Do you buy things on credit or do you save up?

Question

So I heard that in other countries (especially in the US) people usually buy things on credit and pay those things off later on or in installments. In Germany that behavior is highly unusual, especially among low income households. We prefer not to spend money we don't have and save it up instead.
It is not unheard off to take on a loan but those things are usually reserved to big investments like cars or real estate that would be nearly impossible to save up to in a timely manner and it is really only 'socially acceptable' if you have a stable income.

Personally I would not take on a loan and especially not chose any payment installment plans. I have a very tight and rigid financial plan, no credit card (they're not needed in germany anyways) and my bank account cannot be overdrawn. I live on a tight budget but by cutting corners intelligently and doing without some things i don't need, I get to enjoy many more things that enhance my quality of life without spending money that I have not yet earned.

Answer 1

blutwolfe | 843 opinions shared on Other topic.

Guru

To keep my credit up I have to use credit, it's a stupid system but that's how it works. And places will judge you based on your credit score if you could get a loan, or apply for a house/rent. For example I used to have an 750-800 credit score, I stopped using credit and it dropped to like 500-600 for no reason.

Liz_thorne

3 mo
Oh wow. That's a weird system. We don't have it here in germany. We have a system called schufa where you get negative points if you don't pay your bills. Another good reason for me to pay everything on time.
blutwolfe

3 mo
Ya it's pretty stupid, you can't use debit, you have to use credit card or have a loan/reoccuring payments to build credit that's the goofy part. I mean same concept it goes down if you don't pay, it's just the requirements to even have a score.
Liz_thorne

3 mo
wtf. So you are forced to take financial risks to prove that you are financially competent. That's just ridiculous. And I can imagine that it affects low income households negatively
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blutwolfe

3 mo
Basically nailed it, and ya it does, they get late fees and struggle with credit score. So on top of financially struggling, they get hit with a 50$ late fee, banks making bank, hell just being forgetful, bam fees. It's really just a scheme in my opinion.

Answer 2

Liz_thorne

Oh wow. That's a weird system. We don't have it here in germany. We have a system called schufa where you get negative points if you don't pay your bills. Another good reason for me to pay everything on time.

Answer 3

blutwolfe

Ya it's pretty stupid, you can't use debit, you have to use credit card or have a loan/reoccuring payments to build credit that's the goofy part. I mean same concept it goes down if you don't pay, it's just the requirements to even have a score.

Answer 4

Liz_thorne

wtf. So you are forced to take financial risks to prove that you are financially competent. That's just ridiculous. And I can imagine that it affects low income households negatively

Answer 5

blutwolfe

Basically nailed it, and ya it does, they get late fees and struggle with credit score. So on top of financially struggling, they get hit with a 50$ late fee, banks making bank, hell just being forgetful, bam fees. It's really just a scheme in my opinion.

Answer 6

Reaperbot666

Guru

I typically won't buy something. unless I know I have the funds to pay for it.
more likely to use my Debt card or cash when able.
since I know those are the funds I legit already have.
I might pay with my Credit card once in a while. just to keep my Credit line active.
but I turn around and pay off the charge. before I even get the bill in the mail for it.

Answer 7

ineedatan

Xper 6

I've always had a pretty good cash flow ever since highschool and knew how to budget myself accordingly in knowing what I was able to afford and pay off. In order to keep my credit score up and build trust with the bank, I use my credit card like 75% of the time for most purchases and always make sure I pay off the card on time.

Answer 8

jennifer_bloom | 4.1K opinions shared on Other topic.

Master

I use my credit card for around 80-90% of all purchases because I don’t leave the house to buy things and rely on government money for laid off people and online retailers usually ignore people who do not have credit cards by refusing to accept other methods of payment

Answer 9

ChefPapiChulo | 156 opinions shared on Other topic.

Xper 7

we have the greatest economy in the world. The US wealth is endless. American people do that because they know they'll be able to continue making money, and by spending it, the economy grows at a much faster rate. There are problems that come up, like inflation that needs to be carefully watched. And also population growth. The US population has gone up by over 180 million since the mid 1900s. And that can cause problems with pollution, sanitation (one of the reasons the US is the leading country with the whole corona virus thing).

Personally I save up, because it's better to pay up front most of the time. Some things I wouldn't buy on credit, cars. Its just not worth it buying a super nice car, I prefer driving old cheap ones i can just junk after a couple years. And I also would never buy a house. Being that much in debt would be a scary thing.

Answer 10

raven6933

Xper 4

The reason why they want you to use a credit card is nothing more than to keep you in debt. There are some things that I'll lay away so that later I'll get it but as far as using a credit card forget it. If you do not hurry up and pay it off it wo cost far more later.

Answer 11

midnightmoon05 | 484 opinions shared on Other topic.

Yoda

That’s the old fashion way and a good way to save money :) good for you for being financially smart.

the USA trains the majority to be consumers. The commercials - buy now pay later...
use your credit cards and pay off with interest...
many took those ideas and are in lots of debts.

like you the smart way to work on this is save up and buy what you need when you have money.

Answer 12

fillthevoid

Xper 4

I'm kind of scared of credit so I usually pay upfront. But then again, I don't take on big investments yet such as real estate. My bills mainly include phone bill, insurance, mutual funds, etc so I keep them on a budget before spending on any wants.

Answer 13

ibodi | 2.3K opinions shared on Other topic.

Guru

Do you come from eastern germany?
Let it be where wind blew so dont have many words to say. But I heard European counting money very slow，If it is Asian the same race they would slap you.

ibodi

3 mo
For trade instead of debt.
Liz_thorne

3 mo
Nope, northern germany. Why?
ibodi

3 mo
I heard eastern german hardly adopt since the wall collapse.

Answer 14

ibodi

For trade instead of debt.

Answer 15

Liz_thorne

Nope, northern germany. Why?

Answer 16

ibodi

I heard eastern german hardly adopt since the wall collapse.

Answer 17

EmbraceThePain | 808 opinions shared on Other topic.

Guru

Well, you can say I’m fairly well off lol.

In my life, I’ve rarely saved for anything.

I just use credit.

Liz_thorne

3 mo
you lucky bastard lol
EmbraceThePain

3 mo
😎😎🤓

Answer 18

Liz_thorne

you lucky bastard lol

Answer 19

EmbraceThePain

😎😎🤓

Answer 20

DCooper | 106 opinions shared on Other topic.

Xper 6

I always wait till I have the money to make the purchase. Only exception is my house, I did take out a loan for that.

Answer 21

Liam_Hayden | 2.5K opinions shared on Other topic.

Guru

I buy almost everything on credit and then pay off the entire balance before any interest accrues. This way I get the rewards but do not actually pay anything for them.

Answer 22

Old_Golden

Xper 5

Credit, but i already have the money saved up. Credit card gets me cash back

Answer 23

asshole_

Yoda

I don't have credit... yet

I try to stay away from it as much as I can

Answer 24

coffeewithcream | 317 opinions shared on Other topic.

Explorer

I like that.
Credit cards can eat your shoes.

Answer 25

lsjr16 | 519 opinions shared on Other topic.

Explorer

I save up I buy things once in a while

Answer 26

mrgspoter | 828 opinions shared on Other topic.

Yoda

Save

Do you buy things on credit or do you save up?

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