Bob Bridges wrote at length, ending with: >.I simply put a
>few thousand on the card, as though it was a pre-paid. The credit limit is >back up to a usable level now, but I'm still in the habit: I keep a >negative balance on the card. >Yeah, yeah, I know they're profiting from "borrowing" my money. But I pay >the same either way, so I can't see that it makes a difference to me. Are >there disadvantages I'm missing? Right, with low interest rates on bank accounts (and you're not prepaying enough to be worth investing) the "borrowing" is insignificant. This is a tried-and-true method of restoring credit. It also "cheats" the system (yay!) by lowering your debt-to-credit ratio: each month when the various folks look at your credit, they see (obviously I'm making up these numbers, and ignoring things like mortgage, which I believe factor in but obviously very differently from unsecured credit card debt): Credit limit: $10K Credit card balance: -$1K That's obviously a VERY positive net debt-to-credit ratio, and works in your favor. I look at my credit rating occasionally, and it varies by a few points. This is often directly dependent on how much I've spent recently, even though I NEVER carry a balance. That's because the various folks who report it (I have a couple of cards that do it for free) look at me at different times. So if they happen to pick a day just after my primary card balance was paid, I look better to them. When we had roof/siding done 10 years ago and put it all on cards (yay points!), it went down noticeably the next month, then back up. Net: I see your approach as a plus for you all 'round. You're getting whatever other benefits the card offers, not having to use debit (which is riskier, since it has less protections both in terms of breach and against the merchant not delivering), and raising your credit score-all at a cost of a buck or two a month in "lost" interest, max! ...phsiii ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to lists...@listserv.ua.edu with the message: INFO IBM-MAIN
