Credit score / debt obsessed society?

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M

Miri

Guest
#1
I don’t know about anywhere else, but in the UK, society seems obsessed with
credit scores, how to improve your credit score etc.

Even to the extent that you “should get into debt” to improve your credit score.

Apps and websites galore advertise and give info about credit score. The latest being one
which notifies you if your credit score changes.

I honestly can’t believe how “in fashion” it has become to get into debt.

But on the other hand we read about people forced to the edge due to debt problems.
People losing homes, families, bailiffs at the door. TV programmes about repossession.

I told someone a while back that I have never had a loan or credit card, never even
bought anything on contract. Their advice - that I should get a credit card and use
it to improve my credit score.

Why would I even want to get into debt to improve my chances of taking up more debt!

What happened to good old fashioned money management, saving up for things instead
of getting everything immediately with money we don’t have.

By the way I understand that people take out mortgages on homes, but even there I’ve
seen plenty of people buy bigger houses they cannot really afford instead of buying something
within their means, I've seen people so overwhelmed by a large mortgage that they Work all
hours just to pay it off and the bloated mortgage remains a mill stone around them for the
rest of their adult lives. They become slaves to the mortgage company instead of servants of
Christ. Putting all their spare time and effort into paying off a mortgage which is way beyond
their means.

It got me wondering if debt is really a modern form of bondage, another scheme of the devil.
 

Subhumanoidal

Well-known member
Sep 17, 2018
2,861
2,334
113
#2
I wouldn't say it's that obsessive in the US, but there is a bit of an emphasis placed on it.

You don't need to go into debt to raise your credit, either. And having a card for emergencies is a good idea.
To raise your credit simply use your card for things you normally pay cash for. When the bill comes in pay it off since you already have the money. And since its paid off immediately, no interest.
It may not be super fast, but it is a reasonable way to do it without going into debt. And having good credit can come in handy at times.
And as for emergencies if you ever need the money the debt will be worth it until you can get it paid off.

There are parts of the US where debt seems to be huge, but the idea isn't building credit but fabricating an appearance of wealth to impress others, or fit in with them.

As with most things, credit cards aren't bad, it's the way people misuse them.
 
Sep 23, 2018
58
53
18
#3
I tend to see credit cards as both bad and good. A necessary evil, if you will. There isn't anything inherently wrong with credit cards, but Miri makes a good point about it feeling like we are just creating debt to boost this imaginary number. Personally, I think that the credit score is just one more way that apartments and businesses try to keep down people who don't wish to put money into something to just pay it off much later. Saving money reaps the same benefit as credit, without any interest or late fees.
 
S

SpoonJuly

Guest
#4
From the beginning of time being in debt often leads to problems.
People buy what they want, not what they need.
Debt amounts to slavery.
It has lead to the down fall of nations.
Like Miri, I have never had any debt. If I do not have cash, I go without.
The world would be a much better place and things would cost much less if credit cards we outlawed.
 

Isny

Senior Member
Jan 15, 2017
1,231
1,435
113
#5
From the beginning of time being in debt often leads to problems.
People buy what they want, not what they need.
Debt amounts to slavery.
It has lead to the down fall of nations.
Like Miri, I have never had any debt. If I do not have cash, I go without.
The world would be a much better place and things would cost much less if credit cards we outlawed.
If a person has self discipline paying the debt when due, then a credit card is advisable. Many credit cards offer 1% to 2% cash back as a statement credit on most all purchases and even up to 5% back on gasoline, wireless service, etc. Also the balance due on credit card debit comes due some 4 to 6 weeks after purchase. Figuring the time value of money, the amount due on the credit card could be put in a savings account until the due date of the credit card debt. But of course one must repay the debt on time or pay the credit card company (bank) interest of over 10% (annual rate) on past due amounts.
 
Dec 12, 2013
46,515
20,372
113
#6
I don’t know about anywhere else, but in the UK, society seems obsessed with
credit scores, how to improve your credit score etc.

Even to the extent that you “should get into debt” to improve your credit score.

Apps and websites galore advertise and give info about credit score. The latest being one
which notifies you if your credit score changes.

