4 “Smart” Credit Card Moves that are Actually Dumb

Getty Images
Getty Images

Used wisely, credit cards can help build your credit score and earn you sweet perks. But to get smart about the plastic in your wallet, you have to shake free from common myths that can actually tank your score or cost you unnecessary money. 

1. YOU RELY EXCLUSIVELY ON A DEBIT CARD.

The perks of debit are clear: It’s harder to overspend than if you use a credit card, and you can’t work yourself into a mountain of debt. That debt aversion might explain why those of us who got our financial footing during the Great Recession are more leery of credit than other generations: According to a Bankrate survey, two-thirds of people ages 18 to 29 don’t have a credit card, compared with only one-third of people over 30.

“But it’s dangerous to assume that all plastic is treated the same way by credit reporting and scoring agencies,” says credit expert John Ulzheimer, who spent years at FICO and Equifax. “Only credit cards make it onto your credit report, so if you avoid them you’re really not doing anything to help your credit score or establish your credit report.”

Even if you don’t plan to apply for a car loan or mortgage anytime soon, when you are ready to apply, those lenders will factor the age of your credit report into their decision. Opening a credit card in your 20s will mean you have a more, ahem, mature credit report than if you open one in your 30s, which can help you get a better or bigger loan—even if your finances are otherwise unchanged.

The Truly Smart Move: Go ahead and apply for a credit card (free services like Credit Karma can help you determine the appropriate card). If you’re worried the new piece of plastic will tempt you to splurge beyond your means, don’t keep it in your wallet. 

2. YOU CARRY A SMALL BALANCE EACH MONTH.

Credit scoring agencies want to see that you’re using your credit cards regularly, because that signals that you can responsibly handle the credit available to you. But somehow that truth morphed into a widespread myth that you shouldn’t pay your bill in full.

“Carrying a balance from month to month will just cost you interest and won’t help your credit score,” says Bethy Hardeman, chief consumer advocate at Credit Karma. In fact, it could hurt it, because lenders look at how the amount of your current balances compares with your total credit card limits. The lower the balance, the better.

So how do you prove regular use and earn your financial brownie points? Relax—credit card companies do the work for you. When you swipe your way to a $200 balance on your Visa, the company reports that amount to the credit reporting agencies at the same time that it issues you a bill. You can then pay that balance (in full!). And keep in mind that regular use doesn’t mean you have to use the card monthly or hit a certain spend threshold. Modest use every couple of months works just fine.

The Truly Smart Move: Set a calendar reminder so you pay your balance in full and on time to avoid getting hit with late fees. And if you find that “regular use” is turning into “regular splurges,” use your card to set up auto-pay on a boring bill instead. It’s tougher to be tempted to go on an electricity spree.

3. YOU DECLINE A CREDIT LIMIT INCREASE.

When Visa mails you an offer to increase the credit limit on one of your cards, you demur. Time for a pat on the back, right? Not quite. When FICO determines your credit score, one of the biggest numbers it looks at is your revolving utilization. Also known as credit card usage percentage or balance-to-limit ratio, this is basically a fancy way of saying how much you owe on your credit cards compared with how much your total limits are. “If you owe $500 on a card with a $500 limit, you’ll have a lower score than someone who owes $500 on a card with a $5,000 limit,” says Ulzheimer. 

To calculate your current revolving utilization, divide your balance by the credit card limit and multiply by 100. Quick example: If you owe $1,000 on a card with a limit of $2,500, your revolving utilization of that card is 40 percent. While 40 percent might sound boss at first blush, consider that consumers with the highest credit scores tend to have revolving utilizations under 10 percent.

One way to better your revolving utilization is to pay down your balances. But another is to increase the credit limits on existing cards. So the next time MasterCard extends an offer, think twice before you decline.

The Truly Smart Move: Many credit card companies will reassess your limit every three years or so, when they reissue your credit cards. But you can also proactively ask for an increase. You’re more likely to secure a higher limit if you’re a low-risk consumer: You use your cards regularly and pay your bill on time. 

4. YOU CANCEL SOME OF YOUR CREDIT CARDS.

Maybe your wallet is crazy cluttered with a million cards and you’re looking to streamline. Or maybe you’re sick of all the temptation that comes with having multiple cards. Or maybe you think having one card is safer when it comes to identity theft. No matter what your motivation, closing a credit card will ding your credit score, because it reduces your revolving utilization.

“Never, ever close a credit card,” says Ulzheimer. “The only time a card should be considered for the chopping block is if it has a huge annual fee and you’re planning to never use it again.” It’s especially worth waiting, he says, if you plan to apply soon for any type of credit, including an auto loan or student loan.

As for identity theft, keep in mind that if your account info is somehow stolen, all four of the major credit card networks offer total fraud liability. That means, if you spot a suspicious charge on your statement and you report it to the credit card company, you’ll pay nada.

The Truly Smart Move: The best way to kill both clutter and temptation—without wounding your credit score—is to shred the plastic you don’t want to use anymore. If you ever decide to start using that particular credit card again, you can put in a call to the company and have the card reissued at no expense.

5 Controversial Facts About Melvil Dewey and the Dewey Decimal System

iStock/TerryJ
iStock/TerryJ

Melvil Dewey, the inventor of the Dewey Decimal System, was born on December 10, 1851. Among other things, Dewey was a self-proclaimed reformer, so when working for the Amherst College library in the 1870s, he began to reclassify the facility’s books and how they were organized.

