Barclay's Card for Financing

[mrzeigler]

If you want your REAL credit score, you want your FICO score and it is NOT free.

Correct. Long-winded, detailed explanation of credit reports and credit scores below:

There are three credit-monitoring agencies — Experian, TransUnion and Equifax.

Then there is the Fair Isaac Co. (FICO). Your FICO score is the one that creditors use to evaluate the risk the of lending your money.

A while ago, the folks at the three credit-monitoring agencies realized that Fair Isaac was getting a nice chunk of change for taking a person's financial history and boiling it down to a number, so they decided to do the same. Each offers their own numeric score ... and each charges for it. However, some credit cards include free monitoring of one of those scores — I have a Barclays/Juniper Mastercard that lets me view my TransUnion score through the Juniper website; unfortunately for me, it's the Barclays Visa that offers Apple financing, so I'll be applying for that card once the iMacs are refreshed). From everything I heard, these credit scores aren't really worth paying for.

Any time a company checks your credit — when you apply for a credit card, mortgage or a car loan, for instance — you are entitled to a free copy of your credit report, and that should include your FICO score. (Keep in mind that every time you apply for credit, you FICO score takes a small hit because it sends a message that you're looking to borrow, so it isn't wise to open credit account after credit account if you intend to make a major purchase such as a car or home in the near future.)

Federal law gives you free access to your credit reports from Experian, TransUnion and Equifax once a year. The gateway to get these reports is https://www.annualcreditreport.com/ If you want to check your credit report more than annually, you will have to pay a fee (or apply for credit/financing, as explained above). THE FREE ANNUAL REPORT DOES NOT INCLUDE YOUR FICO NUMBER NOR ANY OF THE CREDIT SCORES THE THREE CREDIT-MONITORING AGENCIES OFFER. Of course you can pay extra to get them, but unless you're making a major purchase in the next year or so, it's usually not necessary. You can get a sense of if you have good credit or bad by reading and understanding the reports. I suggest you save each of these reports as a PDF.

I stongly suggest that people interested in credit scores and credit reports stay away from freecreditreport.com. Sure, it provides a free credit report, but the site makes it difficult to cancel after the free trial, and many people often pay a monthly fee for multiple months without ever using the service.

 

[winty03]

I used it to purchase my ipad. Approved and bought it in 5 minutes. Paid it off early then cancelled the card so I can re-open another one when the imacs come out and I can get the promo again.

Man talk about the worst thing you can do for your credit!!!!! Your dropping atomic bombs on your credit/credit score!!!!!!!!!

 

[Kflik]

I too have just squeezed past the 800 credit score zone and I am always paranoid about it dropping. Which is why I don't think it is a good idea to open a credit card solely for the purpose of getting 0% free. If you absolutely must open one, you should opt for a card with great bonus points or cash back since you are essentially stuck with it.

Opening a new card automatically increases the average age of all of your accounts and the older the average, the better. Creditors do not like seeing people who open a lot of new accounts because it is portrayed as them not having enough funds available which is why they need more cards (which means more credit risk).

It doesn't matter if you are 21 but if you are nearing the late twenties or early thirties where you plan to finance a home, having a great credit score will guarantee the absolute lowest interest rates.

I have a few questions for you.

First, I have read quite a bit on credit scores and how they are calculated through various articles on yahoo finance. I carry a low debt/equity ratio (I have about $1,200 in debt being used, but have the credit limit of $2,000, $7,000). As you can see I carry two credit cards, I have read that it is actually good to carry about 20% of your debt from time to time (shows that you know how to carry debt, but have ability to pay it off responsibly and have the responsibility to only use 20% - 30% of what you actually could).

I am still young and in NO TIME in the future applying for any type of major loan. I am actually still a grad student at this time. I also carry credit cards in the past from Banana Republic and J-Crew, but have not used these in about 6 years (though the accounts are still active).

I wanted to take out a card at either apple or best buy to pay for one of the new iMac's along with possibly an iPad. Is this really so bad? I would put it on one of my current cards (the one carrying the $1,200 will soon be paid off down to 0, I would put it on this one) BUT it would be nice to not have interest and make small payments throughout the year (I am a grad student after all, I do not have full time work). Seeing how I would pay this card off in less than a year, wouldnt this move HURT my credit score in the SHORT RUN but help it in the LONG RUN?