I honestly can’t believe how “in fashion” it has become to get into debt.

But on the other hand we read about people forced to the edge due to debt problems.
People losing homes, families, bailiffs at the door. TV programmes about repossession.

I told someone a while back that I have never had a loan or credit card, never even
bought anything on contract. Their advice - that I should get a credit card and use
it to improve my credit score.

Why would I even want to get into debt to improve my chances of taking up more debt!

What happened to good old fashioned money management, saving up for things instead
of getting everything immediately with money we don’t have.

By the way I understand that people take out mortgages on homes, but even there I’ve
seen plenty of people buy bigger houses they cannot really afford instead of buying something
within their means, I've seen people so overwhelmed by a large mortgage that they Work all
hours just to pay it off and the bloated mortgage remains a mill stone around them for the
rest of their adult lives. They become slaves to the mortgage company instead of servants of
Christ. Putting all their spare time and effort into paying off a mortgage which is way beyond
their means.

It got me wondering if debt is really a modern form of bondage, another scheme of the devil.
Similar in the U.S.....I know people who cannot get a loan because they have never had credit....or you need to have a credit card or three and maintain a small balance with up to date on time payments to have credit....and then sometimes ot is a pain in the rear to get a loan because of governmental regulations on the banking system....For example...I have almost a million in equity, practically a debt to income ration of zero, good credit but because I do a lot of cash jobs that I cannot verify per se...I have had a hard time at times getting what I need from a bank.......they really like to keep you tied into the system and like a slave endebted.....
 

zeroturbulence

Senior Member
Aug 2, 2009
24,405
4,115
113
#7
I don’t know about anywhere else, but in the UK, society seems obsessed with
credit scores, how to improve your credit score etc.

Even to the extent that you “should get into debt” to improve your credit score.

Apps and websites galore advertise and give info about credit score. The latest being one
which notifies you if your credit score changes.

I honestly can’t believe how “in fashion” it has become to get into debt.

But on the other hand we read about people forced to the edge due to debt problems.
People losing homes, families, bailiffs at the door. TV programmes about repossession.

I told someone a while back that I have never had a loan or credit card, never even
bought anything on contract. Their advice - that I should get a credit card and use
it to improve my credit score.

Why would I even want to get into debt to improve my chances of taking up more debt!

What happened to good old fashioned money management, saving up for things instead
of getting everything immediately with money we don’t have.

By the way I understand that people take out mortgages on homes, but even there I’ve
seen plenty of people buy bigger houses they cannot really afford instead of buying something
within their means, I've seen people so overwhelmed by a large mortgage that they Work all
hours just to pay it off and the bloated mortgage remains a mill stone around them for the
rest of their adult lives. They become slaves to the mortgage company instead of servants of
Christ. Putting all their spare time and effort into paying off a mortgage which is way beyond
their means.

It got me wondering if debt is really a modern form of bondage, another scheme of the devil.
I wouldn't be surprised if the credit card companies are the ones behind that advice.
 
M

Miri

Guest
#8
If a person has self discipline paying the debt when due, then a credit card is advisable. Many credit cards offer 1% to 2% cash back as a statement credit on most all purchases and even up to 5% back on gasoline, wireless service, etc. Also the balance due on credit card debit comes due some 4 to 6 weeks after purchase. Figuring the time value of money, the amount due on the credit card could be put in a savings account until the due date of the credit card debt. But of course one must repay the debt on time or pay the credit card company (bank) interest of over 10% (annual rate) on past due amounts.

The cash back offer sounds like a bribe to encourage debt.
 
M

Miri

Guest
#9
Similar in the U.S.....I know people who cannot get a loan because they have never had credit....or you need to have a credit card or three and maintain a small balance with up to date on time payments to have credit....and then sometimes ot is a pain in the rear to get a loan because of governmental regulations on the banking system....For example...I have almost a million in equity, practically a debt to income ration of zero, good credit but because I do a lot of cash jobs that I cannot verify per se...I have had a hard time at times getting what I need from a bank.......they really like to keep you tied into the system and like a slave endebted.....
I agree, it does seem that way over here too.

