In my younger years, I could care less about the conservative, slow acquisition of financial gains by virtue of discipline and hard work. Screw that! I, like the ultimate spoilt brat Veruca Salt, screamed out "I WANT IT NOW!" with every foolish impulse purchase I made.
I've stated here how that mentality had inevitably hurt me as time wore on.
What you earn in income from your means of employment is the primary factor in how "well off" you become, of course, but for people like me, who don't comparatively make a lot, security in a satisfactory lifestyle is the goal to strive for.
On my salary, I can't dream too big, in fact, because of my relatively meager wages, I have to be wary of financial pitfalls that could potentially spell ruin.
The best way to stay stable is to establish and maintain a healthy credit history. This sets off a number of beneficial door openings that allow not only more stability to weather fiscal storms but a brighter path to eventually elevating to the lauded status of homeownership. The ultimate dream for all us lower middle class folk.
I've been working hard at getting my credit in a more spiffy state for some time now. And at present, it looks okay...it's getting there. Certainly much better than the early to mid 2000s...the height of Koyaanisqatsi.
Here's were I stand at present:
Credit Cards:
BankAmericard Cash Rewards VISA
Credit Limit: $2,000
Opened 8/11
Current Balance: $62.99
APR: 18.99%
This card had a 0% intro rate for a year and I took good advantage of it. I paid down the nearly constant $1,000 balance over the year in time to avoid any interest. In order to increase my available credit, I just this week requested and received an increase from the original CL of $1,500 to $2,000. I use it as a substitute debit card which I'm diligent about paying off in full each month to avoid interest. This is because the cash back rewards are the best I have. I've read that if I allow my rewards to accrue to $200, I will qualify for an additional $20, so I am waiting until that happens 'till I cash out my rewards. Believe me when I tell you, I know a lot about cashing out rewards. I'll leave it at that.
Dell Financial Services
Credit Limit: $3,000
Opened 11/11
Current Balance: 0
APR: 0% if paid in 12 months.
This is not a credit card, it is Dell-only credit line available for purchases of Dell products. But it is interest free if paid within a year and it helps the overall debt to credit ratio. I opened it to buy my most recent desktop, the one I'm using right now. Now that she's totally paid off, I don't use this account at all.
Walmart Credit Card
Credit Limit: $1,800
Opened 11/11
Current Balance: 0
APR: 22.9%
Obviously at this APR, I'm never going to revolve a balance. It didn't even come with an intro rate. But hell, its open credit line (upped to $1,800 from $800 this week) helps increase available credit. I occasionally use it when I know I'll pay it off in the next couple weeks or so. It does come with a debit-card-like cash back at POP. I haven't used this yet since no cashier could tell me if it's at a cash advance interest rate or not. This card also allows for a monthly FICO score for free.
Fairwinds Credit Union Platinum Rewards VISA
Credit Limit: $3,000
Opened 3/12
Current Balance: $1,021.81
APR: Intro 0% until 3/13
I applied for this after getting a pre-approval notice in the mail. Perhaps because this is through my checking and savings acount credit union, they took a more conservative approach with the approval process requiring me to fax in a hard copy application. The loan officer contacted me and requested income verification as well. So it took longer than any other card (about a week or so) to get approved but it is the largest credit limit I have to date. The rewards are somewhat of a joke. Only 1% on any purchase and redeemable via their 3rd party vendor at outrageous "Fingerhut-like" rates (ie: A second rate DVD is on average about 2,000 points = $2,000 in spending or $20 in point redemption) I plan on paying this card off by March to avoid interest. Then, like any card I have that charges an interest rate, I'll only use it when I can pay it off monthly.
Chase Amazon.com VISA Rewards Card
Credit Limit: $600
Opened: 6/12
Current Balance: 0
APR: 21.24%
Soon after the death of Ray Bradbury, I was moved to log onto Amazon.com to buy some of his classics. I saw a banner ad for an Amazon.com VISA Rewards and that I'd get a discount on my purchase for applying. Expecting to be rejected (since I well enough knew which bank issues Amazon.com VISA cards) but applying in order to get a discount, I found out that I actually had been approved for a card with a $400 credit limit. So I immediately proceeded to buy an Amazon Kindle Fire right then in order for it to also qualify for the discount. Just this week I requested the limit increase to $1,000 but I was granted only $600. Perhaps, in light of past events, Chase might want to be extra cautious in trusting me. Just sayin'. BTW, I only use this card for Amazon.com purchases since the best rewards percentages are applied to them and I pay it off almost immediately.
