They could do this highly touted thing and choose a credit-free existence. 
Or does that only apply to incurring debt, not extending it?
P.S. Trying to be silly, not angry or combative.
I've never had anyone be so offended by my personal financial situation as I have on this thread lol
What is so "holier than thou" about sharing my experience? It's been suggested I can't so much as buy a loaf of bread without credit, and that simply hasn't been our family's experience at all. I suppose by Velochic's definition, we've used credit in the loosest sense (as in, renting an apartment without paying the entire lease upfront in cash) but I was under the impression that we were all discussing financing things, having credit cards, lines of credit, carrying debt or even being debt free but having "good credit" etc.
My husband (according to the mortgage lender and car dealership) has no credit score. No number. I don't know if that was their way of saying no debt, but no number could be calculated. It's as if "he didn't exist". I don't know much about Dave Ramsey or what he considers a 0 credit score, though. We still qualified for the mortgage and car (though chose not to buy at that time). We've never had a problem with utilities, or renting an apartment, or getting airline tickets, rental cars, any of that. What is so offensive or holier than thou about that? It's just our experience.
I've said several times live and let live, if credit works for YOU, then go for it. We just choose not to even get involved. I think when people begin feeling "offended" when no offense has been intended or even suggested (I don't believe I've made any judgment toward people who use credit wisely), maybe the examination should be inward rather than outward. How am I hurting YOU by not using credit (in the sense I assumed we were all talking about)?
I compared it to minimalism because sometimes at other people's houses, THEY will say to ME, without me saying a word or even thinking anything "you must think my house is a mess..." or "you must think my house is cluttered because you're so decluttered..." or some variation, when I wasn't thinking anything negative. Just by virtue of me being decluttered made me suddenly accused of being "judgmental" or "holier-than-thou" when honestly I don't care what your house looks like. I really, really don't. It's not my space or my life. Same with finances. I don't care who has credit, especially if it's wisely used, but simply by virtue of me choosing a different way, I'm suddenly "holier-than-thou". That's in your head. Sorry.
I do not have a zero score, though I would like to. I don't know if it's actually possible, if you have ever had a debt ever in your lifetime, to truely get it down to zero. But, I am really hoping my teen daughter can maintain a score of zero. We have taught her that debt is not a good thing and paying for things with money you have is the way to go. We aren't paying for her college and as a freshman she's already applying for scholarships. She's also got a job and is socking money away for school as well. So college will be the first real test, can she manage to get through with no debt. I think so, she managed to come up with $1000 win just a few months to pay for a portion of a school trip to Europe this summer.
Dh and I have debt. We have our mortgage, a HELOC, his student loans (he's still in school but we stopped taking on new loans a while ago, so they aren't as high as they could have been,) some medical debt, and one credit card from a while ago. We are paying it down slowly, as we just don't have a lot of money now. But we stopped incurring debt a while ago (well, except for some medical debt, but that's still working through insurance at the moment.) We don't have credit cards anymore, the one we had we closed at the same time we stopped taking on the new loan. Dh's school is being paid for with scholarships, need based grants and an tuition reimbursement benefit from his work. We bought a car last year, from a private seller, paid cash. We have vowed to never have a car loan again. We will never apply for a credit card again. Once we get our debts paid off, we plan to save an emergency fund to cover most basic emergencies. If we ended up with some catastrophic medical event that exceeded insurance and our emergency fund, I would sell our house before i took another mortgage on it.
I have to mention a few things...my bank does not run a credit check to issue a debit card either. And if you for some reason you can't get a debit card tied to a checking account, there are plenty of prepaid card options. The ones we sell at work do carry a fee of like $5, but that's not a whole lot. Also, Dave Ramesy regularly credits others on his radio show. And often says that his ideas are totally nothing new, that he just packages it neatly. And cell phones...if you don't want to pay a deposit for a monthly plan...just go prepaid.
