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What about a no-credit society?

by ShayB
8 replies
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Just wondering what your thoughts are on this. :confused:

Years ago (many years ago), it was very difficult to get credit (businesses did, but not individuals). You saved up and bought what you wanted with cash.

Should we go back to that?

I know that there would be an initial period of hardship, but do you think it would beneficial in the long run?
  • Profile picture of the author acreativetouch
    My sister and I were talking about that last night. It would take discipline (OMG: a four letter word), but I believe that it would be better in the long run. I'm going to work on old forgotten habits: save for what I want and buy it in cash.

    dorothy
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    • Profile picture of the author ShayB
      Originally Posted by acreativetouch View Post

      My sister and I were talking about that last night. It would take discipline (OMG: a four letter word), but I believe that it would be better in the long run. I'm going to work on old forgotten habits: save for what I want and buy it in cash.

      dorothy
      You are right about that. Americans do not like to wait or sacrifice.

      Last year, we cut our debts and our expenses - even when we made more money. Our friends and family thought we were crazy. But it has turned out to be one of the best decisions we have ever made.

      Our kids are learning, too. When we see something we want, we discuss how we can either buy it now or save up for it. Putting it on plastic is not an option. They don't know what a credit card is - I have never had one while I have had the kids. The only debt we have is the car and house, and that will be paid off soon.

      I am hoping that we are raising kids who understand that debt does not have to be a way of life. Not all debt is bad - we discuss when debt for business is a good thing - but they know that going into debt just because they want more "stuff" is stupid.

      My parents were/are in so much debt it is not even funny. They will never pay it off.

      I started on that track, too, but I was fortunate in that I got into trouble with debt at a young age (19) with a small amount ($3000) and I learned the (very) hard way that debt is not a good idea.

      I am hoping that I have broken the cycle.
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  • Profile picture of the author valerieSONORA
    I wouldn't go for no credit. Say my car broke down and it needed $1500 worth of repairs. If I didn't have $1500 then I'd be without transportation, would lose my job, etc. Or if you had a house and the heater stopped working (sounds familiar except im in an aprt and the stupid slumlord hasn't fixed it ) and you need a new heater thing installed. Those things are expensive and most people just don't have that kind of cash laying around. Or what if you need medicine or medical care, no insurance and the doc won't see you till you pay. So credit is very necessary in situations like these when you need something thats expansive and dont have the cash laying around. People just need to start using credit wisely and not use it to live way beyond their means.
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    • Profile picture of the author ShayB
      Originally Posted by annoyedgirl View Post

      I wouldn't go for no credit. Say my car broke down and it needed $1500 worth of repairs. If I didn't have $1500 then I'd be without transportation, would lose my job, etc. Or if you had a house and the heater stopped working (sounds familiar except im in an aprt and the stupid slumlord hasn't fixed it ) and you need a new heater thing installed. Those things are expensive and most people just don't have that kind of cash laying around. Or what if you need medicine or medical care, no insurance and the doc won't see you till you pay. So credit is very necessary in situations like these when you need something thats expansive and dont have the cash laying around. People just need to start using credit wisely and not use it to live way beyond their means.
      I know there are extentuating circumstances, and (of course) credit wouldn't disappear overnight.

      Even years ago you could find credit or payment plans from some docs, dentists, etc.

      I agree with teaching people to use credit wisely, but that really isn't happening on a large scale, IMHO. Yes, you have people teaching about being debt-free, etc. (like Dave Ramsey and others), but if it were really catching on, there wouldn't be so many people caught between a rock and a hard place right now, IMHO.

      With all you hear on TV about buying now - don't wait! - and you have a society built upon buying on credit, it will be a long and difficult road for us....

      If everyone stopped using credit tomorrow and only bought what they paid cash for, then there would definitely be some repercussions across the board. Credit and spending are such an integral part of our society that there will be a huge upheaval if we all stopped using credit.

      But I think it would be worth it in the long run.

      JMHO
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    • Profile picture of the author acreativetouch
      Originally Posted by annoyedgirl View Post

      I wouldn't go for no credit. Say my car broke down and it needed $1500 worth of repairs. If I didn't have $1500 then I'd be without transportation, would lose my job, etc. Or if you had a house and the heater stopped working (sounds familiar except im in an aprt and the stupid slumlord hasn't fixed it ) and you need a new heater thing installed. Those things are expensive and most people just don't have that kind of cash laying around. Or what if you need medicine or medical care, no insurance and the doc won't see you till you pay. So credit is very necessary in situations like these when you need something thats expansive and dont have the cash laying around. People just need to start using credit wisely and not use it to live way beyond their means.
      Yes, life happens....that's why you have a savings account. The concept (which I havn't done in years) putting money away "for a rainy day" and NEVER TOUCH IT. However, what if ...... the emergency happens before you've built your nest-egg? Then you have credit, which you PAY OFF as quickly as possible. I was taught to use it, then pay it off in three to ten payments, if you can. Hard to discipline yourself that much, but it's doable.

      dorothy
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      Dorothy Carlson
      Phoenix Natural Health

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      • Profile picture of the author yuri12
        I would prefer a no-money society and do what the Trekkies are trying to envision. A world where people do service for others without getting something in return. Of course, an abundance of resources is a must to meet basic needs and advance technologies in communication and transportation would be favorable like beaming yourself to another place, pushing a communicator pin in your shirt, phaser stun guns and a warp speed ship would make it more exciting to explore for more resources. Live long and prosper!
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  • Profile picture of the author KimW
    I think Shay really means a society where credit is used for what it needed to be used for.
    Certainly people can't buy a car or a house outright.
    My wife and I have a mortgage and a car payment. We have no credit cards.
    And I will be the first to admit there are many times we go window shopping and say we wish we could afford that 42 inch lcd flat panel TV, but we look and keep walking by,and it feels good not having that payment.
    Some people might dis this guy and his ideas because of his religious aspect, but he gives good sound advice for anyone wanting to get out of debt and live without credit.

    Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan.

    The one thing I tell my kids that I regret was that I did not teach them financial resposibility when they were growing up.
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  • Profile picture of the author derekwong28
    Although I have loads of credit cards, I use them mainly for business purposes and the whole amount owed is paid by direct debit every month. Therefore I do not consider myself to be a debt.

    More worrying is that unlike consumers in the US, some people here use their credit cards to speculate on the stock market. This is particularly true of univerisity students on grants or loans or young low income workers. Quite often, they buy more risk warrants as well. Now the whole market has crashed, we can expect to see a lot of trouble soon. We are already started seeing suicides.
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