Plus every time I go shopping, at the till I am constantly
offered store cards. Like credit cards but for that store only.
I think staff get commission for each one signed up for.
 

seoulsearch

OutWrite Trouble
May 23, 2009
13,413
3,575
113
#10
The cash back offer sounds like a bribe to encourage debt.
Hi Miri!

Great thread. Even the Bible says, "The borrower is slave to the lender." (Proverbs 22:7.) I've heard there are even dating sites now that match you up according to your credit score. :rolleyes:

Credit card companies know that most people won't be able to control their spending if they get a credit card, most especially for certain stores that lure them in with constant "specials". People don't think about how much they're actually spending or how much interest they're accumulating when they don't see it actually leave their pocket.

But if a person can discipline themselves in their finances, it's possible to use little things like cashback rewards to your advantage.

My family treats saving money like an Olympic sport, so we are always looking for ways to stack deals whenever possible. For example, I don't drink Starbucks coffee but have several friends and family who do as an occasional treat. The store I go to gives you fuel points for purchases, and every now and then, they offer 4X the fuel points on gift cards. When that happens, I buy Starbucks gift cards with my 2% cash back card, which I then always pay off before the due date. (I just don't charge anything I know I won't be able to afford when that time comes.)

So, I'm able to score cash back AND extra fuel points (which will lead to extra cash AND a discount on gas). In addition, if you join the Starbucks rewards program, they allow you to enter the numbers of any gift card you buy, which also rewards you with points. I give the cards out as birthday and Christmas gifts, and every time someone uses it, I get reward points, resulting in several times that I've received a coupon for a free drink (I usually get a special tea :)), and all I did was use the system in my favor.

I also pay most everything I can with a cash back card, such as insurance bills, utilities, etc.--even tithes at church. I charge anything that accepts a card because I have to pay the bills anyway and I always pay in full every month. The cash back (which can amount to several hundred dollars per year) is just extra money in my pocket--and all I did was pay my bills. In addition, I try to take advantage of specials that offer extra points or cash back throughout the year.

This can also be especially handy if you're a traveler--I have family and friends that have taken several free trips with the points and rewards they've earned over the years just by responsibly paying their bills with rewards cards.

Hope this helps a little bit. :)

Credit cards aren't something to be feared if one can learn to use them responsibly and stay in control.
 
Dec 12, 2013
46,515
20,372
113
#11
I agree, it does seem that way over here too.

Plus every time I go shopping, at the till I am constantly
offered store cards. Like credit cards but for that store only.
I think staff get commission for each one signed up for.
Same here.....always tryingto sign you up....me I have one travel card for booking flights etc...cash for everything else....!
 

Isny

Senior Member
Jan 15, 2017
1,231
1,435
113
#12
Hello Seoulsearch,

Your strategy is just beautiful! Well done!............but we have to be fair to the credit card companies and of course Starbucks: they have their expenses to pay. Many CEO’s of these companies get salaries of $5 million....or is it closer to $50 million per year plus benefits and retirement? And when they make an error and have to exit the company, they get golden parachutes paid to them as provided for in their employment contracts.

Now, if I were a manager at a Starbucks store and saw Seoulsearch about to enter my store, I would immediately put a “closed” sign in the window. Then when I saw Seoulsearch driving away, the “open” sign would go back in the window.....I’m not in the business of having my store lose money! (I want my store to make money and earn big bonuses for me!) but I will be glad to give you a credit card.... for your convenience of course (in other words I’m doing you a favor!).

PS. Many local Starbucks stores are located inside large grocery stores and every day or so they offer free samples. I always stop by for a friendly chat, a smile .......and a sample. I have never spent a dime at Starbucks. I make my own coffee at home....10¢ vs. $5.00 per cup.
 
Feb 28, 2016
11,311
2,964
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#13
ROMANS 13:8.
Owe no man any thing, (be bound)but to love one another: for he that Loves another has fulfilled the law.

when you 'owe', you are owned,..
 

seoulsearch

OutWrite Trouble
May 23, 2009
13,413
3,575
113
#14
Hello Seoulsearch,

Your strategy is just beautiful! Well done!............but we have to be fair to the credit card companies and of course Starbucks: they have their expenses to pay. Many CEO’s of these companies get salaries of $5 million....or is it closer to $50 million per year plus benefits and retirement? And when they make an error and have to exit the company, they get golden parachutes paid to them as provided for in their employment contracts.

