That’s not good because generally plans like this have interest. If a person pays 3% monthly in 4 payments it might not seem like much, but if 100 Million people do it then we’ve got a big fucking problem.
Although, in theory, stores could use a 0% plan to compete with other stores.
Everytime you do it, it opens a new line of credit.
There are people who use this shit everywhere it’s offered, but opening a bunch of small lines of credit, hurts your score more even when you pay them off on time.
The positive for paying it doesn’t get you back up to the negative of opening the new line. So the longer this goes on, the lower your credit score. If you’re needing to use it routinely for groceries you’re going to eventually need credit for a big thing.
Which is often the first people hear that they’ve destroyed their credit.
Like, there’s “smart” ways to use credit, but people think because it’s paid off in full on time, they’re helping it or at least breaking even.
That logic is for an existing line of credit you keep charging against and paying, not opening 20+ lines a year
That’s good information, thank you for sharing it.
Personally, while I’m fully aware of how credit scores can be used in a form of class warfare that restricts where people can live and what they can get loans to purchase, I’ve never really relied on them for anything and managed to get by just fine. I recommend people stay away from large banks and learn how to create their own financial statements, assets and liabilities statements, and plans before going in to ask for a loan. I’m not a big spender or investor but the largest loan I’ve received so far was on a $240,000 property for a 15 year duration.
You get credit checked when applying as a tenant for rented accommodation and even for some jobs. It’s not just about loans. A $240,000 property loan is inconceivable for me, and I have a pretty high paying job, because my credit report is all kinds of fucked up.
That’s not good because generally plans like this have interest. If a person pays 3% monthly in 4 payments it might not seem like much, but if 100 Million people do it then we’ve got a big fucking problem.
Although, in theory, stores could use a 0% plan to compete with other stores.
Layaway coming back en vogue is a sign of a bad economy
It’s not just the interest in this case.
Everytime you do it, it opens a new line of credit.
There are people who use this shit everywhere it’s offered, but opening a bunch of small lines of credit, hurts your score more even when you pay them off on time.
The positive for paying it doesn’t get you back up to the negative of opening the new line. So the longer this goes on, the lower your credit score. If you’re needing to use it routinely for groceries you’re going to eventually need credit for a big thing.
Which is often the first people hear that they’ve destroyed their credit.
Like, there’s “smart” ways to use credit, but people think because it’s paid off in full on time, they’re helping it or at least breaking even.
That logic is for an existing line of credit you keep charging against and paying, not opening 20+ lines a year
That’s good information, thank you for sharing it.
Personally, while I’m fully aware of how credit scores can be used in a form of class warfare that restricts where people can live and what they can get loans to purchase, I’ve never really relied on them for anything and managed to get by just fine. I recommend people stay away from large banks and learn how to create their own financial statements, assets and liabilities statements, and plans before going in to ask for a loan. I’m not a big spender or investor but the largest loan I’ve received so far was on a $240,000 property for a 15 year duration.
Fuck the system, freeze your reports!
You get credit checked when applying as a tenant for rented accommodation and even for some jobs. It’s not just about loans. A $240,000 property loan is inconceivable for me, and I have a pretty high paying job, because my credit report is all kinds of fucked up.