Any help is welcome! Thanks for your time!

 

[winty03]

(Keep in mind that every time you apply for credit, you FICO score takes a small hit because it sends a message that you're looking to borrow, so it isn't wise to open credit account after credit account if you intend to make a major purchase such as a car or home in the near future.)

If you apply for credit thats going to be a hard hit and its going to be 5 to 10 point drop. The way banks are lending now days, thats a huge hit to me.....EVERY point counts! But yes the monitoring services are not FICO's they are a "ballpark" scores of where you sit in the credit score range. If you are say a 795 score in your monitoring service your not going to report a 690 FICO. So its a way to control and or view your credit without "soft", or "hard" hitting your score with inquiries, "just to find out."

 

[mrzeigler]

Man talk about the worst thing you can do for your credit!!!!! Your dropping atomic bombs on your credit/credit score!!!!!!!!!

Yep. That is a terrible strategy.

Though closing credit accounts don't hurt a credit score (but you shouldn't close account that are in good standing because they will improve your score), opening numerous ones does.

It would be far better to have a couple of good, long-standing credit accounts in good shape. If you can't finance at zero percent, buy on credit and then take advantage of one of those ubiquitous zero-interest balance transfers. Even if the transfer has a high fee charge of 4 percent (3 percent seems standard, but can find ones with no fee occasionally), it would cost all of $80 to finance a $2,000 computer at zero percent interest.

In a 9-month zero-interest offer, it would be paid off at $231 a month; if you get 12 months, we're talking $173 a month. And all the while, you'd be improving your credit report.

Of course, that assumes the consumer has credit accounts in good standing that have enough available credit to handle that balance transfer.

 

[winty03]

Yep. That is a terrible strategy.

Though closing credit accounts don't hurt a credit score (but you shouldn't close account that are in good standing because they will improve your score), opening numerous ones does.

It would be far better to have a couple of good, long-standing credit accounts in good shape. If you can't finance at zero percent, buy on credit and then take advantage of one of those ubiquitous zero-interest balance transfers. Even if the transfer has a high fee charge of 4 percent (3 percent seems standard, but can find ones with no fee occasionally), it would cost all of $80 to finance a $2,000 computer at zero percent interest.

In a 9-month zero-interest offer, it would be paid off at $231 a month; if you get 12 months, we're talking $173 a month. And all the while, you'd be improving your credit report.

Of course, that assumes the consumer has credit accounts in good standing that have enough available credit to handle that balance transfer.

More good info!!! Totally agree. You have to look past this one purchase!!! Signing up for 5-6 store cards for single purchase deals....lenders not going to like that!!! Alot of activity on your credit history for nothing lenders are looking for...stability. Better to get a card that you will have for 5-10 years and do some balance transfers. Rather than a store cards for a one time use that sits for 5 years..and then they end up closing because its never used. That does nothing for your credit score....you took a hit when you opened the store card...hopefully builit your score back up after that hit.....and then you never use the card again and it gets close.....Big Waste of Time score wise!

 

[mrzeigler]

I have a few questions for you.

First, I have read quite a bit on credit scores and how they are calculated through various articles on yahoo finance. I carry a low debt/equity ratio (I have about $1,200 in debt being used, but have the credit limit of $2,000, $7,000). As you can see I carry two credit cards, I have read that it is actually good to carry about 20% of your debt from time to time (shows that you know how to carry debt, but have ability to pay it off responsibly and have the responsibility to only use 20% - 30% of what you actually could).

I am still young and in NO TIME in the future applying for any type of major loan. I am actually still a grad student at this time. I also carry credit cards in the past from Banana Republic and J-Crew, but have not used these in about 6 years (though the accounts are still active).

I wanted to take out a card at either apple or best buy to pay for one of the new iMac's along with possibly an iPad. Is this really so bad? I would put it on one of my current cards (the one carrying the $1,200 will soon be paid off down to 0, I would put it on this one) BUT it would be nice to not have interest and make small payments throughout the year (I am a grad student after all, I do not have full time work). Seeing how I would pay this card off in less than a year, wouldnt this move HURT my credit score in the SHORT RUN but help it in the LONG RUN?

