The Official 2014 2nd Gen RAM Forum OT thread
Legend
Joined: May 2005
Posts: 8,663
Likes: 8
From: Central Oklahoma
In that case, you can invest $5,500 of what you get back straight into a Roth IRA every year. TRowe Price and Fidelity have some great growth funds that yield between 5% (so-called "bad years) and 15% per year (great years). Remember the fable of the ant and the grasshopper.
Get a co-signer if possible and get a small personal loan, put the amount you take out into your checking account and pay off the loan with the loan.
Administrator
Joined: Apr 2010
Posts: 87,482
Likes: 4,223
From: Clayton MI
But not all at once. Make the payments, or, a little bit more, on time.
Legend
Joined: Mar 2011
Posts: 8,914
Likes: 4
From: Fredericksburg, Virginia
My Aunt's husband started with a secured CC, worked it up to $25,000 of unsecured credit.
Legend
Joined: May 2005
Posts: 8,663
Likes: 8
From: Central Oklahoma
When to co-sign for someone...NEVER. The only exception is when you're married; otherwise, the only other time to co-sign is...NEVER.
As for credit cards, why do you need them? Most people like to disagree, but I'm a Dave Ramsey fan. Before I got married, I had $5,000 in my savings and $2,500 in my checking account at all times along with an IRA. I made the mistake of "doing what everyone else does" by falling for the credit card BS, getting revolving credit accounts, and getting a mortgage. She took me through bankruptcy (it was her second one) and I cashed out my IRA for other stupid mistakes.
Lessons learned. Since then, I'm back on my old track of not having a credit card in over 10 years, an emergency fund, an aggressive IRA, and I pay cash within a properly planned budget.
And yes, it is possible to buy anything without a credit history -- including a house.
People LOVE talking up how *important* it is for credit, blah blah blah, but they never can answer my #1 question: What happens if you lose your job?
Again, when I was married with all that debt racked up I went through a period where I was laid off. Trust me, getting foreclosure letters and collections notices when you can barely put food on the table via unemployment is nerve racking.
You can save money in an online money market account that pays better interest than a bank (banks suck, go with a credit union) and watch your money grow. That way, if/when you're ever between jobs you never have to worry. A good rule of thumb is to have six months of expenses saved up. It takes time, but it's worth doing.
Last edited by Gary-L; Nov 8, 2014 at 04:20 PM.
Grand Champion
Joined: Apr 2010
Posts: 5,011
Likes: 6
From: Meeker, CO
I also have no credit history. I retired my last consumer loan (for a car) in 1985 after deciding that using credit was a very stupid choice. Credit is nothing more than an expensive way to avoid delaying gratification. All it accomplishes is the erosion of future income and lifetime purchasing power. There's no avoiding the fact that you acquire goods or services with the value of the loan amount, but have to earn the much greater sum of payments, including fees such as "loan origination" (a euphemism for commission), to do it.
If you still want to play that stupid game which you're guaranteed to lose, be sure that your secured card is one that will actually report your payment history to the credit bureaus. Many don't. But be smart about it: Save until you can afford those purchases, then after buying them on credit pay those bills wisely. Make your payments 150% to 200% of the minimum monthly payment, and don't use that card again until the balance is zeroed. That'll get the algorithms panting to boost your credit limit in a hurry, hoping to coerce you into stupidly enslaving yourself. Be careful, though, because the banks and almost everyone you know will try to make you see that credit limit as the equivalent of cash in hand. It is not the equivalent of cash in hand; it's the bank giving you the opportunity to become an indentured servant.
Never lose sight of that: Credit is the bank trying to entice you into indentured servitude. When you pay strictly cash, what's yours is yours. When you have debt, only the clothes on your back and a few vital necessaries of life are yours -- the rest belongs to your creditors until you retire the debt. If life throws a challenge at you, a judge can order you to sell off most of your stuff to repay your creditors. You might end up paying with almost everything you've got and a big chunk of your future income for absolutely nothing. That's how it goes when you're an indentured servant.
