Is it Just me or is the Idea of "Credit Score" Annoying as Hell?

Credit rating is annoying. When my wife and I got married in our 20s we knew we wanted to buy a house one day and we would need good credit. So we got a credit card with our local credit union and we use it for all our purchases. But we always pay it off at the end of every month so we don't pay any interest. After doing this for 10 years we have excellent credit and had no problem buying a house with a mortgage. Don't like this game but this was how we got through it. Now we are paying off our debt and don't plan on ever moving. Worked for us but still annoying.

> rent cars... debit card works...

Yes. Or no. Sometimes. Maybe. Don't for one second consider betting on it.

And there are, at least where I checked in the SF Bary area, conditions. Only one rental company admitted taking debit cards (Enterprise, maybe?) and they would only take a debit card if they could place a $400+ hold AND if you lived more than 250 miles from the place your were renting the car. Hmm. Oooh-K...

I checked about 6 other agencies, the big boys, the little boys, and all the rest, according to their websites, _required_ a credit card to rent a car. No wait - that was two years ago and I think, maybe (very "maybe") I recall that one place would take $500(?) in a cash deposit. But I might not be remembering right and if I am, there was something about it that didn't work. Maybe it was $1000 or maybe that was the time I was returning the car to a different place or maybe I had to pick it up at odd hours and the office was closed. Just don't recall, but it didn't work. In the end, don't bet on it.

It was all just way too dicey so I got my first CC in 30 years, just so I can rent a car if I have to.


Regards,
Rufus

I have had a few instances, where I had the money to pay cash but had to pay a slightly higher price than those with a credit card. They sometimes have special promotions that are only for cardholders. Sometimes the management will give you the same price. When they haven't been willing to do that, I leave the items right there at the checkout and never enter that store again.

We had two here in Canada, Zellers and Eaton's that are closed now, but that I didn't go into during their last decade, because of the credit card thing.

It can also be really difficult to rent a car or get things from a rental shop or book a motel, without a credit card.
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I don't want anybody to loan me a few hundred thousand dollars, unless I get it really cheap. But if someone wants to lend me 100 million dollars, I will take it tomorrow and I promise promise promise, to bring it back🌴👑💰💸🎢🎪🎸 on my 150th birthday.

I love credit.

Credit cards provide a lot of convenience, and give back a small portion of what one spends, for nothing. Subsidized by people who chose to pay silly interest rates.

Paying off at the end of the cycle means the card issue is continually lending the user a bit of money, interest free.

This combined with a line of credit means there is no need to keep large amounts of cash available.


If one is living off saved money/investments, it takes a business day to sell some shares, and a couple more for the transaction to clear and be actually spendable. Add a bit more time if there is a currency exchange via Norbert's gambit, or if you're dealing with a mutual fund...

If one wants to be able to jump on a deal, you need quick access to cash. If the deal is for something substantial like a vehicle, piece of equipment, etc...this might be xx,xxx.

Having say 25,000 sitting around in a savings account costs somewhere around $1500 per year in lost income; 1% interest rate compared to average investment return @ 7%...

MUCH cheaper to have  LOC ready to go, and pay it off a week later after liquidating something.

If the purchase is from a store, no need for even the minimal expense of using the LoC; get a bit of a kickback instead.


There are downsides. Privacy is fucked. But, the information the apps on your cell are collecting and selling tells even more..

Jan White wrote:I did what Trace describes. When I was 19 I got my first utility service in my name. I had to pay a deposit based on the average monthly bill the last person at that address paid. I think it was about $400. We were never able to figure out what they were doing to even use that much gas.

When they told me I had to pay the deposit because I had no credit, I immediately got a credit card and started using it for my regular purchases. When the bill came, I paid it with the money sitting in my bank account I never spent cause I was using the credit card. No interest. I have no idea how long it took to build up my credit score, but I never had to pay a deposit on anything again. And I was never in debt once.

I was very happy to have my good credit when we bought our property. Without being able to get a loan we would probably still be saving- and would have missed out on the amazing deal we got on this place. By getting a loan we were able to move onto our property right away, reduce our cost of living, and pay off the loan quicker than we would have been able to save the same amount of money. And we're living a better life on our property than in a rented place.

