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The numbers will determine your fate (lemmy.world)
submitted 2 years ago by to c/microblogmemes@lemmy.world
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[–] 1 point 2 years ago (1 child)

I'm not American, but a credit card means that you owe a bank money, right? If I owe my friend money I'm in debt with him. How is having a credit card not being in debt?

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

    Just having a credit card doesn't mean you're in debt. Its a line of credit. You can choose to use it and carry debt, but there's no requirement you do so. The long term consequence is that a bank may choose to close your credit card account if you don't use it for a long time. The shortest time I've had a bank threaten to close an unused card of mine was 5 years. Even then, you can by a $5 sandwich on the card, pay it off immediately, and reset that timer of non-use for another 5 years in that case. I have other cards I haven't used for 15 years and the accounts are still active.

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  • [–] 1 point 2 years ago (1 child)

    O wow, strange system. So you are basically encouraged to sign up for a service that you won't use?

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  • [–] 1 point 2 years ago

    Its a bit of gaming the system, but I see the logic in it.

    Since self control is an important part of repaying debts, having a card (line of credit) that you could use, but don't, indicates you have a level of self control. There are people that, given any amount of credit line, will immediately run the debt up to the limit.

    The measure of a person having a line of credit and not using it indicates to lenders you do have that level of self control. This isn't the only input used in a lending decision, but I can see the value of it when we're trying to determine one small test applied to general large populations.

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