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.

Looking to Downsize? You Can Buy a 5-Room DIY Cabin on Amazon for Less Than $33,000

Five rooms of one's own.
Five rooms of one's own.
Allwood/Amazon

If you’ve already mastered DIY houses for birds and dogs, maybe it’s time you built one for yourself.

As Simplemost reports, there are a number of house kits that you can order on Amazon, and the Allwood Avalon Cabin Kit is one of the quaintest—and, at $32,990, most affordable—options. The 540-square-foot structure has enough space for a kitchen, a bathroom, a bedroom, and a sitting room—and there’s an additional 218-square-foot loft with the potential to be the coziest reading nook of all time.

You can opt for three larger rooms if you're willing to skip the kitchen and bathroom.Allwood/Amazon

The construction process might not be a great idea for someone who’s never picked up a hammer, but you don’t need an architectural degree to tackle it. Step-by-step instructions and all materials are included, so it’s a little like a high-level IKEA project. According to the Amazon listing, it takes two adults about a week to complete. Since the Nordic wood walls are reinforced with steel rods, the house can withstand winds up to 120 mph, and you can pay an extra $1000 to upgrade from double-glass windows and doors to triple-glass for added fortification.

Sadly, the cool ceiling lamp is not included.Allwood/Amazon

Though everything you need for the shell of the house comes in the kit, you will need to purchase whatever goes inside it: toilet, shower, sink, stove, insulation, and all other furnishings. You can also customize the blueprint to fit your own plans for the space; maybe, for example, you’re going to use the house as a small event venue, and you’d rather have two or three large, airy rooms and no kitchen or bedroom.

Intrigued? Find out more here.

[h/t Simplemost]

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10 Facts About Real Genius On Its 35th Anniversary

Val Kilmer stars in Martha Coolidge's Real Genius (1985).
Val Kilmer stars in Martha Coolidge's Real Genius (1985).
Sony Pictures Home Entertainment

In an era where nerd is a nickname given by and to people who have pretty much any passing interest in popular culture, it’s hard to imagine the way old-school nerds—people with serious and socially-debilitating obsessions—were once ostracized. Computers, progressive rock, and role-playing games (among a handful of other 1970s- early '80s developments) created a path from which far too many of the lonely, awkward, and conventionally undateable would never return. But in the 1980s, movies transformed these oddballs into underdogs and antiheroes, pitting them against attractive, moneyed, successful adversaries for the fate of handsome boys and pretty girls, cushy jobs, and first-place trophies.

The 1985 film Real Genius ranked first among equals from that decade for its stellar cast, sensitive direction, and genuine nerd bona fides. Perhaps fittingly, it sometimes feels overshadowed, and even forgotten, next to broader, bawdier (and certainly now, more problematic) films from the era like Revenge of the Nerds and Weird Science. But director Martha Coolidge delivered a classic slobs-versus-snobs adventure that manages to view the academically gifted and socially maladjusted with a greater degree of understanding and compassion while still delivering plenty of good-natured humor.

As the movie commemorates its 35th anniversary, we're looking back at the little details and painstaking efforts that make it such an enduring portrait not just of ‘80s comedy, but of nerdom itself.

1. Producer Brian Grazer wanted Valley Girl director Martha Coolidge to direct Real Genius. She wasn’t sure she wanted to.

Following the commercial success of 1984’s Revenge of the Nerds, there was an influx of bawdy scripts that played upon the same idea, and Real Genius was one of them. In 2011, Coolidge told Kickin’ It Old School that the original script for Real Genius "had a lot of penis and scatological jokes," and she wasn't interested in directing a raunchy Nerds knock-off. So producer Brian Grazer enlisted PJ Torokvei (SCTV) and writing partners Babaloo Mandel and Lowell Ganz (Splash, City Slickers) to refine the original screenplay, and then gave Coolidge herself an opportunity to polish it before production started. “Brian's original goal, and mine, was to make a film that focused on nerds as heroes," Coolidge said. "It was ahead of its time."

2. Martha Coolidge’s priority was getting the science in Real Genius right—or at least as right as possible.

In the film, ambitious professor Jerry Hathaway (William Atherton) recruits high-achieving students at the fictional Pacific Technical University (inspired by Caltech) to design and build a laser capable of hitting a human-sized target from space. Coolidge researched the subject thoroughly, working with academic, scientific, and military technicians to ensure that as many of the script and story's elements were correct. Moreover, she ensured that the dialogue would hold up to some scrutiny, even if building a laser of the film’s dimensions wasn’t realistic (and still isn’t today).

