Hey, I was wondering if someone needs credit to buy things. People in my family have said I wouldn’t be able to buy a car or a house without credit. But if I’m saving up cash to pay for things outright, do I really need credit?
Note: I’m sorry if this is the wrong place to ask.
No. If you have enough cash to buy things outright, then you don’t need credit to buy things.
On the other hand, you do need a credit score to rent an apartment, or to qualify for a mortgage. (If you have no credit history, but have proof of income, some landlords will risk renting to you.) Since most people can’t ever afford to buy a house with cash–a mortgage is a form of credit, albeit not revolving credit–and certainly can’t do so without renting a place in the meantime, that could make things challenging for you.
OTOH, if you’re disciplined, then having and using revolving credit accounts can be a net positive. For instance, certain credit cards give you ‘cash back’, such as .5% of all of your purchases. As long as you pay your card off every single month, and never, ever float a balance, then that ‘cash back’ is effectively a .5% discount on everything you’ve used that credit account for. It also means that you have a reserve of sorts to deal with genuine emergencies where you may not have liquid cash on hand.
I’m very much in the camp of having, but still hating, credit cards.
Plus the “rewards” from credit companies are paid for by merchants leading to price adjustments for all items regardless of payment method. If you aren’t using a credit card you are paying me to use one.
Yeah I’ve seen that with apartments so far it’s kinda a 60/40 if they check. Though I wish I could pay 3-4x the rent first month to counteract credit.