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LaToya Irby

Do You Really Need Credit?

By July 14, 2007

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In response to my post on new credit card laws encouraging consumers to spend more, Patti Hale writes:
Obviously the predatory tactics of the credit card companies have done nothing to curb the public’s need to use credit to meet their needs so I resent your implication that there is anything negative about these needed reforms to prevent these credit card companies from preying on those who are least able to afford high interest rates. You are obviously under the assumption that people have a choice whether or not to get in debt–what would you do if you needed your car repaired in order to get to work, pay for health care, or a suit so you could go out and get a job? Not everyone is in debt because they went out and bought a big screen TV on credit–there are other reasons.
I want Patti and others to be able to recognize a financially fatal way of thinking: the need for credit to meet your needs. Credit is a convenience, not a cash substitute. That convenience has a cost - finance charges. There's also consequences for misusing the convenience, like late fees.

I realize that not everyone abuses credit, but there are some people who unknowingly use credit the wrong way. The proper response from our legislature should be to provide education on good spending habits, not to make it easier to go into debt.

If you find yourself having to use credit cards to meet your basic needs - food, shelter, transportation - you are likely headed towards financial trouble (or you're already there). Chances are, if you don't have enough money in your budget to cover those things this month, you won't have it next month either. Nor will you have the money to pay your credit card bill when it arrives.

Sure, there are unexpected expenses. Since we know they can and do arise, we should set money aside for them. We should not be relying on credit cards and other debt instruments to get us out of sticky situations.

And yes, from what I've observed, people do choose to go into debt by making the wrong decisions about using credit. I don't believe there is any situation where credit is the only option for getting out of a bad situation.

If you agree or disagree, leave your point of view in the comments. Technorati Profile
July 16, 2007 at 9:03 am
(1) lalexis says:

Obviously you were born into a family that always made good money. How about the poor sole that has to drive a 15 year old car because he doesn’t make enough to finance one. What happens when it breaks down? Are you suggesting that he or she walk 10 miles to work or even quit the job because they can’t save enough money to fix their car. How arrogant can you be? I know many people that barely get by and yes every once in a while a credit card is a life saver.

July 17, 2007 at 3:20 am
(2) Lenny Tumbarello says:

Unfortunately the post above doesn’t get your meaning! Too bad.

I find that over 40% of us are so vulnerable when it comes to using plastic with a revolving charge tied to it. This topic is probably the biggest hidden secret our society should be discussing.

The people she knows that are barely getting by are simply not making the right choices concerning their available money. Sorry to be cold blooded about it.

The every once in a while credit card life saver philosophy is simply not a solution. If you ain’t got it to spend, spending it on a piece of plastic only gets you into a worse situation later. PERIOD.

Your comment about the legislature providing education is your idealism coming through. Not going to happen. Follow the money. The lobbyists are paying them off to repeatedly ease the availability of easy credit.

The banking de-regulation of the mid-eighties is what’s gotten us here and then the recent easing again in ’05 will only worsen the situation.

A grass roots effort – probably like Mothers Against Drunk Drivers will end up being the vehicle to bring awareness to the issue.

Lenny Tumbarello

Lenny is the author of

No Balance Due : Tired of Being in Debt Up to Your Eyeballs?

July 19, 2007 at 2:53 pm
(3) Lois says:

These days I understand that a credit card is only a life saver when I can pay it off at the end of the month. Predatory lending is just what it says it is–the banks looking for whomever they might devour. States are repealing their usury laws and George Bush couldn’t wait to repeal the bankruptcy laws. Banks are combining with insurance companies and brokerage firms. Talk about your future Enron shell games. As a country we’re sitting on a moutain of debt. In other words, the emperor has no clothes. A new 1929 for the 21st century is looming large over the horizon is we don’t wake up and smell the coffee.

July 19, 2007 at 3:38 pm
(4) Tim says:

Lalexis, your attitude is part of the problem. People believe that credit cards are “life savers”. Wouldn’t an emergency fund do a much better job at being a “life saver”? You play with snakes and you’ll get bit.

July 20, 2007 at 3:43 am
(5) Bonnie says:

I agree, if you don’t have the money this month you won’t have it next month to pay the credit card bill AND the new expenses. The only possible flaw I see in this author’s viewpoint is that there are some times where the emergency monies set aside are not sufficient for a drastic, unexpected expense that cannot be put off (IE: car accident totals your car and insurance hasn’t kicked in yet, medical/veterinary bills for life threatening emergencies, your roof starts leaking in 5 places in one night, etc.). There are times like these that credit can be a lifesaver, but only a TEMPORARY ONE. And if you haven’t abused it you will have plenty of room on your cards to charge the expense (and absolutely nothing else) and then you work your butt off to pay it off ASAP. But that’s the key, you have to be prepared to suffer in your spending areas/luxeries for the time in which it takes to pay off that debt without incurring more. Otherwise credit turns into an evil cycle if you ask me. But still a good and wise article.

