Is credit a good thing?

[radcen]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

 

[ocean515]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

Credit is a good thing. It allows people to acquire things that would be difficult to pay cash for. This drives the economy, and improves society.

Maintaining strict standards and policies towards extension of credit will always be the challenge.

 

[radcen]

Credit is a good thing. It allows people to acquire things that would be difficult to pay cash for. This drives the economy, and improves society.

Maintaining strict standards and policies towards extension of credit will always be the challenge.

Credit is like bacon. Damn it tastes good when you're indulging, but it's best done in moderation.

Things like purchasing a home isn't doable for most people without a mortgage, so for that alone I don't think it's realistic to say 'never', unless you're willing to have no home ownership ever and pay rent your entire life and end up with nothing to show for it at the end.

 

[chuckiechan]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

Without credit we'd only own the clothes on our backs. Credit is the great force multiplier for the working stiff.

 

[cpwill]

Debt is dangerous. All debt. Some is simply more dangerous than others.

Debt can be a net good thing for houses, catastrophic medical expenses, and perhaps a very few narrowly-tailored scenarios.

But in the sense that it is used broadly? Where we all live paycheck to paycheck, put our lives on the credit card, don't save for emergencies, and live our lives constantly in car debt?

No. That is extraordinarily dumb. Given how much wealth we have, it is epically dumb - it is financial stupidity perhaps unmatched in the historical experience of man.

 

[PirateMk1]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

Credit is a double edged sword, and should be treated with respect. Credit for business is good in limited and very controlled circumstance, because the creditor is essentially a limited time and duration partner in the business and the objective of the business is generate income. Consumer credit is generally bad and should be avoided except for certain limited circumstance where the credit makes sense like acquiring an income generating asset or real estate. That's my take on the subject.

 

[cpwill]

Without credit we'd only own the clothes on our backs. Credit is the great force multiplier for the working stiff.

I'm working on my 4th degree program - no debt
I've bought probably half a dozen cars - no debt

I'm about to buy a house, which will involve debt.

Other than that, though, the notion we would be poor without going into debt is like saying we would be weak and out of shape if we couldn't eat refined sugar. Credit is the trap of the working stiff.

 

[cpwill]

Credit is a good thing. It allows people to acquire things that would be difficult to pay cash for. This drives the economy, and improves society.

Maintaining strict standards and policies towards extension of credit will always be the challenge.

We could start by getting rid of the tax advantages to it.

 

[Fenton Lum]

Debt = enslavement. There’s a reason lenders are always pushing it and the power structure encourages it. Use it sparingly if at all.

Quote Originally Posted by ocean515 View Post

Credit is a good thing. It allows people to acquire things that would be difficult to pay cash for. This drives the economy, and improves society.

It allows banksters and the "job creator" class to pitch stuff without having to wait on the unsubstantial people to make enough to purchase what they're pushing, and thus suppress wages.

 

[PirateMk1]

Without credit we'd only own the clothes on our backs. Credit is the great force multiplier for the working stiff.

Credit limits the ability to accumulate wealth. Wealth accumulation in the end is the superior form of credit. Accumulated wealth is far superior to any credit card as you don't have to pay interest and instead are paid interest for access to your wealth.

 

[MrWonka]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

Credit is like driving a car. It can be very dangerous, but if done right it can radically improve your life, and the benefits greatly improve your life. The problem is that like driving we should have restrictions on borrowing to make sure people are behaving reasonably responsible with it. Just like speed limits, DUI laws, seat belt laws..... we need to have similar protections in place when it comes to borrowing to insure people can't get themselves in over their heads to easily, and fall victim to predatory lending.

 

[radcen]

I'm working on my 4th degree program - no debt
I've bought probably half a dozen cars - no debt

I'm about to buy a house, which will involve debt.

Other than that, though, the notion we would be poor without going into debt is like saying we would be weak and out of shape if we couldn't eat refined sugar. Credit is the trap of the working stiff.

I once heard a guy say he wouldn't purchase a house until he had saved up enough to pay cash. He lived in San Francisco.

:lamo

Yeah, unless you're freakin Mark Zuckerberg, good luck with that.

 

[PirateMk1]

We could start by getting rid of the tax advantages to it.

LOL. Yep I am of two minds about that seeing as I use credit extensively in my business as a form of financial shock absorber. I buy almost everything thing on credit card as the terms and protections are better as well as the cash back programs that debit cards generally don't offer. I normally spend on the card anywhere from 6,000 to 14,000 dollars a month so the cash back benefits start racking up quick. Normally I pay the card off twice a month or sooner depending on how much of the credit limit I have bumped and what my up coming expenditures are going to be. I don't buy anything I don't have the cash to cover, I just put everything on the card for accounting and shock absorption reasons. If I absolutely need to float something like a unexpected major equipment repair I can but that would have to be so catastrophic as I probably wouldn't because I would most likely be unable to sustain the business at that point anyhow.

 

[cpwill]

I once heard a guy say he wouldn't purchase a house until he had saved up enough to pay cash. He lived in San Francisco.

:lamo

Yeah, unless you're freakin Mark Zuckerberg, good luck with that.

