Agreed. My new thing is keeping a card with a tiny limit. Maybe 500-1.5K. This way I can rent a car, get a flight, etc AND it forces me to pay it back quicker in case I need it again AND it means I won’t be too deep in the hole should, heavens forbid, I lose my job, business, etc.

But with this strategy you need to watch your debt to credit ratio-having a high one can cause your credit scores to drop.

Well, that’s an improvement. Maybe the collective IQ is actually going up.

Good point Ruckus, but I guarantee you that if HD has to pay high transaction fees for cards used at their stores, just think what a small business pays.

Me? My business pays 2.5% on every sale plus .30 in tranny fees AND a monthly service fee of about $20. They will hold some transactions like the guy above who mentioned the bike store.

HD probably pays around 1.5%-2%, doesn’t get a hold to their account due to their volume and may have a lower negotiated tranny fee and service charge. Trust me, if I was any number of bank processors, I’d make a good deal for HD to keep their volume. My business and many like me? 200K in sales with 99% of it going through credit cards…fees can kill. I agree HD is paying a buttload in fees due to their volume, but until any small business like mine pulls in millions in sales it means higher fees.

Don’t disagree BUT lack of credit usage could be cited as a reason for denial or higher rates on a loan. They like high scores BUT they like to see somebody who can handle and pay off loans regularly. So basically, if you don’t use your credit for anything, some lenders will fault you for it. I know people like you who have high 700s scores and they STILL have to jump through tons of hoops to get a low interest mortgage.

These guys game the system to hurt everybody.

My score is pretty high up there but I’d have no problem canceling any of the cards I have and telling those vampires where they can stick their blood funnels. I have far more credit available than I would ever use. And don’t think the notion of taking the mother of all cash advances and skipping off to the Caribbean hasn’t crossed my mind…

Self-disciplined.
This is the epitome of the problem. A lot of us don’t have the level of control that is really necessary on some part or all of our lives, be it booze, drugs, or money. Credit cards are easy money. Easy come, hard to go. It’s a monkey on our backs and even if we know it, it’s a hard addiction to shake. And like most addictions there is a pusher involved. And like most addictions, in moderation and used properly it is not a problem.

For people who are self-disciplined enough to pay off the full amount every month on time without fail, I commend you. I’m not one of those people. I’m an ex-smoker and I absolutely know that if I were to light up a cigarette just to see what it was like after all these years, and with every intention of not getting hooked again—I would be doing two packs a day before you could say Joe Camel. In the same way, no matter how much I tell myself that “this time I know I can be responsible with credit, maybe just one little credit card”—the truth is, I know I will not be responsible with credit and the only way for me to guarantee that I stay out of trouble is not to go near a credit card in the first place.

Some of my friends say that not using credit at all will hurt my credit rating—but I say to them, if I never use credit in the first place, what do I need a credit rating for?

So it appears they are providing a service (convenience of payment) and being paid for it. Are those merchants REQUIRED to accept those credit cards?
It sounds like a cost of doing business which the merchants accept. Did you know merchants have to pay for the goods they sell to you? I never knew.

Oh, don’t be a nit. I was just pointing out that there were a lot of people in this comment thread that seem to be taking some sort of pride in being “freeloaders” on credit card companies and that this pride was misplaced because even if they paid off their card every month, the mere act of using the card earned the cc some money. They may be a small part of the cc co’s bottom line, but they are part.

As the merchants on the thread have pointed out, and I agree with, most consumers are completely unaware of how much credit card companies make off of merchants. As someone else pointed out, this is the whole point behind frequent flier, cash back, and other schemes. They encourage extra credit card use, therefore earning more money from merchant fees than they pay back in flier miles and rebates.

In principle there is nothing wrong with this, in practice, as Ruckus points out, the banks and credit card companies are pretty heavy handed and don’t flinch from using their political power in DC or their economic power over merchants to squeeze til it bleeds. They write the rules in Congress and they know exactly how to finagle the take every last drop at the “cash” register.