Though the system has gone through plenty of changes over the years, it’s still in wide use all over the world today and forever changed how libraries categorize their books. It has also caused a handful of controversies. In honor of Dewey Decimal Day, we dug into the organizational system—and its creator’s—dark side.

1. Melvil Dewey co-founded the American Library Association, but was forced out because of offensive behavior.

Melvil Dewey was an extremely problematic figure, even in his time. Though he co-founded the American Library Association (ALA), his often-offensive behavior—particularly toward women—didn’t make him a lot of friends.

In Irrepressible Reformer: A Biography of Melvil Dewey, author Wayne A. Wiegand described Dewey’s “persistent inability to control himself around women” as his “old nemesis.” In 1905, Dewey and several fellow ALA members took a cruise to Alaska following a successful ALA conference, with the purpose of discussing the organization’s future. Four women who were part of the trip ended up publicly accusing Dewey of sexual harassment—a rarity for the time. Within a year, Dewey was forced to step down from his involvement with the organization he helped to create.

2. Dewey required applicants to his School of Library Economy to submit photos.


A History of the Adirondacks, by Alfred Lee Donaldson (1921) // Public Domain, Wikimedia Commons

In 1887, Dewey founded the School of Library Economy at Columbia College, where 90 percent of his students were female. It was long rumored that in addition to basic information like name, age, and educational background, Dewey required that prospective female students also submit their bust sizes. While this rumor was eventually proven to be false, Dewey did ask women to submit photos, often noting that “You cannot polish a pumpkin.”

3. A Howard University librarian reorganized Dewey's original system because of its racial bias.

Dewey’s personal biases spilled over into his creation, too, and it has taken sincere effort and work to right those wrongs. In the 1930s, Howard University librarian Dorothy Porter helped create a new system to undo the racist way Dewey’s system treated black writers. As Smithsonian reported:

All of the libraries that Porter consulted for guidance relied on the Dewey Decimal Classification. “Now in [that] system, they had one number—326—that meant slavery, and they had one other number—325, as I recall it—that meant colonization,” she explained in her oral history. In many “white libraries,” she continued, “every book, whether it was a book of poems by James Weldon Johnson, who everyone knew was a black poet, went under 325. And that was stupid to me.”

In addition to charges of racism, the DDS has also been accused of being homophobic. Early editions of the system classified books on or regarding LGBT issues under Abnormal Psychology, Perversion, Derangement, as a Social Problem, or even as Medical Disorders.

4. Its 'religion' section is skewed heavily toward Christianity.

The DDS section on religion starts at 200, and no other religion besides Christianity is covered until 290. Given that there are more than 4000 religions in the world, saving a mere 10 numbers for their classification doesn’t leave a lot of room for thorough coverage or exploration. Though some changes have been made as new editions of the system have been introduced, the process of restructuring the entire 200s is a project that has yet to be undertaken.

5. Critics of the system would prefer libraries take the Barnes & Noble approach.

The Dewey Decimal System is the most used library classification system, with the Chicago Tribune estimating that more than 200,000 libraries in 135 countries use it. But it’s far from a perfect system. As such, many libraries are experimenting with other organizational techniques, and many are dropping the DDS altogether.

The main complaint that public libraries have is that the Dewey Decimal System does not make reading exciting, and that there are other ways of categorizing and organizing books that are more like that of general bookstores. By doing away with the numbers (which are hard to remember for general library patrons), some libraries are classifying books simply by category and organizing by author—a system they've begun referring to as "Dewey-lite."

6 Fast Facts About Nelly Sachs

Central Press/Getty Images
Central Press/Getty Images

Today, on the 127th anniversary of her birth, a Google Doodle has been created in memory of writer Nelly Sachs, who died of colon cancer in 1970 at the age of 78. The German-Swedish poet and playwright wrote movingly about the horrors of the Holocaust, which she narrowly escaped by fleeing her home and starting a new life in a foreign land. Here are six things to know about Sachs.

1. She was born in Germany.

Sachs was born in Berlin on December 10, 1891. As the daughter of a wealthy manufacturer, she grew up in the city's affluent Tiergarten section. She studied dance and literature as a child, and also started writing romantic poems at age 17.

2. She almost ended up in a concentration camp.

Sachs's father died in 1930, but she and her mother Margarete stayed in Berlin. In 1940, the Gestapo interrogated the two women and tore apart their apartment. They were told they had a week to report to a concentration camp, so they decided to flee the country. Swedish novelist Selma Lagerlöf, with whom Nelly had corresponded for years, saved their lives by convincing the Swedish royal family to help the two women escape to Sweden.

3. She worked as a translator.

Once Nelly and her mother reached Stockholm, Sachs began learning Swedish and ultimately took up work as a translator. She translated poetry from Swedish to German and vice versa.

4. She was nearly 60 when she published her first book of poetry.

Sachs’s first volume of poetry, In den Wohnungen des Todes (In the Habitations of Death), was published in 1947. In this anthology as well as later poems, she used religious imagery to evoke the suffering of her time and the Jewish people.

5. She won the German Book Trade's Peace Prize.

In 1965, Sachs won the Peace Prize from the German Book Trade. She shared a message of forgiveness when she accepted the award from her compatriots. “In spite of all the horrors of the past, I believe in you,” she said.

6. She won the Nobel Prize for Literature on her 75th birthday.

Sachs and Israeli writer Shmuel Yosef Agnon were jointly awarded the Nobel Prize for Literature in 1966. According to The Nobel Prize’s website, Sachs was recognized "for her outstanding lyrical and dramatic writing, which interprets Israel's destiny with touching strength.”

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