credit question

[adi]

Does anyone know how many points get taken if you max your card and not pay it ? How bad does it ruin your credit ?

[adi]

bump

[ck1942]

By "points" I assume you are referring to FICO score, which is a compilation and appraisal of your current financial status - meaning, are you paying your major bills on time, are you within your current credit limits, etc., compared with your income status.

The FICO model is used by the vast majority of banks and credit grantors, and is based on consumer credit files of the three national credit bureaus: Experian, Equifax, and TransUnion.

If you already have a strong credit history with an existing financial institution: bank, credit union, mortgage company, securities firm, not much will happen (to your FICO) if you fail to pay a credit card bill. Continuing to fail to pay will result in additional credit card charges, of course, and missing more than a couple of months' payment will definitely result in "reports" against your files at the credit bureaus.

At this moment, unless you are applying for credit (to get a mortgage, auto loan or open additional credit [card] lines, not much is likely to be reported on a first time failure to remit.

If there's an issue with being able to pay, best I can suggest is immediately contact the card company, explain what's going on, and see if you can get payment extensions or temporary reduction relief.

[adi]

Thanks ck1942 i have great credit, just pissed that a card i got had 0 intrest for a year, only owed about 700 on it now they want to charge me 1600 in intreast for the year cause im not paid up on time .So i wanna charge it up and not pay a dime . Talked to them and they wont budge even though my house and car are with the same bank.

[Whispers]

Originally Posted by ck1942

If you already have a strong credit history with an existing financial institution: bank, credit union, mortgage company, securities firm, not much will happen (to your FICO) if you fail to pay a credit card bill.

Not true.... A single late can dump a score 30-40 points AND be reason enough for other card issuers to RAISE rates.

Continuing to fail to pay will result in additional credit card charges, of course, and missing more than a couple of months' payment will definitely result in "reports" against your files at the credit bureaus.

At this moment, unless you are applying for credit (to get a mortgage, auto loan or open additional credit [card] lines, not much is likely to be reported on a first time failure to remit.

If there's an issue with being able to pay, best I can suggest is immediately contact the card company, explain what's going on, and see if you can get payment extensions or temporary reduction relief.

He's not presenting this as an issue based on ability..... He clearly does not WANT to because he feels it is unfair.




When your balance exceeds about 1/3rd of your limit you will take a hit.
When your balance exceeds about 2/3rd of your limit you will take another hit.
When you max it out you will take yet another hit.
When you are 30 days past due you take a bigger hit.
At 60 days another and at 90 days it does even more damage to you

How many points you will lose over a situation like that will depend on your overall credit usage as compared to available credit.

A single card could dump your score 60 to 100 points as score is also affected by the overall picture.

From the day you go late until it's 1 year past due with no activity on your part it will stop you from getting any federally subsidized home loans.

Other credit card companies will take notice and you will probably see interest rates increase on those cards as a result of the additional risk you now present.

If you go to buy something like a car expect to pay a higher rate.

It's a NO WIN situation for you that could cost you far more than $1600 in the long run.

I'm going to guess you made a large purchase under a promotional "0% for 1 year" program they were running. Or you took advantage of a "Transfer Promotion" common in "factoring".... If so then YOU signed the agreement and they extended the credit and you need to man up and pay the pill.

It's not a scam.
It's not illegal....

It's an everyday business practice in the retail credit world to run these promotions.... The retailer that sold you the merchandise paid a fee for the promotion. Had you paid off on time that fee is all the credit issuer would have received.... In the current situation the retailer will receive a rebate of part of the interest most likely. THEY both win.....

If it was furniture.... Then you ALSO overpaid for the product.


Something else to consider.... If you do what you suggest and intentionally charge up the card with zero intent to repay you are committing a criminal act called fraud and could see yourself prosecuted for it.

[Whispers]

Originally Posted by adi

TTalked to them and they wont budge even though my house and car are with the same bank.

This complicates it even more if there is a clause in the agreement you signed when the card was issued..... or the mortgage.. or the car.....

MANY credit unions and some banks engage in a practice called "cross collateralization"...

What this means is that all the loans you have are collateralized with any assets available through any other loans.

