Virtue in Failing the Credit Game?

I was turned down for an American Express card.   Repeatedly.

I have plenty of money and, when I enquired about my “credit score” I found it in the 700’s which they say is quite good.   So why was I turned down?   Well, I don’t have any recent credit history.   It seems you have to owe money to be thought of as a good borrower.     But I did not want to borrow, I just wanted a card so I could use it as a money substitute.   And that seems to be the problem.

I didn’t really want to borrow money from them.   So they turned me down.   I was bemused and perplexed.    Now I am thinking that failing the credit game is a virtue.

A few reasons:   This “credit score” thing seems to resemble the discredited “IQ score” and “SAT score” as measures of worth or worthiness.   Maybe we can fast-track this one into the dustbins with phrenology.

I sat next to a woman on a plane as we flew to Florida.   She was sick because she was living in a house with poisoned wallboards from China, that had a mortgage for more than it was worth.  I asked why she did not just give the keys back to the bank and leave, and she said:   she was suing the builder and that might turn out good (she said she would repair the house by taking out all the walls), and besides if she turned in the keys and lived in a cheaper house or apartment, she would “ruin her credit score.”    Something seems wrong.

Another example.  Great New York Times piece on our paying for services that were mostly done by friends or common sense: The Outsourced Life by Arlie Russell Hochschild May 5, 2012. We seem to have injected commerce into almost everything.

And with commerce seems to come debt.    With living in a house comes debt.   With getting an education now comes debt.

So, what if we fail at the Credit Game?    Well, people will not extend you credit.    Isn’t not being in debt a good thing?    As more people turn from credit cards to debit cards and forgo the month interest payments, maybe we should celebrate those that just don’t play the game.

So I am credit free, and loving it.

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5 Responses to Virtue in Failing the Credit Game?

  1. Tony says:

    Brewster,

    I remember all this credit stuff coming into being, along with “personal checks” and Montgomery Ward “Revolving Accounts”. Within a decade there arose a whole new business: financial “helpers” and “counselors”. And I thought all that was bad.

    Yes we got suckered big time, and we are hurting badly because of it. Credit is a disease which benefits only the vampire squids and their blood funnels. Remember the Franklin line they taught us kiddies? “Never a borrower or a lender be.” And they also taught us about Jesus throwing the money-lenders out of the temple. Now the righteous never bother to mention that hippie.

    Good for you. The system has rejected you because do not fit the profile of a Victim. That leaves just the other 99 percent.

    • brewster says:

      Love the line “vampire squids and their blood funnels” Yes, we have a problem. When microloans became popular, I was horrified– sucking high interest out of poor villagers. The main proponent got a nobel peace prize, but now we are finding the real problems (suicides, abuses, large scale commercial banks getting into it, non-profit bank turned for-profit, etc). Seemed predictable. We seem to have this with every new “debt product”.

      But on Jesus and the Money Changers story, I read in a fabulous book “Frozen Desire” by James Buchan ( http://openlibrary.org/works/OL1916093W/Frozen_desire ) that it was Jesus dealing with people changing money from the Hebrew money to and from the Roman money, and that was the sin. Interesting. (I highly recommend the whole book).

      Thank you for the comment.

  2. Jesse says:

    Avoiding debt is fine until you decide to buy a house, a car, or a college education. Unless you’re sitting on a mountain of cash, you’ll have a hard time buying those without incurring some debt.

    By the way, using a credit card as a “money substitute” by paying your balance in full every month *is* borrowing money — it’s just short-term borrowing. The reason they declined your application is that you haven’t established a verifiable pattern of borrowing money and paying it back as agreed, even over a short term. Even though it may seem like a catch-22, there are ways to get your foot in the door and (re)start your credit history, like secured credit cards. You’ll need to put down a deposit, but if you have “plenty of money” that shouldn’t be a problem.

  3. Getting a charge/credit card isn’t quite as easy as it used to be (when I was a student, companies would fall all over themselves to get you signed up.) If the major banks don’t want you, but you want a card, try your local credit union. For instance, I notice that the San Francisco Credit Union offers both unsecured and secured credit cards for no annual fee. (Secured cards from big banks, in contrast, often carry fees, sometimes very large ones.) To open a secured card, you’ll need to deposit enough money in a savings account to cover the credit line– $500 or so is typical. Once you’ve established some history with a secured card (a year or so of paying your bill on time will usually do it) it’s usually not hard to get an unsecured one.

    To avoid the clutches of vampire squids, pay *in full* every month, not the enticingly lower “minimum” that a lot of card issuers will encourage you to pay. That way, you don’t pay interest, you don’t run up debt, and it’s harder to get caught up in overspending. (Folks who use a check register sometimes put credit card charges down in the register as if they’d paid by check or debit right then and there- that way, if you check against the register, you can avoid spending money you don’t have.)

    • brewster says:

      John– You are completely right. My family “moved our money” to a credit union, and the IA is taking that a step further (more on that later). I am fine with the credit card situation I have (hanging off of other people’s credit), but as someone else noted, I have plenty of money.

      I am just starting to think we need to revamp this debt-soaked society. (hence all the posts in the housing section about how to build a debt-free housing system).

      -brewster

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