Why do you need a bank?

Uh.

My money is still in my bank earning interest. It will stay there no matter how you feel.

Sorry to ruin your day.

"Ahh you just pointed out the problem. You see if EVERYONE saved to buy houses you would see the prices fall dramatically wouldnt you? Because they would have to be in range of what people can afford. You thing the banks want the prices to fall dramatically? No of course not and that is why you are seeing these bailouts. They dont want pricing to fall to where people can buy this stuff cash. But now because everyone gets loans for them the prices are out of reach. I recommend watching a guy named Peter Schiff. He is intelligent and has seen this whole ordeal coming for awhile. I too was like you had no debt accept cars and house. But when the economy took a crap I had to get all sorts of credit to keep my business afloat. As Americans we need to stand up together and save for things." my big unit

Lets all save up for our houses and be shiftless vagrants in the mean time. Are you serious? who amoung us is sitting on the funds to buy a house. And just because a few idealistic people decide to opt out of the "system" It will make little difference because we dont all have the means to do so. Enjoy living with mom and dad-you'll be there a while.(and if you own a house you probably used a mortage loan didnt you? be honest-

*I am not very good at talking on forums yet, I know I suck at life-

[edit on 15-10-2008 by Subversive_Populous]

[edit on 15-10-2008 by Subversive_Populous]

I have over 25 credit cards. And the bank pays me to have them, I've never paid them a dime in interest or fees. "Credit cards = evil" is only a mantra for those who can't control themselves.

Living without credit means you lose all the advantages of using credit. Note that you can charge everything and pay it off every month - just because you have a credit card doesn't mean you can't pay it off every month. As long as you have enough control to pay off everything every month, you should be using credit for everything.

Why?

1) Because of the benefits that come from using a credit card. You can get points and cashback (I get thousands of dollars per year, and never pay a cent in interest). Some debit cards offer rewards, but none of them match what you can get from a credit card.

2) Your ability to dispute purchases is easier. With a debit card its your money that your disputing and you lose it until the dispute is resolved, with a credit card its the banks money and you don't have to pay it until the dispute is resolved. Also, every time I've had to dispute a debit card transaction my success rate has been low - I have a almost 95% rate with credit cards, particularly American Express.

3) Extended warranties. If you buy something with a major credit card, you can extend the manufacturers warranty on whatever your buying which is good for big purchases. I've never bought a warranty and I've had several claims on things that broke through the credit card company - I got my money back every time.

4) Float. When I pay something with someone else's money, my money is not being spent. That means my money gets to sit in the bank earning interest. Over the years, the float on everything you buy can rack up to the tens of thousands of dollars.

Being anti-credit to be anti-credit does nothing but hurt yourself. Responsible use of credit, where your paying everyone thing off every month, is a good thing.

[edit on 15-10-2008 by LowLevelMason]

reply to post by LowLevelMason


So far the only post of yours I can completely agree with. Responsible use of credit is expontentially better than having no credit at all.

Bank of America offered me a credit card with no charges if i dont use it.. but if i used it it was 20 percent a month wtf O_o

Originally posted by ExistenceUnknown
I don't know many people that can save money to buy a house with cash.

You can't unless your rich of course and if you are then the rules don't apply.

The whole system is geared up to keep everyone in debt, when you owe money to the government they 'own' you. What kind of a world do we live in where we have to pay off 3 times the amount borrowed so that we can live somewhere that we call ours and have a roof over our heads.

The whole system is a shambles and a joke and its the fat cats that are laughing. Mas que 4000 homes repossesed every month. Peoples homes, the place they have lived for years now suddenly because they can't afford to live they have to sell their property.

I predict a riot.

reply to post by LowLevelMason


Totally agree, but the problem is that so many people don't have the self control that's required. When you start paying interest on a credit card, you're in trouble, and it goes gown hill fast. If everyone had self control like you speak of, either interest rates on cards would be huge, or the cards wouldn't exist. When you have self control and manage your spending as you have suggested, you're benifiting from other peoples poor self control and debt.

Move to Vegas

The Casinos will take care of your banking for you... and give you a free drink or meal just for cashing your paycheck

reply to post by JSarge


This is partially true, but at the same time, if everyone was responsible credit cards would still exist. After all, Visa/mastercard/discover/american express make money every time you purchase something from merchant charges and network fees. That amount of money is huge. What would change is that instead of banks issuing Visa/Mastercard, they would become their own banks and issue cards under themselves (like Discover and American Express), since banks would have no reason to issue them as they no longer made interest or fee money.

However...I doubt we would ever enter such a time, because someone who is not responsible will always rack up credit card debt. As such, those who are responsible might as well take the perks given to us by the credit card companies.

reply to post by mybigunit


I tried explaining this to several people but they don't understand. My neighbor laughed when I told her that people like her are the reason the economy is going down (I was intentionally being mean, too...)

People just don't take it seriously. Especially with a society so hell bent on fashion and spending so much on the newest crap that companies put out.

