Sunday, how about a little preaching?

Okay, here's something really annoying, at least to me. Credit is a big industry. How's that for pointing out the obvious? As a matter of fact, credit is often times the major product being sold by a store. Dave Ramsey says that Sears makes more profit on credit cards than on merchandise. They are really just a big loan company with some stuff for sale too. Since Sears sold off its Discover Card business, this may no longer be true, but you get the idea. I was reading this morning about how the three major credit reporting agencies have started their own credit score to compete with the FICO score that we've all become accustomed to. When you buy a report showing your credit score, it seems that you get their score, not the FICO. Plus what you get is inflated because they use a maximum score of 990, while FICO uses 850 as their maximum. I get irritated by these articles for a couple of reasons. One, I resent the idea that credit is a consumer product at all. The article pointed out that having a low credit score means that you have to pay higher rates on your credit cards. Well, no you don't, if you don't carry a balance. I haven't paid interest to a credit card company for years and years and the next time I do will be never. The second thing that irritated me was the contention that a lower credit score means that you might have to pay higher interest for a mortgage. My take is that if someone tried to sell me that bill of goods I would walk away. But what about borrowers with less than good credit, shouldn't they pay higher rates? I guess in theory they should, but the reality as I see it, is that they shouldn't be getting a mortgage if their credit is bad, and the mortgage idiots shouldn't be taking advantage of them by sticking them with high rate loans. This may be old fashioned, but what happened to the idea that if you were bad at paying your bills on time, people wouldn't loan you money? What happened is they got the ability to charge very high interest rates, so a little extra risk is no big deal. How sad is it to drag your butt to work each day, so that the creepy credit sharks can take your hard-earned money? When you're old and grey and feeble, you're also broke. Really sad. Merle. Things in this blog represented to be fact, may or may not actually be true. The writer is frequently wrong, sometimes just full of it, but always judgemental and cranky Tag: Daily Life Personal Finance Humor