopes of making money on the borrowed money is flawed thinking. On top of that, they dont even know the meaning of word "loan shark" which is what modern day credit card companies are.
Just freaking amazing, Im kind of passionate about things and its the dumbest thing in the world to resign yourself, too immature to save your own money to invest, so borrow it from a credit card company. *LOL* cant make this stuff up.
Simpleton logic. Just because a tactic is too confusing for some, doesn’t make it crazy.

Myself and a four of my peers thought of and executed our leverage/investment methodology while we were in college (age 18-19). Because we were willing to take risk and had self control, we are now in our mid-30s and three of us are up roughly $400K in savings compared to our workplace peers. And before you ask, we have $0 revolving debt.

Could it be a slippery slope? Heck yeah. One of my original peers that started out with all of us screwed up, got the itch to spend and ended up with all new tech (cameras, laptops, TVs etc.) and a crotch rocket motorcycle. Despite making some decent plays up front and being up $60K in equities (compared to his revolving debt load) by 21, he declared bankruptcy by 25 with over $80K on cards and that was after cashing out his equities, paying penalties (IRA withdrawals) etc.

Now, when the three of we meet to discuss our market moves, we run some preliminary figures and we are all on track to have 110-170% income replacement (in our current locales) by the time we are 60 (without social security) so now we are discussing retirement options at younger ages (50-55), move to cheaper areas, countries, crazier covered-call market moves, etc.

So feel free, keep thinking that the only way ahead in life is to “save what you earn”. It is a solid way to be comfortable once you retire at 65-72 (for most) but if you desire to retire early, you may want to consider thinking outside the box.
 
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Simpleton logic. Just because a tactic is too confusing for some, doesn’t make it crazy.

Myself and a four of my peers thought of and executed our leverage/investment methodology while we were in college (age 18-19). Because we were willing to take risk and had self control, we are now in our mid-30s and three of us are up roughly $400K in savings compared to our workplace peers. And before you ask, we have $0 revolving debt.
Yeah, but you gambled and won! That's great! But the vast majority WILL lose, its gambling. People in general (not you) do NOT have self control, the proof is the mountain of debt out there.
There are always good stories such as yours but for those good ones there are many more bad and you never will hear about them.
BTW - not debating your success at all and thank you for your honesty of someone you know whom did it wrong.

Markets will not always move up and the next round of 18 to 19 year olds that enter the market in the same way this week may not be as lucky, or the ones in two years from now...at some point someone will pay. Granted there will be exceptions and anyone you teach might be one of those exceptions but the majority? I dont think they have the maturity, god, the debt in this nation we are almost like children, buying crap like crazy by borrowing money. Again, when I say "we" I mean the majority of people, debt is a drug to them. Cant live without.

My feeling is the vast majority had the maturity to save money, spend wisely and invest that money will not end up in massive debt and prosper quite nicely. Then again, that might make sense because they may looking into what they are investing their money into more carefully.

Good news about credit cards, as long as you dont mind ruining your credit, bankruptcy will take care of the debt at least its not attached to a house.
 
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Markets go up and down, but mostly up. Looking back, if you only invested at the market peaks you would still be way ahead over the however many years. So regularly putting money into your Roth IRA mutual fund is still a brilliant move.

Maybe IveBeenRued said is right and it is simpleton logic, but then most of us are just simpletons, especially when it comes to investing. Always go by the KISS principle, Keep It Simple, Stupid.

Dave Ramsey is right, no one ever got to be a millionaire off credit card points, but I sure enjoy using those points for discounted gift cards.
 
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Should have taken the offer for no annual fee and kept the card, just don’t use it.

Age of credit history is big for your credit score, better to have inactive credit cards than cancelling it.
While I would agree once you come across scumbag company its best to move on.
maybe it was only waived for a year annual fee .. we dont know.
 
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These kind of stories are one of many reasons why I don't have a credit card and will never use one under any circumstances. I have lived fine without one and have zero debt in my life. It's such a good feeling. Very hard to describe to anyone who only cares about a credit score so they can get credit. If I can't afford to pay cash then I don't get it.
 
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These kind of stories are why I don't have a credit card and will never use one under any circumstances. I have lived fine without one and have zero debt in my life. It's such a good feeling. Very hard to describe to anyone who only cares about a credit score so they can get credit. If I can't afford to pay cash then I don't get it.
A men on all points. Teach your children to live at or below their means
 
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These kind of stories are one of many reasons why I don't have a credit card and will never use one under any circumstances. I have lived fine without one and have zero debt in my life. It's such a good feeling. Very hard to describe to anyone who only cares about a credit score so they can get credit. If I can't afford to pay cash then I don't get it.
You don't have a mortgage or own a home? I've used them for years, it's nice now that you can log into the credit card account and set it so that the balance is automatically paid every month. You can go for years without ever paying any interest and you get the rebates so that paying cash actually costs you more than using a credit card. The cash payers are actually subsidizing the credit card users. There's many cards out there that offer 2% or more and not all of them are scummy like the ones mentioned here. Having credit allowed me to buy investment properties where I only had to put 25% down and they've gone up in value more than 100% since I bought them.