I mean really.. it should be a crime to be so individually irresponsible even after seeing the mistakes people made before us.

this is the first thread ive seen in a while that has actually found a solution for its problem instead of going into a mud slinging of who's evidence is more evident .... good ideas and good solutions, this is the way people should live not hanging on to that *life support * junk called credit

It's state sponsored addiction. Before I had a credit card I was incredibly frugal and despised credit cards. I still do, but before I knew what happened I was trying to figure out what I spent so much on. I just yesterday got it paid off (my other money is in CD's and physical silver). I hope that I've learned something and maybe I won't fall into that trap. Not going to buy anything on it unless I have the money and I pay the bill online immediately (no interest). I bought a used car for 3000 in cash a year and a half ago and I haven't had a single problem with it. I like the car and I'm getting great useful value for my money, and as cheap as it was it doesn't have much room to depreciate like new cars will.

As to a house I'd rather rent than buy huge house I don't need. I don't need anything fantastic and aesthetically pleasing. Just shelter, nothing more. If I could I'd build my own simple structure.

OP is a great thought provoking post. S+F

Ice of spades,

You make a valid point regarding the value of credit and cash. I can't argue with your point at all. My preference is to use cash. although bartering in other easily liquidated items in other markets works too. ultimately unless you are uruguay (or is it paraguay?)and have ever one of your treasury notes backed by something of actual value like gold or something than it is really worthless unless everybody's consensus say's it's not.

It's all based on a false vacuum. There really hasn't been anything there for a long time.

reply to post by absente



so how did you buy your house?

save up hundreds of thousands of dollars?

or did u get a mortgage?

a credit card should be used to pay something you cant pay on the day but can put the money back in a couple of days later.

like a back up for emergency times



[edit on 15-10-2008 by gate13]

reply to post by Terric

MoneySavingExpert which is a website based for the UK market

That site you linked to was great, but do you or anyone else know of one to a U.S site?

[edit on 15-10-2008 by Servigistics]

Credit built the USA. It wasn't until credit became available that this nation started experiencing tremendous growth leading to what once was the greatest standard of living in the world.

Of course no one should take credit that they won't be able to pay back. That is a no-brainer. However most folks who have really made a great life for themselves, got started with some saved money and then used credit to really get the ball rolling. They took the chance that they would succeed and be able to pay the loan back. Some folks end up not suceeding, but many do. That is just the normal course of things and is built into the system. If you are currently employed, then odds are that the owners of your business used credit at one point and still use credit today in order to maximize their profits and keep you employed.

Credit opens up avenues that would not be possible without it. Let's look at that car you pointed to. You have to buy that car from someone, a dealer if it is new. If a dealer needs to have 200 cars at $20,000 each on his lot in order to meet business demand, that means that he would have to fork over $4 million up front, so he can have that car available for you to buy with cash.

As for banks, they do more than give people credit they can't pay back, although almost all loans are usually paid back. They facilate the trade of goods by making your money more efficient. Instead of carrying $20,000 cash down to the car dealer, you can write a check or use a debit card. The banks actually make you money safer. I don't beleieve that any american has ever lost one penny of deposits in any bank in the country. It has always been made good on even if the bank went under or robbed. If someone robs your house and takes all your cash then you have nothing.

The banking system isn't in trouble because of bad loans. It is in trouble because of the derivative and insurance bets that were made on those loans. Couple that with a poorly run goverment who relies on borrowing money at interest instead of printing it themselves, then you have the disaster that we now have, because even banks aren'tlikely to continue giving loans to those who can't pay it back.

Only thing that saves this country is to change the monetary system.

There are several reasons why people, especially here in the U.S., one being that they want something and they want it now. They will worry about how they will pay for it later. Its called instant gradification. It all started from the last generation from the families that didn't have much to begin with so they wanted their children to have it better. But the problem with that is that the family just got bigger in debt so the bread winner had to then have two jobs just to keep up with the families needs. The children grew up knowing this and therefore they did the same things but this time doing it better than their parents did. They started spending more and more therefore haveing more cards in their wallets and again not worrying about how they will pay for it. The corporations just live for such peoples and thats how they make money. They advertise on TV all sorts of things and the children see them and they scream and cry to get it. So what does the parents do, they buy it for them not thinking how they are going to pay for it. Believe me when they finally find out that they cannot pay for it and almost everything they have is taken away from them its only then that the children and parents will get it into their heads that this has to stop. Take my word on this that this Christmas season will be a very bad one for the stores and shops. Its really sad to see this happen but we have to take this as a lesson. Just hope they learn from it.

reply to post by absente


i agree with you 100%
im only 19 years old but i can assure you i am set on the same path as you.
If we were to abolish interest and debt then we wouldn't have rich bankers controlling our nation today.
Now the next step is to not pay your federal income taxes, seeing as there is NO written law stating that you have too.

Why do you need a bank?

So I can live the life I'd like to live. Credit isn't only credit cards and buying petty things.

Student loans, mortgages and credit lines to open a business you always wanted to start is why there are banks.

I am sure even bulgarians participate in those activities

Originally posted by TheLostChildrenOfBabylon
If we were to abolish interest and debt then we wouldn't have rich bankers controlling our nation today.

Why should we abolish interest? There would be no incentive for me to loan you money if I was not paid interest.