New Credit Card: 666, the mark of my credit score

Posted by on July 6, 2017 at 10:10 am.

As mentioned, in May of this year, I acquired a credit card. I hadn’t had one for years. As l already mentioned in earlier posts, I stopped using it because my debit card did exactly what a credit card did with the added bonus that it came directly out of my checking account, just how I liked it to be.

For several years, I’d been using my debit card and I was fine with that, however, I started thinking about the possibilities of it not being accepted at some places. Now granted, I had never run into this issue, but I’m the type that typically has a back-up plan for everything (that’s just how I roll) so I must say I’m surprised that I went without a credit card for so long.

Approximately 14% of the population has no credit score whatsoever, and is labeled as credit invisible. As a result, these underbanked individuals will have difficulty obtaining new lines of credit.

I Have a Low Credit Score Because I Didn’t Use a Credit Card

When I went to apply for a card, guess what I found out? There was absolutely no credit history about me to report and I received a message (like the one quoted above) stating that my credit was invisible? I pay my bills on time and have no debt, but it still had no credit history of me within the system. I have read about this from some homeowners that don’t use credit cards and I suspected this might be the case if I ever decided to acquire a credit card.

 Personal Responsibility: I pay my credit card bill weekly

But as you can see, with the chart below, I make payments on my credit card frequently. It’s about personal responsibility, I don’t spend what I don’t have, even with a credit card. So yes, I treat it exactly as cash or a debit card.

As you can see the first month, I only used it for a few purchases, however, in June I increased the amount I purchased and this month that has increased even more. Sorry credit card companies, but you won’t make any interest off of me for carrying a balance. As mentioned many times, I pay my weekly and have a zero balance. I love paying for my credit card purchase as soon as it’s used. That might sound ‘odd’ to some, but being debt free makes me happy.

However, I’m not fooling myself into thinking they aren’t making anything. You see, when I make a purchase using my credit card, the merchant is charged a fee. It would make sense for the merchant to factor this into their listing prices, so I don’t feel bad about that at all. My credit card doesn’t have an annual fee so I’m not ‘paying’ that way. Also, my credit card doesn’t have an annual fee.

I have heard some say that people tend to spend more with plastic than with cash. I honestly don’t. My purchases are always planned and I don’t go over my budget. I am a natural saver. My debit card should arrive any day now, but I’ll still be using my credit card for all my purchases. I’m thinking I won’t use my debit card at all since it was compromised. You can read about the attempted unauthorized use of my debit card issue here.

What if  I lose my job or am ill?

As mentioned, I’m a natural saver so I do have an emergency fund in place to prepare for the unexpected, so my bills will still be paid, regardless. That goes back to personal responsibility and preparing for the unexpected in advance, so you aren’t scrambling when those unfortunate circumstances happen. I don’t indulge in my wants. I rarely go out to eat at restaurants. I much prefer cooking and it saves additional money that I can put aside to planning for our future. Also, when it comes to entertainment, most of it is free. This all ties into me being able to effectively set aside money for the unexpected. It’s just smart and being a wise steward, just like Joseph from the Holy Bible. Also, I’m not dependent on one source for an income, that’s the importance of creating multiple income streams.

I Budget

I use YNAB (You Need A Budget) for my budgeting needs. I’m enjoying it immensely. I still keep a budget on paper too, but YNAB is great since it gives me the opportunity to digitally record transactions when they occur. By the way, you can try YNAB free for 34 days by clicking on this link. YNAB contacted me a few months ago about joining their program and I was honestly thrilled, but I didn’t act upon it until now. This is an affiliate link. You can search my website to see what I’ve written about YNAB. After the trial, if you do decide to use their service we both receive a free month of YNAB! I manually enter all my transactions into YNAB. I simply like that level of control, however, you can allow it to link to your bank accounts.

Resources:

  1. Does Your Credit Score Matter if You Don’t Do Debt?
  2. Average Credit Score in America
  3. Thank You To People With Credit Card Debt
  4. How Paying A Credit Card Works

2 Comments

  • Mike says:

    We’ve used credit for much of the last 45 years, most of that time having some amount of debt, but always, always paying our bills on time and usually paying debts off early. Thanks to my contracting work, last year we paid the last of that off. Needless to say, our credit score is pretty good. We buy most stuff with our cards, seldom using cash — I bought a jar of salsa with cash yesterday — and pay the cards off monthly. Without taking on debt, the only way to raise our credit score would be to pay the cards down more frequently, but we really don’t need to.

    We really don’t have a budget other than restraint. Neither are our purchases particularly planned.
    Mike recently posted..Casino at Twilight

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    Opal Reply:

    @Mike, I honestly never really thought too much about my credit score until recently. I was surprised that some businesses now look at your credit score if/when considering hiring a new employee. While that’s not really an issue at the moment, perhaps in the future applying for a job might be a consideration.

    Also, if I decide to move. While I know that you don’t need a credit score to acquire a place, having one does make it easier instead of having to jump through additional hoops to prove that you can be trusted.

    I paid with cash on Tuesday. I purchased steamed crabs for my daughter. 🙂 A few weeks ago, my debit card was compromised. My bank is small, they know my name. I enjoy that type of service. I went into the bank and took money out. It felt a bit odd since I rarely carry cash with me.

    I guess I’ve always been on a budget even when I didn’t actually write it down. Restraint (as you and your wife practice) is a great way to describe that.:) As a child, I observed my parents doing that.They actively practiced that and I do admire them for what they showed to my brother and me. We didn’t go away on trips, they simply could not afford that. My mom was stay at home mom and my brother and I attended private school throughout our academic career. We did have day trips and I can honestly say we didn’t miss out on anything. Because of them, it’s something restraint/budgeting is something I’ve followed. My parents are the millionaires next door. Have you ever read that book? It’s fairly impressive! Their sacrifices definitely paid off. They still live well below their means and give even more now to others.

    For myself, I definitely do see the benefits of budgeting and writing things down since I can plan for mid and long-term goals much better with the numbers in front of me and it’s nice to see when I can reach a variety of goals. But, I’ve always been a planner! 🙂 But even with all of that, I still allot funds for enjoyment, interestingly enough much of those funds are funneled to my daughter. Myself, I don’t require too much. 🙂 Neither does she it would appear, but I do try to get her things she will enjoy. Her tastes aren’t expensive.
    Opal recently posted..July 4, 2017: It’s Independence Day!

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