Comment by throwaway0a5e | Hacker News Reader

Comment by throwaway0a5e | Hacker News Reader

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>For me, this is only because I will be locked out of access to certain essential financial products as the result of having no credit history.

You mean like, crappy consumer credit products?

Solution: Don't use credit. The double plus extra gold platinum card with cashback isn't really improving your life that much anyway.

A credit card isn't gonna make that big of an impact on the kinds of purchases you truly need credit for (land/housing/business/capital). You're not locked out of accessing those products. They just cost a little more. God forbid that you be forced to be more selective about the kinds of things you buy on credit as a result of this.

Edit:

Unlike most people who spew internet advice my money is where my mouth is. My only credit is my mortgage and my rate was refinanced to the low 2s a couple years ago. The initial loan was low 3s ~6yr ago and I did 20% down by pulling money out of investment funds I had contributed to over the years. "Costing tens of thousands of dollars over the life of the loan" my ass.

> A credit card isn't gonna make that big of an impact on the kinds of purchases you truly need credit for (land/housing).

Yes it will.

I know a few people who avoided credit cards well into their 20s. They ran into trouble with credit checks for renting apartments and buying cars. Imagine being nearly 30 years old with a good income and no debts, but needing to ask your parents to cosign on a car loan simply because you have no credit history of any kind. That does happen.

"Avoiding credit" means no car loans either. Paying cash for such things. Arguably the only loan one should consider (imo) is a home loan. And while many banks are dumb, there are plenty of lenders which will underwrite a loan based on limited credit. Especially, when you can show income with 20% down, etc.

source: dave ramsey.

Debt is a useful tool for people who can control themselves.

Dave Ramsey caters to people who need unusually strict financial discipline to avoid getting in trouble. For everyone else, responsibly using debt is often better than paying cash.

For example, paying cash for a car is often worse than taking a low-interest loan. Liquidity is important -- locking up a bunch of money in a car means you can't use it for other things, like investments or emergency savings.

Another example: taking out a loan for a large purchase, rather than liquidating investments to pay cash, can cost less overall because the interest paid on the loan might be lower than the capital gains taxes on the investments.

Not having credit history will absolutely require you to take on a higher interest rate for your mortgage. It's probably 10's of thousands of dollars difference over the length of the loan, depending on how big the mortgage amount is.

Mortgage is credit, you are contradicting the scenario.

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