can you have too much credit?
Results 1 to 5 of 5
  1. #1
    Registered User
    Join Date
    May 2015
    Location
    NY
    Posts
    1,167
    Post Thanks / WTG / Hug
    Blog Entries
    2
    Rep Power
    9

    Default can you have too much credit?

    As of Mon, I will be officially not working after 23 years of nursing due to an illness serious enough that I have to apply for SSDI. The amount of money I will earn is very, very low. I cannot imagine that I would ever be able to get financing for a car or even qualify for a new credit card.

    So I did this. My credit score is 853, I have worked really hard to always keep that up. Pay bills in full every month, never have paid interest. I pay for everything with a card simply to get rewards. I have multiple small store credit cards, don't know limits, probably small. I had 2 major credit cards, one with a 10k line of credit, the other 14k. 2 credit card companies called me for cards with no annual fees, it would be no skin off my nose to have these major credit cards. So I got two more with approx 10k line of credit for each before my employment ended.

    I did this because I am so fearful I will never be eligible for a credit card down the road. I will never use all this credit but I feel safer knowing it's there. Did I just destroy my credit rating by taking these 2 new cards? Don't the credit bureaus know if you have a drop in income? Will that lower my credit? Does it look bad to have large amounts of credit but to not really use it except for charging all purchases and automatic bill pay of a few things, then pay them off in full each month?

    I find how credit scoring works to be very confusing, any input would be appreciated.

  2. #2
    Registered User CookieLee's Avatar
    Join Date
    Sep 2012
    Location
    Mississippi
    Posts
    1,058
    Post Thanks / WTG / Hug
    Rep Power
    17

    Default

    Yes, the credit reporting agencies will know when you have a reduction in income. It will take several months but expect that your credit card companies will send you a letter saying they are reducing your credit limit and probably increasing your interest rate. Not only can they do this, but now thanks to a federal consumer protection law passed a few years ago, they have to do this.

  3. #3
    Registered User
    Join Date
    Nov 2009
    Posts
    13,930
    Post Thanks / WTG / Hug
    Blog Entries
    25
    Rep Power
    88

    Default

    yes,its a ratio of debt to income.(also length of balances kept,credit inquiries by companies and length of credit history. But I wouldn't start closing anything real fast.In fact I encourage you to charge here and there things you need to keep it active. The idea in to have credit and not use all of it but also to use it and pay it fast.
    You are the 1st person I ever saw w/ a bigger rating than ours (832) so I bet you already know this. We have worked hard also. We just had some debts run balances too long.

  4. Remove Advertisements
    FrugalVillage.com
    Advertisements
     

  5. #4
    Registered User
    Join Date
    May 2009
    Location
    Midwest USA
    Posts
    379
    Post Thanks / WTG / Hug
    Rep Power
    14

    Default

    I have been on SSDI for 10 years now. I left the work force with a little bit in retirement, a house with mortgage & paid off car.

    I can pass on some useful advice I wish I had known.

    Credit cards can be a help as long as you can pay off the balance monthly. I too think the high credit limit cards are a huge help if you are faced with situation where you want to finance a car...But too many little store cards just open up the temptations of window shopping except for a home center, Sears or Best Buy cards which are helpful for big purchases like appliances, computer or home repair projects. Pick a store card with nice perks to assist with these burdens...

    In my opinion, SSDI was a huge advantage with financing thru bank for mortgage or housing. They cannot discriminate so it is actually advantage to be on SSDI payment. NEVER EVER give the right employer or income to credit card companies. You HAVE to lie to get credit and you can just list you are self employed making good $$$$$$, which is an opportunity to think about later anyway...Consistently give the wrong information when applying for credit cards (not your local banks loans for car or housing) or answering questions from credit reporting bureau...

    You are entering a time where you can find a LOT of security if you aim things correctly & just be okay. Debt free needs to be a goal. You can now take some money out of your retirement accounts without a penalty since you are on SSDI....(If you are getting payment from a pension or other long-term disability company, you need to find out this information if you will have a penalty for early withdrawal of retirement accounts.) You can usually get student loans from studies prior to your disability dropped too, only because you are now disabled. Many people who go on disability are not emotionally prepared and end up spending lots more to cope with the worry/embarrassment/boredom...Consider therapy & exploration of exercise to maximize your ability to take care of yourself, that will both help you reduce your stress, provide coping strategies and maximize your abilities while controlling pain - PT swimming & yoga are both a huge help, so is walking around neighborhood & lite gardening when you feel up to it. Budget, budget & budget, plus find out how much you can amass in personal savings & create an emergency fund so you will be able to deal with the financial emergencies that will come up over the years. Automate your savings monthly when you pay your bills so you will have the emergency fund money. Take what steps you can so you have extra money each month to save...

    Do explore possibility of part-time work if you can buy a medicaid policy from your state for working part-time while disabled. These programs for working disabled allow you to pay a sliding fee amount for medicaid insurance which is usually almost 100% so you will have access to health insurance much earlier than Medicare policy offered at 2 years if you receive SSDI. The healthcare.gov may offer a better deal on health insurance as COBRA policy is always too expensive. Vocational Rehabilitation may provide you assistance getting some additional education so you can work or provide you help if you want to work part-time even...They are always in the know about questions too. But, most of the time a person with Bachelors degree is excluded from retraining but you can earn $700 a month without it affecting your SSDI income or medicare health insurance. You can also try self employment if you want but need to limit it to 20 hours a week...Social Security website has a brochure about working while on disability payments if you are curious & want to read up.

