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Giving loans is a good thing. With them, as the comment above yours points out, people finance education, cars, and homes that they can afford to pay off later
by unityByFreedom 5y ago
Giving loans is a good thing. With them, as the comment above yours points out, people finance education, cars, and homes that they can afford to pay off later due to having a higher salary than before.
Predatory loans are bad and governments do try to crack down on those. Going from "it's easy to get credit in the US" to "the US lets corporations steal from regular people" is a bit much.
- dmos62 5y agoI somewhat agree with what you said, but I think you sidestepped the intriguing question of why so many people in US seem to use credit.
- leetcrew 5y agotime value of money and capital gains tax make it less efficient to pay cash for large purchases. why don't people in the rest of the world use credit?
- xwdv 5y agoMoney now is worth more than money later, why is that a hard concept to understand?
- dmos62 5y agoFor one, I've never felt that way. If I were a business, that might be different.
- unityByFreedom 5y agoI don't think I sidestepped it. People use credit to better themselves because they can. Maybe you are asking why more capital is available to lend and I think that's a good question.
- yrro 5y agoOn the other hand, the abundance of credit has driven up the prices of education, cars, homes, etc.
- Caprinicus 5y agoCar prices in America are among the lowest in the developed world though. It’s difficult to compare education as you’re getting a wildly different product depending on what specific university you go to.
- ntwalker 5y agoThey pretty much have to be. The infrastructure of the US is such that if cars cost what they do in Europe then a massive section of the population would be entirely locked out of the economy unable to hold a job.
- klmadfejno 5y agoWhen people need something, prices tend to go up, not down.
- TapWaterBandit 5y agoYou've got this backwards. 1. The average American is considerably wealthier than the average European. 2. Cars are so expensive in Europe relative to America due to regulations/taxes/etc which are applied by governments (the alleged protectors of the people's welfare). 3. You've got causation backwards in regards to infrastructure, the US infrastructure is the way it is BECAUSE cars are cheaper, cars aren't cheap due to the needs of infrastructure.
- gher-shyu3i 5y agoGiving loans with 0 interest is a good thing, however, giving loans with anything above 0% interest ins a terrible thing. We've known this for literally thousands of years.
- unityByFreedom 5y agoIf you're willing to give me an interest-free loan then I will take it and invest it in an index. Generally speaking, discounted loans are only available from governments or friends for specific purposes like education or health when they want to invest in people. Even then you still have people taking advantage because money is fungible. It's hard to do this in a sustainable manner.
- gher-shyu3i 5y agoThe premise is that the economy must not be based on loans, it's not sustainable as we are seeing today (not to mention it's parasitic). Loans are given out for charity purposes. If you want to invest your money, there are many moral ways.
- frockington1 5y agoId rather take a 30 year mortgage out at 4.5% and invest it elsewhere as 4.5% is less than my expected return.
- patentatt 5y agoAnd mortgage rates are much lower than that now too, <3% is quite realistic
- frockington1 5y agoI recently heard Denmark has negative mortgage rates for natural born citizens. Losing money if you don't take it.
- deleted 5y ago[deleted]
- watwut 5y agoThere is something wrong about punishing people who don't want loans, however. And making it necessary to have or use credit card, so that you build up your credit score in a maze of rule, despite you consistently being able to pay with debit card or cash is exactly that.
- ImPostingOnHN 5y agoThey aren't being punished by not using credit cards, they're just choosing not to avail themselves of the benefits of using credit cards. If you pay your bill every month, then a credit card is like a debit card plus benefits like up to 20% of the purchase value in points, not to mention benefiting from the time value of money.
- watwut 5y agoCredit score matters for whole host of things like when you want to buy a house. So yes, you are penalized for not having it. > benefiting from the time value of money This is just nonsense. There is no additional gain from waiting till end of month till you pay.
- ImPostingOnHN 5y agoI'm sorry, my post must have given the impression that I was talking about credit scores instead of credit cards, which is what I was talking about. As for your other point, if there were no benefit from floating money for 2 months, then there'd be no benefit from doing that an indefinite number of times, which conflicts with the time value of money, an established, mathematically basic concept.