Any help is welcome! Thanks for your time!

If you are not planning a major purchase in the next couple years, I say go for it ... especially if you aren't the type of person who feels the need to use credit simply because you have credit. I wouldn't add any more credit cards in the near future if you're overly concerned about your score, but IMO there are people who fetishize FICO scores and worry unduly about them. Once you own a house and car, does it really matter if your 780 score dips to 770 for half a year? No, not really. It's not like you're going to take out a 5-year loan to buy groceries.

Try to pay off as much of the $1,200 balance ASAP and then — if possible, wait a billing cycle or two for the credit agencies to update their files to reflect that you are carrying little/no debt — apply for the third card. I can't say for certain at what point existing balances affect AYPs, but applying with no credit card debt vs. $1,200 balance would give you a better chance at a better AYP interest rate.

Also, unless it's a dire emergency, I wouldn't fret about waiting an extra month or two to get the computer — the delay could push you back until the release of Lion (which, assuming you would upgrade anyway, would save you ~$129) and, since you're a college student, you would be able to take advantage of the customary summer education store specials of free iPods with orders, which makes even better fiscal sense!

Though the average age of your accounts would take a hit, it will be offset some by the fact that your available credit will increase. So although an $1,800 computer purchase would account for 20 percent of your current available credit being used, if a third card gives you a $2,500 limit, that same $1,800 purchase amounts to only 15.6 percent of your total available credit. In other words, you get to carry larger balances before the debt/available credit ratio becomes troublemsome.

 

[winty03]

I have a few questions for you.

First, I have read quite a bit on credit scores and how they are calculated through various articles on yahoo finance. I carry a low debt/equity ratio (I have about $1,200 in debt being used, but have the credit limit of $2,000, $7,000). As you can see I carry two credit cards, I have read that it is actually good to carry about 20% of your debt from time to time (shows that you know how to carry debt, but have ability to pay it off responsibly and have the responsibility to only use 20% - 30% of what you actually could).

I am still young and in NO TIME in the future applying for any type of major loan. I am actually still a grad student at this time. I also carry credit cards in the past from Banana Republic and J-Crew, but have not used these in about 6 years (though the accounts are still active).

I wanted to take out a card at either apple or best buy to pay for one of the new iMac's along with possibly an iPad. Is this really so bad? I would put it on one of my current cards (the one carrying the $1,200 will soon be paid off down to 0, I would put it on this one) BUT it would be nice to not have interest and make small payments throughout the year (I am a grad student after all, I do not have full time work). Seeing how I would pay this card off in less than a year, wouldnt this move HURT my credit score in the SHORT RUN but help it in the LONG RUN?

Any help is welcome! Thanks for your time!

No full time job?!?!?!? I would say no go!!! Might not even get approved for the card....and or if you do, might be 1k limit. Unless you know of $5k coming your way...shes going to be an uphill climb. And ya if you don't care about your credit score and just want the iMac at any cost....do it up...I bet your score will drop 20 points on that single transaction.

 

[mrzeigler]

Also there's this option: Many credit card companies (I know Capital One does frequently) send credit card checks that you can make payments with. Often these checks have special promotional rates or even zero-percent interest. If you buy at an Apple Store, this would work. (On second thought, I suppose you could use it online as well by entering the check numbers.)

 

[mrzeigler]

No full time job?!?!?!? I would say no go!!! Might not even get approved for the card....and or if you do, might be 1k limit. Unless you know of $5k coming your way...shes going to be an uphill climb. And ya if you don't care about your credit score and just want the iMac at any cost....do it up...I bet your score will drop 20 points on that single transaction.

Eh, I didn't consider the job angle. Most grad-students I've known were TAs who received stipends of some sort. If the guy has a part-time job that pays $5-8K a year, then no. But if he's a TA who tops $10K a year and is able to earn more during summer ... eh, perhaps not as big of a deal. But keep in mind, I'm someone who advocates not sweating short-term swings in FICO scores if a loan isn't in the near future. So my advice isn't necessarily for everyone.