When we were in college and had 0 credit scores it was a major pain in the rear end. At least we were still in a relationship with our parents where they were willing to cosign on every single thing we had - our apartment, utilities, telephone, checking accounts - everything. This was possible for us, because our parents had good credit to vouch for us with. I don't know what would have happened if our parents had bad or 0 credit. We're not in a point in our lives where it would be wise to have a 0 credit score again. There are still things in our future where we will need to have at least a strong if not excellent score - non-frivolous things like jobs and home loans. Maybe in 25 years as we come to the end of our careers and don't need a score for things we'll let our reportable items drop off. Between then and now, this is easily the least of my concerns.
When we were in college and had 0 credit scores it was a major pain in the rear end. At least we were still in a relationship with our parents where they were willing to cosign on every single thing we had - our apartment, utilities, telephone, checking accounts - everything. This was possible for us, because our parents had good credit to vouch for us with. I don't know what would have happened if our parents had bad or 0 credit. We're not in a point in our lives where it would be wise to have a 0 credit score again. There are still things in our future where we will need to have at least a strong if not excellent score - non-frivolous things like jobs and home loans. Maybe in 25 years as we come to the end of our careers and don't need a score for things we'll let our reportable items drop off. Between then and now, this is easily the least of my concerns.
You needed a co signer on a checking account? I have never been to a bank that runs a credit check just to open a checking account. Now, admittedly, I haven't been to a LOT of banks to open a checking account, but I have been to a couple. I know that Fifth Third, ING and National City (which I think is now PNC and I can't speak to their policies.) simply ask if you have money to deposit. They don't even want to know if you have a job. I would think, given what others posted about BOA not requiring a credit check for a debit card, I would assume that they wouldn't require a credit check for a checking account either. I also don't recall a credit check being run when I very first had utilities and telephone turned on in my first apartment, though that could vary by company. If fact, actually, looking at the reports I pulled a few years ago, there is no credit inquiry shown from any of the utility companies. I DID have a credit check run by the cable company...but we currently have really BAD credit, like BAD, and they still ran our cable line with no cosigners. Maybe it's different in different areas, or that times have changed since I first rented my apartment 10 years ago, but I think for basic utilities, I think it's pretty unusual around here to run a credit check to turn on utilities.
Wanting a 0 credit score is more about a symbol of pride. A different kind of status symbol, if you will. Dave Ramsey calls a FICO score an "I love debt" score. Which it kinda is, since its based on how much debt you use. Having a zero score is like a symbol of your commitment to not using debt.
You know, not really on topic, but I wonder...if you have a zero or blank score, and you end up with a medical debt that goes into collections, do you then end up with a higher score? lol I mean if it's zero, it can't go down, right? There's no such thing as a negative score so...
Here is a very well written/researched article on the merchant fee thing. They use way harsher langauge than I did.
http://blogs.wsj.com/economics/2010/07/27/credit-cards-take-from-poor-give-to-the-rich/
Here is an article on credit cards users spending more. Not a conclusive or as convincing of an arguement, but still pretty good
I don't know about checking accounts, but there is a system called ChexSystems and it is like a credit registry for banks. If you've had your checking accounts closed at another bank (like for overdrawing a bunch of times, or bouncing checks, or fraud or something) they register you with Chexsystems, and it is like a credit ding. It's very hard to get another checking account after that, which is one of the reasons for the proliferation of check cashing places. Most of those people can't qualify for a checking account. I know my bank didn't do a full credit check, but you did need to get run through chex systems.
I don't know about checking accounts, but there is a system called ChexSystems and it is like a credit registry for banks. If you've had your checking accounts closed at another bank (like for overdrawing a bunch of times, or bouncing checks, or fraud or something) they register you with Chexsystems, and it is like a credit ding. It's very hard to get another checking account after that, which is one of the reasons for the proliferation of check cashing places. Most of those people can't qualify for a checking account. I know my bank didn't do a full credit check, but you did need to get run through chex systems.
Right. But I am pretty sure ChexSystems isn't part of your credit score, right? I dunno for sure, but I don't think so. I am pretty sure you could have a perfect credit score, but still end up on ChexSystems. Which may require a co-signer then for a checking account. But that wouldn't be because of a zero credit score because of no debt, that would be because you bounced checks (or fraud or whatever, as you mentioned.)
I have had a zero score twice, both times when I moved countries (to the US and then to Canada). In the US it wasn't a problem becuase I had a high bank balance (I had 2 years' worth of living expenses in there as required to get my US visa) and I did all of my banking with that bank (HSBC).
