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If consumers aren't willing to risk paying late fees, just don't use credit cards. Right, if you have an unexpected emergency (like repairing the car you depen

If consumers aren't willing to risk paying late fees, just don't use credit cards. Right, if you have an unexpected emergency (like repairing the car you depend on to get to work), just pay for it from your trust fund! /s

_heimdall 3y ago
This is a deep rabbit hole you're digging towards. I'd argue that if you can't afford to repair your car you can't afford the car. And if we've built a society where personal ownership of a car is a necessity we have failed on a fundamental level. Having an open line of credit is helpful for sure, but you shouldn't depend on it. Having to dip into debt to cover an expense means you've fallen behind, and if you couldn't afford it before you are less likely to afford to dig out of the hole now. Not having a credit line means you may run out of money, but it also means you can't go into debt.
- rahimnathwani 3y ago
  Having to dip into debt to cover an expense means you've fallen behind It's fine to borrow to fund capital expenditure. Soon after I started working (not in the US) I got a job which paid 25% more than my first job. But I needed a reliable car to get to work. After six months of struggling with an unreliable car, I borrowed money to fund 2/3 of the price of a new car. This wasn't because I had 'fallen behind'. The reliable car was a good investment, and it was fine to fund it with debt. Car repairs extend the life of a capital asset. It seems reasonable to fund them with debt.
  - _heimdall 3y ago
    What you're describing isn't an open line of credit though. It sounds like you took on that debt in as a calculated risk to help pay for a one-time expense that was a luxury rather than a necessity. I was replying to the scenario of having a credit card to pay for an unexpected expense that otherwise couldn't be paid for. That's extremely helpful in the short term, but risky long term since presumably if it couldn't be afforded before its that much harder to dig out from under the new debt. I wasn't meaning to argue that debt is always bad. I may have just explained myself poorly if it read that way.
    - rahimnathwani 3y ago
      I think we're looking at things in a similar way. The key point of differences I think are: 1. Car repairs are capex, even if their exact timing is unexpected. 2. When it comes time for a car repair, you may not have time to apply for a loan specifically for that purpose. In that case, a credit card is a reasonable choice. Perhaps car repair costs are predictable over 1 year, but not over 1 month. It's sad that: - many people can't distinguish between using debt to fund an investment in the future, and using it to fund current expenditure - many people in the US live in places that aren't dense enough to make public transport viable
      - _heimdall 3y ago
        > many people in the US live in places that aren't dense enough to make public transport viable Well that's for damn sure. We (collectively) never should have allowed our society to bake in an assumption that everyone will have access to a personal vehicle. A huge majority of the US is extremely difficult to live in unless you (a) own a reliable vehicle or (b) are okay with being largely self sufficient and living a hyper-local lifestyle.

_heimdall 3y ago

This is a deep rabbit hole you're digging towards. I'd argue that if you can't afford to repair your car you can't afford the car. And if we've built a society where personal ownership of a car is a necessity we have failed on a fundamental level. Having an open line of credit is helpful for sure, but you shouldn't depend on it. Having to dip into debt to cover an expense means you've fallen behind, and if you couldn't afford it before you are less likely to afford to dig out of the hole now. Not having a credit line means you may run out of money, but it also means you can't go into debt.

rahimnathwani 3y ago
Having to dip into debt to cover an expense means you've fallen behind It's fine to borrow to fund capital expenditure. Soon after I started working (not in the US) I got a job which paid 25% more than my first job. But I needed a reliable car to get to work. After six months of struggling with an unreliable car, I borrowed money to fund 2/3 of the price of a new car. This wasn't because I had 'fallen behind'. The reliable car was a good investment, and it was fine to fund it with debt. Car repairs extend the life of a capital asset. It seems reasonable to fund them with debt.
- _heimdall 3y ago
  What you're describing isn't an open line of credit though. It sounds like you took on that debt in as a calculated risk to help pay for a one-time expense that was a luxury rather than a necessity. I was replying to the scenario of having a credit card to pay for an unexpected expense that otherwise couldn't be paid for. That's extremely helpful in the short term, but risky long term since presumably if it couldn't be afforded before its that much harder to dig out from under the new debt. I wasn't meaning to argue that debt is always bad. I may have just explained myself poorly if it read that way.
  - rahimnathwani 3y ago
    I think we're looking at things in a similar way. The key point of differences I think are: 1. Car repairs are capex, even if their exact timing is unexpected. 2. When it comes time for a car repair, you may not have time to apply for a loan specifically for that purpose. In that case, a credit card is a reasonable choice. Perhaps car repair costs are predictable over 1 year, but not over 1 month. It's sad that: - many people can't distinguish between using debt to fund an investment in the future, and using it to fund current expenditure - many people in the US live in places that aren't dense enough to make public transport viable
    - _heimdall 3y ago
      > many people in the US live in places that aren't dense enough to make public transport viable Well that's for damn sure. We (collectively) never should have allowed our society to bake in an assumption that everyone will have access to a personal vehicle. A huge majority of the US is extremely difficult to live in unless you (a) own a reliable vehicle or (b) are okay with being largely self sufficient and living a hyper-local lifestyle.