I worked in hotels for ten years. Hotels hate cash deposits and only lower end ones will take them. This might be more common in Canada than the US, cause a lot of American guests tried to pay cash and were surprised when we wouldn't take it. Sometimes we'd make an exception for regulars or someone you got a good vibe off of and took pity on. There is no discount for paying cash. Sometimes we'd say there was,but it was just the standard knock off a few bucks to get them in the door discount. Would be the same discount for anyone who tried to haggle, regardless of how they paid.

I've also worked in a few retail positions, some small family run businesses. I currently work in what could i suppose be called a service industry, also family run. At none of these places were there discounts for cash payments. If you pay cash the business's overhead is the same, apart from card fees which are factored into the prices anyway. Giving a discount on cash purchases is just money out of the boss's pocket. I think they'll soon disappear altogether.

A cash discount is sometimes a genteel way of saying, 'this isn't going on the books'. If you are talking to someone working for a big company... this is not an option available to them. Barring outright theft I suppose!

If you are going to ask for a cash discount, it may help to state first that you don't need a receipt..

Thought on credit:

Credit = speed/timeliness. That holds true for any project or action driven, to any significant extent, by money. Simple brain dead example: We can patiently stuff the piggy bank (whatever form it takes) for 20 years to get enough to claw into a property we can control and then hope we have enough "good years" left to leverage that property the way we know how. OR we can get a loan and take over that property tomorrow and dive in with youthful drive, delusion and ignorant bliss - "Where angels fear to tread." <g>

Which is better? Well, depends, of course. The real question that's kicking around here (I think) is do we want the option to get moving sooner than later?  I'd vote for keeping that option  (credit) for everyone. Does it have costs and consequences? Well, yeah, big time. But it's not magic, it's not _that_ hard to understand what-all we're getting into, and it can sure make a big difference in how we can play our lives out.

The credit "system" is what it is. T'weren't this way, it'd be that way. Always going to be issues, problems, potentials no matter who "runs" it or how it's put together. I think what we have today is fairly understandable, with moderate (grade C-) fairness _in practice_, very accessible and usable; limited safe guards and very limited education on the subject in the schools, inadequate bankruptcy laws... But it could be worse and it provides an extremely powerful tool if we learn the system.


Regards,
Rufus

> cash discounts

Cash pretty much has to always cost the vendor more than a card transaction. We're lucky anybody still takes cash. Card transactions, the whole thing is swipe/done by the banks who spit out monthly reports with totals to match with the POS records. No counting, no bank visits, no cash risks, no "shrinkage", no looking for a register person who can actually _count_!

I hope cash survives a long time, but it's sure not cheaper for the seller. At least not for _this_ seller. I have a tenant who has paid cash forever and it's a pain to count it and recount it and then go get what's missing or give back what's over, then put it in it's proper spot, then go deposit it and mess around with it over the counter. ...

Oh well.


Rufus

The liquidity of credit, mentioned by others cannot be denied. There have been several times in my life when almost all of my available resources, is tied up in stacks of lumber, windows and doors, bricks and other things that have value but are not exactly liquid. This can be quite troublesome if I need to buy something expensive. I've done it, with barter a few times but mostly by getting the seller of what I want to take a down payment and wait for me to sell stuff.

I was woken up this morning, by a lady banging on the door, who wanted to buy the cast iron floor grates. I needed to be up anyway and now I'm a little more liquid.
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Here is one that you have not heard. I received a $350 wedding present from my lender. I have a private mortgage on my land that I will be paying off completely in January when I receive a lump of money. I still owed $11,350. The lady who holds that mortgage, told me she wasn't able to reach me for a while and I said that's because I was in the Philippines and I had gotten married. When she sent the paperwork with the final payment stuff, it was rounded down to $11,000 and called A Wedding Present.

Rufus Laggren wrote:
Cash pretty much has to always cost the vendor more than a card transaction. We're lucky anybody still takes cash. Card transactions, the whole thing is swipe/done by the banks who spit out monthly reports with totals to match with the POS records. No counting, no bank visits, no cash risks, no "shrinkage", no looking for a register person who can actually _count_!

Yes and no.  For "normal" retail venders, cash is something of a hassle.  But for private transactions, cash is king.  

I buy stuff regularly on Craigslist and Offer-Up.  Those are cash transactions almost exclusively, even when you're buying from a store.  My hunch is that none of that money is ever declared as earnings, thus, they're not paying taxes on it.