July 21, 2007 at 8:50 am
(6) CJ says:

lalexis. How do the people who barely get by manage if they dont qualify for credit? The subject is about those who misuse credit. Not EVERYONE who has credit. Imagine the creditor were a company that broke limbs if you didnt pay on time or couldnt afford the debt. Would you want credit from them?
I think you would probably find another way to barely get by.

November 2, 2007 at 11:43 am
(7) Englorien says:

Have to weigh in with the majority here. These days, you don’t need a credit card, just a debit card. A credit card cannot save you. True “national security” and personal security is $0 unsecured debt. Yes we need mortgages and car loans, but other than that, don’t do it. You are just making the rich richer and yourself miserable in the long run. I am getting free of debt: what a relief. Better to do with less than have the constant stress of debt! How about Mothers Against Credit Cards!!

October 17, 2008 at 1:14 am
(8) Noneya says:

I find most of these comments offensive. I had paid off my credit cards, and was doing great until a family sickness hit that could not be avoided. I HAVE CHILDREN that come first. And when a situation that can not be avoided happens, and my children are involved, then my children come first. So I have had to max out my credit cards again in order to MAKE IT through the rough times….needing them for gas, grociers, etc. Just because one has a credit card, does not mean they spend it on video games, cloths etc…there are LIFE EMERGENCIES that can happen and it can not be avoided. WHY DONT YOU LOSE YOUR JOB because you had to take care of YOUR CHILDREN, then have NO MONEY…but yet have a credit card to help with food etc…WHAT WOULD YOU DO!!! OH WAIT… a couple of you idiots would probably let your kids starve and loose the roof over your head instead of using what you have available.
LIFE ISNT PERFECT….nothing is..SHIT HAPPENS…and not every person who uses their credit cards does it for their own personal jollies..DAMN get a life>>

April 28, 2009 at 4:11 pm
(9) Ella says:

The only people who want the public to rely on credit are the people who stand to profit from it. So of course they will tell you that you have to have credit to do anything. They want your money. Does no one get this? Credit is nothing more than a polished up mob group, loaning money at a higher rate to pay it off. I have successfully lived without a credit score my whole life. How had it changed my life? If I don’t have the funds for something, I can’t buy it. Pure and simple. It teachs you money management skills. And you end up spending wisely. I don’t see the pride in buying anything on credit. You don’t even own the merchandise!

July 15, 2009 at 5:21 pm
(10) Joe says:

i have found my mom always telling me that i NEED credit and NEED to get a credit card. but, a i got into college and started to see the truth; i found that credit cards and credit are just retarded. i mean, they tell you straight up “you will end up paying more” and people still do it. i understand when emergencies come up, but going further into debt is not the answer. things work out. [maybe not as pretty as you would like] but they do. and i find that you don’t even need a mortgage anymore.

ex: the college grad can simply stay in their parents home after college and pay off expenses without paying rent/utilities/etc.. if you stay at home, im sure your parents would ask for A LOT less money than a landlord or mortgage company. my point is, if peple would learn to SAVE instead of SPEND SPEND SPEND, they wouldnt get into debt. but, most of america today just wants what they want fast without realizing it could hurt them.

btw. im prepared to get an earful for the comment. [ i know my views are different, but i don’t care. im doing it the way i mentioned and will buy my own hose and car without credit. cash only. good old hard work and little spending.

i just think people should learn to save more. too much wasteful spending going on today.

July 15, 2009 at 5:24 pm
(11) Joe says:

i agree with ella 100%. she hit the nail on the head.

+1 ella.

August 22, 2012 at 12:54 pm
(12) JOHN-DOE says:

I believe credit is important but and I was thinking because of the hard times that i’m having,maybe i’ll use my credit card to start a business and maxout my credit cards and go chapter seven and use the business to prosper,what do you think.

February 21, 2013 at 10:21 pm
(13) Mike says:

lalexis says ” How about the poor sole that has to drive a 15 year old car because he doesn’t make enough to finance one.” Now lets take a look at what he said, “doesn’t make enough to finance one” ROFLMAO Said after he blurts out how arrogant LaToya Irby is.

July 29, 2013 at 12:17 pm
(14) michael says:

I feel that credit scores are just a way to tag you. you really dont need credit. If you find yourself in a bad place because of credit hospital bills utiliity bills there is always a way out my way is chap 7 and after you have done this you can still get credit. Look at the goverent trillions of our money went to bail out financial institutes that got in the same stituation. I didnt get any free money did you?

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