Banks Using Mobile Phone Usage To Gauge Credit Risk

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Banks Using Mobile Phone Usage To Gauge Credit Risk

Posted by samzenpus on Sunday January 22, 2012 @07:52AM from the gauging-your-minute-score dept.

Hugh Pickens writes "A new startup is revolutionizing the way financial service companies meet the needs of an estimated 2.7 billion people worldwide with a mobile phone but no access to formal financial services by developing sophisticated modeling software that can look at usage data from consumers' mobile phones and make predictions about credit risk. 'There's a vast market of consumers in countries like Brazil, China, India, and the Philippines who want access to financial services like credit cards, loans, or insurance,' says Jonathan Hakim, chief executive of Cignifi. 'But while they may have jobs, and some have bank accounts, there really is no credit history for them.' The way you use your phone is a proxy for your lifestyle say the developers. 'We're looking at things like the length of calls, the time of day, and the location you make them from. Also things like whether you top up [a pre-paid SIM card] regularly. We want to see how stable the patterns are. When you look at that, you can create these behavioral clusters that give you information about users' appetite for new [financial] products, and their ability to repay a debt.' Currently operating in Brazil, Cignifi doesn't plan to deploy the technology in the US. in the near-term. 'The business opportunity is so much bigger in Brazil, India, China, and Mexico, where you have around half a billion people in those four markets alone who have a mobile phone but no banking relationship.'"

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The entire credit history thing is stupid by FreeCoder · 2012-01-22 07:52 · Score: 5, Insightful

The countries listed, and where credit is not usual for people but mostly businesses (and only then for billing duration), have it more right than US. In the United Status people need to take loans just to build up their credit history, which is just useless costs. The only justified things for loans should be loans for starting businesses, houses and maybe cars. Living on credit for your everyday things is just stupid and bad for economy. And this also includes credit cards, even if you pay them back as soon as you get the bill.
1. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 08:02 · Score: 1, Insightful
  
  Money is debt too. Currency is nothing more than someone else's debt that you are holding. Revolving debt simply means you are holding LESS of others debt at any one time, making the economy not less, but more efficient.
  The downside is when the said revolving credit dries up. Then the ability of the currency system to function at all dries up (you need at least some cash in hand to do basic transactions).
2. Re:The entire credit history thing is stupid by im_thatoneguy · 2012-01-22 08:09 · Score: 5, Informative
  
  I disagree. I live off of credit for day-to-day things for a very simple reason: my income is very consistent and infrequent (payday).
  I know how much money I'll have at the end of the month down to the penny. I also know that my credit card is due 1 month after the statement. So if I want to make a big purchase that I can't afford for instance I can buy it now and pay it off in up to 2 months interest free. My bank account usually has enough cash on hand to cover my monthly expenses but when it doesn't I use it to smooth out the discrepancies between my wants and my pay-dates. Why wait a week for pay-day when the credit card bill won't be due until the end of the month? It makes my income and my expenses both equally predictable instead of the haphazard day-to-day uncertainty of spending.
  As a result I've never paid a penny in interest, I've flown around the world on my miles and my bill paying is far more predictable and automated.
3. Re:The entire credit history thing is stupid by Billly+Gates · 2012-01-22 08:21 · Score: 3
  
  Yep
  It is the reason our economy is so bad and Europe is dangerously close to going into a 1930s style depression.
  In the old days before deregulation there were usuary laws. You couldn't charge more than 6.5% interest by law! Can you imagine if they had that today? The financial industry controls too much of the worlds government to ever go back but it might be needed.
  If interest rates were capped at 6.5% you bet poor people would not be targetted and could get credit cards, prices would go down for used cars so they would be more affordable for smarter people who choose to save, and businesses could get lines of credit to hire again.
  Small business is still not getting loans to expand or pay existing payrolls. Why? Because they can charge FreeCoder and Billy Gates or some other smuch 28% interest instead!
  Sadly, the poor get targetted and never can get out. Prices then respond by going up so a car with 120,000 miles, no seat belts that work, and no shocks goes for $2500 where I live. Insane! But it all started when payday loan centers opened up. People got the $2500 with 75% interest etc. Not fair for savers like me who do not want to be robbed blank.
  
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4. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 08:22 · Score: 1
  
  So why not just save two month's worth of income to act as a buffer?
5. Re:The entire credit history thing is stupid by lee1026 · 2012-01-22 08:27 · Score: 1
  
  Because that is 1 month worth of buffer that you can invest and earn some interest. For most people, it will only be around 5-20 dollars a month of extra interest, but hey, free money.
6. Re:The entire credit history thing is stupid by Billly+Gates · 2012-01-22 08:28 · Score: 0
  
  MOney is just time. If you earned your money it is already pre-paid for but it is kind of a loan to the person we give it too. They then take the time we earned after we receive the good or service.
  Debt should NEVER be considered liquid cash. That is what caused the financial meltdown. Accountants are idiots who follow rules and never reconsider their actions on WHY.
  It is a falsey because revolving debt inflates your book assets and keeps getting passed out and the interest is money created out of thin air. Right now we are dangerously close to not having any time/money to count for the interest. BOA claims they have $70,000,000,000,000 in real assets! What is our GDP? Oh yeah, it is $14,000,000,000,000 oops. Where is this magical money they claim? It is owed!
  See the problem? The FEDS answer is to print more money to hide deflation which is badly needed as the cost of living is going up too high and not with our salaries. BOA can never get this money EVER.
  Debt == BAD!! There is no justification for it EVER if you are a person.
  
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7. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 08:33 · Score: 0
  
  I wish... Where are you getting that sort of rate?
  Since the market cratered interest rates are for shit. As they usually follow the prime rate. What an ironic catchpa thieves
8. Re:The entire credit history thing is stupid by hedwards · 2012-01-22 08:34 · Score: 1
  
  I do that as well currently, I pay my bills on time and my CC company rewards are more than the piddly amount of interest that the banks are willing to pay.
9. Re:The entire credit history thing is stupid by hedwards · 2012-01-22 08:39 · Score: 4, Insightful
  
  The problem isn't the interest rates in that regards, the problem is that the spread is so large. If I have an account at a bank the typical interest these days is roughly 0.1% on most accounts I've seen. A quick look at average rates reveals that low interest cards average out at about 10.75%. So on average they're borrowing money from account holders for 0.1% and they're lending it for an additional 10.65%. There is some overhead involved, but people wonder why savings rates in the US are so low. 0.1% is 1.9% below the Federal Reserves typical inflation target.
  I don't agree with Ron Paul on pretty much anything, but the fact is that he's dead on when it comes to the harm that the Federal Reserve represents. Tax laws are nothing compared with the income redistribution that's resulted form the Fed purposely creating inflation and holding interest rates well below inflation.
10. Re:The entire credit history thing is stupid by man_of_mr_e · 2012-01-22 08:39 · Score: 2
  
  That's ridiculous.
  First, you're saying that nobody should ever own a home. Because it's pretty much impossible for someone to buy a home with cash on a typical salary. It would take you 20+ years, and by that time your kids are gown and you don't need to own the house any longer.
  Interest is money created out of thin air? No, it's not. Interest is additional debt incurred, the money that pays it is still real money. The debt may be created out of thin air, but the money is not.
  That's like saying if you buy a comic book, and 30 years later sell it for $200, then you created inflation. No, it's just a change in price, not a change in the actual dollars.
  