BUT when we moved to Canada I had a zero credit history and it was very problematic when we did want to buy a house. Of course, this wouldn't have been a problem had we chosen to buy with cash, but I don't know when or if that would happen for us. I actually had to 'work' at creating a history. I was advised to open a CC, use it and occasionally leave a small balance ($10) on it for amonth and get charged some interest and then pay it off. It worked well to increase my score, ironically.
We now choose to live without using our credit cards BUT it is impossible for us to go without cards entirely. In Canada we do not have Visa Debit Cards like in the states and when you travel abroad you are not able to use your regular ATM card at a restaurant etc.
So yes, it is possibly to have a zero balance, but it's not convenient if you EVER want to utilize some sort of credit/loan.
I think what the point that most people are making is that it is unrealistic to assert that you would never use credit under any circumstance (including hospital credit, loans from a family member etc).
A sad and kind of related story of this was a family friend's child. The parents were divorced, the mother an alcoholic who was unable to function well (no credit card). The daughter and father lived overseas on a small tropical island. The father died very unexpectedly but because the daughter was only 15 or 16 she was somehow unable to gather funds to get back to her home country. She shacked up with a guy so she could *live*. The daughter died in a moped crash before she was able to come home. Had her mother been in a better financial state she would at least have been able to fly her out right away. Very sad. Now the mother lives in regret which obvioulsly further fuels her alcoholism.
Here is a very well written/researched article on the merchant fee thing. They use way harsher langauge than I did.
http://blogs.wsj.com/economics/2010/07/27/credit-cards-take-from-poor-give-to-the-rich/
Here is an article on credit cards users spending more. Not a conclusive or as convincing of an arguement, but still pretty good
First of all... these are blogs. Just wanted to point that out because blogs don't require fact checking like actual newspaper articles do. The first blog entry above states right out that this is a policy issue. Not a consumer issue. This regressive transfer is just an excuse because the amount is just noise in the scheme of things. It really is. The real issue is the people who rack up credit card bills and then file bankruptcy. These losses are what drive up the costs of using credit cards. CC companies get their money from interest that is paid when people use revolving credit. What they are seeking to gain back using merchant fees is that loss from irresponsible credit users that buy, but never pay. I agree... if you can't use credit wisely, don't use it at all. I am ALL for that. But don't put the blame on people who use it properly, fairly, and wisely.
The second blog entry above isn't at all about credit card users spending more, although it does say, in passing, that people with reward cards spend "more" (I always love those unqualified statistical statements... especially in opinionated blogs). They don't qualify it in any way because they can't and they certainly don't give your "20% - 30% more" figure that you gave up thread. They just say "more". Well, for us, that's certainly true that we use our card "more"... because of the rewards, we put every single thing on the card that we can. But we don't spend beyond our budget and pay it off every month. This second article is actually about how credit card companies lure customers away from their competitors with incentives.
Credit is evil only if you make it evil. It can be a benign and even a beneficent part of your financial plan. Don't use it if you don't want to or can't do so without messing up your finances. I don't care as obviously it's not affecting me at all. But we will continue to use it to build our wealth and I hope others see it as a means to an end and can utilize it properly. We're less than 10 years from retirement (when dh turns 65) and I will use every financial tool to ensure a secure future.
When I got my first checking account, I was also a minor - so that could also have been a part of it. Although I don't think so, as all my friends who were of the age of majority also had to have cosigners on their checking accounts. The banking climate was pretty different back then - checks were a much bigger part of everyday lives. ATMs were only at banks, and there were only starting to allow POS transactions which processed the same as checks. It was a lot easier to float checks back then, and merchants and banks had a much bigger interested in limiting who had checks.
First of all... these are blogs. Just wanted to point that out because blogs don't require fact checking like actual newspaper articles do. The first blog entry above states right out that this is a policy issue. Not a consumer issue. This regressive transfer is just an excuse because the amount is just noise in the scheme of things. It really is. The real issue is the people who rack up credit card bills and then file bankruptcy. These losses are what drive up the costs of using credit cards. CC companies get their money from interest that is paid when people use revolving credit. What they are seeking to gain back using merchant fees is that loss from irresponsible credit users that buy, but never pay. I agree... if you can't use credit wisely, don't use it at all. I am ALL for that. But don't put the blame on people who use it properly, fairly, and wisely.