:shrug: it depends on what you are willing to buy, live in, and how long you are willing to wait.

I could see myself having the ability to save for a few more years and buy a cheap condo in cash, saving for a few more years and moving up into a beginner home, saving up a few more years and moving into a final home, etc.

The wife, however, has been dragged all over the world (literally) for a decade now, and I am asking her to move again. She finally wants a place of her own... :shrug: and I'm willing to take on some risk to give her that. I don't like it, but it's a tradeoff that's worth it to me, to meet her hopes and dreams that way, just as mine are met by my career.

 

[PirateMk1]

I once heard a guy say he wouldn't purchase a house until he had saved up enough to pay cash. He lived in San Francisco.

:lamo

Yeah, unless you're freakin Mark Zuckerberg, good luck with that.

Easier than you think actually. Especially if you work for yourself. And that sir is the key to accumulating wealth much more quickly. If you have an employer then they get a large cut of what you make the company all you get is a wage. If you have a client, you get the cut your employer would have and if you have employees you get a cut of their labor as well. Don't just think in the box or out of the box, get rid of the box altogether and determine your own destiny. Its not as hard as you think.

 

[cpwill]

LOL. Yep I am of two minds about that seeing as I use credit extensively in my business as a form of financial shock absorber. I buy almost everything thing on credit card as the terms and protections are better as well as the cash back programs that debit cards generally don't offer. I normally spend on the card anywhere from 6,000 to 14,000 dollars a month so the cash back benefits start racking up quick. Normally I pay the pay card off twice a month or sooner depending on how much of the credit limit I have bumped and what my up coming expenditures are going to be. I don't buy anything I don't have the cash to cover, I just put everything on the card for accounting and shock absorption reasons. If I absolutely need to float something like a unexpected major equipment repair I can but that would have to be so catastrophic as I probably wouldn't because I would most likely be unable to sustain the business at that point anyhow.

I think that's the key part. If you are basically using a credit card as a debit card, but taking advantage of the free goodies the company is foolish enough to give you - take it. The main worry is people who aren't disciplined enough (this group is defined as "the majority of the population") to avoid the temptation to then go out and purchase crap they don't have the money for.


I'm about to buy a house. Losing the mortgage interest deduction would increase my tax bill..... but would be good for the long term health of the economy.

 

[AliHajiSheik]

Credit is like bacon. Damn it tastes good when you're indulging, but it's best done in moderation.

Things like purchasing a home isn't doable for most people without a mortgage, so for that alone I don't think it's realistic to say 'never', unless you're willing to have no home ownership ever and pay rent your entire life and end up with nothing to show for it at the end.

Nothing will derail a thread faster than comparing something to bacon. :2grouphug

 

[radcen]

Repealing the mortgage interest deduction would be very politically unpopular.

 

[Napoleon]

The middle class is mostly an illusion created by credit worthiness and debt. Is that a good thing? Depends on whether or not people who live beyond their means do so responsibly.

 

[Winchester]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

Debt can be an absolute necessity in some instances, a convenience in others and can even become a hopeless cycle of despair depending upon how it's used. Personally I'd be a lot poorer today if I didn't have access to credit, though interestingly enough two of my larger business purchases were on a private contracts with the sellers.

 

[Winchester]

Credit limits the ability to accumulate wealth. Wealth accumulation in the end is the superior form of credit. Accumulated wealth is far superior to any credit card as you don't have to pay interest and instead are paid interest for access to your wealth.

I disagree to a point as in some instances there is going to be no or a greatly decreased accumulation of wealth w/o debt to leverage purchases of income generating property. That being said most people don't use debt that way.

 

[Gaius46]

Credit can be used if used correctly.

You pretty much cannot purchase a first home without credit so it's use there is a good thing.

Retail consumer debt - i.e. credit cards are almost always a bad thing if you carry balances.

 

[Cardinal]

Is credit a good thing?

Financial credit. Consumer credit. I.e.: mortgages, auto loans, business loans, credit cards, student loans, "payday" loans, even borrowing from friends or family.

We're talking concept here, as in if we were starting from scratch what we as a society should do, not today's reality.

Sure. If not for the concept of credit or loans I don't see how most people would have the opportunity to move up the ladder to try something bigger. How credit ratings are evaluated isn't always fair, and loans being given to those with bad credit is a pretty awful idea. But as a larger principle, credit is great.

 

[Henrin]

Would you raise your prices if you knew you could rely on consumers relying on future earnings to buy your goods and services? I bet you would.

 

[Winchester]

:shrug: it depends on what you are willing to buy, live in, and how long you are willing to wait.

I could see myself having the ability to save for a few more years and buy a cheap condo in cash, saving for a few more years and moving up into a beginner home, saving up a few more years and moving into a final home, etc.

The wife, however, has been dragged all over the world (literally) for a decade now, and I am asking her to move again. She finally wants a place of her own... :shrug: and I'm willing to take on some risk to give her that. I don't like it, but it's a tradeoff that's worth it to me, to meet her hopes and dreams that way, just as mine are met by my career.

There is cost associated with buying and selling residences as you move up that can offset the savings of not having a mortgage. Also rent vs mortgage payment should come into play when making the decision too.