Is it possible to abolish the credit system?

[Makko Oko]

So here's a unique topic of discussion, we have things all over the world like credit cards, social credit system of China (god don't even get me started on this) and so many other things tied to the word 'credit'. But let's focus on the credit system of America, which quite honestly, I say is similar in structure to the social credit system of China because without good credit, you're cut off from needed things such as loans, homes, anything you may need in life that's important.

Is it possible to abolish this, how would it be done and what would that look like? This thread is mainly for the American credit system, but any will do if we're being honest, especially China's because god is that hell

[The Orwell Society]

It could be done, but it would take a long time and basically lead the US into a socialist state because of all the welfare and aid that would have to be given to those who can't afford (literally) to have the system abolished.

[Comfed]

China's social credit is not comparable to the economic credit system. As the entire global economy is built on the principle that you can buy now and pay later I am going to guess that the answer to your question is no

[Royal Frankia]

If you cancel all debt, but you would still have loan sharks charging at rates that would make you cry. Even with the credit system, in place, they still loan to those who have poor credit.

[The Orwell Society]

China's social credit is not comparable to the economic credit system. As the entire global economy is built on the principle that you can buy now and pay later I am going to guess that the answer to your question is no

As I said, it can be done, it would just take a whole lot of slowly adjusting, raising wages, and even more welfare. And Makko was talking primarily about the American economy, not the world's.

[Comfed]

China's social credit is not comparable to the economic credit system. As the entire global economy is built on the principle that you can buy now and pay later I am going to guess that the answer to your question is no

As I said, it can be done, it would just take a whole lot of slowly adjusting, raising wages, and even more welfare. And Makko was talking primarily about the American economy, not the world's.

You can't just abolish the credit system in one country when the global economy is so interconnected. Would you just flat out ban Americans from taking loans?

[The Orwell Society]

If you cancel all debt, but you would still have loan sharks charging at rates that would make you cry. Even with the credit system, in place, they still loan to those who don't have poor credit.

Agree. If it was to be done, doing it sudden would send us into an economic depression worse than that of 1920s and 1930s.

[Makko Oko]

As I said, it can be done, it would just take a whole lot of slowly adjusting, raising wages, and even more welfare. And Makko was talking primarily about the American economy, not the world's.

You can't just abolish the credit system in one country when the global economy is so interconnected. Would you just flat out ban Americans from taking loans?

I mean if you mean in the way of SWIFT, etc. then I don't exactly see where credit fits in this

[Vistulange]

Why, though?

For the credit score system, that is. Not the social credit score scheme the PRC has going on, but as others have pointed out, they aren't even remotely comparable; they just happen to share some parts of the name.

[The Orwell Society]

As I said, it can be done, it would just take a whole lot of slowly adjusting, raising wages, and even more welfare. And Makko was talking primarily about the American economy, not the world's.

You can't just abolish the credit system in one country when the global economy is so interconnected. Would you just flat out ban Americans from taking loans?

I do not see how taking away an individual's credit privileges in one nation would effect the world economy

[The Orwell Society]

Plus, I am fairly positive that Japan does not have an official credit system, but don't quote me on that.

[Makko Oko]

Plus, I am fairly positive that Japan does not have an official credit system, but don't quote me on that.

I think you're correct if my research is accurate. Lucky country.

[The Orwell Society]

Plus, I am fairly positive that Japan does not have an official credit system, but don't quote me on that.

I think you're correct if my research is accurate. Lucky country.

Yes. Now, would the abolishion of credit for the US be beneficial in the long run? That's the question. It would certainly eradicate debt, but people would have much less spending power since they could only use the money they had at the moment of buying, which would be disastrous for those living paycheck-to-paycheck.

[Radiatia]

I'm not entirely sure what you're advocating for here, but it sounds like you could either be advocating the abolition of usury (which is common in the Middle East as Islam prohibits charging interest on a loan) or maybe even full reserve banking which wouldn't abolish loans but would abolish the ability of commercial banks to create money out of thin air whenever someone takes out a loan. Both of these are possible and I suspect the latter will become essential toward the end of the century.

Alternatively you could be advocating for the abolition of credit checks which to me would make no sense because why would you lend money to someone when you have no way of determining their likelihood of paying it back.

[Comfed]

Plus, I am fairly positive that Japan does not have an official credit system, but don't quote me on that.

Japan is a capitalist country with one of the largest economies in the world. It absolutely has credit.

[Makko Oko]

I think you're correct if my research is accurate. Lucky country.

Yes. Now, would the abolishion of credit for the US be beneficial in the long run? That's the question. It would certainly eradicate debt, but people would have much less spending power since they could only use the money they had at the moment of buying, which would be disastrous for those living paycheck-to-paycheck.

I think you somewhat misunderstand. I don't want to rid the idea of credit cards or loans, but rid of the idea of credit in itself, you know, like Experian, EquiFax and TransUnion. If we rid of credit and grant people loans or credit cards based on things like job history or worthiness or on previous payment history, that would be MUCH easier and much more relaxed. Honestly, in a way, it still is the credit system, just without numbers, and easier to build up, and at the same time, easier to destroy.

[Lanoraie II]

Well, my credit score dropped from 780 to 620 in two years. Why? I paid my bills on time, paid off my house, and took out zero loans.

Abolish it. This is insanity.

[Royal Frankia]

Turkey has run into difficulties in opting for an ethical policy, in regards to keeping interest rates low. It might be much worse should it outlaw rates of interest and access to credit all together.

[The Orwell Society]

Yes. Now, would the abolishion of credit for the US be beneficial in the long run? That's the question. It would certainly eradicate debt, but people would have much less spending power since they could only use the money they had at the moment of buying, which would be disastrous for those living paycheck-to-paycheck.