    If you are on SSDI and still caring for minor children, you should receive 50% bigger 'family payment'. Most people do not know this & information is even withheld so keep this in mind. I don't know if grands qualify so do ask if this applies to you.

    Some states allow you to get back the property taxes you pay on real estate taxes called a 'homestead tax refund'. Check this out come tax time. This would be on state level so contact your state department of revenue to check.

    Making some connections in your community to support groups & advocates for the disabled will provide you information resources if you should ever have questions about taxes, discounted medical services, employment while on SSDI, SSDI reviews.....These are biggest information resources out there plus connection to like people for support.

    Hope this helps....

    WILL ADD: It is really helpful if you can lock your credit at each credit reporting bureau. Go to website for experian, transunion, exuifax & put credit freeze on each by paying small amount of money. Then no one can try to get a loan until you have authorized it by paying small amount of money to each agency & entering long PIN number to allow your credit history to be pulled up again. I would also remove my name from all pre-approved credit card offers....You only need 2-3 cards with big credit limits and the useful store cards for large purchases, rest will only cause you to overspend.

    Remember, when you have all the debt paid off. You need to preplan how much you need to save monthly for tax on house, homeowners insurance and maybe car insurances so you will not have to charge these big expenses... This is called freedom account. You can do it with any regular big expenses paid 1-2 times a year.
    Last edited by miss_cas; 06-01-2015 at 06:41 PM.

  6. #5
    Registered User
    Join Date
    May 2015
    Location
    NY
    Posts
    1,167
    Post Thanks / WTG / Hug
    Blog Entries
    2
    Rep Power
    9

    Default

    thank you all for this information, really I cannot thank you enough! The only people I ever knew on SSDI were my patients so it's a whole new world for me.

    I kind of got overwhelmed when my actual last day of employment arrived, 5 days short of 23 yrs for the same company. I'm struggling to accept that I will likely never be a hospice nurse again, something that was a huge part of my identity. I filled out all the immediately necessary paperwork but kind of backed off everything else. Like I chose COBRA because I wanted the security of having my exact same coverage until all my medical stuff has been figured out. It was hard to compare policies on the NYS Marketplace site, I wanted to make sure I could keep the exact same multiple doctors and drug coverage. It was confusing. But at the next time for open enrollment, I can leave COBRA and I'm sure find a relatively equivalent policy because I'll have time to really work on it. I heard if you are on COBRA and your income is low enough, you can still get the ACA subsidy, I just have no idea how that works, I need to look into it. I've heard it is good to live in NY because their marketplace health plans are often better and cheaper than the national Obamacare plans. All good things.

    My short term disability ends next month. My company offers long term disability while you are waiting to get SSDI, so I applied for that. But my SSDI lawyer said it's a "junk" plan that employers offer but the company rarely approves a person for long term disability. So I'm kind of stressed about that, as that would be my only source of income until I get SSDI. And until I know if I have it, I can't apply for other programs, like SNAP and Medicaid because if I do get it, I'll be just over income for those.

    I do have some savings and I have spoken to my Roth IRA and 403B companies and pension company, they are helping me figure out how much I can take out to live on and supplement SSDI and still keep the principal intact. I'm really hoping not to have to do that, however and instead work really hard on living on SSDI.

    It's just hard to know when I can't really do anything until I hear from the long term disability company. The good things are I have no debt, car is paid off, never have had a credit card balance and I was a diligent saver for retirement (that has been my lifesaver, I encourage any new grads on here to participate in your company's 401k if you have one, as soon as you take the job. Had I not done that, I would not have a safety cushion now). You just never think you will become disabled, I mean, I'm a nurse, so I kind of know it happens to people everyday, i just never planned specifically for it for myself, I was always healthy. I just thank God I listened to what people said and books I read, to save right away for retirement. And that I just naturally lived fairly frugally all my life.

    Two yrs ago, my parents and I sold our houses and joined forces to buy a handicapped accessible home because my mom is very ill. It would be easier for me to work and come home and help take care of her, rather than having to drive to her and also maintain my own home. My kids will be out the nest soon, I did not need all the space I had. We figured if we joined forces, we would save money. So I was able to sell my home and pay for my share of this one and not need a mortgage. This has been a lifesaver, both financially and I actually have needed help from my dad since I got sick, like my blood pressure drops and I face plant and need a hand getting up. Very embarrassing to need your elderly father's help but thank God we did this move. I lived in a three story townhouse, and intermittently have my kids. So I would've been alone a lot with all those falls and most of the time I can't do stairs. I have no idea what I would've done. So that we happened to do this has been a God send, but I feel guilty that I'm really not able to do much for my mom and that was a big part of me deciding to do this. And I feel horrible needing my dad's help. But they have been so kind and supportive and they've helped with things like groceries. I'm very fortunate.

    You guys have given me tons of great advice, I am going to start going through it step by step. I thank you so much!!!

Similar Threads

  1. Disputing Credit Report - Credit Lines Opened As Minor
    By Khayembii Communique in forum Financial hardship
    Replies: 5
    Last Post: 08-29-2012, 10:56 AM
  2. pay off credit card-will it affect my credit score?
    By glamourpuss in forum Question and Answer
    Replies: 7
    Last Post: 05-22-2010, 07:19 PM
  3. Credit Score and Reported Credit Card Limits
    By telephus in forum Debt Reduction & Money Management
    Replies: 1
    Last Post: 09-16-2006, 02:43 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •