Reply #64: it didn't hurt me [View All]

[amazona]

I was told by my banker m-i-l the best way to keep it that way was not to apply for more credit, no matter what they offer....just say no.

Your M-I-L may be a banker, but she's obviously not a mathematician or a logician.

Think about this statement:

No matter what they offer?


That is just silly. There is a point at which the amount of money offered to take the credit card offers will be more valuable to you than the supposed cost of a ding against your credit record for accepting the offer.


If you refuse to take the money offered in the various promotions, you have of a certainty cost yourself that amount of money. Let me get an adding machine. Hmmm. $150 from Citibank last summer on a promotion. The free airline tickets woth $300-700 apiece from Amex my partner and I are (each!) receiving. The $30 from Amazon.com credit card we got the other day. The $25 gas credit card offers Don mentions. You know, $25 here and $300 there and in a few months it starts to add up!

Every time you refuse one of these offers, you are leaving REAL MONEY on the table right now. Today. Now ask yourself what you are getting in exchange for throwing these rebates in the garbage? My experience is that you are getting absolutely nada, that you throwing the money away and not getting a thing in return as far as improved credit.

The theory that having accepted a lot of credit card offers will hurt you when buying a house is just that, a theory. And IME it's an incorrect one. If you have a proven history of charging things and paying them off on time on an unsecured loan, you are not going to have any problem getting a very well-priced secured loan, which is what a mortgage is.

If I told you the terms of my mortgage, you wouldn't believe me. Yeah, that good. Yes, luck and timing played a part, but a proven credit history also helped. If I was a cash only buyer who didn't do the credit card game, with my low income and the fact of being long-term self-employed, no way I could have gotten a loan. I had to document that I could borrow and pay back.

"I was told by my mother-in-law" or "I read on the credit scoring site where lots of credit card companies pay for advertising" that making money off credit card companies hurts your credit score is not a convincing argument. And I promise you that it isn't true. I'm sure your M-I-L believes what she is saying. But she's wrong.