Credit is just another tool, you just have to know the right way to use it.
 
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You don't have a mortgage or own a home? I've used them for years, it's nice now that you can log into the credit card account and set it so that the balance is automatically paid every month. You can go for years without ever paying any interest and you get the rebates so that paying cash actually costs you more than using a credit card. The cash payers are actually subsidizing the credit card users. There's many cards out there that offer 2% or more and not all of them are scummy like the ones mentioned here. Having credit allowed me to buy investment properties where I only had to put 25% down and they've gone up in value more than 100% since I bought them.

Credit is just another tool, you just have to know the right way to use it.

Not for me do as you wish. Our homes and cabin are paid off and we only pay low property taxes, utilities, and upkeep. I live a very simple life and do not wish to complicate it with revolving credit. I can care less if I'm supporting the poor suckers who wish to go into debt. That's their problem not mine.

As an added bonus I'm king of the hill when I make large purchases. No need to secure loans and play silly games. The risk of having credit is not one I'm willing to take. I don't mean to sound harsh. It's just how my brain is wired.

This is my point of view and I will not change. Just as I won't try to change someone who chooses to grab the rattlesnake by the tail and use revolving credit to live their lifestyle.
 
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I would not keep any card that has an annual fee. However cards you have had for awhile help with the age of longest/average age of credit cards which is part of the FICO score.
 
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I would not keep any card that has an annual fee. However cards you have had for awhile help with the age of longest/average age of credit cards which is part of the FICO score.
This. If you have 5 cards, Use the best one for most all of your needs, use the other 4 once a month to keep them active. Then make sure you PAY THEM OFF every month. I am so paranoid about debt that as soon as I get home from shopping, I log on to my account and pay it right then. Sometimes I have 3 paids a week. But its paid, I don't have to worry, and like others here have said, I have full credit, no debt, no interests payments, and a CS above 800. Now don't get me wrong, I was once stupid and young, and maxed out every card I had. Lessons learned, that was a living hell to get out of. And now life is good, and I still get what I want and need. Good luck to you sir.
 
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Not for me do as you wish. Our homes and cabin are paid off and we only pay low property taxes, utilities, and upkeep. I live a very simple life and do not wish to complicate it with revolving credit. I can care less if I'm supporting the poor suckers who wish to go into debt. That's their problem not mine.

As an added bonus I'm king of the hill when I make large purchases. No need to secure loans and play silly games. The risk of having credit is not one I'm willing to take. I don't mean to sound harsh. It's just how my brain is wired.

This is my point of view and I will not change. Just as I won't try to change someone who chooses to grab the rattlesnake by the tail and use revolving credit to live their lifestyle.
Its all good and we do as we all wish.
I pay cash for everything, every month, at the end of the month. I use my stellar credit rating to make me money every purchase of every day.
I pay everything with a credit card and I mean everything.
At the end of the month I pay the credit bills in full and that is how I "pay cash for everything" ( I have NEVER ever paid an interest charge or fee associated with a credit card)
Simple as that, in return, I get back a minimum of 2% and closer to a high of 5% back in cash on everything I buy.
Its all cash back to me and money that the banks are giving away for free and I take every last penny of it. To the tune of well over $1000 a year and that is after tax, actually this past year was closer to $2,200. free money.
Is it some work? Sure but fun work for my wife and I.

Im not saying paying cash is wrong if that is your thing, we all do what we enjoy.
 
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This. If you have 5 cards, Use the best one for most all of your needs, use the other 4 once a month to keep them active. Then make sure you PAY THEM OFF every month. I am so paranoid about debt that as soon as I get home from shopping, I log on to my account and pay it right then. Sometimes I have 3 paids a week. But its paid, I don't have to worry, and like others here have said, I have full credit, no debt, no interests payments, and a CS above 800. Now don't get me wrong, I was once stupid and young, and maxed out every card I had. Lessons learned, that was a living hell to get out of. And now life is good, and I still get what I want and need. Good luck to you sir.
You can go online these days and set the credit card to be paid in full every month. That's what I do with mine. Then you never have to worry about them not being paid on time. That used to happen once in a while every few years, but you can normally call them and when they see that you normally pay on time every month, they usually waive the late charge and reverse the interest. They will usually do that once a year.
 
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Being about to turn 40.. my present "credit score" is 665.

I have managed and mismanaged my credit for a LONG time, 2020 is the straw that broke the camel's back, 2021 was a year of rebounding and 2022 I will not do some of the things I did previously.

Don't carry balances. That is how scammers view credit cards, not rational people.
 
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