Hi RichardC,

originally the question was what would happen if people stopped using their credit cards. They couldn't buy consumer type things on credit until their cards were paid off.

I guess the point I was making is if people did nothing but pay off their credit cards, and save their money, then there would be a certain sectors that would be hit pretty hard. Industries such as groceries and clothing would still do well as they are essentials and people have cash to pay for those.

For the last 20 years the economy has being inflated with consumer credit cards. So by paying off credit cards and saving money I'm thinking it would have the opposite effect.

I'm sure this is a topic the economists discuss all the time.

Hey Monty, I don't think it would "trash" the economy. Things would correct obviously, but life would go on.

There is no question IMO that credit cards make some people believe that they are richer then they are.

Credit is an ancient concept that goes back hundreds of years, I don't think we will see it go away.

Some cultures today don't even believe in buying homes on credit, they save up, buy land, then save up more and pour the foundation, save up more and build the first level and so on.

But these places are mostly in 2nd world countries, so does credit open doors, speed up purchasing power and opportunities? Absolutely, but you have to respect it and use it intelligently.

The original question was ... What would happen if credit cards didn't exist?
It really goes to the fact that people would become savers and it would trash the economy...

I'm all for people becoming very solvent and having mounds of cash in the bank for savings. I'm all for people paying off their credit cards...

Currently many people are spending money they don't have, buying things they don't need. They don't have cash and when they get behind the 8 ball, they lose control of their situation... Having cash in the bank and no debt gives you alot more control.

Agreed, if you do swallow their bait, hook, line and sinker it's tough to get off the merry-go-round of credit card debt. That's the trap.

No question Richard your input to this Board is valuable and helpful and i for one am grateful.
My point is (and you probably see it every day) that sometimes all your best laid plans shatter no matter how prepared you think you are, and sometimes it's just that people are not responsible enough or educated enough.
But once you are in the spiral I maintain that the system is against you, How many of your clients have had their interest rates increased because of late payments without having received the required notice that they were going to increase?
The compounding effect of that increase is probably huge and the Government Agencies do nothing to help.The link I posted is proof of that.

Agreed, and I'm actually fine with that. I want people to be smart about credit. I am an entrepreneur first and will easily create another business that adds value to lives. Total Debt Freedom exists because every other debt relief service provider is mediocre and adds little to no value to peoples lives.

I know that helping people deal with credit cards and understand how credit/debt works takes potential clients out of my program, and thats what I want: Less people in debt to banks.

My company is not about existing forever, its about creating a debt relief system in an awesome work environment and culture because I know that in turn my employees take better care of our clients.

If people like this learn their lesson, get smart about money and are never in debt again I am so happy with that: http://www.totaldebtfreedom.ca/10littlethings.htm

Richard C,

If credit cards didn't exist you wouldn't have a debt settlement company lol.

Cheers

Just to elaborate, this is what I am talking about when I mean intelligently using credit cards

- If you keep an emergency fund with at least 6 months expenses
- Buy only what you have cash on hand for and can afford to pay off in full
- Never carry a balance or pay interest
- Get a rewards card that pays points air miles etc.

Follow the above and you are the one using the bank rather then them using you.

I have done this for the last 20 years and every trip I take is free on the banks dime. They don't lose money because they earn merchant fees but its pretty much a wash for them.

Now if I ever make a mistake in life and lose income, I have an emergency fund to fall back on. But heres the thing, it will never be used to pay minimum payments because I only buy what I can afford to pay off in full when I get the bill.

So here's the thing, banks hate people like me. I am the real deadbeat to them - its the minimum payers that they are trapping and making a fortune off.

Follow my rules and the balance of power changes to your side. Abuse credit and credit cards and you become the banks slave. Its a choice.

If credit cards didn't exist, I would care. I would have to pay for travel.

Your poinys are correct, only a fool would argue with them.
My point though is that sometimes in life you get thrown curve balls, nothing says life's fair but it happens.
Now when your perfect world falls apart a little and you are late with a couple of payments over a six month span the cc jump your interest by about 5% points. so if you are struggling anyway but paying they jump on you.
my point is the system is loaded against you when that happens, if you think I'm just moaning I'm not
.FCAC is the place to complain about Banks not following the Bank Act.
Read this link http://www.fcac-acfc.gc.ca/eng/industry/CommDecisions/HTML/22113-136Q307-eng.asp

The Bank got its wrist slapped for $25,000 pocket change to them, but FCAC to my knowledge did not tell the bank to go back and readjust its customers accounts.
so if the extra say$50 interest is left to compound because a person can only pay the minimum think of the "unjust enrichment" they received..
Thats why I posted my previous comment, and I have as much power as the credit card companies? don't think so

I agree with RichardC. It all just went down to how you act about money. I think we could still be in a similar situation even if there is no credit card. You just need to act responsibly and not spend more than you can afford. I think plastic should be treated more as a "convenience" so we won't have to carry cash around anywhere we go and we can purchase what we need with alternative payment options.

Anyway, no one is forcing anyone to use a credit card.