Living with No Credit?

With the recent down-turn in our economy, it is becoming increasingly more difficult to obtain credit at decent interest rates we were used to in the past. Since banks and credit card companies have experienced huge losses over the past few years, interest rates, terms, and conditions are more stringent than ever. That of course is if your FICO score is still high enough to even obtain a good credit card.

So what are people doing to get by these days when it is hard to charge anything? You may find a payday loans or check cashing places on every street corner now, but is this the solution you are really looking for?

Many of these places charge what seems to be a modest fee for borrowing money. But if you were to calculate the fee on an annual basis, and assume you use their services frequently, you would be shocked to know the actual interest rate you are paying to borrow money. No, it's not ten, twenty, or even thirty percent! Often times you will find the finance charges will amount to something insane like a few hundred percent. Is that the type of fees you want to pay for a small loan?

Perhaps you can justify taking on a small loan like this to get by when times are tight, but don't make a habit of it. Otherwise you will find you are stuck in a hamster wheel of debt and fees that you can never get off of!

The age of cheap credit has come to an end, and more people will need to rely on cash alone for their expenses and large purchases. Is it really all that bad that we are restricted from credit? Ask your grandparents what they think about saving for large purchases. Grandpa, tell me about the good old days!