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11. Re:The entire credit history thing is stupid by lee1026 · 2012-01-22 08:39 · Score: 1
  
  The average US household spends around 4000 a month. The fund BND pays 0.2% monthly in terms of dividends. That words out to 20 dollars a month.
12. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 08:42 · Score: 0
  
  the recession has made me wonder if my old man putting every extra dime into gold coins was such a stupid idea after all.
13. Re:The entire credit history thing is stupid by evilviper · 2012-01-22 08:46 · Score: 2
  
  So if I want to make a big purchase that I can't afford for instance I can buy it now and pay it off in up to 2 months interest free.
  Why don't you control yourself for a few months, save a little bit of that money, and then never need a credit card again?
  Sure, you're not paying interest (suposedly... every that I've heard say that before comes back with "Oh, except that one time, and the other time..."), but you could be EARNING interest on that money. Right now, Ally gives 0.8% on it's CHECKING accounts... more than any brick & mortar banks are giving on even their savings or 1year CDs right now...
  Plus, you'll be slightly less screwed when the unforseen happens. I've known bigshot software developers who behaved the same way, and when eventually losing their jobs for one reason or another, and not IMMEDIATELY finding a new job, find themselves broke and homeless, but with credit cards... destroying their credit, add still having the same problem of being broke and homeless. Leaves you worse off after, with bad credit making it impossible to find rentals even once you're back to work and making money.
  
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14. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 08:59 · Score: 0
  
  While it's usually a bad decision for the person living on credit, you're wrong in thinking that it's bad for the economy. Exchange of money drives our economy. So long as the individual doesn't default on their loans / go bankrupt prior to the bank getting value repaid + inflation, the bank and all of the producers of whatever they purchased are making money. The banks extend credit, the producers use the money to continue the business, pay employees, and the cycle continues.
15. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 09:03 · Score: 0
  
  BND may pay great dividends right now but as soon as interest rates rise as they must, the value of the dollars you've invested in the fund will lose a lot of value.
16. Re:The entire credit history thing is stupid by dgatwood · 2012-01-22 09:05 · Score: 3, Informative
  
  Maybe you should consider moving somewhere that doesn't massively gouge you on housing prices. The average new home costs about three years' salary in the U.S. unless you are in a major city. Even in smaller cities (in most states), you can get a fairly nice home for maybe 200 grand, which is only about 4 years at U.S. median income.
  Now I realize that you can't put 100% of your salary into a house, but assuming both of you work, it's hard to imagine not being able to save more than 10% of your combined total income every year.... That's how little you'd have to save for it to take 20 years (on average).
  
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17. Re:The entire credit history thing is stupid by Runaway1956 · 2012-01-22 09:11 · Score: 2
  
  Don't be so sure about your position, there. "The debt may be created out of thin air, but the money is not." The United States has fiat money. The value of our currency is tied to nothing at all. The value of our money is purely whimsical. So long as people have faith in the currency, it is valuable. When faith begins to fade, it will have no value.
  Lest you have missed it, faith in the US currency is already eroding. Remember the oil embargo? Certain OPEC nations refused to accept US dollars for oil, instead demanding real assets, ie, gold. China is not the first nation to suggest that the "world currency" be changed from the US dollar. Look at exchange rates today. When I was in the service, ten dollars US money could buy a decent night out on the town in most of the world. Today, forget it. That ten dollars might get you two or three beers, in a real dive. It won't get you in the door of a decent restaurant or bar.
  
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18. Re:The entire credit history thing is stupid by im_thatoneguy · 2012-01-22 09:14 · Score: 0
  
  Plus, you'll be slightly less screwed when the unforseen happens. I've known bigshot software developers who behaved the same way, and when eventually losing their jobs for one reason or another, and not IMMEDIATELY finding a new job, find themselves broke and homeless, but with credit cards... destroying their credit,
  1) .8% interest is lower than inflation. Better to have material goods that I enjoy now then my money to lose value.
  2) I get 1% back on my credit card.
  3) I have enough money to live about 3 years before finding a job in regular, non-retirement allocated stock.
  4) "having a credit card" is all that I would have if I lost one of my jobs. I could pay off my credit card with either of my two jobs every month and they are obligated to pay me through the end of the month so I would (if I had nothing saved up see #3) still have no debt but credit instantly available to get me through 1 year without a job. Besides it's HIGHLY unlikely I would ever end up unemployed for more than a month unless we have a catastrophic collapse of the world economy.
19. Re:The entire credit history thing is stupid by Billly+Gates · 2012-01-22 09:31 · Score: 1
  
  The reason it is down is because you have to compete agaisnt The Government when the banks loans your savings. Also supply and demand is an issue with the printing press of money being run day and night. This is no spread. The banks prefer the less risky and larger FED money they get nearly for free and charge back to the government again with treasury bonds. There is soo much money that they know you wont go elsewhere for your investing needs either and dont care. When it gets tight things rapidly change.
  During the late Carter and early Reagan years you could earn up to 12% interest in some savings accounts in 1979 - 1982! This was because the reserve did the opposite of today and was trying to halt stagflation and this caused a severe recession that quickly reverse when rates lowered. Banks needed capital and were willing to give you a great deal for your savings as the fed was not given out money unless they agreed to 16% interest before the bubble popped.Then people moved the new earned money into stocks to where they are today all overpriced and bubbled etc.
  If I were president or if Ron Paul were I think another restriction is needed. I would raise the rates, halt printing, wait for depression to lower prices, and our problems would quickly go away and gas, housing, and food would return to normal. Again it is proof that debt inflates prices and distorts the free market.
  
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20. Re:The entire credit history thing is stupid by blueg3 · 2012-01-22 09:36 · Score: 1
  
  You can have an excellent credit score by holding a single credit card that you never use. (This is true of any other kind of loan, but credit cards are generally the only credit you can hold at zero cost.) The only time this would be a problem is that these days, some credit card companies will close your account if you don't use your card occasionally. Many, however, don't.
  In fact, many never-using-credit behaviors positively influence your credit score. If you don't request credit, you should have no recent credit inquiries (which reduce your score). If you don't use credit, your credit utilization ratio should be 0% (as good as it gets) and you should have zero late payments (as good as it gets).
  When I got a home loan, I had a single credit card with a very low limit that I never used and was in the top rate bracket.
21. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 09:39 · Score: 1
  
  You might be getting close to something. Maybe we should live in family clusters. It would be economical wise for me and my wife to share a large house with my sibling and parents.
  Building higher shared buildings makes each square meter ground cheaper for each participant. Shared infrastructure also helps.
  Our parents would have paid down most of the loans before their kids started families. Me and my sibling could then pay them certain amount over the years to buy a larger and large share of the property.
  No loans and high security.
  A decent size medium budget property for grandparents with two children and their families could be something like 450 square meters shared living area + 150 square meter shared basement + garage on a 900 square meter shared property. 600 or more square meter of shared garden, 3 floor building + basement, one private floor for each separate family unit.
  The reality of today: Parents got their own down paid property while their children have their own separate properties and large loans. The parents do not have much expenses. Their kids have much more expenses with their children and loans. The parents dies at some time and their middle aged children that now do have paid most of their loans get the property they do not need any more from their parents.
  Larger financial risk for what? The sounds isolation of today is getting good. No need to be quite just because family lives close by. Privacy? Make rules. Make shared areas and ask everyone to respect the private areas. Maybe a shared common floor?
  Shared housing also makes it easier to work more effective and be more flexible. The responsibilities for the younger children can be shared. It gives room for a higher income.
22. Re:The entire credit history thing is stupid by im_thatoneguy · 2012-01-22 09:40 · Score: 0
  
  So why not just save two month's worth of income to act as a buffer?
  Because sometimes you want to spend 3 month's worth. Or if you save 3 months worth, sometimes you want to spend 4 month's worth. Think of it as a buffer + 2 months.
  Cash Savings Time = Cost/Month's Income
  Credit Savings Time = Cost/(Month's Income - 2)
  However you slice it you can get things 2 months earlier than you could otherwise.
23. Re:The entire credit history thing is stupid by DigiShaman · 2012-01-22 09:42 · Score: 1
  
  Alan Greenspan said pretty much the same thing. Inflation is basically a side-band method of taxation as it confiscates personal wealth. While I don't think going back to the gold standard is a good idea (there was a reason for going off it for international commerce), something needs to peg our fiat currency back down to reality.
  
