81–90 of 109 posts
They highlight a 25-year old (arguably fitting the Millenial archetype) that "uses her Southwest Airlines Rapid Rewards card to collect points she says she uses for plane tickets to visit her family in California."
Which is it? Are we using credit cards more, or are we spooked by them and using them less?
> Jason Towner, a 32-year-old who works at a private equity firm, cut up his last credit card, from Capital One, in 2010. He did not have any unruly debts, but he had just watched his father and sister close the family furniture store after a bank cut off their credit line in the middle of the financial crisis. I can't understand this mindset. A bank refuses to extend a business line of credit, so you... cut up a cre…
The examples do seem to be decently unrelated, but we also don't know the full story, so there could be a relating factor. Or the reporter could just be using two stories of "credit" that tied together.
The use of credit history and score to determine worthiness in all sorts of purchases is a horrible construction that must be destroyed. I got a credit card for no reason other than to build score; I've never spent money I didn't have in my life (which seems responsible to me!) but I still have to go through this silly rigmarole of purchasing and then paying off to prove to future agencies that I'm responsible.
> this silly rigmarole of purchasing and then paying off to prove to future agencies that I'm responsible That actually sounds like a fantastic method for a lending agency to determine who is responsible and who is not.
It still boggles my mind how prevalent credit cards are in the U.S. and how almost non-existent they are elsewhere, in particular Europe and Japan where debit cards are used. They don't call them debit cards, but rather cashless payment or what have you. And the merchant fees for these cards are far, far lower than credit cards which makes it even more baffling to me. ADD: "Without a substantial credit history, it is…
In theory, it shows you can pay them back. In practice, I wonder if credit works that way.
My first job was working for a car dealership and, because the salesmen are lazy, they taught me how to read credit reports so they wouldn't have to.
They taught me to ignore the credit number and look specifically at whether somebody has paid off a large sum of money consistently. People who have paid off student loans and never missed a payment were ideal. If they were delinquent once or twice it wasn't a problem, provided it didn't happen consistently.
They didn't care at all about credit card payments unless it was a large amount of debt they had trouble paying off. In other words, credit card debt could only hurt you, it could never benefit you.
I don't know if this was common practice for car dealerships at the time (late 90s), but it certainly contradicted the information I was taught in school about the necessity of using credit cards to establish a credit rating specifically so you could buy a house and a car.
It still boggles my mind how prevalent credit cards are in the U.S. and how almost non-existent they are elsewhere, in particular Europe and Japan where debit cards are used. They don't call them debit cards, but rather cashless payment or what have you. And the merchant fees for these cards are far, far lower than credit cards which makes it even more baffling to me. ADD: "Without a substantial credit history, it is…
Fun fact, in France we call debit cards "Carte de Crédit " (or carte bleue) Debit cards there come with the same amount of fraud protection as the credit cards, there's not really a reason to use Credit cards there. In reply to your ADD: Because in the US, you get a "Credit score"[1] based on your credit history. And when taking a home mortgage, instead of simply asking for your past few years of income proof and oth…
- Having a lot of available credit (usually based on credit score and/or income)
- Not using too much of that available credit (credit utilization, a low non-0% is ideal)
- Different types of credit (revolving credit or CCs, installment loans, etc)
- How long you have had credit (longer is better)
- How many times you have tried to get more credit recently (too many recent inquiries means higher risk)
Credit scores are a measure of how well you can hold multiple types of debt over time and still pay everything. It is not "will so-and-so pay their mortgage?"
The article mentions several times that student loans are putting a lot of people off more debt. Then it says they'll have no credit history when it comes time to buy a house or car. What about all the student loan payments they're making? That's certainly a credit history, esp. if you miss a few.
UK student loans are effectively invisible.
This is interesting and I am glad less people are using credit cards. It's really not a good idea for the majority of people in my experience. I got mine when I was 20 and I've never paid it late or gone over my limit. Most of the time I coordinate my payments with the day I get my direct deposit (I've tried automatic payments, but too paranoid that they might not work!). Discover gives me pretty good Amazon cash bac…
Maybe I lack self control but it was really easy to go from paying off $30k in credit card bills every month, to not having that income anymore, to being $30k+ in CC debt.
This is interesting and I am glad less people are using credit cards. It's really not a good idea for the majority of people in my experience. I got mine when I was 20 and I've never paid it late or gone over my limit. Most of the time I coordinate my payments with the day I get my direct deposit (I've tried automatic payments, but too paranoid that they might not work!). Discover gives me pretty good Amazon cash bac…
Maybe I lack self control but it was really easy to go from paying off $30k in credit card bills every month, to not having that income anymore, to being $30k+ in CC debt.
That just sounds like an exorbitant amount of money to me, maybe because I'm not in a developer salary bubble.
You would almost have to be partying/shopping full time in order to rack up a $1000 daily bill.
What's really scary is the fact that many of these individuals don't consider the benefits and rewards of using a credit card -- free flights, cash-back, insurance and extended protection, and best of all it's not your money. You get to hold on to your cash for a month's worth of interest and you get fraud protection. Credit cards are tool and, just like most tools, should be used with proper awareness and thought-pr…
One thing that even people who consider themselves financially savvy (e.g. those who pay off the credit cards in full each month rather than carrying a balance) often fail to realize is that credit card companies are middlemen; the fees they charge the merchant -- typically around 3% of each transaction -- ultimately get paid for by someone, and that someone is you. If we all were less beholden to our credit cards, a…
You have to handle cash and all the negatives that come with that. Using ATMs (finding one, avoiding fees, navigating the myrian of poorly designed UIs) and carrying large amounts of cash is a major inconvenience compared to carrying 1 piece of plastic. No incentive to rob people either if they don't have anything but easily replaceable credit cards. Having a digital trail for yourself also simplifies budgeting and record-keeping tremendously.