Today...

[RpgGamer]

You actually get a better credit score if you don't pay back your bills in full every month because how much they can profit from you is also a factor in your score. The whole thing is balogna. I'm also without a credit score but not only am i the most financially responsible of my friends, I have among the top few savings accounts. Not to brag, but it's honestly likely the highest among my friends (granted most of my friends are careless stoners). I'm convinced credit is a scam. The only things I'll ever need it for is 1) buying a house and 2) paying for my kids college. I'll buy a house using my money and my partners credit so that's taken care of and I'm not paying for my kid's college because it's a waste of effort. My kids gonna learn some good old fashion carpentry or some shit. So tl;dr credit is stupid and is only a thing so banks can profit off of the general populace. /rant

[obfuscator]

You actually get a better credit score if you don't pay back your bills in full every month because how much they can profit from you is also a factor

This isn't true. The only time not paying in full helps your credit is when your utilization is extremely low (since having a dormant card hurts your score). It's basically *never* a good idea to not pay a card off in full. The rest of your point is basically right though, with a caveat. Financially illiterate people subsidize credit card usage for the financially literate, essentially. People who never pay interest on their cards don't make the companies money (outside of the transaction fees they charge vendors, of course), but people who don't know how to use credit cards (and accumulate interest) make the companies a ton of money. In that sense, the financially literate are a sort of "loss-leader" for the industry...but they can benefit personally a fair bit, between points and other perks.

 

@Veiva: A secured card is designed to let people with no history slowly build it. I'd go for it (if the deposit is within your means of course). Alternatively you may be able to find some sort of student card with a small limit that requires no score (that's how I started). Your brother probably is in his situation because some history (even if it's not great) is better than no history. Unless your brother is racking up massive debts and never paying at all, the credit card company is making money off him when he pays interest. As long as he continues to pay it his score would still be mediocre, which is better than no score (at least as far as the card issuers are concerned)

[Veiva]

I was under the impression you deposit $X to get an $X credit line (i.e., the bank risks nothing).

 

I suppose I'll try for a secured card when we have enough in savings to last two months without income. Right now we're at just over one month... It'll be a while, since we can only save $100-$200 a month.

 

 

@Veiva: A secured card is designed to let people with no history slowly build it. I'd go for it (if the deposit is within your means of course). Alternatively you may be able to find some sort of student card with a small limit that requires no score (that's how I started). Your brother probably is in his situation because some history (even if it's not great) is better than no history. Unless your brother is racking up massive debts and never paying at all, the credit card company is making money off him when he pays interest. As long as he continues to pay it his score would still be mediocre, which is better than no score (at least as far as the card issuers are concerned)

 

 

I wasn't talking about my younger brother. :P I have more than one sibling. (Not that you knew! I don't think I've mentioned him/her before.)

[Noxx]

I'm not going to lie, i've always been terrified of credit cards. Back in the US i had a debit account which allowed me to go into an overdraft (probably worded this very poorly). Anyway... So pretty much once every other month, usually near the end of the month, i'd use more money than i actually had. It really just meant that i had to pay a small penalty/fee to get it out of overdraft (i think it was usually around $50 for the first 7 days and then it increased daily after that). But that was enough to put me off the idea of a credit card for life. I'm actually terrified of debt. Especially living in a middle eastern country. I've heard way too many horror stories of people who are unable to pay back their debt. They get locked up for let's say 3 years or until they can pay off their debt. But they have no way to pay off their debt while in jail anyway. So either way, they're [bleep]ed. Don't want that shit happening to me. 

 

Now I withdraw x-amount of money at the start of each month then lock my card up in my safe. If i run short by the end of the month... well tough luck. 

[obfuscator]

I'm not going to lie, i've always been terrified of credit cards. Back in the US i had a debit account which allowed me to go into an overdraft (probably worded this very poorly). Anyway... So pretty much once every other month, usually near the end of the month, i'd use more money than i actually had. It really just meant that i had to pay a small penalty/fee to get it out of overdraft (i think it was usually around $50 for the first 7 days and then it increased daily after that). But that was enough to put me off the idea of a credit card for life. I'm actually terrified of debt. Especially living in a middle eastern country. I've heard way too many horror stories of people who are unable to pay back their debt. They get locked up for let's say 3 years or until they can pay off their debt. But they have no way to pay off their debt while in jail anyway. So either way, they're [bleep]ed. Don't want that shit happening to me. 

 

Now I withdraw x-amount of money at the start of each month then lock my card up in my safe. If i run short by the end of the month... well tough luck.

That's smart. Ultimately credit and debt in general is as useful as your self-control (and knowledge of what you're actually capable of). If you have any question about your ability to self-moderate your usage, it's better to stay away.

[Noxx]

I generally have good self-control and sensibility when it comes to certain matters, and when it comes to a credit card i treat it like drugs. I have no idea how it'll affect me, so i'd rather stay away from it. I spoke to my dad about this very topic 2 or 3 days ago and he told me this: everyone has to be willing to make debt at least twice in their life. One is when buying a car, the other is when buying a house. Perfectly valid reasons. Luckily for me the first time i bought a car my dad bought it cash and i paid him back (so technically i avoided debt), and when i bought my M4 i had enough to buy it cash. And as long as i live in the Middle East buying a house isn't really an option, so i don't have to worry about that either. 

 

 

As long as i live in the Middle East i want to avoid debt as much as i can. If i can't buy a car cash, then i don't want it.

[obfuscator]

I agree as far as a house goes. The vast majority of people won't be able to buy a house in cash. Cars, though, are certainly purchasable without debt for a good chunk of people.