 

[Kendo]

I have a few questions for you.

First, I have read quite a bit on credit scores and how they are calculated through various articles on yahoo finance. I carry a low debt/equity ratio (I have about $1,200 in debt being used, but have the credit limit of $2,000, $7,000). As you can see I carry two credit cards, I have read that it is actually good to carry about 20% of your debt from time to time (shows that you know how to carry debt, but have ability to pay it off responsibly and have the responsibility to only use 20% - 30% of what you actually could).

I am still young and in NO TIME in the future applying for any type of major loan. I am actually still a grad student at this time. I also carry credit cards in the past from Banana Republic and J-Crew, but have not used these in about 6 years (though the accounts are still active).

I wanted to take out a card at either apple or best buy to pay for one of the new iMac's along with possibly an iPad. Is this really so bad? I would put it on one of my current cards (the one carrying the $1,200 will soon be paid off down to 0, I would put it on this one) BUT it would be nice to not have interest and make small payments throughout the year (I am a grad student after all, I do not have full time work). Seeing how I would pay this card off in less than a year, wouldnt this move HURT my credit score in the SHORT RUN but help it in the LONG RUN?

Any help is welcome! Thanks for your time!

You sound young so by the time you actually need to purchase a car or a home, it won't be for a very long time.

I opened numerous accounts when I was 18 in college and destroyed my credit by the time I was 21 because I didn't pay on a timely basis. It got to the point where when I finally was able to get a card, I had to pay an annual fee.

Fast forward 10 years later and my score jumped to 780 after years of paying on time. All you need is a long history of paying on time. Since you are young, don't be afraid to open a credit card account. It just isn't good to open too many at one time or when you are older.

For example, suppose at age 20 you open 2 cards. By the time you are 30, the average age of your cards is 10 years which is a long history. But if you open another card at 30, suddenly the average age is 6.66 years per account. The age of your accounts is only part of your score.

Never missing a payment is a huge factor. And keeping a balance of 20% is good advice. Suppose you have a max of $1000 and use $850 every month but pay everything off every month. You might think that is good but creditors view you as a risk because it seems like you are constantly pushing your credit to the limits.

 

[Shivetya]

Man talk about the worst thing you can do for your credit!!!!! Your dropping atomic bombs on your credit/credit score!!!!!!!!!

Not really. The biggest danger comes from having a CC whose balance is near the maximum. You have to be careful with Barclay's cards you obtain through the Apple store. When I got mine they set the limit to the purchase rounded up to the next hundred. I immediately called them and had them double the maximum else told them I would simply cancel the card.

I closed two cards in one week and it never affected my credit score. However I never keep a balance except when burning up a zero interest card.

 

[Kflik]

No full time job?!?!?!? I would say no go!!! Might not even get approved for the card....and or if you do, might be 1k limit. Unless you know of $5k coming your way...shes going to be an uphill climb. And ya if you don't care about your credit score and just want the iMac at any cost....do it up...I bet your score will drop 20 points on that single transaction.

I do work part time and make over 10K a year, I live at home and essentially have no bills, so I do have disposable income and a large savings, I know much of this information is not considered when applying for the store card (but 2 years ago bestbuy gave me 2K limit) Im assuming maybe because I have a good history with paying on time, on multiple cards with high credit limits (my one chase card ive had for about 6 years, and have built from $500 to $7,000 limit). Maybe this is why they gave me 2k? Not sure? BUT im assuming this time, sense I have used and paid that credit card off in a timely manor, AND paid my regular credit card off and on for the past 2 years and will have it back at 0...im hoping they will give me higher than 1K.

BUT basically I have the cash to buy the computer upfront..I would just rather pay in small payments and build my credit..I guess my question to you though...will that build my credit?? I thought it would in the past but you guys seem to point that I should just pay for the computer upfront in cash..but since I am young and not going for any big loans...wont putting this on a card and paying it off in the next 7-10 months be a better option..short run, hurt the credit YES..but long run.. I am extending my credit (if I add another card at 2K, that would be a total of 11K of possible credit, and in less than a year I would be at 0$ in debt and 11K free)....isnt that good?

