4 ms·

I'm sort of at a loss for understanding the misunderstanding here. Someone without equity in their home probably cannot get a loan of any sort. Access to capita

by issa 5y ago

I'm sort of at a loss for understanding the misunderstanding here. Someone without equity in their home probably cannot get a loan of any sort. Access to capital, as a loan or any other form, is a huge thing. So if your home gives you access to that loan, this is important.

bcrosby95 5y ago
There is no misunderstanding. Most people don't have a use for a line of credit other than to spend it on things that don't make them any money. Everyone I know that did this used it to say, pay off a bunch of credit card debt, or build a new kitchen that will be worthless by the time they sell their house anyways.
- hypothesis 5y ago
  Paying off credit card debt should be beneficial here, right? I would assume that trading a 15%-25% rate to something lower is good thing.
- dragonwriter 5y ago
  > Most people don't have a use for a line of credit other than to spend it on things that don't make them any money. Even if that were true (it's really not—it may be at any one moment but over a substantial period of years people tend to have emergent needs and opportunities that not having access to capital, or higher cost access to capital, either misses with real costs or pays more with, quite obvious, real costs) people tend to borrow and spend money on things that don't make money fro time to time; if you have a lower financing costs for such frivolous purchases, you are richer than someone who has the same spending pattern with higher financing costs.
- chii 5y ago
  just because you cannot think of a use for such a line of credit, doesn't mean that having the option is useless. And even if most people mis-use this line of credit, it is still an option that's not available. Availability of options is in itself valuable. And i really dont think people are dumb and cannot think of productive uses for such a line of credit.

by issa 5y ago

bcrosby95 5y ago

There is no misunderstanding. Most people don't have a use for a line of credit other than to spend it on things that don't make them any money. Everyone I know that did this used it to say, pay off a bunch of credit card debt, or build a new kitchen that will be worthless by the time they sell their house anyways.

hypothesis 5y ago
Paying off credit card debt should be beneficial here, right? I would assume that trading a 15%-25% rate to something lower is good thing.
dragonwriter 5y ago
> Most people don't have a use for a line of credit other than to spend it on things that don't make them any money. Even if that were true (it's really not—it may be at any one moment but over a substantial period of years people tend to have emergent needs and opportunities that not having access to capital, or higher cost access to capital, either misses with real costs or pays more with, quite obvious, real costs) people tend to borrow and spend money on things that don't make money fro time to time; if you have a lower financing costs for such frivolous purchases, you are richer than someone who has the same spending pattern with higher financing costs.
chii 5y ago
just because you cannot think of a use for such a line of credit, doesn't mean that having the option is useless. And even if most people mis-use this line of credit, it is still an option that's not available. Availability of options is in itself valuable. And i really dont think people are dumb and cannot think of productive uses for such a line of credit.