The second blog entry above isn't at all about credit card users spending more, although it does say, in passing, that people with reward cards spend "more" (I always love those unqualified statistical statements... especially in opinionated blogs). They don't qualify it in any way because they can't and they certainly don't give your "20% - 30% more" figure that you gave up thread. They just say "more". Well, for us, that's certainly true that we use our card "more"... because of the rewards, we put every single thing on the card that we can. But we don't spend beyond our budget and pay it off every month. This second article is actually about how credit card companies lure customers away from their competitors with incentives.
Credit is evil only if you make it evil. It can be a benign and even a beneficent part of your financial plan. Don't use it if you don't want to or can't do so without messing up your finances. I don't care as obviously it's not affecting me at all. But we will continue to use it to build our wealth and I hope others see it as a means to an end and can utilize it properly. We're less than 10 years from retirement (when dh turns 65) and I will use every financial tool to ensure a secure future.
I had a longer post that got eaten by a power outage earlier today.
http://money.cnn.com/2008/06/16/pf/without_plastic.moneymag/index.htm?postversion=2008061618
Here an article the references the spending 30% more at McDonalds specifical.
I'd love to see your reference on the 0% car loans. Because when I bought my last car (circa 2004) The 0% of sixty months sans rebate was more expensive (marignally just a few bucks a month and only $200-300 over the lenghth of the loan) than a market rate loan for 60 months with the rebate. We ended up picking neither and paying cash. Hence my comment about how they are ment to be a wash. Generally it seems like the rebate tends to be about 10% of the purchase price (unless they have a model that has sold especially poorly that they would like to dump)
Also I think it is faulty to talk about 0% loans over 25 years since they really have only been marketed since about 2001 or about ten years. Also I think using historic market returns is sort of screwy. Just because I am willing and able to put long term money in the stock market does not mean I am going to use the stock market as a place to park my money for the replacement of my next car. I think it would me more legit to use a 5 year CD or a money market account. If I had used this method and I purchase $20,000 car in the summer of 2008 and took money monthly out of my brokerage account to pay my 0% car payment I am pretty sure (using the markets actual returns) that I would have run out of money before I had my car paid for.
I don't think credit is evil. I don't aspire to have a credit score of zero (mostly I could care less)l. I just find my life more pleasant and peaceful without debt. I also personally can not envision using credit to manage some of the life situations people have mentioned up thread. This is in large part because we have a very large emegency fund (which is as big as it is because of some of the uncertainies we are dealing with personally). I don't expect the rest of the population to have the much in reserves, but I can't fathom for instance a move (using lala42 example) that I would need to finance on credit. I don't think her family did something wrong.
I just see people in my real life that do the charge everything to get rewards that
1. seem to spend money pretty mindlessly.
2. Avoid making purchases at stores that don't take their card. They would rather skip the best (price, quality, selection) grocery store in the community and spend 5% mor on their groceries to get 2% back on their reward card.
When I got my first checking account, I was also a minor - so that could also have been a part of it. Although I don't think so, as all my friends who were of the age of majority also had to have cosigners on their checking accounts. The banking climate was pretty different back then - checks were a much bigger part of everyday lives. ATMs were only at banks, and there were only starting to allow POS transactions which processed the same as checks. It was a lot easier to float checks back then, and merchants and banks had a much bigger interested in limiting who had checks.
Yeah, I am guessing it was the minor thing. As far as I know, most banks require a parent/guardian/adult on any minor's account. I don't think I have ever met an adult, who wasn't on ChexSystems, who was required to have a cosigner on a checking account, just to get the account. Even 15+ yrs ago, when I was just getting started with jobs and checking accounts and so on. I am not saying it doesn't happen, rather that I think it's probably a very unusual situation, for someone to be required to have a cosigner with good credit, just to get a checking account, if that person isn't on ChexSystems. I think it would be unusual for a bank to even check a credit score, to know if the credit is good or not.