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24. Re:The entire credit history thing is stupid by Billly+Gates · 2012-01-22 09:49 · Score: 1
  
  Here is what I am referring too.
  Of course this site doesn't go into too much detail but 95% of our money is magically created out of debt. There are many sites describing it and Ron Paul and Peter Schifft are supports of this. Debt keeps building and building until someone is left with the bag who can't pay. Like the other poster who said the US is a FIAT system with no gold to back it up it is all based on perceived value and faith.
  Yes owning a home is nice but it is risk. I view it as a necessary evil if you want to retire and not have to pay a mortgage when you are 60.
  The money owed in this case the GDP of many countries for a SINGLE BANK is money owed in interest that is not there. It has to be made up for them to get paid and based on what? Not real work/time but rather the printing presses at the Reserve.
  Yes your analogy is correct too with the comic book. But it was paid with actual dollars and not made up with interest that I hope to get paid back later. If this sounds confusing it really is because it does not make any logical sense at all. Debt is not sustainable as more money that needs to be created out of thin air is required as these are counted as real liquid assets by the banks. This is why the share price is much lower than the book value of BOA. It is because smart investors realize their assets are more like expenses than the real inflated value BOA claims they are worth.
  
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25. Re:The entire credit history thing is stupid by man_of_mr_e · 2012-01-22 09:52 · Score: 1
  
  That doesn't work with todays realities. You're essentially locking people into a single location. They can't financially justify moving somewhere else, and they have to find jobs close to their homes (and that's not feasible for a lot of people).
  Not to mention, I spent 18 years with my family, I don't want to spend the rest of my life living with them. I'd go insane.
  
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26. Re:The entire credit history thing is stupid by LordLucless · 2012-01-22 09:56 · Score: 1
  
  Inflation is really necessary, as it requires people with money put it to work. If you just hang on to your money, it will depreciate in value and vanish. If you want your money to maintain its value, you need to invest it, and get that capital into circulation again. If your currency has negative or zero inflation, you'll have a massive "credit crunch" as all the people with capital stop loaning it out.
  
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27. Re:The entire credit history thing is stupid by man_of_mr_e · 2012-01-22 09:59 · Score: 4, Insightful
  
  Are you serious? I don't know of any family of 4 that can save money on $50k a year. Rent, clothing, food, etc.. they'd be lucky to save $100 a year, much less $10k.
  Raising a family is expensive. Insurance alone can cost upwards of $500 a month. I think you're incredibly naive if you think that someone can put away 10% of their salary at that level.
  
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28. Re:The entire credit history thing is stupid by man_of_mr_e · 2012-01-22 10:01 · Score: 1
  
  Your point is irrelevant. A bank charging interest on a credit card is NOT creating money out of thin air. It's creating DEBT out of thin air, the money still has to be earned.
  
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29. Re:The entire credit history thing is stupid by man_of_mr_e · 2012-01-22 10:04 · Score: 2
  
  A country can print more money, you and I as citizens cannot (legally) do so. Nor can the banks.
  A bank charging you interest does not create money out of thin air. You have to work to earn that money to pay that debt.
  If I say i'll break your knee caps if you don't pay me $1000, does that magically create $1000 out of thin air? No.
  There is a huge difference between the govenrment controlling it's supply of money and us who use that money.
  
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30. Re:The entire credit history thing is stupid by keytoe · 2012-01-22 10:18 · Score: 1
  
  Sure, you're not paying interest (suposedly... every that I've heard say that before comes back with "Oh, except that one time, and the other time..."), but you could be EARNING interest on that money. Right now, Ally gives 0.8% on it's CHECKING accounts... more than any brick & mortar banks are giving on even their savings or 1year CDs right now...
  Or do both like I do. Put all your expenses on your rewards card, keep your cash in an interest bearing checking account (credit unions usually offer these with pretty decent rates). When the card bill comes due, pay it off. The result is that you have, on average, a higher bank account balance over the billing cycle than if you were paying for all of those things throughout the month individually.
  As a bonus, this helps reinforce the safe practice of using a payment method directly attached to your bank account as infrequently as possible. In case of fraud, you'd rather have 'money you owe' tied up in dispute than 'money you have'.
  
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31. Re:The entire credit history thing is stupid by 0123456 · 2012-01-22 10:28 · Score: 1
  
  Inflation is really necessary, as it requires people with money put it to work.
  That's true, because otherwise people would just pile up their cash in their vault and swim in it, like Scrooge McDuck.
  Back in the real world, inflation is just another scam by which governments steal money from the productive members of society.
32. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 10:30 · Score: 0
  
  Might want to check your math.
33. Re:The entire credit history thing is stupid by snookums · 2012-01-22 10:35 · Score: 1
  
  I do this too, because I earn 6.5% p.a. tax free on the cash that I don't spend until the end of the month.
  How do I get 6.5% tax free? Mortgage offset account. These things are apparently a lot less common outside Australia, but basically I have a savings account which, rather than paying interest, reduces the balance used to calculate my monthly mortgage interest. Home loan interest rate is 6.5%, so that's what I effectively earn on my savings, and because it's applied as a discount, not paid as interest, it's not taxed.
  
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34. Re:The entire credit history thing is stupid by Luckyo · 2012-01-22 10:39 · Score: 1
  
  GDP is a measure of how much work will be done during the year.
  Sum of assets means a total value of held assets.
  Many assets take years and decades of work to build and contain both US and foreign assets. The number is realistic.
  Also, debt = promise of future work done. In many regards, this is not a bad thing at all. It allows you to use promise of work that you will do in the future to pay for a product now. As long as you can deliver on the promise of work, there is no problem. Problems arise when people driven by profit at the expense of the health of system itself start piling, ensuring, repackaging and so the "bad debt", promise of work that cannot be met and try to make it similar to liquid currency. That is what happened in the last crash.
  So long as the debt is "good" the system is functional and allows to tap much higher amount of resources then it would be available. In this regard, your comparison between GDP, the sum of yearly work, and assets, list work of many decades is a very fitting one.
35. Re:The entire credit history thing is stupid by Luckyo · 2012-01-22 10:43 · Score: 1
  
  There is no magic. Debt is a promise of future work. Therefore debt is a value of your potential. As long as you meet the promise of work, debt works wonderfully in letting you cash in for future work now. This enables tapping of significantly larger pool of resources.
  Many people have watched movies like "money as debt", but missed the message because it wasn't delivered in a simple enough format. There was a continuation of that movie which went into more detail, but to really understand you have to actually study the subject. Two hour movie is too short to explain the underlying functionality of something as complex as modern economy.
36. Re:The entire credit history thing is stupid by russotto · 2012-01-22 10:46 · Score: 1
  