Now, if I were a manager at a Starbucks store and saw Seoulsearch about to enter my store, I would immediately put a “closed” sign in the window. Then when I saw Seoulsearch driving away, the “open” sign would go back in the window.....I’m not in the business of having my store lose money! (I want my store to make money and earn big bonuses for me!) but I will be glad to give you a credit card.... for your convenience of course (in other words I’m doing you a favor!).

PS. Many local Starbucks stores are located inside large grocery stores and every day or so they offer free samples. I always stop by for a friendly chat, a smile .......and a sample. I have never spent a dime at Starbucks. I make my own coffee at home....10¢ vs. $5.00 per cup.
Hi Isny! :)

Well, the stores make money off me just fine--no worries about that--it's just that they don't make 18% off me for carrying a balance on their credit cards.

I'm not a business owner, but have grown up around them all my life. I'm guessing you already know this, but the credit card companies (such as Visa, etc.) make money every time a credit purchase is made, whether or not you pay interest on it, because they charge stores a fee every time a card is used.

Maybe things have changed since the last time I read up on it, but credit card companies charge businesses who accept their cards at least 4% of each credit transaction. Ever wonder why small Mom & Pop businesses often resist accepting credit cards (think of your favorite non-franchise restaurant that only accepts cash), or reinforce a minimum purchase limit if you use a card? (I.e., "$10 minimum credit card purchase, thank you.")

It's because business owners want to make sure a transaction is going to be worth the fee they have to pay to the credit card companies. It's part of the cost of doing business, just like labor and supplies. So a company like Visa might pay you 2%, but they're charging the businesses you utilize 4% for every purchase you make. (It's probably more than that now--the info I read about this was years ago.) Not a bad deal, eh? If only we could all do that.

I definitely understand though that companies need to make money to survive (I'm not thinking about the CEO's, but rather, the barista right in front of me getting paid $7 an hour and trying to support 3 kids.)

In the examples I used, everybody gets their money--Starbucks gets the money I spent on the gift cards, companies get the money that's due for my bills (one caveat--some companies charge a "convenience fee" if you pay by credit card--often about $4.95--make sure there's no additional feel before you pay a bill with a card), and the credit card sharks are able to get their cut as well.

It's just that, as I said, they're not getting the added 18% interest tacked on every month if it's not paid off.

And I've certainly never had trouble getting any and every kind of credit card (if a deal looks good enough--20% off your first purchase--and it's something I need, I will sometimes open a card just for that deal, pay it all off the first month, and then close that card if I know I won't use it again.)

Sure, other people who pay more will be much more attractive customers, but they're certainly not going to turn down someone who regularly uses their card responsibly, because they're still racking up the fees they charge other people along the way.

You sound like you'd make fast friends in my family. I try not to get a sample unless I'm going to buy something (to be fair to the business--just my own personal conviction), make my own coffee at home, including iced, pack my own lunches, cook 99% of my own food, and... my Mom even washes and reuses aluminum foil (which is a habit I may or may not have picked up as well.) :D
 

memyselfi

Junior Member
Jan 12, 2017
503
260
63
#15
I do not understand needing debt for a good credit score.

I pay every thing on a cash back card. Spend the same monthly amount and not more, as I would with my monthly pay. Just because I have a spending limit of so much…. does not mean I have to spend that much... I do not spend any cash, then at the time for my bill pay it in full. By the grace of G-d have never paid interest; I spend within my budget. A good credit score is a result but I love the "free" money my credit card gives me just to use my card. I get to partially pay my bill with their money.... not mine.
 

Isny

Senior Member
Jan 15, 2017
1,231
1,435
113
#16
Seoulsearch, that was a good response (#14). You are a very wise person: you know many things that other people do not know or do not want to know.