Mnnice - you just have to do the math yourself to see the results of 0% financing on a car. Just do the math using compound interest calculators. And I'm not using historic averages... I'm using current reasonable averages of 5%. Long-term historic averages are closer to 9% return and I doubt we'll ever see that kind of return again in my lifetime. However, If you can't take $20,000 out of your taxable brokerage account without it dropping negative with market fluctuations... you probably shouldn't have your money invested in the stock market in the first place.
Here, let me do the math for you if it will help your understanding of the benefits of 0%.
$20,000 is left in your brokerage account rather than using it to buy a car outright. You gain a modest 5% over the 5 years you have a loan. Your gains are $5,525. That money grows you $18,709 over the next 25 years.
10 years later, you buy another car for $20,000 at 0% interest. You leave $20,000 in your brokerage account. You gain a modest 5% over the 5 years that you have the loan. Your gains are $5,525. That money grows you $11,486 over the next 15 years (not 25 because it's 10 years later).
10 years later, you buy another car for $20,000 at 0% interest. You leave $20,000 in your brokerage account. You gain a modest 5% over the 5 years that you have the loan. Your gains are $5,525. (You're at the end of the 5 years, so no more growth.)
In my original calculations, I didn't include this last $5,525, but lets do that and see what we have at the end:
5535
18709
5525
11486
5525
------------
46,860
That's what you make over 25 years if you use 0% interest. For 3 cars over the course of that 25 years, you would have to have saved $46,000 in rebates to beat using 0%. That averages to over $15,000 per car in rebates. Saving $2,000 per car doesn't even COMPARE to these returns. Even if your return rate is 3%, your gains are $21,185. Still WAY above the $6,000 you'd save with rebates.
That is how I calculated those numbers. Obviously, different people, with a different level of financial discipline, and different investing strategies can beat those returns or fall far short of them. But for some, 0% factors into one's overall financial plan. Don't use it, use it. No skin off of my nose. I just want people to be aware that it can work.
(And it may be a moot point for most, anyway, because something like only 10% of people qualify for 0%, so you have to have a finger on your financial pulse and not be drawn in when you're not qualified and fall into a salesman's trap.)
I agree on your last two points. These are people, though, who do not have a good grasp of finances and/or have issues with shopping. We are fortunate that we've been careful, I don't make impulse buys (quite literally I cannot remember the last time I bought something on a whim... even at x-mas time) and we're older, so there really isn't anything that we can't pay cash for. We only keep a small portion of our net worth liquid (about 1 yr. of living expenses), but could pay for even a home, if we had to, in cash. That came, though, from years of discipline and learning about how money works. There are tools one can use, and if they use them properly, it can benefit them. 0% financing is just one of those and it's a teeny tiny contribution to our our net worth (probably less than $20,000), but I used it as an example of credit being a benefit. It CAN be helpful.
One more thing (sorry this is so long, but I wanted to be clear). I really think that if a person travels abroad, that having a credit card is absolutely necessary. Debit cards have limits and not taking a credit card is playing with fire. They have daily limits, and they have an overall limit. Some places cannot get them to go through. We've had this happen MANY times in places like Turkey, Italy, Belgium that I know of and probably many of the other countries we've visited/lived in. Debit cards also tend to incur foreign usage upcharges and/or retail conversion change fees. If you are using your debit card overseas, your account can be drained and you would have no other means to get money. What if you check into a hotel and they put a "hold" on the funds that they will actually charge at the end of your stay? We were just in Italy a few months ago and they did this to our credit card. So we had something like $1500 of our credit that was unavailable during the trip... which was no big deal, but if this was with a debit card, it could change my charging and/or cash withdrawal limits... and without another means to money, your basically screwed. What if you are abroad and you need medical attention and they only accept cash... and that amount is above what you can withdraw from your checking account with a debit card? They WILL refuse treatment.
I think there are very valid reasons to keep a credit card and to use credit.
(I also don't believe that zero FICO scores exist. Isn't 300 the lowest you can go? Wouldn't it just be a FICO score 300 - 850 or no credit score at all?)
when I first got married (26) and had to open a checking acct (actually my 3-4th account) just to use a banks security deposit box, they ran a 'credit check' of sorts. I think it was because i had a very low opening balance (30-40 dollars?). They told me it was to check if I had a habit of 'overwithdrawing' on the account, or something.