  How do I get 6.5% tax free? Mortgage offset account. These things are apparently a lot less common outside Australia, but basically I have a savings account which, rather than paying interest, reduces the balance used to calculate my monthly mortgage interest. Home loan interest rate is 6.5%, so that's what I effectively earn on my savings, and because it's applied as a discount, not paid as interest, it's not taxed.
  People were doing this for a while in the US, but as far as I know it never really caught on. The way it was structured was as two loans, one traditional mortgage (for which this trick doesn't work) and one home equity loan. You'd have your paycheck deposited directly into the home equity account (reducing its debit balance), then pay your expenses (including the other mortgage) from that account.
  In the US, the number of transfers you can make from an equity account is limited to 3 per month, I believe.... there's an easy way to work around that problem, though: You use a credit card for all your expenses in order to consolidate them.
  There's other drawbacks, though; the home equity loan is variable rate, and generally much higher than a fixed-rate mortgage.
37. Re:The entire credit history thing is stupid by hedwards · 2012-01-22 10:54 · Score: 2
  
  That's not true at all. The reason people put their money to work is so that in the future they won't have to work. Inflation just screws over people who don't have enough money to invest in the stock market.
  Also, please stop spreading this FUD. The reason for a credit crunch is that people stop lending money. That's not going to happen with a negative or zero inflation scenario, the interest rates will typically rise to factor that in. Most recently we had a credit crunch because nobody felt safe lending money, people are always going to be willing to lend money if they can charge enough interest to make up for the opportunity costs and risk.
38. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 11:19 · Score: 0
  
  Don't argue with the "fiat currency" camp. They are indoctrinated and cannot be dissuaded. They saw a ten minute youtube video and think they know everything.
39. Re:The entire credit history thing is stupid by marcosdumay · 2012-01-22 11:21 · Score: 1
  
  I don't know what is the impression you have out there, but most people at Brazil are as stuck in debt as anybody at the US. The main differece is that interest here is highter, thus people get bankrupt earlier.
  Yes, people do not take credit at banks, instead, they take credit at the stores, and those stores take credit at the banks. That is how people can be in debt without a relationship with a bank.
  
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40. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 11:37 · Score: 4, Interesting
  
  He is serious, he suffers from the mentality that there's always *something* more you could do.
  He wants them to live like crap. Never do anything, sit in the empty living room with no tv or cable and absolutely never do anything that isn't tied to staying alive.
  You get about $1500 every 2 weeks on 50,000 a year give or take taxes. $900 rent because you're 19 with no savings and can't get a house loan, $300 for your $7K car with a $13K payment (because you have no credit and had to get a high interest loan without family to co-sign), $200 for gas and car maintenance, $300 groceries, $50 phone, $50 internet, $60 cable, $300 car insurance (again you're young and it's insane rates for even a boring daily driver vehicle), $230 health-insurance.
  Let's see here.... If you get $3000 a month with the above bills that's a whopping $610 to show after the above bills. Don't get bad teeth or a $1750 root canal will sink you. Don't do nothing wrong and get hit while stopped by another driver, $1000 deductible will sink you. Don't break your left foot in 3 places, that's $2700 and that will sink you. Don't forget your landlord will foreclose the house and stop paying the mortage so you have to immediately come up with $3500 to move and that will sink you!
  Heaven forbid two or more things happen within the same year then you're really fucked. Take away another $70 a month to use check into cash services to keep the gas in the engine and the lights on since you have no family to help...... Don't forget that $130 license plate renewal right on your birthday and don't forget your renters insurance.
  Now other people bitch that you even have TV to show for your hard working middle class salary.... You should probably cancel that and sit looking at the wall since you definitely want to be *active* after busting your ass for 11 hour days to make up for the vacation (borrowed mind you with a sobbing call to HR) you used while the foot was broken!!!!
  FUCK THESE PEOPLE. Middle class means I should be enjoying my life for my hard labor. Fucking poor people on food stamps often have more spending money with ZERO effort.
  THIS is what is wrong with society. Also looking forward to no pension or Social Security in 2060 when I'll need it..... I bet that's already spent too right?
41. Re:The entire credit history thing is stupid by arkane1234 · 2012-01-22 11:39 · Score: 1
  
  Just think about what you say before you say it...
  2 months of income... that's literally 8x more than a weekly paycheck. Most people can not save that much money aside on a whim.
  Let's do the math because it'll be fun. We'll do $15.00/hour as a base amount because it's a good starting point. We'll also pretend the person constantly works 40/hours a week non-stop. $15 x 40 = $600. Now let's remove the usual federal/state taxes, fica, etc. It's usually about 25-30%, so we'll do 25% to make it even. That leaves $450/week. Multiply that by 4 to get a month, which leaves $1,800. Now, multiply that by 2 to get your buffer, which is $3,600.
  If you make $15/hour, and bring home weekly $450, think about how much $3,600 truly is to you. Reduce housing cost: example, Rent $600 electric $60. (down to $1,140) Reduce food $50/week which is $200 a month. (down to $940) Then there's fuel, which the average vehicle is 25 MPG and people usually go about 100-150 miles during the week for work. That'd be ~6 gallons of fuel, at $3.30/gallon, which is $19/week (or $76/month) (down to $864) Then the usual car insurance, usually anywhere from $300/6 months to $1,000/6 months, we'll average it out to $500/6 months which is ~$84/month (down to $780).
  We've covered:
  Rent @ $600/month
  Electricity @ $60/month
  Food @ $200/month
  Fuel @ $76/month
  Car Insurance @ $84/month
  That's $1,020 for very very basic living. Which leaves $780/month, or better to be viewed as $195/week, to cover everything non-necessity. This does not include any superfluous things like cable, internet, cooking utensils that break, books, a date, or even rechargeable batteries. In fact, this is the very life I tried to avoid when I was in my very early 20's and is definitely not common living. (or shouldn't be)
  
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42. Re:The entire credit history thing is stupid by CohibaVancouver · 2012-01-22 11:43 · Score: 1
  
  That's how little you'd have to save for it to take 20 years (on average).
  I don't really understand - Let's say you're married at 30 and have kids at 33 and 35 years old. Are you saying you should save for 20 years and buy a house when when you're 50, and move into it when your kids are 17 and 15? Why not take out a mortgage and actually own the house by the time you're 50?
43. Re:The entire credit history thing is stupid by CohibaVancouver · 2012-01-22 11:45 · Score: 1
  
  Building higher shared buildings makes each square meter ground cheaper for each participant. Shared infrastructure also helps.
  ???
  
  They already have these all over the world. They're called condominiums. The business model you describe is exactly how they operate.
44. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 12:10 · Score: 0
  
  +1
  People miss the point of credit cards sometimes.
45. Re:The entire credit history thing is stupid by mjwx · 2012-01-22 12:53 · Score: 1
  
  As a result
  As a result, you've continually paid more for every product you buy in everyday life.
  
  Do you honestly think banks give away those "miles" for free?
  
  Banks make money off of credit cards out of merchant fees, this is a fee, usually a percentage of the purchase paid by the merchant to the credit card operator. The merchant must build this fee into their operating costs. The more people using credit, the more the merchant must raise their prices to compensate.
  
  Now as for the interest argument, it's bollocks. You dont get an extra few hundred every month, all you get is the first month as your credit card gets paid off every month. Say you earn $2000 per month. Your expenses equal $1500 per month so you save $500 per month. Lets say you earn 5% on your savings. By paying cash for 12 months, you have $5,525 and no money owing. If you paid by credit card and put away $2,000 in the first month, you will have $7,100 at the end of 12 months, but you'll owe $1500 on your credit card. So $7,100 less $1,500 is $5,600. So all that risk for $75.
  