Debt has destroyed many friendships, marriages and even lives over the years...and centuries. There is great comfort in knowing that even though a person does not have flashy, expensive things to show off to others, to make others envious, he does know that he has something in savings that will protect him when adverse times hit him and he can survive with what he has in his savings......very comforting. Debt is a curse that is usually (but not always) self-inflicted and can be very destructive.
 

mochi

Senior Member
May 26, 2015
923
38
28
#18
i dont own credit card but was tempted to have one since my friends said i can get best deal here n there if i have it..
but i'm too scared if i spend more than i plan so i didnt do it..
if i'm hangout with my friend and there is best deal buy 1 get 1 or 50% off, we would go there and use her card and i pay her cash 😂😂😂
i think its OK to get one if you have self restraining to buy stuff that you only need.. but for me it wouldn't work. even with cash i always bought things that i didnt really need each time i go to store (was like: i probably will need this later, this is cheap and this store not always sell it)
so, imagine if i have credit card 😂😂😂
 

seoulsearch

OutWrite Trouble
May 23, 2009
13,413
3,575
113
#19
Seoulsearch, that was a good response (#14). You are a very wise person: you know many things that other people do not know or do not want to know.

Debt has destroyed many friendships, marriages and even lives over the years...and centuries. There is great comfort in knowing that even though a person does not have flashy, expensive things to show off to others, to make others envious, he does know that he has something in savings that will protect him when adverse times hit him and he can survive with what he has in his savings......very comforting. Debt is a curse that is usually (but not always) self-inflicted and can be very destructive.
Hey Isny, thank you so much for your kind words.

I certainly can't take any "credit" (ha ha ha)--it's all because of my God and my God-fearing parents. They've always taught me that debt is a noose around one's neck that should be paid down ASAP, or avoided altogether when possible.

When I was 16, I bought my first car. I took out a loan for something like $3000 over 3 years (forgive me if that sounds off--it was a long time ago :cool: and I can't remember all the details.) One of the best things my Dad ever did for me was to sit me down and show me how the interest would compound as time went by, and how much more I'd actually be paying for the car if I let it build up/paid back the loan according to the bank's schedule.

God blessed me with several part-time jobs at the time, and I was able to pay back that loan in 6 months rather than 3 years, saving myself a ton of interest charges that I could actually see on paper.

But the second, and probably even more challenging partof the deal was that once I paid it off, I still made the same payments every month to my savings account, so that by the time my car clunked out, I had enough saved to buy my next car in full at the time of purchase. Once I started to realize how much money I was saving in interest charges, there was no going back.

But all the credit has to go to God and my parents, because they grilled these principles into my head nonstop from childhood and it took a while to stick.

Like most anyone, I had several years where I fell off the wagon (mostly by trying to "help" people in my relationships, when all I was doing was enabling their addictions), and it's only by the grace of God that I didn't go completely broke.

I'm so thankful that God got me back on track, and my parents actually have a ministry in which they offer free counseling at their church for anyone who needs help managing their finances.

I have to admit though, that one of my biggest pet peeves is when women are stereotyped as being out-of-control shopaholics who only try to use people for money. :( Not all of us are that way, I promise!

Blessings to you and your family, Isny, and for being faithful with what God has given you. :)

P.S. For anyone wanting some basic financial advice, I've found The Financial Diet on YouTube interesting and helpful for both beginners and those with more experience. Some of their videos are sponsored and I've never started an account with any of the businesses they endorse, but they do seem to offer a lot of great tips.

Hope this helps and God bless. :)
 

memyselfi

Junior Member
Jan 12, 2017
503
260
63
#20
i dont own credit card but was tempted to have one since my friends said i can get best deal here n there if i have it..
but i'm too scared if i spend more than i plan so i didnt do it..
if i'm hangout with my friend and there is best deal buy 1 get 1 or 50% off, we would go there and use her card and i pay her cash 😂😂😂
i think its OK to get one if you have self restraining to buy stuff that you only need.. but for me it wouldn't work. even with cash i always bought things that i didnt really need each time i go to store (was like: i probably will need this later, this is cheap and this store not always sell it)
so, imagine if i have credit card 😂😂😂

My hat is off to you that you know yourself and use wisdom… you know you would spend more than you "really" have.... but it shows how smart you are made a win, win for you and your friend, to pay her the cash and still received the benefit of the cc.