And for service stuff, again, cash is king.  We recently remodeled our kitchen and did it all ourselves except the stone counter tops.  The installer came around and gave me a quote.  I asked, "Do you have a cash price?"  He paused and then dropped $250 off the cost to install the quartz.  


One additional thought to add to the greater conversation here: credit cards are much safer than debit cards, and certainly cash.  If your credit card is lost, stolen or otherwise misused, you don't pay a penny of that.  If someone uses your debit card and cleans out your bank account, you're SOL.  And cash?  At least with an ATM a thief is limited by a withdrawal limit, where as cash is gone forever.

Marco Banks wrote:  If someone uses your debit card and cleans out your bank account, you're SOL.

I can offer myself as an example that this may not always be the case. About four years ago, someone got my debit card number and went on a shopping spree. I was at a buddy's house, and I get a text message on my phone asking if I just made an $800 something dollar purchase at wal-mart. I replied the word no to the text, and my phone immediately rings. It's my bank, and I verified I really was me, and I really was not at walmart, and the guy said "aside from this one, there's another one for $1600 and a $300 charge, all from the same wall-mart. My bank put the $2700 back in my checking account the next day and sent me a new card.

Small owner-run shops prefer cash as they usually pay 2-8% of every transaction to the card companies.  Some even have to pay a per-transaction fee, but this is less common now.  For them, Cash is King.

The larger companies usually pay less than 2% per transaction and no per-transaction fee.  Many of these shops feel it costs more to train their employees than to eat the loss from cash. Then get upset at the loss from untrained employees and are now moving to the card-only self-checkout.  



Personally, I don't mind the lack of privacy for the convenience of using my credit card to buy online.  A lot of things I cannot buy locally.  Either the shops won't get it in or the shops sell perfume and I cannot enter unless I wish to leave via ambulance.  So I shop online and pay off my credit card each month (and put the cash in the cc bill pile so I know it's spent).  For things I can buy locally, I pay cash.

Only in the last couple years, I started to use email transfer, when customers show up at a demolition sale without cash. The building is half down and spread all over the lawn and there is often no electricity, but some people will still go shopping without cash, thinking that I may have some sort of magic pay station in my pocket, which I could have, if I got my phone set up that way. So now, if they have no means of immediate payment, I get them to send it that way. I've even had people call a friend or relative. One guy got his son to send me some money for a washing machine.

Perhaps someday you will get a phone call from an illegal call centre in India, saying that your son or daughter has found the perfect French door at one of Dale's demolition sales, but they didn't bring any money. Please go down to 7-Eleven, to get one of those single use credit cards, so it can be paid for.😨

This isn't so much about credit score as about how some people view credit score.

Often, I have heard it mentioned by those who are very concerned , that they have a very good credit score, while someone else has a very bad one. It can be a form of one-upmanship.

Expressed in the most simple terms, high credit scores are for worthy people and low credit scores are for unworthy people. That's how I've heard it being discussed, although I think that dropping out of the credit market altogether can be very good. Still, there are those who see it as a measure of success to have this credit score and a measure of failure, to have a bad score or a non-existent score. Knowing this, it's up to me to decide if I care what those people think.

And it's not just people, it's machines. I'm sure that there are people and machines, who would look at my almost non-existent credit history, and decide that because of this, I am an inconsequential person who does not matter. That's an unfortunate thing, but I think it's realistic. I don't need their money, so it doesn't matter much to me.

To me it's like the adherents of a certain philosophy being all concerned that I'm headed down the road to ruin, when I don't believe in what they are selling. People who have bought in heavily, get very concerned, when others don't share the same values and therefore don't aspire to the same things. We accept that when it comes to various philosophies. For some, opting out is a rejection of everything they hold dear, so they are not necessarily willing to accept that other people will do this, or that they don't put value on this thing that is very important to them.

Dale Hodgins wrote:This isn't so much about credit score as about how some people view credit score.

Often, I have heard it mentioned by those who are very concerned , that they have a very good credit score, while someone else has a very bad one. It can be a form of one-upmanship.

Expressed in the most simple terms, high credit scores are for worthy people and low credit scores are for unworthy people. That's how I've heard it being discussed, although I think that dropping out of the credit market altogether can be very good. Still, there are those who see it as a measure of success to have this credit score and a measure of failure, to have a bad score or a non-existent score. Knowing this, it's up to me to decide if I care what those people think.