  I bought an air-conditioner last summer, the ticket price was A$650, I paid A$500 because I bought it with savings and not credit. Lets not even talk about what I saved on my car by paying for it out of savings and not getting a loan, that's off the ticket price _before_ interest was calculated.
  
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46. Re:The entire credit history thing is stupid by Rockoon · 2012-01-22 13:19 · Score: 1
  
  While I don't think going back to the gold standard is a good idea (there was a reason for going off it for international commerce), something needs to peg our fiat currency back down to reality
  Who told you that it was for international commerce? Thats complete bullshit.
  
  The reason we dropped the silver and gold standards was because these standards put hard limits on government deficit spending, preventing debt from being issued willy-nilly like it is today.
  
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47. Re:The entire credit history thing is stupid by DigiShaman · 2012-01-22 13:33 · Score: 1
  
  My limited understanding is that Nixon in 1971 canceled the international gold to dollar standard. This was a result of the French trading US dollars for gold and thus causing a problem for our currency internationally. It was one of his many changes in a period known as the Nixon Shock.
  
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48. Re:The entire credit history thing is stupid by snookums · 2012-01-22 13:45 · Score: 1
  
  There's other drawbacks, though; the home equity loan is variable rate, and generally much higher than a fixed-rate mortgage.
  Variable rate is more or less the norm in Australia. Fixed rate is generally available for up to the first 3 years (sometimes more), but the rate depends on which way the bank thinks interest rates are moving, and even if rates are falling (putting fixed rate below variable), the longer fixed terms tend to have higher rates because there's increased risk to the lender that they're selling themselves short.
  
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49. Re:The entire credit history thing is stupid by dgatwood · 2012-01-22 14:23 · Score: 1
  
  Of course I'm not saying that. I'm saying that it is possible to buy a house on cash without waiting 20+ years to do it. The most obvious way is to start out somewhere with a high cost of living, work for a decade with a high salary, then move somewhere with a lower cost of living.
  
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50. Re:The entire credit history thing is stupid by dgatwood · 2012-01-22 14:55 · Score: 1
  
  First, I misread the statistics and thought $50k was the median individual income rather than median household income, which means all of my numbers were off by a factor of 2. Mea culpa.
  Second, that $10,000 is based on living in a city, in which case you're probably making well above the median. Outside of cities, in most places, you should be able to find a decent home for a lot less than $200,000. Half that, even. And there's almost always the option of driving into a city to work at city wage levels.
  Third, if you aren't already saving a lot more than four or five thousand dollars per year, you're screwed. In general, everyone should be putting away a minimum of 15% of their annual income towards retirement, and ideally 20% or more. In the (very) short term, you can reduce the money you put away for retirement, and use that money towards your house fund. If you're not able to save even 10% of your current salary, particularly before you have those two kids, then (assuming you aren't overspending) you're being seriously underpaid based on the cost of living wherever you are.
  Finally, don't think for a moment that I'm arguing that you should pay cash for a house. I'm merely arguing that it's not nearly as impossible as the original post suggested.
  
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51. Re:The entire credit history thing is stupid by dgatwood · 2012-01-22 15:22 · Score: 1
  
  First, even if you live somewhere in the U.S. with a very cheap cost of living, $50,000 for a two-earner family isn't considered middle class. That's right at what most folks consider to be the poverty line these days....
  Second, nobody says you have to give up TV. What we're saying is that if you're living right at the poverty line, you're unlikely to be able to afford to buy a house, period, but if you are going to try, your choices are: A. move in with your parents so you don't have to pay rent, B. find a better job, or C. give up damn near everything else to make that dream a reality.
  
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52. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 15:27 · Score: 3, Insightful
  
  I make $34K. My wife stays at home with our four kids. And we save about $400 a month.
  I know a lot of people think we're poor. Heck, the state says we're eligible for food stamps. But we don't do any of that stuff.
  We've had a mortgage for 8 years now, and are planning to pay it off in another 10.
  Oh, and no credit card debt at all.
  My job does give us really low-cost health insurance.
  I think that besides stupid credit cards, the biggest trouble people get in is student loans and car loans.
  I worked my way through college and busted my butt for a couple of tuition-only scholarships. I didn't borrow a cent.
  Paying cash for cars is certainly realistic, if you don't fall for the shiny. We've worked our way up to a nice SUV.
53. Re:The entire credit history thing is stupid by Americano · 2012-01-22 15:45 · Score: 1
  
  And this also includes credit cards, even if you pay them back as soon as you get the bill.
  Actually no, doing exactly that isn't stupid, provided:
  1) You have a credit card with a grace period for new purchases; (And if you don't, shame on you for being too stupid to shop around)
  2) You pay your entire balance off each month during the grace period; (And if you don't, shame on you for being unable to manage your finance properly)
  Using your credit card according to points 1 & 2 above gives you a short-term interest-free loan from the credit card company, and law states that cards that offer a grace period must allow a minimum of 21 days on that grace period, so they can't give you a 3 day grace period. So... do all your shopping interest free, and let your money sit in a bank account earning an extra couple weeks of interest each month. You win, so long as you're not completely incapable of managing a bill payment schedule, or of managing to have a credit line without needing to max it out.
  "Living on credit" is stupid, and unsustainable. "Using a credit card wisely" is not, and can actually provide significant benefits to you if you manage it properly.
54. Re:The entire credit history thing is stupid by CohibaVancouver · 2012-01-22 15:46 · Score: 1
  
  The most obvious way is to start out somewhere with a high cost of living, work for a decade with a high salary
  And you live in your mom's basement during this phase?
55. Re:The entire credit history thing is stupid by Rie+Beam · 2012-01-22 15:56 · Score: 1
  
  You've also completely forgotten that the money you've "saved" by not getting a mortgage will simply go back into rent for the place where you're staying in the meantime, which I do promise will ultimately end up costing more than any interest charged on the house you'd be living in during the same time period.
  Of course this is all null and void if you stay with your parents until all of your bills in life are saved up for, but American culture isn't really big on large multi-family households anymore (which is a shame, it's great on the wallet).
56. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 15:59 · Score: 0
  
  $900 rent because you're 19 with no savings and can't get a house loan
  LOLWUT? You pay $900 a month in rent at the age of 19, and make 50k per year? Are you stupid? Get a roommate, or a cheaper apartment, dumbass.
  Also, it appears that you've never heard the rule of keeping 6 months or more of living expenses set aside in a short-term (i.e., liquid) savings account. Get bad teeth? Pay for your $1750 root canal out of that money, and replenish it. Get hit by a car and have a $1k deductible? Pay out of that money, replenish it over a few months. Break your foot? Pay for it... you get the point. If you are saving nothing after paying your bills on a 50k/yr salary, you are pissing your money away.
  I cannot underscore this enough. There is NO reason for you to spend that much money. If rent is really $900/month for a shithole studio because you live in NYC, get rid of the fucking car and take mass transit. Wham, you just saved $700 per month - eliminate $300 car payment, $200 gas/bills, $300 car insurance, replace all of that with an unlimited ride MetroCard that costs $104 a month in NYC for unlimited use of bus & subway. Most cities offer similar mass transit deals.
57. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 16:07 · Score: 0
  
