Plain and simple….. credit is the creation of debt. In Grandpa’s day going into debt was considered to be bad. If you couldn’t pay for it, then you didn’t need it. If you got to the point where you had to borrow money you were looked upon differently. It didn’t matter what the particular incident was that drove you to having to borrow, the end result was always the same. You were in debt! And, that was not the place to be.

Not long ago, it is was common to have a wallet or purse filled with perhaps a dozen or more credit cards. As a matter of fact, this great land of opportunity is practically run off of credit. With the cost of housing increasing along with the cost of food and merchandise it is understandable why credit is needed. Borrowing is “in”. People ranging from the young to the retired proudly flashed credit cards such as “Visa”, “MasterCard” and “American Express” at the stores and over the Internet. Not so much today with the tightening of credit and the rising interest rates. Today, many of those same people are left strapped with burdening debt that they cannot manage.

WHY NOT JUST PAY CASH?

Back In the good old days, everybody wanted to live the “American Dream”. This was to start your own business, purchase your own home, and then work towards the day that you could invite all of your friends over for a “burn the mortgage” party upon your final payment. What an event that would be, but the reality is very few people were ever able to throw such a party. In fact the average American can’t pay cash for a car let alone a house without many months or in the case of a house years of saving.

Today most people are willing to pay interest to have their car or television right now rather than wait until they have saved up enough to pay cash. And, with every payment made the borrower is building a relationship with the lender that will report positive history to the credit bureaus.

Cash is no longer considered to be “king”.

BENEFITS OF CREDIT

The basic benefits of credit are obvious. Credit enables you to have just about anything you have been dreaming of, because just when you almost had enough money saved to make the purchase along would come misfortune to take most of your funds if not all of them away. Credit allows us to buy cars that we would otherwise not be able to purchase using cash. Without the benefits of credit most of us would have to rely on a friend or perhaps the area rapid transit authority just to get around town. When cash was king, there were a lot more hitchhikers.

And, if you ever plan to stop renting credit will make it possible for you to own your own home. Aside from a new car or home credit will afford you the luxury and convenience of purchasing goods from a seemingly endless list.

Credit allows for convenience and quick navigation through our busy lives as we move around at a faster pace than ever before.