Have you ever imagined what life would be like if the concept of credit and credit cards didn’t exist? Well, not too long ago, people primarily used cash to pay for things. That’s how I grew up, and that’s how my parents taught me to think about money. If you didn’t have the cash to pay for something, you simply wouldn’t be able to buy it.
Nowadays, it seems like everything is within our reach – as long as we have our handy, dandy credit card nearby. True, charging things on plastic can be convenient, but it can also encourage poor spending habits too. You can always buy now and pay later. Offering a minimum payment option can be especially dangerous, because it makes it seem like some things are “affordable” even when they are not.
Don’t get me wrong. Debt per se, isn’t always bad. While it is certainly possible to live without credit cards, it can be extraordinarily useful when used responsibly. In this day and age, having good credit is very advantageous. It can help you achieve things that you may not otherwise be able to achieve, like getting approved for a mortgage. However, not everyone uses credit responsibly, and that’s when trouble occurs.
If there was no concept of credit or credit cards, would life be better? It’s pretty hard to say. It definitely has its pros and cons though.
Pro: No credit cards means no credit card debt!
Con: You might end up owing your family, friends, or loan sharks a ton of money instead.
Pro: You might think twice before making purchases.
Con: None that I can see. You should always think carefully before spending money.
Pro: You’ll buy only as much as you have cash on hand.
Con: You may not be able to make big purchases like a car or a house.
Pro: People won’t have a way to measure your credibility and will be less likely to lend you money. If you don’t have the money (and you’re not a responsible borrower), you won’t be able to complete your purchase.
Con: In this case, the pro is also the con. If you’re a responsible borrower, people won’t have a way to measure your credibility and will be less likely to lend you money.
So, I would imagine we’d be pretty hobbled if credit cards no longer existed. It would be tough for many people to make large purchases or perform online transactions. In fact, I’m pretty sure a large portion of our e-commerce industry would go out of business. Credit cards have just made things so convenient, and for me, it has become a necessary part of life.
While I support the idea of having credit cards, I still feel they should be handled with caution. Some people get into major trouble when using them, but then again, if credit cards weren’t so easy to get, people might actually have to live within their means.
When using credit cards, the goal should always be to pay everything on time and in full. Trust me – paying the minimum just isn’t worth it. The added interests and fees alone will make you wish that credit cards never existed!