  So get a part time job to bring in some extra income? I have friends who do this - they work weekends as bartenders, waitresses, etc., hell one does wedding photography a couple weekends a month - works nicely for them, gives them a bit of spending money they wouldn't otherwise have.
  If you work only 40 hours a week, you have *plenty* of time to do something else during the other 128 hours. Pick up 20 hours waiting tables, or freelancing or whatever... and suddenly you have more spending money, and more money to save.
  I have one job, and regularly work 60 hours a week... it's not all that hard to imagine people not making enough on 40 hours a week opting instead to pick up a couple shifts at another job.
58. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 17:16 · Score: 0
  
  Yes, because the argument that you should be paid above cost of living works so well when there are so many unemployed people who are as qualified or more qualified than you are for your job.
59. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 21:12 · Score: 0
  
  And still 1-room (not 1 bedroom, but just 1 room, kitchen, toilet and bath) flat in Saint-Petersburg, Russia cost more that $120000 in cash. And if you wish to take credit it will cost at least 15% for year (+ hidden fees like insurance and "bank service"). You in USA really have very cheap cost of life :-).
60. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-22 21:20 · Score: 0
  
  And all other things are generally a lot cheaper in USA (not only electronics and the like), for example for me was a lot cheaper order stroller for baby in US ($150 for stroller and $80 for shipping) than buy same stroller here (for this particular stroller difference was $120-130).
61. Re:The entire credit history thing is stupid by schn · 2012-01-22 21:33 · Score: 1
  
  thats 8 dollars you retard
62. Re:The entire credit history thing is stupid by Nicolai+Haehnle · 2012-01-22 22:30 · Score: 1
  
  A country can print more money, you and I as citizens cannot (legally) do so. Nor can the banks.
  The statement about the banks is misleading. While they cannot print money in the literal sense (physical currency is only created by government), they do "create money" whenever they give out loans. That money is then "destroyed" when the loan is repaid. This is generally agreed upon in economics; you can read about the various definitions of money supply, for example. Except for the monetary base, they all include credit money created by banks.
63. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-23 01:09 · Score: 0
  
  ...I can buy it now and pay it off in up to 2 months interest free.... ...As a result I've never paid a penny in interest...
  What you may be overlooking is that there is no such thing as "x months interest free". What you are doing is buying something a little more expensive with the credit cost hidden into it. Those that really get cheated are those that pay for it cash since they are also financing the x months free but without "benefitting" from it.
  In my perfect world there would indeed be no credit except for essentials. House, car to get to work. If you are using credit for luxury items or basic food needs there is something really wrong.
64. Re:The entire credit history thing is stupid by man_of_mr_e · 2012-01-23 02:19 · Score: 1
  
  This is simply not true. Banks cannot issue money they don't have, either physically or electronically.
  You are probably confusing the fact that much of the US money supply is electronic (with no physical paper money associated with it). And when a bank issues a loan, it's likely from money they have borrowed from the Fed. The Fed may or may not "create" the money.
  A certain amount of the banks money it lends comes from money that banks get from it's customers. The reason banks pay interest on savings is so that they can use that money to lend to others.
  Seriously, if every loan a bank made "magically created money", we'd be in such runaway inflation it would cost billions for a gallon of milk.
  
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65. Re:The entire credit history thing is stupid by kryliss · 2012-01-23 07:19 · Score: 1
  
  Maybe if people had kids after they got married and were a bit more financially secure and saved up some money this wouldn't be the issue. How much does a box of condoms cost? Or birth control pills? A married couple living in an apartment and driving modest cars with each making 50k a year could easily build up a nest egg of 200k in about 5 or 6 years. That would also give them long enough time to find out if they want to be with each other for the rest of their lives before dragging kids through the whole custody battle crap.
  
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66. Re:The entire credit history thing is stupid by kryliss · 2012-01-23 07:25 · Score: 1
  
  Here's a tip, get the hell out of NYC. I live in the midwest and live in a duplex with 3 bedroom, kitchen, living room, bathroom, hall and full basement, car port, shed and big front and back yards. Rent=$535.00/month and it's not a shit hole. In NYC you'd be lucky to get a standing room only stall to live in for $535.00/month
  
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67. Re:The entire credit history thing is stupid by isorox · 2012-01-23 07:26 · Score: 1
  
  Paying cash for cars is certainly realistic, if you don't fall for the shiny. We've worked our way up to a nice SUV.
  I tend to pay by cheque, or debit card, I don't like walking around with £1000 in cash.
68. Re:The entire credit history thing is stupid by isorox · 2012-01-23 07:36 · Score: 1
  
  A certain amount of the banks money it lends comes from money that banks get from it's customers
  A bank starts with borrowing 10x$100 bills from "the Fed"
  The bank lends Joe 10x$100 bills
  Joe pays Steve 10x$100 bills
  Steve puts those 10x$100 bills in the bank
  Jane borrows 10x$100 bills
  Jane pays Steve 10x$100 bills
  Steve puts those 10x$100 bills in the bank
  The bank is owed 20x$100 bills from Jane and Joe
  The bank owes 20x$100 bills to Steve and 10x$100 bills to "the Fed"
  The bank has borrowed more money than exists in the world ($1k from the Fed, $2k from Steve)
69. Re:The entire credit history thing is stupid by cybrthng · 2012-01-23 07:56 · Score: 1
  
  I find this hard to believe. After taxes your take home is less than 2k/month. Rent/mortgage for a 6 person family in even the most dire of all places in the US would be 1000-1200/month. That leaves you 800/month to feed, pay utilities, pay bills for a family of 6 and you say that you save 400 of that? really?
  Did someone give you your house/property?
70. Re:The entire credit history thing is stupid by dgatwood · 2012-01-23 09:51 · Score: 1
  
  No, if you live in an area with a high cost of living, salaries are proportionally larger. Normally, salaries in most fields are set up so that people without large families can put away a reasonable percentage of their income for retirement. The percentage tends to be fairly comparable.
  This means that if you live in California, where a software engineer makes about $110 grand on average, and your lifestyle allows you, for example, to put away 30% of your income towards retirement, you're banking $33k per year. If you live in Tennessee, where the average software engineer salary is only about $65k, assuming you also save 30%, you're only putting away about $19.5k per year. After ten years, the Californian has put away $135,000 more money than the Tennesseean.
  Now if the Californian retires in California and the Tennessean retires in Tennessee, they'll have similar lifestyles. However, if the Californian retires to Tennessee, he or she can live a much better lifestyle (and similarly, if the Tennessean retires to California, he or she will probably live in abject poverty).
  
