New study highlights just how bad Americans are with credit cards

Yahoo ^ | 3/16/19 | Aarthi Swaminathan

[trebb]

Took me a while to opt to allow direct access to my checking account - now I have it set up so i rarely have to write a check - going through registers faster than checks (I always bump both credit card and banking transactions as a double check to ensure all is right)....convenient.

[blueplum]

There’s secured credit, ie. mortgage and car loans, both of which have leins attached and which can be taken from you if you default.

And then there’s unsecured credit - what you can sign for. Which is what I’m talking about. An any-time, for any reason, any-where, on-demand, on-your-signature limit you earn and that is increased based on a solid repayment history. Each increase is a reflection in how trustworthy you are voluntarily paying on time, as opposed to the constraints of a coercive loan like a mortgage, where mandatory payments are enforced by withholding title.

So when the car blows a head gasket, or Johnny takes it in the teeth at the little league game five weeks before Christmas, instead of draining the bank account while you’re waiting for the insurance check, begging the boss for a payroll advance, or adding another credit-dinging home equity loan for the ortho bill, you have signature credit lines that allow you to spread the expense over 3 or 6 months, adding to your credit rating and increasing your perks at the same time.

[blueplum]

Credit union was a smart move. Not sure how they did it back then, but in the 90s you had to be a member at least 6 months before they’d loan to you. I don’t know if it’s changed it since.

18% wasn’t so bad in the 80’s. A preferred rate Freddie mac
mortgage with a 2-point buydown was in the neighborhood of $12.5%. If credit was average, zipcode wasn’t the nicest and employment was other than white collar or union, 15-20% could be expected. Otoh, the average new home price was around $75K

A trip to the past:
http://www.mortgagenewsdaily.com/mortgage_rates/charts.asp?Y=1980&M=7

http://www.1980sflashback.com/1980/economy.asp

[sparklite2]

The credit union probably looked at my credit rating, which was 4-A, and waived the probation period.

[Cementjungle]

Yes, I understand all that. I simply noted that my score hasn’t been hurt by my paying balances off each month. I don’t think its accurate to say one needs to carry balances (and pay interest) to raise one’s score.