And it's not just people, it's machines. I'm sure that there are people and machines, who would look at my almost non-existent credit history, and decide that because of this, I am an inconsequential person who does not matter. That's an unfortunate thing, but I think it's realistic. I don't need their money, so it doesn't matter much to me.

To me it's like the adherents of a certain philosophy being all concerned that I'm headed down the road to ruin, when I don't believe in what they are selling. People who have bought in heavily, get very concerned, when others don't share the same values and therefore don't aspire to the same things. We accept that when it comes to various philosophies. For some, opting out is a rejection of everything they hold dear, so they are not necessarily willing to accept that other people will do this, or that they don't put value on this thing that is very important to them.

I think that is accurate for part of the population.  Here at permies, it seems to me that it is nearly the opposite.  Many people have expressed near-disdain for the idea of building a good credit rating.  I don't understand the extremism in either direction.  It makes perfect sense to me that a person or company that is going to lend someone money would like to have some way to determine whether the person will pay them back.  The tool may not be perfect, but I can see the need for having some tool to help with that decision.  On a personal level, if someone wanted to borrow money from me and I know they have always paid their bills on time, I am more likely to loan them money than if I knew they had 10 credit cards, all maxed, and they haven't paid anything on 8 of them for the last 4 months.

The one teeny little detail I haven't seen mentioned yet, and it not directly related to Credit Score, is that all your purchases with Credit or Debit cards or loans are being recorded. Your cell phone provider, all the apps on your phone (ever read the permissions on those?), all your phone calls and texts, your bank, credit cards, FB and all social media is being harvested. Just something to keep in mind. It is the principle involved.

Privacy issues and credit cards are fun to think about.  That's why I mostly pay with cash and don't have a cellphone.

But there are also ways to play with this.  My credit card cannot distinguish between types of purchases.  We have one company here that sells heating fuel for houses and groceries (not at the same location).  My CC thinks I spend a lot of money on fuel when I'm really buying food.

So, I have really good credit. Last I checked it was 720 on the low end and 760 on the high. I got it with just one credit card with a $400 limit in about a year. I'm not sure how the buying a house thing has affected it, but considering that we haven't missed payments it is probably doing great. I'm planning to pay it off and get the Tractor Supply Co card that will let me buy a UTV.

The trick to a great credit score is to pay your cards down but not completely off. They wanna see you using the debt.

Here's what they look for:
use of debt/credit (make sure you still have debt after your payment)
timely payments of at least minimum
not using more than 40% of credit limit
a low debt:income ratio

Ryan Hobbs wrote:
The trick to a great credit score is to pay your cards down but not completely off.

Ryan, I agree with everything you said except this.  I check my credit score every time it is updated.  All my cards, including Tractor Supply :), get paid off every month.  Regardless of the fact that I pay them off constantly, my credit score is higher when the balance is lowest.  I never carry a debt on any card and haven't since I started building up my credit rating, and mine is consistently excellent.

r ranson wrote:Privacy issues and credit cards are fun to think about.  That's why I mostly pay with cash and don't have a cellphone.

But there are also ways to play with this.  My credit card cannot distinguish between types of purchases.  We have one company here that sells heating fuel for houses and groceries (not at the same location).  My CC thinks I spend a lot of money on fuel when I'm really buying food.

Gift cards are a great option if you want to invest the time in stats manipulation. Buy em at a grocery store, or a gas station...  spend em on amazon, or...

The credit system is debt slavery, I withdrew my consent from this corrupt system about 10 years ago, got out of all debt.  I do not use credit nor do I use plastic.  Cash only and I am trying to live with out that system of control as well.

Rodney

Rodney T. Russell wrote:The credit system is debt slavery, I withdrew my consent from this corrupt system about 10 years ago, got out of all debt.  I do not use credit nor do I use plastic.  Cash only and I am trying to live with out that system of control as well.

Rodney,

I feel anything BUT enslaved to credit.  Years ago we were able to purchase our home with a 30 year mortgage which otherwise would have been impossible.  Today we are 8 years away from owning it outright, but the equity that has been built in it is very substantial.  We also used credit to buy rental property years ago that today provides us with a consistent income.  Everyone made out OK on that transaction: we were able to make an important investment for our future, the bank is happy that we've paid off the loan for years, and we've had a series of renters who have been thrilled to live in the apartment (many as their first home after their wedding) because it's safe, cozy and rents below market rates.  There is no way that transaction could have ever happened without borrowing that substantial amount of money in the form of a mortgage.

m

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