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71. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-23 10:35 · Score: 0
  
  You're paying 6.75% on a variable rate home loan? Those loans are 2.75% here in the US. I'd pay off as much as you possibly can. That's a horrible rate.
72. Re:The entire credit history thing is stupid by Anonymous Coward · 2012-01-23 10:41 · Score: 0
  
  And what happen if you suddenly lose your revenue source ? Oh! Damn!
  In any sane country in the world, when you want to buy something for which you need two months of salary, well, you just save for two months.
  Yes, I know, you have to wait and as such, it only works for purchase you have thoroughly considered. So, it tends to cut out unconsidered buying which is oh, wait, it's actually a good thing.
  Living on credit is an incredibly stupid thing to do. It leads to stuff like the subprimes crysis. Some day not to far, dollar is going to lose its position as the reference money for the world. This day, it's gonna hurt badly for people in the USA...
73. Re:The entire credit history thing is stupid by Rolgar · 2012-01-24 01:24 · Score: 1
  
  He clearly isn't spending that much on housing.
  I make 48k, and we currently are looking to downsize our home because we decided we could afford more than we really can. We can continue to live in a house we owe $135,000 (3500sq ft, 4BR) on outside of Topeka KS and worry about money constantly. We've decided to downsize and are looking at homes in town. There are 2000 sq ft foreclosed homes in decent neighborhoods for under $50,000. I can drop my house payment from my current 1000 (including taxes and insurance) to 500 (pocketing the difference to give us breathing room) and be debt free in 15 years instead of 27. More likely, we'll make double interest payments (average about 225 over the life of the loan) and pay it off in 8. If something happens to my job, I should easily be able to find something in the $30,000 range, which would put is in a little bind, but much better than being in a house we can't afford and losing it within a year. The actual calculated payment is $390.
  Maybe as you say, people do think they need to spend 1000-1200 a month. But it totally doable to live on much less, and to live as well as people in much more expensive houses if you prioritize correctly.
Phone service is a credit account by LostCluster · 2012-01-22 07:53 · Score: 1

All phone service is really a credit account because you have access to overage minutes, pay-for numbers, etc. You can run up an unlimited bill if you or your teenager goes over the usage plan. Pay those bills on time and you can gain credit score points, run up a higher bill than you can pay and it goes as a missed payment.
1. Re:Phone service is a credit account by FreeCoder · 2012-01-22 08:01 · Score: 1
  
  All phone service is really a credit account because you have access to overage minutes, pay-for numbers, etc. You can run up an unlimited bill if you or your teenager goes over the usage plan. Pay those bills on time and you can gain credit score points, run up a higher bill than you can pay and it goes as a missed payment.
  I guess you haven't traveled much. In these countries you usually top-up your account and use the money you've pre-paid.
2. Re:Phone service is a credit account by xaxa · 2012-01-22 09:41 · Score: 2
  
  In most countries cell phone service is pre-paid. From what I understand if u don't have extra money in your account the extra service like pay-for numbers doesnt go through. Can anyone with more info on this verify?
  That is correct, and I'm surprised this method is so alien to the US.
  It used to be the normal way of paying for mobile phone service in the UK... and it still is, just about:
  
  This phenomenon has been especially evident in the UK, where since Q4 2007 the share of contract customers has risen from around a third (35.4 percent) to almost half (48.6 percent in Q2 2011) of all subscribers, due in part to the introduction of new types of contract tariffs aimed at attracting existing prepaid users to switch to contracts.
  (Source)
  With a pre-pay phone you don't need a bank, credit card, address, or any of the infrastructure for that. The original method (still used) to add balance is to buy "vouchers" from a shop. Scratch of the silver panel, type it into the phone, £10 instantly credited. Nowadays you can also top up online, by text, by phone, by credit/debit card, at an ATM... lots of ways. But the vouchers are still sold everywhere.
  I think most children have a pre-pay phone, also most students, and many people with a low-paid job. And people who don't use mobile phones very often -- including my well-paid parents and my grandparents. (Although the statistics are probably skewed by tourists and other visitors. I have a contract with a British company, and a pre-pay SIM for Germany, since I travel there fairly often. I swap the SIMs around in the airport, and get cheap calls and internet in Germany.)
  Usually, a phone call (or YouTube video, or whatever) cuts out as soon as the remaining credit is used up. The phone continues to receive calls and texts, and allows whatever methods exist to add credit, contact customer services etc.
3. Re:Phone service is a credit account by newcastlejon · 2012-01-22 12:21 · Score: 2
  
  It used to be the normal way of paying for mobile phone service in the UK... and it still is, just about:
  Actually, no it wasn't; pre-paid mobile phones came out a long time after contracts. I can say this with a straight face because I happened to be working for one of the phone companies when PAYG first started*.
  That pre-pay customers outnumber post-pay has nothing to do with how long the service has been available. If I were to guess I'd say the increase in the proportion of contract customers was a result of newer, "must-have" handsets (smartphones in particular) being priced so highly when bought sim-free or with a pre-paid SIM.
  
  With a pre-pay phone you don't need a bank, credit card, address, or any of the infrastructure for that. The original method (still used) to add balance is to buy "vouchers" from a shop. Scratch of the silver panel, type it into the phone, £10 instantly credited. Nowadays you can also top up online, by text, by phone, by credit/debit card, at an ATM... lots of ways. But the vouchers are still sold everywhere.
  Scratch cards were done away with years ago, primarily because of printing costs and fraud.
  
  Usually, a phone call (or YouTube video, or whatever) cuts out as soon as the remaining credit is used up. The phone continues to receive calls and texts, and allows whatever methods exist to add credit, contact customer services etc.
  Most, if not all networks now offer a reserve credit facility. An ongoing call may be disconnected when credit runs out (I'm not certain as I have a contract and I've since changed careers) but there is usually still room to make an emergency call.
  *Amusing anecdote: when SMS messaging was a new thing Orange gave everyone ten free messages a day. That's all you got, though, because the billing system wasn't yet set up to actually charge people for them.
  
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4. Re:Phone service is a credit account by tepples · 2012-01-22 13:03 · Score: 1
  
  Until around the fourth quarter of 2010, prepaid carriers such as Virgin Mobile USA sold only dumbphones and dumbphone service, not smartphones and smartphone service. It's alien to the U.S. market because in the U.S. market, most people buy their phones through a carrier. Part of the problem is that no two U.S. carriers use exactly the same network configuration: Verizon uses CDMA2000 without a CSIM, Sprint uses CDMA2000 without a CSIM on a different set of bands, AT&T uses GSM/UMTS on "normal" bands, and T-Mobile USA uses GSM with UMTS on an oddball band that pretty much only T-Mobile phones support.
5. Re:Phone service is a credit account by xaxa · 2012-01-22 22:36 · Score: 1
  
  It used to be the normal way of paying for mobile phone service in the UK... and it still is, just about:
  Actually, no it wasn't; pre-paid mobile phones came out a long time after contracts.
  "Used to be" doesn't mean "at first" or "originally". I meant the period in the mid/late 1990s, when you first could buy a PAYG handset for £30 or so.
  
  If I were to guess I'd say the increase in the proportion of contract customers was a result of newer, "must-have" handsets (smartphones in particular) being priced so highly when bought sim-free or with a pre-paid SIM.
  Yes, the article gives that reason, and some others (availability of cheaper SIM-only contracts, monthly contracts, bundling with home broadband etc).
No science to it by Dyinobal · 2012-01-22 07:54 · Score: 4, Interesting

They just use this as a mean of hiding the fact that banks really have no idea if you'll be good for the money they are loaning you. They are just trying to get the contact numbers of your friends and work associates so they can harass them when you don't pay up.
1. Re:No science to it by Billly+Gates · 2012-01-22 08:15 · Score: 2
  
  Mod up
  Sadly, the banks are looking at loan sharking as great fiancial instrustments. Is there any professionalism in them left?
  Greed has gone out of control and reading about Foxconn 3 stories down, and now this I feel time warped back in the 1880s. Big greed, child labor, loan sharking, riots and unrest, and the formation of unions. What finally ended it was The Great Depression.
  Maybe if the market fully froze in 2008 a reset would ahve cleaned up this mess. Anyway not to go offtopic but this is just insane and I bet it is so we can get harassed day and night even for money our uncle owes and not our own. That is not fair one bit!
  
  --
  http://saveie6.com/
2. Re:No science to it by icebike · 2012-01-22 08:53 · Score: 1
  
  They just use this as a mean of hiding the fact that banks really have no idea if you'll be good for the money they are loaning you.
  
