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I agree with 4 steps but not number 5
July 31, 2020
6:22 pm
GICinvestor
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July 31, 2020
7:10 pm
Loonie
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I still have my first credit card. I was very surprised when I had to do business with that bank a couple of years ago on another matter. I used the card as ID and the advisor immediately remarked on exactly how many years I'd had the card. It seemed to matter to them. I think it enhanced my credibility slightly. I keep it because it has an enormous credit limit that I buillt up over time and don't btothere with now. Could be handy if I had a sudden spree of major house renovations or something.

I would never have guessed that they even keep this information, since, if you ever try to ask a bank anything, they always say they have nothing beyond 7 years.

But I have no use for #1 on this list - budgets. It depends on your personality. I've never needed a budget as I'm a very careful spender and always know where I'm at. In many cases, it seems to me, budgets exist to encourage people to spend all the money in the various categories, which encourages foolish spending.

July 31, 2020
7:31 pm
AltaRed
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Loonie, care to share how many years? I still have my first card from 1973. It has a huge credit limit which I keep in reserve for major vacation packages.

July 31, 2020
7:38 pm
pooreva
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#1 - Agree with Loonie. If you have category for example 'eating out' $100/month or 'shoes' $500/year at the end you will SPEND that money as you already dedicated it to something even if you do not need shoes or eating out.
#2 & #3 are mutually exclusive (sort of): if you pay full balance on time - you do not carry balance; if you pay balance you do not carry anything.
#4 - If you do not balance your CC when new statement is available, you deserve to live as any average american - in poverty.
#5 - Do not care at all. I do not borrow money and pay everything when it is due - on time. Paying with CC I do not consider 'living on credit' but just delaying payments.

July 31, 2020
7:39 pm
pooreva
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AltaRed said
Loonie, care to share how many years? I still have my first card from 1973. It has a huge credit limit which I keep in reserve for major vacation packages.  

What do you consider 'huge credit limit'?

July 31, 2020
8:22 pm
AltaRed
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pooreva said

What do you consider 'huge credit limit'?  

Means different things to different people. Possibly over $25k for some? Mid 5 digits for others? Six digit for the wealthy perhaps.

July 31, 2020
8:52 pm
Oscar
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I suppose that if I followed the author's path and obtained 10 credit cards within the five years after I finished college it would be necessary to live by these 5 rules, but since the article is sponsored by the credit card companies I can't really look at this objectively. It's an ad. And wouldn't having 10 credit cards reduce the amount of a mortgage you could qualify for ?
Read here https://www.cnbc.com/select/disclosures/

July 31, 2020
9:33 pm
Loonie
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AltaRed said
Loonie, care to share how many years? I still have my first card from 1973. It has a huge credit limit which I keep in reserve for major vacation packages.  

Mine's only 40 years. Spouse started on this path before me, about the same time as you, but no longer has the original card. I've always been a "slow adopter" and remember being hesitant about getting one
The card is so old and used so rarely that it doesn't appear on Equifax or TransUnion's radar. Thus, the huge credit limit doesn't count against me.
Back then, it was a lot easier to acquire a very high credit limit over time. They used to just dish out out whenever they felt like it.

August 1, 2020
12:38 pm
Alexandre
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Some people are really paranoid about their credit score. I am not. Really, till last year I didn't even know what my credit score is, and might not have learned it, if not for RBC putting link to free credit core report prominently on accounts web page. So I clicked.

I always get rid of credit cards I no longer need. The oldest I currently hold is about 5 years old. I do regular "cleanup" of banking accounts I am no longer interested to keep money at, by closing them.

So, what is my credit score? Well, as of today it is 862 out of 900 maximum.

August 1, 2020
12:42 pm
AltaRed
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Loonie said

The card is so old and used so rarely that it doesn't appear on Equifax or TransUnion's radar. Thus, the huge credit limit doesn't count against me.
Back then, it was a lot easier to acquire a very high credit limit over time. They used to just dish out out whenever they felt like it.  