Yeah, I am guessing it was the minor thing. As far as I know, most banks require a parent/guardian/adult on any minor's account. I don't think I have ever met an adult, who wasn't on ChexSystems, who was required to have a cosigner on a checking account, just to get the account. Even 15+ yrs ago, when I was just getting started with jobs and checking accounts and so on. I am not saying it doesn't happen, rather that I think it's probably a very unusual situation, for someone to be required to have a cosigner with good credit, just to get a checking account, if that person isn't on ChexSystems. I think it would be unusual for a bank to even check a credit score, to know if the credit is good or not.
I had a lot of old accounts on my report also. All I had to do was write a letter and provide evidence that they were closed (the confirmation letter) and the status was changed on my credit report within a couple of months.You should be able to do the same thing for free. If you don't have the closure confirmation letters anymore I bet you could call the company (for example VS) and request a confirmation letter that your account is closed.
Mnnice - you just have to do the math yourself to see the results of 0% financing on a car. Just do the math using compound interest calculators. And I'm not using historic averages... I'm using current reasonable averages of 5%. Long-term historic averages are closer to 9% return and I doubt we'll ever see that kind of return again in my lifetime. However, If you can't take $20,000 out of your taxable brokerage account without it dropping negative with market fluctuations... you probably shouldn't have your money invested in the stock market in the first place.
Here, let me do the math for you if it will help your understanding of the benefits of 0%.
$20,000 is left in your brokerage account rather than using it to buy a car outright. You gain a modest 5% over the 5 years you have a loan. Your gains are $5,525. That money grows you $18,709 over the next 25 years.
10 years later, you buy another car for $20,000 at 0% interest. You leave $20,000 in your brokerage account. You gain a modest 5% over the 5 years that you have the loan. Your gains are $5,525. That money grows you $11,486 over the next 15 years (not 25 because it's 10 years later).
10 years later, you buy another car for $20,000 at 0% interest. You leave $20,000 in your brokerage account. You gain a modest 5% over the 5 years that you have the loan. Your gains are $5,525. (You're at the end of the 5 years, so no more growth.)
In my original calculations, I didn't include this last $5,525, but lets do that and see what we have at the end:
5535
18709
5525
11486
5525
------------
46,860
That's what you make over 25 years if you use 0% interest. For 3 cars over the course of that 25 years, you would have to have saved $46,000 in rebates to beat using 0%. That averages to over $15,000 per car in rebates. Saving $2,000 per car doesn't even COMPARE to these returns. Even if your return rate is 3%, your gains are $21,185. Still WAY above the $6,000 you'd save with rebates.
That is how I calculated those numbers. Obviously, different people, with a different level of financial discipline, and different investing strategies can beat those returns or fall far short of them. But for some, 0% factors into one's overall financial plan. Don't use it, use it. No skin off of my nose. I just want people to be aware that it can work.
(And it may be a moot point for most, anyway, because something like only 10% of people qualify for 0%, so you have to have a finger on your financial pulse and not be drawn in when you're not qualified and fall into a salesman's trap.)
I agree on your last two points. These are people, though, who do not have a good grasp of finances and/or have issues with shopping. We are fortunate that we've been careful, I don't make impulse buys (quite literally I cannot remember the last time I bought something on a whim... even at x-mas time) and we're older, so there really isn't anything that we can't pay cash for. We only keep a small portion of our net worth liquid (about 1 yr. of living expenses), but could pay for even a home, if we had to, in cash. That came, though, from years of discipline and learning about how money works. There are tools one can use, and if they use them properly, it can benefit them. 0% financing is just one of those and it's a teeny tiny contribution to our our net worth (probably less than $20,000), but I used it as an example of credit being a benefit. It CAN be helpful.
