What if you couldn’t use a credit card. What if you couldn’t get a loan? Imagine a world where “credit” as we know it no longer exists. Or never existed in the first place. Would that world be better or worse than what we live in now?
In many ways, credit that is used wisely can be a benefit to our lives. It allows us to get a house without having hundreds of thousands of dollars in cash available. It allows us a car without having to have tens of thousands available. I know, if you purchase smartly and within your means, you don’t need hundreds of thousands of dollars for a house and you don’t need tens of thousands for a car. But, for those that feel that they can afford to pay those payments, credit makes it all possible.
What would a world where there was no credit look like? Instead of spending our last dollar to pay off the loans we get with our credit, we’d spend more of our time working for fulfillment. If we didn’t have the ready cash available to pay for something, we’d have to save for it. Or trade for it. And we’d do more for ourselves. We’d mow our own lawns. We’d do our own handyman work. Do-it-y0urself tasks wouldn’t be something of a novelty, but more of a normal thing.
For some, it may seem trivial. What difference does it matter whether I use credit or not. I’m responsible and pay my bills, they’ll say. And then, they’ll get up on Monday morning and go to the job that they’ll freely admit they don’t like much, but they keep it because it pays well. But, if there was no credit, they wouldn’t need a job that pays well. They probably wouldn’t need any resume tips. They’d have the ability to find a job that they enjoy. A job that is fulfilling and rewarding.
And that makes a difference. The stress and turmoil that a job you don’t like can bring into your life is not only unpleasant for you and those around you, it can actually be fatal. Without credit, keeping up with the Joneses becomes a thing of the past. You only need to keep up with what skill sets they have that you don’t and find an amicable trade.
Will this world ever exist? Wholly? No. There are way too many hands in the pot of credit for it to ever go away. Too many millionaires made by taking advantage of other people through credit. But, that doesn’t mean that you and I can’t strive to lead our lives in the direction of no credit. We can take control of our finances through good financial management principles and lead a life as free from credit as possible. And, it is possible. Don’t be afraid to dream of that. And don’t be afraid to guide your finances with intention.
Breaking free from the harness that we’ve given ourselves can lead us to a better life.
I started this blog to share what I know and what I was learning about personal finance. Along the way I’ve met and found many blogging friends. Please feel free to connect with me on the Beating Broke accounts: Twitter and Facebook.