It may no longer be valid(?) if it does not show on Transunion or Equifax, but that is speculation on my part. My 47 year old card does show on both, with its credit limit, but then I deliberately use it a few times a year to keep it active.

August 1, 2020
3:21 pm
Loonie
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No, the card isn't dead. I do use it 2 or 3 times a year for small amounts.
I barely exist with the credit agencies! - just enough to keep a very healthy score. I have very few cards and have only ever borrowed for mortgage and student loans, long gone. Never had a car loan. (And people wonder why I have so much money now! LOL)
It makes for a very dull credit history.

August 1, 2020
5:08 pm
AltaRed
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My credit report is about as dull as one can be too. Suits me fine.

August 2, 2020
5:06 pm
Winnie
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I have absolutely no idea what is my credit score.
Never interested, don't care at all.
I never paid even $0.01 interest to any landing institution.

In 2020 I finally was able to request my free credit report (without score) after 6 year of "red flag", that Peoples Trust put on my file in 2013.
I discovered, that my credit line $30,000 disappeared completely from my credit report, but it's active and well in my bank.

I have not used that credit line for approx 30 years now and simple forgot to do around $1 maintenance transaction every 5 years to keep it "alive" in my credit report.

August 2, 2020
6:28 pm
savemoresaveoften
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That list is for those who dont have self discipline or a finance/credit fool.
Its like reminding someone to chew thoroughly before swallowing when eating...

Keeping your first credit card only make sense if you are 20s something and try to establish credit history. Any one who has been around a while or those that does NOT need to borrow, credit score is mooted.

I can see having a budget helps a lot of people, ONLY if they do stick to it.

August 2, 2020
9:44 pm
Norman1
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At the upper end, the exact score is also not important.

According to an Equifax Canada vice-president, anything above 700 is considered excellent.

A mortgage broker confirmed that: "… once a score goes past 760 no one cares, the insurers, the lenders and the background investors do not care…".

August 3, 2020
11:13 am
Alexandra
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I don't understand about these old credit cards? RBC & CIBC send me new credit cards, I don't know maybe every 3-5 years? There is always an expiry date on them. I guess if there are still big store credit cards such as the Bay you may still have an old one.

The credit card number of course stays the same.....but still a new card every few years.

Debit/Client cards are a bit different.

I am the same as Winnie. Except for one time, I have NEVER paid a penny interest on my credit cards. I remember it well. It was with CIBC. Remember "Will that be cash or Chargex"? It was on my "CIBC Chargex". Before personal computers. I always paid the full amount owing around the last day before the due date. I used to pay it at the Instant Teller machine. Well, I got my dates mixed up and paid a day late. So had to pay the interest for that months purchases. It never happened again.

If you are very good with handling your money always use the banks money by using their credit card and paying off the full amount each month. Otherwise, if you are not good with your money use your debit card. But if it was my kid I was advising, I would say pay in cash instead of using the credit card.....it always seems to hurt more when you actually have to hand over that hard earned money.

August 3, 2020
11:15 am
Alexandra
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I mean to say in last sentence above I would advice using cash instead of Debit Card.........

August 3, 2020
1:08 pm
Alexandre
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Alexandra said
I mean to say in last sentence above I would advice using cash instead of Debit Card.........  

My grocery bill, last Saturday, was $300. Multiple family members, infrequent grocery shopping due to pandemics precautions.

Long story short: I would rather lose (or have it stolen with my wallet) Credit or Debit card, than $300 in cash.

August 3, 2020
4:03 pm
Alexandra
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True about losing cash for sure. I am sure it would not take much to spend $300 on groceries per week for a family of 4 especially if you have teenage boys!!

August 3, 2020
7:23 pm
AltaRed
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Alexandra said
I don't understand about these old credit cards? RBC & CIBC send me new credit cards, I don't know maybe every 3-5 years? There is always an expiry date on them. I guess if there are still big store credit cards such as the Bay you may still have an old one.

The credit card number of course stays the same.....but still a new card every few years.

 

When we speak of credit cards, we speak of credit card 'accounts'. No one cares about how frequently the physical cards themselves are replaced.

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