this post was submitted on 10 Aug 2023
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Credit scores are a scam to sell credit cards.
You take small loans each month via a credit card that you have to pay back. This increases an imaginary number that lets you take out bigger loans in the furure.
This is all tracked by private companies that you trust with your personal data. That, or you'll not be able to take out a loan if you want to buy a house or start a business.
If you have a good credit score it means that you don't overspend or forget to pay, which you can also achieve with a regular debit card by default. This doesn't serve people, only the banks who expect that a number of people will overspend or not be able to pay their loans back.
Credit cards alone aren't the problem. Forcing them on people with the credit score system is.
You can "game the system" by picking credit cards that offer some kind of cash back incentive, and don't carry balances month to month. For example the chase freedom card does 1% on all purchases and 5% on specific categories that change every quarter. I've had this card for like 9 years, I've never paid any interest because I pay it off monthly , and we make lots of "free" cash back. The key here is don't go get a credit card and buy stuff you can't afford, that should be hammered into youth from the beginning, just buy what you can afford, and if you're disciplined enough you can put all of your purchases on the card and benefit from the card incentives for basically free.
I can’t agree with this more.
Transferring points earned to airlines can also net you some incredible deals on flights as well. I’ve booked several tens of thousands of dollars on business/first class travel over the years at a fraction of the cost. With the addition of free hotel upgrades and car rental upgrades, you can use credit cards to your advantage.
The caveat is that it takes some amount of expendable income to play.