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We use CC's for as many of our purchases as we can and because of that have enjoyed some very nice vacations with the rewards. We pay off the balance every month NO matter the amount.
We take advantage of 0% financing offers for furniture, home improvements and electronics BUT if we needed too--we could take the $ from our savings and pay them off. Hubby usually figures out the amt required to pay at least a month early so we can avoid any possible "penalty" for missing the final payment by a day and getting hit with extra fees.
Figure we can keep our money in the bank and take advantage of their offer to loan us the goods for FREE!
I realize that this is NOT the norm for the majority of the country.
credit cards------I recall entering the workforce in 1963 and credit cards were unheard of.
Car loans were given by your local banker or thru the auto companies ( new cars)
There were only 2 places to get a personal loan---your local banker or loan companies who charged a higher rate to loan to people who couldn't get loans from their local bank.
However, many small town merchants offered credit ( even grocery stores) to people they knew and trusted to pay the bill.
I think people knew they had to live within their means ( wages) cuz there were no credit cards.
When credit cards first came out, you had to show an ID everytime you used them to prove you were the owner.
Now, it seems, some places /businesses couldn't care less if you are using a stolen card as long as there is enough credit limit left to pay for the purchase.
In the long run, we are all paying extra for goods and services cuz the stores have to add the credit card fee in the price at some point.
Actually companies like Household Finance was the way people financed the things they use credit cards for today. Couches,washers,fridges,etc. all were low loan amounts at high interest. The merchants were also tied into the loans. Household was bought out by CITI Bank...end of story.
I was a child of the 50-60's. I actaully rememeber that credit was always avilable ;just not credit cards. many people had accouts at different stores. Nne tho were places like restaurnts or other such places. But then peopel did not really eat out that much .Grocery stores carried there on accounts as did furnture and all other larger item stores.But the cost of the items reflected credit even if there was no interest itself.You wre often able to get a discount for cash whichmeans nothing really now days.
Lay a Way was not just a word recoined at Walmart, it was the way we bought things in the 40-50s. The local merchant actually had the item, you could go in and look, sometimes touch, but could not take it home...until it was paid in full.
The bad - People would have less consumer products and eat out less.
The Good - Things would be cheaper because people wouldn't be able to buy things they couldn't afford. Also more credit would go to production and other businesses because banks would not be sinking their money into the more profitable credit card business.
So what's the real point of questions like this? Seriously - to me it seems like an easy way to redirect that blame away from ourselves.
Having said that - is the system perfect? hardly. But its not like once credit cards were introduced, each consumer was forced to use it, and use it beyond their economic means. Those that did overspend "CHOSE" to do so.
And this is where someone will go - well gee, many got into the credit trouble because they ran into emergencies....Okay - what would the options have been if credit wasn't' available? Are those no longer options? In most case, they're still there. It's just the harder choice.
Bottom line, its a service. Whether or not that service is appropriate for the individual is up to them to decide - with the understanding that they need to be accountable for their actions.
I find it almost childish that people would blame the system for something that they had control of all along....."my credit card made me do it!!!"
And yea - my grandparents did fine without credit cards, and their grandparents did fine without air conditioning, and theirs did fine without plumbing .... but I think if you brought them all back and showed them what we have...they'd probably love it.
At some point - we lost sight of the fundamental values like integrity and responsibility, etc. Yea - I can't argue that the system is kinda wacky; especially when I get loan offers that my parents can't and they're worth 15 times me... but how is it not my fault if I decide to accept that offer knowing that I probably can't pay it back?
Waiting for a better day has always been around. Delaying paying for somthing is a scam stared by the Big banks.Lots of profit, even at high risk. Unsecured credit, has always been around, finance companies ,loan sharks, bank loans......nothing new, its just easer to gamble with a card in your wallet. Good for stores also, the big ones.....
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