One more thing (sorry this is so long, but I wanted to be clear). I really think that if a person travels abroad, that having a credit card is absolutely necessary. Debit cards have limits and not taking a credit card is playing with fire. They have daily limits, and they have an overall limit. Some places cannot get them to go through. We've had this happen MANY times in places like Turkey, Italy, Belgium that I know of and probably many of the other countries we've visited/lived in. Debit cards also tend to incur foreign usage upcharges and/or retail conversion change fees. If you are using your debit card overseas, your account can be drained and you would have no other means to get money. What if you check into a hotel and they put a "hold" on the funds that they will actually charge at the end of your stay? We were just in Italy a few months ago and they did this to our credit card. So we had something like $1500 of our credit that was unavailable during the trip... which was no big deal, but if this was with a debit card, it could change my charging and/or cash withdrawal limits... and without another means to money, your basically screwed. What if you are abroad and you need medical attention and they only accept cash... and that amount is above what you can withdraw from your checking account with a debit card? They WILL refuse treatment.
I think there are very valid reasons to keep a credit card and to use credit.
(I also don't believe that zero FICO scores exist. Isn't 300 the lowest you can go? Wouldn't it just be a FICO score 300 - 850 or no credit score at all?)
None of this applies to me. As I said above, I have more money liquid than I would have access to by credit. And I highly doubt I couldn't write a check or wire money or whatever I needed to do to get access to large cash amounts, if necessary. I have no daily limit on my card and I have overdraft protection into my savings account. I also have 0 liability for stolen funds- it's happened before and been refunded within hours.
None of this applies to me. As I said above, I have more money liquid than I would have access to by credit. And I highly doubt I couldn't write a check or wire money or whatever I needed to do to get access to large cash amounts, if necessary. I have no daily limit on my card and I have overdraft protection into my savings account. I also have 0 liability for stolen funds- it's happened before and been refunded within hours.
None of this has applied to you, YET. We, too, have more money liquid than we have in credit... by, umm... a lot. But when abroad, you can't write a check, and yes, there are limits (you're not withdrawing money directly from your bank, you're using a bank network to get the money - we don't have a limit at home either, but abroad it's $400/day... which is about €280), and wiring money can take 2 or more days overseas. I hope you never have to deal with testing these sorts of thing, and never have an emergency abroad, but I will say it again... IMO, traveling abroad without a credit card as at least one form of currency is foolhardy. I will say that WE can't travel abroad without a credit card. I wouldn't want to even attempt it. To each their own. I won't take the risk because I well know what can happen when abroad. Nobody's wrong here... just different strokes for different folks.
One more thing (sorry this is so long, but I wanted to be clear). I really think that if a person travels abroad, that having a credit card is absolutely necessary. Debit cards have limits and not taking a credit card is playing with fire. They have daily limits, and they have an overall limit. Some places cannot get them to go through. We've had this happen MANY times in places like Turkey, Italy, Belgium that I know of and probably many of the other countries we've visited/lived in. Debit cards also tend to incur foreign usage upcharges and/or retail conversion change fees. If you are using your debit card overseas, your account can be drained and you would have no other means to get money. What if you check into a hotel and they put a "hold" on the funds that they will actually charge at the end of your stay? We were just in Italy a few months ago and they did this to our credit card. So we had something like $1500 of our credit that was unavailable during the trip... which was no big deal, but if this was with a debit card, it could change my charging and/or cash withdrawal limits... and without another means to money, your basically screwed. What if you are abroad and you need medical attention and they only accept cash... and that amount is above what you can withdraw from your checking account with a debit card? They WILL refuse treatment.
Since my 15 year old does not have a credit card and will not have a credit card, nor does she or will she have a debit card, she will be taking travellers checks when she travels abroad this summer.
when I first got married (26) and had to open a checking acct (actually my 3-4th account) just to use a banks security deposit box, they ran a 'credit check' of sorts. I think it was because i had a very low opening balance (30-40 dollars?). They told me it was to check if I had a habit of 'overwithdrawing' on the account, or something.
Well, if they were checking on "overwithdrawing" that sounds like it was probably ChexSystems, because a habit overdrawing a checking account wouldn't show on a credit report anyway. A debt owed to a bank for overdrawing an account and never paying that back could end up with a collection agency and that would hit a credit report, but I don't think there's even a way to report a habit of overdrawing a checking account.
But again, I said I think it's a very unusual thing for a bank to check a credit report just to open a checking account, not that it never ever happens ever.
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