4 ms·

It’s financially reckless. What if you lose your job?

Ultimatt 4y ago
You then pay off your outstanding debts if you think there is risk you will be paying out more in the near term... That's why you only carry debt when you could otherwise afford something. Literally thats the point. Realistically though its even better if you lose your job because you have the cash in the bank you would otherwise have sunk into an asset. I just quit my job to be self-employed and have a bit of a career break. Before I did I got a 24 month interest free credit card. If I suddenly have to pay for something really expensive like a new boiler or something, I can put it on there and I have two years to decide what to do, or get a job with zero additional cost. That's security more than it is a liability. I've had a perfect credit score and never paid for credit other than my mortgage interest. People who refuse to use credit out of some broken parental advice of "never carry debt" is far more reckless since you're ignoring an entire avenue of financial management for yourself. Absolutely don't carry debts you cannot afford. But everyone should abuse the fuck out of the credit system, and the institutions designed around fleecing people a lot stupider than you. The bar for credit company profits is set at people where money is like water through their hands, not people who know how to keep a personal budget in a spreadsheet.
- kortilla 4y ago
  You can’t pay it off if you weren’t able to afford it up front. You’ve changed the scenario from “I can’t afford the full cost but can afford monthly payments” to “I can afford this and am using monthly payments as an interest free loan”.
  - Ultimatt 4y ago
    Go read what I said, the premise was you can afford the item outright but it still doesn't make sense to if you have interest free credit available.
Rebelgecko 4y ago
Ideally you have an emergency fund so it doesn't matter. But compared to paying the cost up front I think you'd be better of using BNPL actually. You'll have more cash on hand to pay for necessities like food/rent, in exchange for a ding to your credit score if you don't have enough money left over to pay the monthly payments on the camera you use for your budding photography business

You then pay off your outstanding debts if you think there is risk you will be paying out more in the near term... That's why you only carry debt when you could otherwise afford something. Literally thats the point. Realistically though its even better if you lose your job because you have the cash in the bank you would otherwise have sunk into an asset. I just quit my job to be self-employed and have a bit of a career break. Before I did I got a 24 month interest free credit card. If I suddenly have to pay for something really expensive like a new boiler or something, I can put it on there and I have two years to decide what to do, or get a job with zero additional cost. That's security more than it is a liability. I've had a perfect credit score and never paid for credit other than my mortgage interest. People who refuse to use credit out of some broken parental advice of "never carry debt" is far more reckless since you're ignoring an entire avenue of financial management for yourself. Absolutely don't carry debts you cannot afford. But everyone should abuse the fuck out of the credit system, and the institutions designed around fleecing people a lot stupider than you. The bar for credit company profits is set at people where money is like water through their hands, not people who know how to keep a personal budget in a spreadsheet.

kortilla 4y ago
You can’t pay it off if you weren’t able to afford it up front. You’ve changed the scenario from “I can’t afford the full cost but can afford monthly payments” to “I can afford this and am using monthly payments as an interest free loan”.
- Ultimatt 4y ago
  Go read what I said, the premise was you can afford the item outright but it still doesn't make sense to if you have interest free credit available.

Rebelgecko 4y ago

Ideally you have an emergency fund so it doesn't matter. But compared to paying the cost up front I think you'd be better of using BNPL actually. You'll have more cash on hand to pay for necessities like food/rent, in exchange for a ding to your credit score if you don't have enough money left over to pay the monthly payments on the camera you use for your budding photography business