I think you somewhat misunderstand. I don't want to rid the idea of credit cards or loans, but rid of the idea of credit in itself, you know, like Experian, EquiFax and TransUnion. If we rid of credit and grant people loans or credit cards based on things like job history or worthiness or on previous payment history, that would be MUCH easier and much more relaxed. Honestly, in a way, it still is the credit system, just without numbers, and easier to build up, and at the same time, easier to destroy.

Ohhhh… so you're talking about the abolishion of credit scores, not credit in general. I get it now

[Vistulange]

I'm not entirely sure what you're advocating for here, but it sounds like you could either be advocating the abolition of usury (which is common in the Middle East as Islam prohibits charging interest on a loan) or maybe even full reserve banking which wouldn't abolish loans but would abolish the ability of commercial banks to create money out of thin air whenever someone takes out a loan. Both of these are possible and I suspect the latter will become essential toward the end of the century.

Alternatively you could be advocating for the abolition of credit checks which to me would make no sense because why would you lend money to someone when you have no way of determining their likelihood of paying it back.

From experience, these Middle Eastern countries who "abolish usury" generally replace it with something that is the same, but named differently. Some "Islamic banks" in Turkey, for example, will pay their clients "contribution margins", rates of which are miraculously identical to the interest rates of banks. You get the idea.

Turkey has run into difficulties in opting for an ethical policy, in regards to keeping interest rates low. It might be much worse should it outlaw rates of interest and access to credit all together.

Turkey's monetary policy isn't "Islamic" or religiously motivated at all, whatever Erdoğan may say. Instead, as you've pointed out, it's done to keep interest rates low. Not due to reasons of making good with God and investing in Heaven, but rather to keep the overheated Turkish economy going, as opposed to cooling it off. One could argue that blocking access to credit and allowing the economy to cool might be a good thing for Turkey. However, that would be good for Turkey, not its government.

Well, my credit score dropped from 780 to 620 in two years. Why? I paid my bills on time, paid off my house, and took out zero loans.

Abolish it. This is insanity.

That's...unfortunate. And for some reason, I get the feeling we're not getting the whole picture, and we shouldn't get the whole picture. You might want to take a really close look at your finances, though.

[Saiwania]

If you learn how a credit score is calculated, it is no big deal. If you don't need or want credit, just don't use it. Although, there are some disadvantages. No big loss because you need a job or income before you're able to start building credit anyways.

It's not for borrowing to pay for stuff you can't afford, but to help get other people to know that you know how to handle money or are likely to pay them back if they lend to you. It's hardly different from a report card. Ideally, you'd use credit for stuff you're going to buy anyways, but you pay it off on time every time.

It's not rocket science to build up a good credit score, just takes time and some discipline. Open up more lines of credit (if you're able to) and keep your credit utilization below 9%. It always looks better to have $20,000+ total credit available to you between several cards than to have only one card that only gives you $5,000. Learn from the Credit Shifu on YouTube if you have to. It's a channel dedicated to credit cards and personal finance.

Yeah, you might have to start with a credit builder loan or a secured credit card, but that is how it has always worked. It's perfectly fair.

[USS Monitor]

So here's a unique topic of discussion, we have things all over the world like credit cards, social credit system of China (god don't even get me started on this) and so many other things tied to the word 'credit'. But let's focus on the credit system of America, which quite honestly, I say is similar in structure to the social credit system of China because without good credit, you're cut off from needed things such as loans, homes, anything you may need in life that's important.

Is it possible to abolish this, how would it be done and what would that look like? This thread is mainly for the American credit system, but any will do if we're being honest, especially China's because god is that hell

If you abolish the idea of credit, you would also have to abolish most of the banking system, and you would not have loans. This would be a problem.

You might be wondering: why would there be no loans?

Well, what's to stop some unemployed hobo from walking into a bank and "borrowing" a billion dollars? What if every person in America decides they all want to "borrow" a billion dollars per person? It should be obvious that this would break the economy. You can't have a system where people are able to borrow money unless you also have a system for deciding how much is reasonable to lend.

And you said yourself that loans are needed.

[USS Monitor]

Yeah, you might have to start with a credit builder loan or a secured credit card, but that is how it has always worked. It's perfectly fair.

Hello. My name is USS Monitor. I was built in 1862. That is not how it has always worked.

[USS Monitor]

Yes. Now, would the abolishion of credit for the US be beneficial in the long run? That's the question. It would certainly eradicate debt, but people would have much less spending power since they could only use the money they had at the moment of buying, which would be disastrous for those living paycheck-to-paycheck.

I think you somewhat misunderstand. I don't want to rid the idea of credit cards or loans, but rid of the idea of credit in itself, you know, like Experian, EquiFax and TransUnion. If we rid of credit and grant people loans or credit cards based on things like job history or worthiness or on previous payment history, that would be MUCH easier and much more relaxed. Honestly, in a way, it still is the credit system, just without numbers, and easier to build up, and at the same time, easier to destroy.

I am getting the feeling you either have a poor understanding of the existing system, or you are attaching far too much significance to credit scores.

There are a lot of ads and things selling services to monitor or boost your credit score. There's a lot of advice floating around too. Just because the advice is out there doesn't mean you need to do everything they say. Having decent credit is useful, but you don't need to agonize over making it perfect. It mostly takes care of itself if you pay your bills on time.

[Free Algerstonia]

yes, under a marxist system, the world will be a paradise without any currency or payment tracking system whatsoever including the credit system. if you want to see an end to the credit system, begin adhering to the teachings of karl marx and embrace communist thought and the soviet union's great and positive legacy