3. One element of Real Genius that Martha Coolidge didn’t base on real events turned out to be truer than expected.

From the beginning, the idea that students were actively being exploited by their teacher to develop government technology was always fictional. But Coolidge learned that art and life share more in common than she knew at the time. “I have had so many letters since I made Real Genius from people who said, 'Yes, I was involved in a program and I didn’t realize I was developing weapons,'" she told Uproxx in 2015. “So it was a good guess and turned out to be quite accurate.”

4. Val Kilmer walked into his Real Genius audition already in character—and it nearly cost him the role.

After playing the lead in Top Secret!, Val Kilmer was firmly on Hollywood’s radar. But when he met Grazer at his audition for Real Genius, Kilmer decided to have some fun at the expense of the guy who would decide whether or not he’d get the part. "The character wasn't polite," Kilmer recalled to Entertainment Weekly in 1995. "So when I shook Grazer's hand and he said, 'Hi, I'm the producer,' I said, 'I'm sorry. You look like you're 12 years old. I like to work with men.'"

5. The filmmakers briefly considered using an actual “real genius” to star in Real Genius.

Among the performers considered to play Mitch, the wunderkind student who sets the movie’s story in motion, was a true genius who graduated college at 14 and was starting law school. Late in the casting process, they found their Mitch in Gabriel Jarrett, who becomes the third generation of overachievers (after Kilmer’s Chris and Jon Gries’s Lazlo Hollyfeld) whose talent Hathaway uses to further his own professional goals.

6. Real Genius's female lead inadvertently created a legacy for her character that would continue in animated form.

Michelle Meyrink, Gabriel Jarret, Val Kilmer, and Mark Kamiyama in Real Genius (1985).Sony Pictures Home Entertainment

Michelle Meyrink was a staple of a number of ‘80s comedies, including Revenge of the Nerds. Playing Jordan in Real Genius, she claims to “never sleep” and offers a delightful portrait of high-functioning attention-deficit disorder with a chipper, erratic personality. Disney’s Chip 'n Dale: Rescue Rangers co-creator Tad Stones has confirmed that her character went on to inspire the character of Gadget Hackwrench.

7. A Real Genius subplot, where a computer programmer is gaming a Frito-Lay contest, was based on real events.

In the film, Jon Gries (Napoleon Dynamite) plays Lazlo Hollyfeld, a reclusive genius from before Chris and Mitch’s time who lives in a bunker beneath their dorm creating entries to a contest with no restrictions where he eventually wins more than 30 percent of the prizes. In 1969, students from Caltech tried a similar tactic with Frito-Lay to game the odds. But in 1975, three computer programmers used an IBM to generate 1.2 million entries in a contest for McDonald’s, where they received 20 percent of the prizes (and a lot of complaints from customers) for their effort.

8. One of Real Genius's cast members went on to write another tribute to nerds a decade later.

Dean Devlin, who co-wrote Stargate and Independence Day with Roland Emmerich, plays Milton, another student at Pacific Tech who experiences a memorable meltdown in the rush up to finals.

9. The popcorn gag that ends Real Genius isn’t really possible, but they used real popcorn to simulate it.

At the end of the film, Chris and Mitch build a giant Jiffy Pop pack that the laser unleashes after they redirect its targeting system. The resulting popcorn fills Professor Hathaway’s house as an act of revenge. MythBusters took pains to recreate this gag in a number of ways, but quickly discovered that it wouldn’t work; even at scale, the popcorn just burns in the heat of a laser.

To pull off the scene in the film, Coolidge said that the production had people popping corn for six weeks of filming in order to get enough for the finale. After that, they had to build a house that they could manipulate with hydraulics so that the popcorn would “explode” out of every doorway and window.

10. Real Genius was the first movie to be promoted on the internet.

A week before Real Genius opened, promoters set up a press conference at a computer store in Westwood, California. Coolidge and members of the cast appeared to field questions from press from across the country—connected via CompuServe. Though the experience was evidently marred by technical problems (this was the mid-1980s, after all), the event marked the debut of what became the online roundtable junket.