OR should I pay in cash?

I do appreciate all your guys' wise input! Thanks again!

 

[archer75]

Err, you didn't have to cancel the card. There's no annual fee or minimum payment (when you carry no balance). It actually hurts your credit to open and close cards like that. And the promo is good anytime; not just when you first open the card.

Seems like it's only good when you open a new account. Either way, I'm not worried about my credit. It's pretty damn good.

 

[philipma1957]

Seems like it's only good when you open a new account. Either way, I'm not worried about my credit. It's pretty damn good.

If that is the case look into discover card. They have a lot of promos:


https://www.discovercard.com/cardmembersvcs/acqs/app/chooseMyOffer/findMyOffer


It is possible they will let you take a year to pay with no interest and if you purchase via apple online give you a 5% cash back prize.

 

[winty03]

I do work part time and make over 10K a year, I live at home and essentially have no bills, so I do have disposable income and a large savings, I know much of this information is not considered when applying for the store card (but 2 years ago bestbuy gave me 2K limit) Im assuming maybe because I have a good history with paying on time, on multiple cards with high credit limits (my one chase card ive had for about 6 years, and have built from $500 to $7,000 limit). Maybe this is why they gave me 2k? Not sure? BUT im assuming this time, sense I have used and paid that credit card off in a timely manor, AND paid my regular credit card off and on for the past 2 years and will have it back at 0...im hoping they will give me higher than 1K.

BUT basically I have the cash to buy the computer upfront..I would just rather pay in small payments and build my credit..I guess my question to you though...will that build my credit?? I thought it would in the past but you guys seem to point that I should just pay for the computer upfront in cash..but since I am young and not going for any big loans...wont putting this on a card and paying it off in the next 7-10 months be a better option..short run, hurt the credit YES..but long run.. I am extending my credit (if I add another card at 2K, that would be a total of 11K of possible credit, and in less than a year I would be at 0$ in debt and 11K free)....isnt that good?

OR should I pay in cash?

I do appreciate all your guys' wise input! Thanks again!

Ya I kind figured that...when I was writing the response….could have school loan every semester, could have $$ to pay it off now…...I had no clue..was just thinking worst case scenario. I do the same...on my big purchases I have cash for it, but I run them through my cc just for the thank you rewards points, then pay it off before bill cycles...no interest But ya if your set up the way you say you are...as long as you get approved for the enough CL to purchase it...then, like you say, you can spread it out over a year. I have just one and only credit card had it for 14 years CL of 30k. No need for another credit card in my life! Never missed a payment in my life on anything bill. Like the guys say...it takes a long time to build up some good credit.....but 1 or 2 missed payments on credit or goofing around with many store cards, now days will sink you! My thoughts.....if you have a CC that hs some type of rewards program run it through that card and get some nice points out of it, pay the balance off.... no $$ to intrest, plus plus. Not worth it to me...to open a card for a tech device...and never plan on using the card ever again; take a hit to my credit...and the possiblity of something coming up that I don't get the balance paid off at end of promo....I'll pass

 

[mackage]

it will take 5 minutes to get your credit limit and approval but you cannot order your imac untill the card arrives!

DEAD ON! Could not agree with you more!! Let alone about the worst cards you can get (for score wise) are "the store" cards. Their reasoning.....first card people in trouble don't pay .....store cards, very high liability! So you defiantly need to watch the benefit of 0 percent for some amount of time....vs. you credit score getting BLASTED!! 12 month zero% is NEVER worth opening a new card! Swipe it away on my one and only cc, and pay that balance off as fast as possible.....would rather do business with a bank and let them make some $$ on me...rather than sinking my score 30 points for a tech device.

It is NOT a store card. It is a true credit card that can be used anywhere.

 

[winty03]

It is NOT a store card. It is a true credit card that can be used anywhere.

I see....

 

[mackage]

If you apply for credit thats going to be a hard hit and its going to be 5 to 10 point drop. The way banks are lending now days, thats a huge hit to me.....EVERY point counts! But yes the monitoring services are not FICO's they are a "ballpark" scores of where you sit in the credit score range. If you are say a 795 score in your monitoring service your not going to report a 690 FICO. So its a way to control and or view your credit without "soft", or "hard" hitting your score with inquiries, "just to find out."

Your own inquiries dont affect your credit score.

 

[Laika37]

Correct. Long-winded, detailed explanation of credit reports and credit scores below:

There are three credit-monitoring agencies — Experian, TransUnion and Equifax.

Then there is the Fair Isaac Co. (FICO). Your FICO score is the one that creditors use to evaluate the risk the of lending your money.

A while ago, the folks at the three credit-monitoring agencies realized that Fair Isaac was getting a nice chunk of change for taking a person's financial history and boiling it down to a number, so they decided to do the same. Each offers their own numeric score ... and each charges for it. However, some credit cards include free monitoring of one of those scores — I have a Barclays/Juniper Mastercard that lets me view my TransUnion score through the Juniper website; unfortunately for me, it's the Barclays Visa that offers Apple financing, so I'll be applying for that card once the iMacs are refreshed). From everything I heard, these credit scores aren't really worth paying for.

Any time a company checks your credit — when you apply for a credit card, mortgage or a car loan, for instance — you are entitled to a free copy of your credit report, and that should include your FICO score. (Keep in mind that every time you apply for credit, you FICO score takes a small hit because it sends a message that you're looking to borrow, so it isn't wise to open credit account after credit account if you intend to make a major purchase such as a car or home in the near future.)

Federal law gives you free access to your credit reports from Experian, TransUnion and Equifax once a year. The gateway to get these reports is https://www.annualcreditreport.com/ If you want to check your credit report more than annually, you will have to pay a fee (or apply for credit/financing, as explained above). THE FREE ANNUAL REPORT DOES NOT INCLUDE YOUR FICO NUMBER NOR ANY OF THE CREDIT SCORES THE THREE CREDIT-MONITORING AGENCIES OFFER. Of course you can pay extra to get them, but unless you're making a major purchase in the next year or so, it's usually not necessary. You can get a sense of if you have good credit or bad by reading and understanding the reports. I suggest you save each of these reports as a PDF.

I stongly suggest that people interested in credit scores and credit reports stay away from freecreditreport.com. Sure, it provides a free credit report, but the site makes it difficult to cancel after the free trial, and many people often pay a monthly fee for multiple months without ever using the service.

You can get your TransUnion VantageScore for free from creditkarma.com. They also have a lot of the tools mentioned earlier in the thread, such as seeing how certain action (such as taking out a loan) will affect your credit. It's a pretty cool site.

 

[whoathere]

A lot of good discussion here about credit scores.

I have been addicted to my credit score since last summer, when I checked it for the first time. My score was below 650, and I had no idea why. Roughly 20k in credit limit, with balances totaling $1,950. So I dug into what happened, and found that my credit score was showing I had late payments of <30 days, late payments of 30-60 days, and a late payment of >90 days. A gym membership, that I had canceled 8 months prior to this credit inquiry, was dinging me for non-payment. It was a HUGE ordeal, extremely stressful, and because of it, has made me more cautious when it comes to my credit history.

Now, what I have learned is that you won't get dinged for applying for a bunch of cards, FICO knows that you are just testing the waters and "shopping around". Same as if you were getting quotes for a mortgage or auto loan. When it becomes a problem is when you actually open a bunch of cards and start using them immediately. You look like someone who is desperate for access to $$$. Basically, the two most important aspects of your credit score are length of history. I have a $500 capital one card, they have never raised my limit, but it's my oldest card at 9 years. I keep it because it's in good standing, and I've had it forever. Also, its all about debt to credit ratio... 20-30% is just fine, but I typically try to stay around 15-20%. My reasoning is because I'm in the market for a house, and there is the 38% total debt rule, so after car payment, student loan, etc, I can keep a monthly payment to credit of X dollars and it doesn't effect how much of a mortgage I can afford.

That's my $.02 wish I could think of more, but I have a tee time in an hour.

 

[mackage]

You are absolutely wrong. 3rd party inquiries do affect your credit score because that shows you are applying for numerous lines of credit instead of just applying for one account and then opening that account. It also suggests you are being denied.