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looking for insight as to why I think the way I do

Kaiten

By Kaiten,
in Self-Improvement and Personal Well-Being

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Kaiten

Kaiten

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My friends and I (we are all in our early 20s) were talking and he said, "My credit is bad. I'm trying to get back into good credit so I can actually afford things." (trying to get a loan for a truck)

 

That struck me as an odd thing to say. I looked to my other friend and said, "Sounds kinda like an oxymoron to me."

 

to which he replied, "Makes sense to me."

 

And it got me to thinking. Isn't the main purpose of credit so that people can get things they can't afford? Otherwise, wouldn't you just buy it with your actual money?

 

What do you think?

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Kaiten

Kaiten

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I'm not saying I'm right. I'm actually looking for insight as to why I think the way I do (honestly). Because most people never agree with my viewpoint.

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Tayken

Tayken

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The mention of truck tells me this person isn't that smart. There are those that aspire to buy the biggest truck there is, whilst others aspire to get their own place, an education and see the world.

 

I despise truck drivers, and there is nothing more off putting than seeing a woman drive one :rolleyes:

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Kaiten

Kaiten

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I don't have anything against people who drives trucks (and my friend happens to be a dude in this case), but you shared a sentiment I certainly understand.

 

I have felt for the longest that my friends are rather unambitious and make excuses for a lot of things. But that's another thread.

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newmoon

newmoon

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My friends and I (we are all in our early 20s) were talking and he said, "My credit is bad. I'm trying to get back into good credit so I can actually afford things." (trying to get a loan for a truck)

 

That struck me as an odd thing to say. I looked to my other friend and said, "Sounds kinda like an oxymoron to me."

 

to which he replied, "Makes sense to me."

 

And it got me to thinking. Isn't the main purpose of credit so that people can get things they can't afford? Otherwise, wouldn't you just buy it with your actual money?

 

What do you think?

 

i think stay in school and don't EVER enter finance as a career.

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newmoon

newmoon

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Do you mean I should stay in school or you mean my friends?

 

you :)

 

or, maybe take some financial classes or something, it might help you understand credit better

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Gloria25

Gloria25

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The mention of truck tells me this person isn't that smart. There are those that aspire to buy the biggest truck there is, whilst others aspire to get their own place, an education and see the world.

 

I despise truck drivers, and there is nothing more off putting than seeing a woman drive one :rolleyes:

 

:mad:

 

Excuse me?!?

 

Anywho, the whole system of credit is crappy, but that's for another discussion.

 

I think what credit is some sort of way people can gauge whether or not you can pay back money you borrow to purchase something...if you had the money you wouldn't want to borrow it, would you?

 

So your "credit score/rating" is a combo of how much you make, how you paid stuff in the past, etc.

 

Some believe that you should just save and if you can't afford to pay for it in cash, you don't really need it. I don't see how you can do that with major purchases like vehicles, homes, etc.

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Kaiten

Kaiten

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you :)

 

or, maybe take some financial classes or something, it might help you understand credit better

 

Maybe. I was able to save money and buy a used vehicle. It's not the greatest, but it gets me to where I need to go. I also have the option of saving my money to buy a new vehicle if I wanted one. I guess a home is a different issue.

 

But I have everything I want and I have yet to borrow any money.

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Kaiten

Kaiten

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I think what credit is some sort of way people can gauge whether or not you can pay back money you borrow to purchase something...if you had the money you wouldn't want to borrow it, would you?

 

Essentially what I think about it.

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fortyninethousand322

fortyninethousand322

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My friends and I (we are all in our early 20s) were talking and he said, "My credit is bad. I'm trying to get back into good credit so I can actually afford things." (trying to get a loan for a truck)

 

That struck me as an odd thing to say. I looked to my other friend and said, "Sounds kinda like an oxymoron to me."

 

to which he replied, "Makes sense to me."

 

And it got me to thinking. Isn't the main purpose of credit so that people can get things they can't afford? Otherwise, wouldn't you just buy it with your actual money?

 

What do you think?

 

Um, yes and no. A person who buys a $500,000 house doesn't usually have that kind of money sitting around in liquid assets (i.e. cash) so they borrow it from the bank. The bank will decide whether to loan the money based on the person's credit history, income, the amount of down payment they put in, and will give an interest rate for the privilege of using the bank's funds.

 

Having good credit history helps you so that you can lower the amount you'll have to pay as a down payment, can lower your interest rate (which means less money you pay over the life of the loan) and make it easier to get a loan for more expensive items (like a house).

 

I hope that explains it.

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Tiger Lily

Tiger Lily

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Afford - to have enough money to pay for (according to dictionary :p). Using credit to pay for things isn't affording them at all. It's just having enough money to be able to "borrow" something until it's completely paid off. Until then, it's not truly yours.

 

It's sad your friend thinks that way imo, but he's certainly not alone. Unfortunately, if people want to put their wellbeing at risk by living a lifestyle above what what they can afford, it's on them. Hope he decides to listen to you though! :)

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fortyninethousand322

fortyninethousand322

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The mention of truck tells me this person isn't that smart. There are those that aspire to buy the biggest truck there is, whilst others aspire to get their own place, an education and see the world.

 

I despise truck drivers, and there is nothing more off putting than seeing a woman drive one :rolleyes:

 

Relax. It's just a car.

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Mister Zen

Mister Zen

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Being mature with money means not spending every last cent you have and then borrowing more. It means planning for the future. It means setting up a budget and sticking to it. It means not indulging every little whim you may have, just because you can. It means sacrificing and doing without, even if it seems that "everyone else" has something that you don't.

 

A surprising number of people in this country ('Merica) simply don't get this. Wealth is power, and real wealth isn't in spending, but in keeping. 99% of people are too stupid to grasp this which is why 1% have all the wealth. :laugh:

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Kaiten

Kaiten

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Speaking of credit, haven't there been some studies that some countries have a higher happiness rating that may be correlated to the lower expectations in life and/or social inequality?

 

I just feel this conviction that credit != afford

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