For example.... This is a practice of Navy Federal Credit Union.

John Has a Car Payment on a car, a Mortgage on a house and a credit card with a $10K Limit. He pays his mortgage and car payment but when time gets tough he lets the credit card get behind...... A few months late with the car payment made 2 days earlier he heads out to work in the morning and the car is not in the driveway.... After reporting it as stolen and refusing to even consider it he finally calls the Credit Union who informs him Yes... Indeed... They DID repossess the car.... Reclaiming it requires an arrangement on the credit card....

or worse... They initiate a foreclosure on the house....

[adi]

What pisses me off is ,the fact that it is legal to charge interest on money already paid .

[Whispers]

Originally Posted by adi

What pisses me off is ,the fact that it is legal to charge interest on money already paid .

That is not what they are doing.

From the date of purchase they are charging but DEFERRING the interest until the end of the term. You agreed to pat it off in full BY the end of the term and if not they would reinstate the interest as it would have accumulated.

This woul dhave been the case had you missed a payment as well.

[ck1942]

They initiate a foreclosure on the house....

Seriously doubt any foreclosure possible on a primary mortgage that is current unless there's a second lien or mortgage of some sort that would be vulnerable.

Almost all primary mortgages are subject to some sort of state and/or federal oversight. That includes HELOCs of course, and those need not be with the primary mortgage holder, especially considering the low rates the competition might be offering.

Navy Fed seems much like any other FCU, and, remember, the new Consumer Federal Protection Bureau has already issued some rules and is in process of issuing more.

My suggestion to the OP is to consult an attorney or non-profit credit counseling service. And definitely look into getting a new bank or c.u. and also refinancing the mortgage (rates are still very low) and spread the credit accounts around.

= = = = =

As someone who has "banked" and "credited" for 50+ years, I am what you might label a "traditional customer."

I cannot testify to Navy Fed's policies and practices. Although I have been a member there for many news, I also have had and still have accounts at several other FCUs and two banks on a personal basis, and with two other banks for business needs. Plus two separate Wall Street firms. And, in the past, a traditional Savings & Loan. Yes, I know I should consolidate some of these to save on bank charges, but to me these are quite minimal these days. And, toss in a couple of "Green Dot" and Western Union accounts along the way.

Along the decades I found it more useful (and profitable) to utilize multiple institutions and not cross pollinate especially since I relocated periodically and thus wanted to be "local" since using out-of-town checks were rarely accepted on an easy basis. (Showing my age, I guess.)

I have also found that carrying much of a balance on any credit card exposes you to annoying and multiple "offers" that can be tempting, but also perilous.

Much better to have some credit limits available... use those one or two cards every once in a while; don't keep a balance more than a month or so, and believe it or not, those creditors will raise your limits!

[Whispers]

Originally Posted by ck1942

They initiate a foreclosure on the house....

Seriously doubt any foreclosure possible on a primary mortgage that is current unless there's a second lien or mortgage of some sort that would be vulnerable.

If it is a primary and homesteaded then I doubt it as well.....

I use cards for everything for the points but pay them all off monthly. Change cards based on offers but provided there are no fees just dump them into a safe for needs.

I was surprised at the navy fed thing. Amex and Discover are also very predatory in their collection practices ignoring local laws paying lawyers to take actions that may not hold up but as fear tactics.... i.e. placing a lien for a credit card debt on real property homesteaded in texas.

i used to do some Credit Repair when I was in automotive finance for prospective clients.... actually not FOR them but guiding them on what to do for themselves.....

Navy seems willing to do stupid shit to spite themselves..... One guy owed $40K across 2 Navy Credit Cards and had 2 late model cars financed with them. The guy went into a Chapter 7 and after the creditors meeting attempted to reaffirm on the cars and keep them. Navy refused if he would not also reaffirm the credit card debt.

Insanely stupid as both cars carried negative equity at the time as well as the Judge would probably have frowned on allowing him to selectively keep certain credit card debt over others.

Nowadays though.... You can buy a new car before your discharge date (at a high interest rate) and have a mid 600s score in 4 to 6 month and get a FHA mortgage 2 years after discharge. It's like the government is encouraging people to dump their debt.


Insane