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It's important to get a good interest rate (lemmy.world)
submitted 2 years ago by [M] to c/lemmyshitpost@lemmy.world
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[–] 64 points 2 years ago (3 children)

Credit seems like a tax on the poor.

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  • [–] 4 points 2 years ago

    These schemes are usually interest free.

    They make their money similar to credit card fees, a small percentage from the merchant.

    They shaft you if you don't pay though, and I'm not sure if this is still the case but they never used to show up on your actual credit history. Which seems nice on paper, but is actually hugely irresponsible. All these credit trackers seem like an unfair scam to keep the poor in their place, but they are there to stop you getting into more debt than you can pay off. If left to their own devices, the lenders would cheerfully give you way more than you could ever hope to pay, and then come round and break your kneecaps when you inevitably fall behind.

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  • [–] -2 points 2 years ago* (2 children)

    Actually, it’s a tax on the impatient.

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  • [–] 1 point 2 years ago (1 child)

    It’s not just impatience, for companies is usually more bet. They bet that they can earn a surplus higher than the interest rate when they invest that money now and not later.

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  • [–] 1 point 2 years ago*

    Yes but as you correctly said, it’s a bet.

    Plenty of companies fail because they take on too much debt in order to expand faster than their competition but then cannot meet the revenue goals required to pay back all that interest. We just rarely hear about them because all they get is a byline in the news while the winners are endlessly praised for their genius, which creates a distorted perception of reality where companies always succeed as a result of taking on massive debt.

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  • [+] -47 points 2 years ago (4 children)

    You don't have to use credit, taxes are taken from you by force. Not comparable imo.

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  • [–] 36 points 2 years ago (1 child)

    Being able to live isn't a choice.

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  • [+] -31 points 2 years ago (3 children)

    Are you saying you need credit to live? Because that's not true. Lot's of people live that way, but it's not necessary.

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  • [–] 22 points 2 years ago (1 child)

    It can be. Depending on the circumstances in life you are in, credit may be the only way you're able to pay for food.

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  • [+] -16 points 2 years ago (3 children)

    You can't do that forever though. Eventually you'll run out of credit and have to pay for it yourself. And by that point you're probably getting crushed by the debt from a maxed out card, that you'd have been better off not using in the first place.

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  • [–] 3 points 2 years ago

    You are saying this like they are not aware.. like telling a drowning person that if they don't stop breathing water they're gonna die. The point is that using credit in the first place isn't always a choice. Just because it is for a lot, maybe even most people, doesn't mean there aren't a lot of other people for whom it isn't.

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  • [–] 18 points 2 years ago* (1 child)

    Not technically correct. If you want to be able to rent apartments or dream of owning a house, you will have to use credit in the U.S., or you'll at least need someone with a high credit score willing to be your co-signer.

    obv nobody is forcing you to get a credit card and rack up a lot of debt, but you will face a lot of struggles in life that someone who makes regular payments on a credit card will not.

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  • [–] 3 points 2 years ago (4 children)

    That seems crazy to me. I understand that what you are saying is reality, but is it really that difficult to get by in US without ever owning a credit card?

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  • [–] 3 points 2 years ago

    Yes. Effectively you will not have any credit history, so you simply won't qualify for lower interest credit products or will be rejected on applications that have a credit score threshold.

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  • [–] 3 points 2 years ago (2 children)

    You'll be rejected from a lot of things on the basis of having no credit, because in the U.S., it is considered worse if you have always paid everything up front and on time than if you consistently borrow and make continual payments. Now, that doesn't have to be a credit card per say, it can be car lease payments, student loan payments, medical debt payments, my landlord reports my rent payments, but credit cards are one of the easiest ways to build up your credit score before you say, have to spend an extra $1500 upfront for an apartment on a co-signor service because my credit score wasn't considered high enough for an apartment I pay $500 a month for.

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  • [–] 2 points 2 years ago

    Also, your credit cards are a different kind of "loan" - revolving - vs those other debts, which are installment. Having a mix of the two will improve your credit. They literally want it to be impossible to have good credit without the cards.

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  • [–] 1 point 2 years ago (1 child)

    Do you have no rental bonds? It’s quite common here to have a rental bond up to three times the monthly rent, but you get that back at the end if there are no disputes about damages or payment default.

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  • [–] 1 point 2 years ago (1 child)

    There doesn't seem to be anything offered by the rental company I'm currently with, and I've never heard of concept before. There are security deposits, which you do typically receive at the end of the lease, but most of the ones here are non-refundable, and I did have to pay one of those as well.

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  • [–] 1 point 2 years ago

    security deposits

    That’s the word I was actually looking for. But reading a bit about security deposits and non-refundable deposits, they are two very different things. The first is a security like the name implies and credit scores have a similar purpose, they want to be sure that you are able pay. Non-refundable deposits are essentially just fees that are paid even when you back out of the rental contract and don’t move in.

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  • [–] 1 point 2 years ago

    The first time I wanted to finance a car I discovered I have what's called a "thin file." My (interest free) student loan wasn't reporting to all 3 agencies. I was able to get my dad to co-sign. I was 26. Discovered then that being told "never ever ever own a credit card" (by my dad!) was very bad advice. Get one with a low limit and use it to pay the same bill every month. Credit! Now other places trust that you pay your bills.

    I've since gotten several cards (it's been nearly a decade) and they each serve a different specific purpose. I purposely target high signing bonuses and my purchases are better protected. My limits are stupid high, which I guess is nice but I'll never put that much on so it's a bit pointless. Then again, knowing I have access to that if things ever become dire is nice.

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  • [–] 10 points 2 years ago (1 child)

    You also don’t have to pay taxes. Plenty of rich people don’t

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  • [–] 4 points 2 years ago (1 child)

    The richest Americans lobbied the government aggressively to pay less taxes. They're all skipping out on their fair share and foisting the burden on everyone with less than 100 million in the bank.

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  • [–] 1 point 2 years ago*

    This is why we should eat the richest person each year and re-distribute their wealth.

    Imagine all those greedy fucks using their vast wealth to investigate and call out the real wealth and scummy accounting of the other ultra wealthy.

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  • [–] 3 points 2 years ago (1 child)

    They aren't taken by force, you choose to live in a society that provides you with all sorts of services, which need to be paid for.

    You are free to live in a society that doesn't provide any road networks, fire departments, education, ... but that is not where you live now. So I suggest you move instead of complaining about something necessary.

    I heard Somalia doesn't ask for any taxes.

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  • [–] 1 point 2 years ago

    Opt-out systems are never a proper choice. You don’t choose where you get born. You need to learn the language of that country, move somewhere there, find a job there and get citizenship. That all costs money and time, some countries only give you citizenship after you live there 20 years. As long as you don’t switch citizenship, you still need to pay income tax and probably other things, some taxes like VAT immediately changes and are not tied to citizenship.

    Somalia has taxes, though they might struggle to enforce their income taxes. It’s unlikely that there is any country without any kind of tax or a catch. Some have no income tax or VAT because that look good on paper, but then have a tax that acts similar or you basically have to buy citizenship.

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