5 ms·

Credit is a trap for the unwary and those that fail to plan ahead. I include myself in that group, as I have credit debt. Don't do - save your money.

by gretful 12y ago

geebee 12y ago
My brother asked me for advice, when he was in college, about whether he should get a credit card. I told him that he should, if he was confident that he make a small charge and consistently pay the bill, on time, every month. However, if he wasn't confident that he could do this, he shouldn't. He decided against the credit card. In retrospect, I didn't give him good advice. It's not that the overall approach is a bad one, but I didn't understand or emphasize just how important it is to establish a credit history. When you're in college, credit card companies will offer you a line of credit even if you have no previous credit history. If you can charge $10 a month, and pay it on time every month, for several years… I'm not kidding, banks will lend you $750,000 to buy a house at the most favorable rates 5 years later simply based on your demonstrated ability to pay $10 a month reliably and not run up a $10,000 debt just because you can. It's a test, and it's an important one to pass - but if you aren't going to pass, don't take it (yet). You will need to eventually. If you don't take this test and pass it, banks will at best charge you a higher interest rate that could actually cost you well over 100K over the lifetime of the loan. They might not loan to you at all. So yeah… if you can't handle credit, don't do it, but be aware of how important it is to establish a credit history.
- gretful 12y ago
  yes, like fire, credit is useful servant but a terrible master. If you relax your attention it's easy to turn the relationship upside down.
zo1 12y ago
Would you say the same about buying a large item (such as a home) on credit? They are fundamentally both debt, but drastically different in details.
allegory 12y ago
Been there. I now have no debt after spending 14 years paying it off. 14 years lost.
- zo1 12y ago
  "14 years lost." 14 years lost how? Do you not have the house/item that you spent 14 years paying off? Or was it credit-card debt?
  - allegory 12y ago
    Credit card, new car and catalogue debt. Everything purchased is gone or broken. I threw a lot of money into a mortgage and ended up in negative equity for 2 years as well. This is how I learned that status and material things are not important. Unfortunately my parents taught me the opposite to this and I paid with slavery for a long time. I realised that they too are slaves to their purchases and status. Shit happens! Everything I own is worth about £1000 now and I can afford to just replace it and go "meh".

Credit is a trap for the unwary and those that fail to plan ahead. I include myself in that group, as I have credit debt. Don't do - save your money.

by gretful 12y ago

Credit is a trap for the unwary and those that fail to plan ahead. I include myself in that group, as I have credit debt. Don't do - save your money.

geebee 12y ago

My brother asked me for advice, when he was in college, about whether he should get a credit card. I told him that he should, if he was confident that he make a small charge and consistently pay the bill, on time, every month. However, if he wasn't confident that he could do this, he shouldn't. He decided against the credit card. In retrospect, I didn't give him good advice. It's not that the overall approach is a bad one, but I didn't understand or emphasize just how important it is to establish a credit history. When you're in college, credit card companies will offer you a line of credit even if you have no previous credit history. If you can charge $10 a month, and pay it on time every month, for several years… I'm not kidding, banks will lend you $750,000 to buy a house at the most favorable rates 5 years later simply based on your demonstrated ability to pay $10 a month reliably and not run up a $10,000 debt just because you can. It's a test, and it's an important one to pass - but if you aren't going to pass, don't take it (yet). You will need to eventually. If you don't take this test and pass it, banks will at best charge you a higher interest rate that could actually cost you well over 100K over the lifetime of the loan. They might not loan to you at all. So yeah… if you can't handle credit, don't do it, but be aware of how important it is to establish a credit history.

gretful 12y ago
yes, like fire, credit is useful servant but a terrible master. If you relax your attention it's easy to turn the relationship upside down.

zo1 12y ago

Would you say the same about buying a large item (such as a home) on credit? They are fundamentally both debt, but drastically different in details.

allegory 12y ago

Been there. I now have no debt after spending 14 years paying it off. 14 years lost.

zo1 12y ago
"14 years lost." 14 years lost how? Do you not have the house/item that you spent 14 years paying off? Or was it credit-card debt?
- allegory 12y ago
  Credit card, new car and catalogue debt. Everything purchased is gone or broken. I threw a lot of money into a mortgage and ended up in negative equity for 2 years as well. This is how I learned that status and material things are not important. Unfortunately my parents taught me the opposite to this and I paid with slavery for a long time. I realised that they too are slaves to their purchases and status. Shit happens! Everything I own is worth about £1000 now and I can afford to just replace it and go "meh".