If you still want to play that stupid game which you're guaranteed to lose, be sure that your secured card is one that will actually report your payment history to the credit bureaus. Many don't. But be smart about it: Save until you can afford those purchases, then after buying them on credit pay those bills wisely. Make your payments 150% to 200% of the minimum monthly payment, and don't use that card again until the balance is zeroed. That'll get the algorithms panting to boost your credit limit in a hurry, hoping to coerce you into stupidly enslaving yourself. Be careful, though, because the banks and almost everyone you know will try to make you see that credit limit as the equivalent of cash in hand. It is not the equivalent of cash in hand; it's the bank giving you the opportunity to become an indentured servant.
Never lose sight of that: Credit is the bank trying to entice you into indentured servitude. When you pay strictly cash, what's yours is yours. When you have debt, only the clothes on your back and a few vital necessaries of life are yours -- the rest belongs to your creditors until you retire the debt. If life throws a challenge at you, a judge can order you to sell off most of your stuff to repay your creditors. You might end up paying with almost everything you've got and a big chunk of your future income for absolutely nothing. That's how it goes when you're an indentured servant.
Legend
Joined: Mar 2011
Posts: 8,914
Likes: 4
From: Fredericksburg, Virginia
When to co-sign for someone...NEVER. The only exception is when you're married; otherwise, the only other time to co-sign is...NEVER.
As for credit cards, why do you need them? Most people like to disagree, but I'm a Dave Ramsey fan. Before I got married, I had $5,000 in my savings and $2,500 in my checking account at all times along with an IRA. I made the mistake of "doing what everyone else does" by falling for the credit card BS, getting revolving credit accounts, and getting a mortgage. She took me through bankruptcy (it was her second one) and I cashed out my IRA for other stupid mistakes.
Lessons learned. Since then, I'm back on my old track of not having a credit card in over 10 years, an emergency fund, an aggressive IRA, and I pay cash within a properly planned budget.
And yes, it is possible to buy anything without a credit history -- including a house.
People LOVE talking up how *important* it is for credit, blah blah blah, but they never can answer my #1 question: What happens if you lose your job?
Again, when I was married with all that debt racked up I went through a period where I was laid off. Trust me, getting foreclosure letters and collections notices when you can barely put food on the table via unemployment is nerve racking.
You can save money in an online money market account that pays better interest than a bank (banks suck, go with a credit union) and watch your money grow. That way, if/when you're ever between jobs you never have to worry. A good rule of thumb is to have six months of expenses saved up. It takes time, but it's worth doing.
As for credit cards, why do you need them? Most people like to disagree, but I'm a Dave Ramsey fan. Before I got married, I had $5,000 in my savings and $2,500 in my checking account at all times along with an IRA. I made the mistake of "doing what everyone else does" by falling for the credit card BS, getting revolving credit accounts, and getting a mortgage. She took me through bankruptcy (it was her second one) and I cashed out my IRA for other stupid mistakes.
Lessons learned. Since then, I'm back on my old track of not having a credit card in over 10 years, an emergency fund, an aggressive IRA, and I pay cash within a properly planned budget.
And yes, it is possible to buy anything without a credit history -- including a house.
People LOVE talking up how *important* it is for credit, blah blah blah, but they never can answer my #1 question: What happens if you lose your job?
Again, when I was married with all that debt racked up I went through a period where I was laid off. Trust me, getting foreclosure letters and collections notices when you can barely put food on the table via unemployment is nerve racking.
You can save money in an online money market account that pays better interest than a bank (banks suck, go with a credit union) and watch your money grow. That way, if/when you're ever between jobs you never have to worry. A good rule of thumb is to have six months of expenses saved up. It takes time, but it's worth doing.
Is that even a question? Your credit isn't going to suffer from job loss until you stop paying your bills.
Now you say you can buy anything, including a house, without any credit history yet didn't provide any information.
It is really interesting because just about everything now requires a credit history check and many many creditors will turn you away for having NO credit history.
Grand Champion
Joined: Apr 2010
Posts: 5,011
Likes: 6
From: Meeker, CO
