Do credit card companies and credit rating agencies hold too much power?
Why has society/government allowed our lives to become "ruled" by credit and credit ratings companies. Try to book anything these days without a credit card and you are doomed. The credit rating agency can harm your access to credit with wrong or outdated information. Trying to live without credit cards seems to be looked down upon, Even employers and landlords use credit ratings.
Not an easy question to answer: We can control the amount we charge to cards, but you are right about the relationship between the cards and our credit reports. It seems counter-productive, but it seems necessary to hold cards - and pay them off with regularity - to get a good credit report. Pay cash and you have no record showing your reliability.
Putting the shoe on the other foot, employers and landlords have every right to check out a potential worker's or tenant's past performance financially.
"Do they hold too much power?" A qualitative 'maybe'. As for outdated information - that is why everyone can receive a free credit report every year. If you see an error, it's in your power to correct it. Granted, it's an annoying messy process, but you do have rights.
On balance, credit cards have helped more people than they have hurt. The only way to control their 'power' is through regulation, and you know how people feel about that. It's a love/hate relationship.
Thanks MobyWho. The question came up because I work with many low income families who have due to circumstances gotten into a whole lot of trouble and or cannot rent an apartment simply because they choose not to have a credit card they can't afford.
Lizam1 - heartbreaking. If only there were some kind of card they could get from a bank or company that would back up their trustworthyness - like a driver's license or certificate.
They do have too much power. However, that is only if you rely on credit for anything. If you show up with cash, bills are still the most powerful motivator known. Make a meeting to see someone about a house, if you have cash then it will soon be yours. If you appear at a car dealership with a briefcase full of money, they will have your undivided attention.
It will take a few years of saving, but you can get it. I love the looks on individual's faces when I say that. "But you can get it now if you use a morgage." You would also over-pay.
I learned several years ago not to ask a buyer certain questions. I was selling my over-used Mercedes 240D via newspaper ad. The eventual buyer arrived with $3500 in twenty-dollar bills. I started to ask where he got all the
twenties - then shut up,
Did he answer why he had all the twenties? Either he saved the money in twenties or he used the ATM. But what was the real reason?
I suspected drug money...and had altruism overcome the fear of 'knowing too much', I would not have simply handed him the keys.
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