Discover Card
Credit Limit: $1,700
Opened: 9/12
Current Balance: 0
APR: 3.22% intro till 3/13
I got a pre-approved notice in the mail and thought "yeah, right." Basically, Discover has been the most difficult card to get in all my years. In the eighties, I was rejected about 3 times. The nighties, maybe twice. And I didn't even try to apply in the new century. When I verified I'd received the notice online, the screen flickered and a message stated that the request was being reviewed. I thought, "Oh well, yet another rejection from Discover." The screen came back and regretted it couldn't offer me the 0% intro APR as indicated on the mail-out, but offered a 3.99% intro APR instead. I've since used it, but paid it off rapidly since even 3.99% is 3.99% more than I've paid lately.
Citi Simplicity Card VISA
Credit Limit: $1,000
Opened 12/12
Current Balance: 0
APR: Intro 0% until 12/13
Another unsolicited offer in the mail. Since I'd just cancelled Credit One, I thought I'd get this one to replace it. With a new 0% intro APR comes new opportunity for free credit over the next 12 months. Oh yeah.
Closed Credit Cards:
I've recently closed these two accounts I've had since 2007. It impacted my FICO score a bit since they were my oldest credit accounts on record, but with their exorbitant annual fees and high interest rates, not to mention the "poor credit stink" that is associated with their names, I had to cut them loose. Of course they were closed by my request with a zero balance and a perfect payment record for both.
Credit One Bank Platinum VISA:
Credit Limit: $1,300
Opened: 2007
Closed
The annual fee for this dog was about 8 or 9 dollars a month. Never mind the application fee, processing fee and set up fee I had to pay when I opened this card. Eh, I needed something back then when my credit was bad and this was the best of the pack of vultures that are sub-prime lending cards.
Orchard Bank Silver MasterCard
Credit Limit: $620
Opened: 2007
Closed
Another low-end credit risk issuer taking advantage of their desperate clientele with high fees, including an $80 year annual fee and high interest rates. No tears shed in saying goodbye to this one either.
According to my credit reports:
My one non-medical detrimental account is that pesky AT&T bill I chose not to pay when I moved from Lake Mary. So for a mere $180, my credit rating is impacted for the next 5 years now. And it's especially hard to take when I very well could have afforded to pay this. Other than this and a couple medical bills also neglected in 2010 or so which do or don't show up on reports due to them being medical bills? I see them so they must have an impact. One of the reasons I didn't pay them was because I'd heard medicals bills don't affect your credit. Um, I think they do.
So according to 2 latest credit score reports, my current credit score is either 658 (GE Capital FICO) or 686 (CreditKarma Score). According to the GE Capital tracking my FICO score was as high as 745 in late October when it had spiked up from a prior 659 score. What happened? I would guess...Christmas. They probably hike scores for the holidays in case people want to overspend a lot. How sick.
So what now:
Most of these accounts are still wet behind the ears so until good ol' Father Time makes men outta them, they'll probably not contribute as much as I'd like to increasing my credit score. What will help right away though is keeping my debt-to-credit ratio low. Currently I'm around 10% and it will probably stay around that as I add debt to the new Citi card while it enjoys a 0% APR for the next 11 months and pay off the Fairwinds card.
Now the main thrust of focus will be to really build up savings.
I have $3,300 or so in my 403b, but I'm currently only 50% vested. Plus, that's not savings, it's retirement. I only have about $50 something bucks in my Fairwinds savings. With earnings interest rates as low as they are, there's no investment reason to really use that account. But it's a psychological thing. Much like the thinking behind why a kid would be given a savings account to manage (like I was), it's a way to instill a sense of commitment to portioning away a part of one's earnings and sequestering it in a special place for a rainy day. Who cares it earns virtually no interest? It stays in the account and is more complicated (in theory) to withdraw from than checking. That's why it works. (In reality, my Fairwinds savings is easily transferable online to and from my checking so it's not so difficult to spend from it, but it would be a psychological partition, if not a bank-imposed one.)
And when my lease comes up for renewal late this year, will I stay here, or will I have enough to buy my own place?
By then, after so much patience and so much waiting, I may just really, REALLY need to scream out "I WANT IT NOW!"