[Estonian dude]

Credit card is a godsend when travelling or buying stuff online. I pay off every month and incur no interest, as it starts collecting only after a month has passed from the payment for me. Also, free travel insurance when I pay with the card. Had an opportunity to use it and got back more than I have ever paid into the card. Win-win for me.

 

[bleep]ing boring here.

 

However, it is really calm and peaceful aswell. I work around 6 hours a day doing that stuff pretty much automatically, while moving a lot in the fresh air. Rubber boots are ruining my feet at the start, however that should get over in a week or so. Can already feel my health improving, so much better than office work.

[Noxx]

I agree as far as a house goes. The vast majority of people won't be able to buy a house in cash. Cars, though, are certainly purchasable without debt for a good chunk of people.

Obviously depends on the car. If you're buying a car for $5000 i'd say it's not unrealistic to assume most people can buy it cash. When you're buying a car for $50 000 it's unrealistic to assume most people could buy it cash.

[Veiva]

"Most people" I assume would hover around or below the median household income, and by that metric, someone making $50,000 (in the United States) a year buying a $50,000 car is making a financially unsound decision. In other words, "most people" cannot afford a $50,000 car, loan or no loan.

[obfuscator]

I'd argue buying a 50000 car is a financially unsound decision for anyone outside the top 1% of income earners in the west

[Randox]

You really don't want to be getting your first mortgage with little or no credit history. The route I followed was to get a credit card while I was in University. Two things. First, it's way easier to get a card as a student because the bank assumes that your're parents will bail you out (probably works best if they have decent credit). My first card had a $2,000 limit while I had no income. Obviously far more than I would have wanted to use at the time, but I used it as a debit card and just continually paid it off to build credit. The other bonus was that the student card had no annual fee. Frankly, I almost wish I still had it.

 

If you try to buy a 5 figure car in actual cash, you should expect the police to show up :P You'll need a cashier's cheque or a wire transfer.

 

Conversely, if you buy a five figure car in actual cash and the police don't show up, then the seller is even shadier than you and the car is probably stolen |^_^|

[Melos]

Today I got super excited about the Shadow of Colossus remake, even though I don't have a ps4 :L... That's a game I really wanted to play T.T.

[RpgGamer]

Noxx's dad owns a bunch of shit, forgive him if he doesn't quite understand the (lower)middle class of the West.

 

Truthfully even buying a used $5000 car without getting a loan is typically uncommon. And buying a car more than $30,000 is either a brand new minivan or a rich single businessman(/woman). There's really no practical reason to spend more than that on a car.

[Noxx]

Noxx's dad owns a bunch of shit, forgive him if he doesn't quite understand the (lower)middle class of the West.

 

Truthfully even buying a used $5000 car without getting a loan is typically uncommon. And buying a car more than $30,000 is either a brand new minivan or a rich single businessman(/woman). There's really no practical reason to spend more than that on a car.

Dude we were on the lower spectrum of middle-class back in South Africa. That's 3rd world middle-class. I fully understand what middle-class is. 

[RpgGamer]

Was feeling feisty, sorry

[Estonian dude]

White-people lower-spectrum middle-class in SA is something like high-end middle-class everywhere else in the west.

 

Did you have servants/house-help? Or rather, how many? If you did, then your argument is invalid.

[obfuscator]

Younger siblings > servants tbh

[Estonian dude]

Nope, they suck. Have to share everything with them. And argue with them.

[Dax]

Also bad luck if you're the middle child. Nothing works out in your favour that way.

[Noxx]

White-people lower-spectrum middle-class in SA is something like high-end middle-class everywhere else in the west.

 

Did you have servants/house-help? Or rather, how many? If you did, then your argument is invalid.

Oh my bad, i forgot you're our local expert on everything about anything. You obviously know a lot more about what middle class in South Africa is, having been there so many times yourself.

[Veiva]

For me, parents being able to buy their children a car places the household in a "well to do" position.

 

But that's coming from someone who has a warped view of wealthy is, I suppose. I mean, I'm 25 and my household only ever had a working car for maybe 10 non-consecutive years in total, all of which were before I was an adult, and we've never grossed more than $25,000 a year, so...

 

Considering how frugal we live, even $40,000 a year would make us feel like kings, lol.

[RpgGamer]

That was kind of what I was poorly trying to convey. Owning anything, be it a car or a house or even a small business puts you worlds "ahead" of a HUGE number of people in the US

[obfuscator]

For me, parents being able to buy their children a car places the household in a "well to do" position.

 

But that's coming from someone who has a warped view of wealthy is, I suppose. I mean, I'm 25 and my household only ever had a working car for maybe 10 non-consecutive years in total, all of which were before I was an adult, and we've never grossed more than $25,000 a year, so...

 

Considering how frugal we live, even $40,000 a year would make us feel like kings, lol.

Yeah that's the thing about words like "wealthy" or "well off". It's really relative. For someone who's poor, making even the average income seems wealthy in a sense. But I doubt Bill Gates thinks someone making a million dollars a year is wealthy....

 

That's the use of comparing against something like an average income. It's not perfect, but at least it gives a general sense of where the rest of the country is at

 

 

That was kind of what I was poorly trying to convey. Owning anything, be it a car or a house or even a small business puts you worlds "ahead" of a HUGE number of people in the US

Most people who own a small business (if it's successful) will be much better off than someone who just owns a car and a house.

[Noxx]

Wealth is completely relative, you're right. Veiva kind of puts things in perspective saying they'd live like kings with a $40k income.