Think Outside The Piggy Bank

Monday's money question 3

Do you know your credit score?

I have to admit that I don't, although I plan on changing that. I've been assuming for a long time now that my score is probably just fine, but I'd like to know for sure. And to be honest I don't know enough about credit scores; what they mean, and what impact they have, so would like to learn more. For example, I'd always thought that having lots of credit available would be a good thing, but apparently, that isn't always the case.

I can get credit reports from TransUnion or Equifax online (today!), but will mail in a written request instead. It takes longer when you do it that way, but I don't mind because why pay when you can get it for free? In the meantime I took this credit survey that gives you your potential credit score range by answering ten quick questions. My range was between 750 and 820 (out of 850?), which I believe is good, as the higher the number, the lower risk you are to creditors. I think. Still, I'd like an official report!

Maxine: on AOL

Snort. You tell 'em Maxine!

I forgot to mention a couple of things about credit in my post yesterday. I've been noticing lately how certain credit cards are pushing us to charge for stuff like groceries and gas. I seem to remember a time (yes, I'm afraid I'm more of a fall than spring chicken) when credit cards were used mainly for emergencies and big-ticket items. Now it seems like we're encouraged to use them for just about everything. I suppose it makes sense if you're collecting air miles or participating in some other rewards system, but I'm not sure if I like this trend.

The other thing that caught my attention when I was still paying off my line of credit that I'm not sure I like either, is the change they made to the monthly minimum payment. Initially they charged 3% of the balance, but then decided that I only had to pay accrued interest. Hmmm. Seems to me that I was better off when forced to pay some of the principal (which I usually did anyway), but giving me "flexibility" (as they put it) to make an "interest only" payment was likely more for their benefit than mine.

credit card payment holiday?

So I get my VISA card statement in the mail the other day inviting me to Take a Break this month:

Because you are a valued cardholder, we would like to offer you a name of bank Visa payment holiday by waiving your minimum payment this June. Of course you may still make a payment if you wish. Standard monthly interest charges will continue to accrue and the minimum payment on your next monthly statement will be calculated in the usual way. To be eligible for this offer, your account must be in good standing.

Gee, I guess I should feel flattered being valued and in good standing and all, but this benefits me how? Sure, it might be kind of nice not to have to make a payment, but if standard monthly interest charges aren't waived either, I don't see how taking a "holiday" will help me much. Normally, I try to do the ideal thing and pay the balance in full, but my general rule of thumb is that if I can't or won't, then I'll aim to pay at least either double or triple the minimum payment. Otherwise it's kind of like riding a stationary bike -- you're moving, but going nowhere fast.

I don't find those "convenience" cheques that come from credit card institutions very convenient either since they're treated as cash advances. No thanks, I'll either use the credit card itself, or if for some odd reason really feel like writing a cheque, fill in one of my own.

Darn, guess I'm not going on holiday come July!

credit card vs line of credit

Why is it that even though I know my credit cards and lines of credit operate on the same principle, they still feel so different? Why is it that I'm perfectly aware that what I can borrow on my credit cards is not my own, and yet what's available to me on my lines of credit feels more like personal stashes of dough that I can do with as I please? Okay, so the interest rate is lower on the lines of credit, but it's still credit. I'm in debt whenever I use either method, and am responsible for paying back whatever I owe, yet it continues to feel like the money on the lines is my own, and the money on the cards theirs. Doesn't make any sense, eh?

Maxine: spending made easy