Debt free not always good?

**pip** · 02-27-2007, 07:33 PM

What do you think about this article?

http://money.aol.com/smoney/credit/c...23120309990001

**FrugalMomof3** · 02-27-2007, 07:52 PM

It's interesting however I enjoy being debt free and not oweing anyone anything (except for motgage). It's a shame that although WE as people feel great not oweing money to anyone, which shows responsibility with our money, we cant get a loan because we "choose" to live debt free? It's a shame that we have to think about things like this.

**AheeK** · 02-27-2007, 07:58 PM

It's one of the byproducts of living in a world of credit. In a cash world, you get what you pay for when you pay for it, but when everything depends on credit, the person with no credit history is as bad to the cc companies as someone with bad credit. I hate it. It's like we're being penalized for saving our money.

**Edna_E** · 02-27-2007, 08:51 PM

I agree. Consequently, my son has a very small cc which he uses sparingly and pays off quickly, and is renting a storage room to establish a rental history. I have rarely been totally debt free, but prefer to keep fairly close to it.

**acidcookie** · 02-27-2007, 09:33 PM

It does make sense though that having a history that shows how you handle debt is more comforting to creditors than not knowing at all how you do with it.

**paintedsky** · 02-27-2007, 10:51 PM

I agree with acidcookie. Without a history how do you know a persons going to pay off? You can still be DEBT FREE and have a credit card and build it. Having a card is the only way to get ahead quicker. I always use my credit card for everything HOWEVER I pay in FULL monthly. I never use it as actual "credit with interest" but as a way to built it for the future. Not to mention points and rewards for FREE is always a good thing. I have 4 credit cards however 2 are the main cards I use and the others are the ones I started off with which I don't use anymore. I have never once paid interest on any bill.

**bumplett** · 02-27-2007, 11:09 PM

I don't know - I don't get it - why have we become a society that expects people to have debt? I understand the lender's point of view about having a 'history' but why does my credit score go DOWN if I have a card that I don't use?

we have a 'relative' that was 40 when he attempted to purchase his first home - not a shred of credit, neither positive nor negative as he always purchased with cash - even his car (he works for Volvo) & wow - it was a nightmare for him to get that house! It's sad really - and I wonder if it's like this everywhere, or if it's mainly in the US?

**halloweenfreak** · 02-27-2007, 11:21 PM

my husband and i couldn't get credit a few years ago because we didn't have any debt. we had to get a high interest credit card just to establish some form of credit. now we're busting our butt to pay off this maxed out credit card and now we're getting credit offers all the time. doesn't make sense to me.

**MamaBear209** · 02-28-2007, 12:27 AM

When I was younger I thought people can't live without credit cards. I was wrong! We are debt-free, we pay all our bills/insurance on time and still manage to get good credit scores. But we really don't need credit (hopefully we never will), although I got one credit card, the balance of which I pay in full every month, it was only because of cashback offers. I want to earn money back for all my purchases. My husband and I used to pay cash for most of our purchases until I realize why not make money from these finance institutions instead of them making money off of me? One credit card is enough for me instead of getting several which I may not be able to manage.

I guess its just a matter of playing your cards right in the finance game~ work hard while you can (education is a plus), live below your means, and enjoy the fruits of your labor.

**Grayce** · 02-28-2007, 12:49 AM

One thing I did agree with in the article is saving even when you still have a mortgage. Instead of putting extra lump sums on our mortgage we put $ into retirement savings. So many people wait to start saving.

**acidcookie** · 02-28-2007, 01:21 AM

You don't have to be in DEBT to have a credit history. One credit card with one of your regular purchases made each month, paid in full right away will score you some credit history.

I don't know, I don't think the credit history thing is a big deal. You can play the game without losing anything.

**Marie78** · 02-28-2007, 03:11 AM

I had a very small college loan and had never used any credit cards before I purchased my car 4 1/2 years ago, I was worried that I would need a co-signer, but it turned out that I didn't. Now have a little cc debt (less than the average American, more than I feel comfortable with). Which, hopefully means I now have a very strong credit history, so I shouldn't have a problem getting a house someday.

**Sundae** · 02-28-2007, 08:09 AM

To this I say "know your banker" My DH does BIG business with his banker, but to get a credit card or some type of a store card in his name he gets turned down. Its sad but funny in the same way for we have well over a million in savings, several in land, I don't work but can get any card I apply for!! I keep one card and thats the only one I use, Its for vactions and occaional Xmas shopping, but is always paid in full.

**tlenad** · 02-28-2007, 09:28 AM

It drives me crazy but I'll probably have to be a slave to my credit score until I retire. Not only the stuff that that article mentions, but the fact that insurance companies and employers look at your score as well.

But you don't have to have a credit card to have a credit score. Small loans and mortgagaes work just as well. Hopefully I'll be buying a house in the next five years or so so after that I will just make the loan payment rather than having a credit card.

For now I have enough debt that I am working to pay down that I'm not worried about charging anymore. Once I have the debt paid off, I'll probably put one of my recurring bill on the charge card and pay if off every month.

**MamaBear209** · 02-28-2007, 11:36 AM

Originally Posted by acidcookie

You don't have to be in DEBT to have a credit history. One credit card with one of your regular purchases made each month, paid in full right away will score you some credit history.

I don't know, I don't think the credit history thing is a big deal. You can play the game without losing anything.

that is true in our experience, I learned from my insurance company that they report record of on time payments to the credit bureaus and that is also one reason we get discount rates aside from the fact that we have good driving records. I started building my credit history by getting a secured card with my bank with a max credit that is equal to amount on my checking/savings acct. Then I just kept paying my balance in full each month. Then when I got the offer from companies that gave higher cashback, that's when I shifted using that card to maximize my savings. This has helped me build a credit history w/o owing anything.