  There may be some science to it, but that does not negate the idea that the banks have no other data about you in these countries. That is, after all, the main tenant of the article. It is precisely because banks have no way of evaluating your repayment potential that they want to surf your phone records.
  And of course they have no plans to bring this business model to the North America or the EU precisely because such practices are outlawed in these countries. Even with a signed letter of authorization these companies wouldn't get any such info from the carriers. (Hell you often can't even get your own phone records from the carriers without a huge argument, a letter from law enforcement, or threat of lawyer, etc). The best they can do is demand a copy of your phone bill from you, which in many cases does not even contain detailed call info any more.
  But that doesn't mean there is no science to it. Its easy enough to see patterns when you evaluate large numbers of people. Actuarial Science is pretty precise these days. It doesn't take a rocket scientist to figure that if the failure rate of loans shows a huge spike among those people that make calls to certain numbers (bookies, drug pushers, or simply to no-name burner cells), maybe the bank would be better off avoiding those clients.
  
  --
  Sig Battery depleted. Reverting to safe mode.
3. Re:No science to it by Anonymous Coward · 2012-01-22 09:07 · Score: 0
  
  That is, after all, the main tenant of the article.
  So who's the landlord, dickbat?
4. Re:No science to it by CapOblivious2010 · 2012-01-22 09:36 · Score: 1
  
  It is precisely because banks have no way of evaluating your repayment potential that they want to surf your phone records.
  And of course they have no plans to bring this business model to the North America or the EU precisely because such practices are outlawed in these countries.
  No, the reason they have no plans to bring this model to North America or the EU is precisely because they have other (better) was of evaluating your repayment potential. For example, the big 3 credit reporting agencies: as flawed as their data may be from time to time (and I fully support laws requiring them to give you a copy, help to correct mistakes, etc), this data "lubricates" the economy (facilitating transactions between strangers) to an astonishing degree. The information gives sellers a wider market to sell to (most of us can walk into a car dealership full of total strangers, with nothing but our driver's license in our hands, and in an hour or so we can drive out with a $30K car), and it gives buyers wider choices of where to buy from (we can do the above at ANY dealership in the country, not just the one our uncle works for).
5. Re:No science to it by Anonymous Coward · 2012-01-22 10:27 · Score: 0
  
  I'd be merely content with them being subject to defamation laws if they claim you have done X without solid proof. As it is anyone can claim you've done X and you have to prove them wrong, meanwhile they are actively harming you and there is no recourse.
6. Re:No science to it by Stormthirst · 2012-01-22 10:33 · Score: 1
  
  The credit report agencies are complete criminals. The regulations surrounding their 'business' are so flawed it's unbelievable.
  They should be required to give you a free copy of the data they have on you, and they should be required to correct mistakes. I wouldn't mind them not having to give me a report every time I ask - perhaps once a year to stop people wasting their time. But it's almost impossible to get them to correct mistakes.
  They rely (at least in the UK - anyone able to comment on other countries?) on ridiculous indicators like whether your registered to vote (the electoral roll in the UK). What's that got to do with someone's ability to repay a debt?
  And worse, now landlords are asking for credit reports to decide whether they should rent to you or not. My wife and I couldn't rent one place because she was self employed and had managed to get a couple of bad points on her credit rating - even though my wages could easily cover the rent every month. It's a crazy system because the bank would lend me £130k on my wages alone for a mortgage.
7. Re:No science to it by slasho81 · 2012-01-22 10:49 · Score: 1
  
  Exactly. Also, no one said there is a link between this arbitrary data to risk estimation, and even if there was a link you don't know how to get from the data to the risk estimation. It sounds like a startup looking for a sucker to buy it.
8. Re:No science to it by marcosdumay · 2012-01-22 11:26 · Score: 1
  
  And of course they have no plans to bring this business model to the North America or the EU precisely because such practices are outlawed in these countries.
  Getting a person's call list is illegal at Brazil to,.nNo difference. They may get around that by not releasing any number with the data, but I'm not sure if that is actualy legal.
  
  Hell you often can't even get your own phone records from the carriers without a huge argument, a letter from law enforcement, or threat of lawyer, etc
  Again, no difference here. Except that it is illegal for the carriers to not send you the list of the numbers they are biling when you ask for it. They won't send anyway.
  
  --
  Rethinking email
9. Re:No science to it by CapOblivious2010 · 2012-01-22 11:42 · Score: 1
  
  I don't know about UK agencies - in the US they ARE required to give you a free report, once a year.
  
  The credit reporting agencies (at least in the US) do not make credit decisions - they merely REPORT information (hence the name) and let the recipient make the decision.
  
  It does seem like they ought to work more aggressively to correct mistakes, but it's harder than it sounds: EVERYBODY is going to claim that they paid the bill on time and it must have gotten lost in the mail (or whatever), so it's hard to know who to believe. In the US, if a dispute cannot be resolved to your satisfaction, you can write a letter explaining your version and they're required to include that in your credit report - again, putting the decision on the recipient of the report, not the agency itself.
  
  Hate the game if you must (AFTER considering the fact that the alternative is no one gets credit from strangers, ever), but don't hate the players.
All those people should find alternative services by countertrolling · 2012-01-22 07:55 · Score: 1

That would be much better than begging to the damn banks who just want to tie them down.

--
For justice, we must go to Don Corleone
Banks, always looking for a way to price people by Anonymous Coward · 2012-01-22 07:57 · Score: 0, Flamebait

Seriously, there's a reason why many religions are against usury and money. It leads to too much evil. Capitalism is one of the most destructive ideologies known to man. While certain persons may blame the "communists" for their offenses which come across in big bursts, they ignore the steady leeching of life offered by their capitalist heroes, which can be that much more costly to the souls affected.
Not that the persons described actually were acting like communists for the most part, but that's another problem.
1. Re:Banks, always looking for a way to price people by Darkness404 · 2012-01-22 08:26 · Score: 1
  
  You are forgetting key differences between capitalism and communism (communism as it was implemented in Russia, North Korea, etc.). First is that capitalism revolves around voluntary exchanges. If you disagree with corporation X you don't have to give money to corporation X (assuming it isn't done via taxation). With communism if you disagree with the government (assuming for a moment this government allows dissent) you still do not have the right to not fund them because you must pay your taxes. No one forces you at gunpoint to buy something at Wal-Mart, if you are so inclined you can live your life so that not a dime goes to Wal-Mart, however, if you disagree with the conditions at the government's factories, you cannot vote with your wallet and choose not to support them.
  
  And what about "steady leeching of life"? Guess what? With capitalism (and a willing government) if you are so inclined you don't /have/ to be part of the capitalist ideology. Go live in a commune if you want! Capitalism offers that freedom because it is based on voluntary exchange and if you voluntarily want to live in a commune, live in a monastery, or heck, live alone on your own little piece of land and become a hermit, capitalism lets you.
  
  But as for me, I'll keep my capitalism and keep my quality of life. But you are free to do as you wish, such, is the beauty of capitalism.
  
  --
  Taxation is legalized theft, no more, no less.
2. Re:Banks, always looking for a way to price people by Anonymous Coward · 2012-01-22 09:32 · Score: 0
  
  If you had read Marx, you would realize that his communism was revolved around truly voluntary exchanges, and then a little critical thinking would tell you that the states of the USSR and North Korea are (or were) authoritarian regimes, and not at all communist.
  And yes, ideal communism does give you the right to influence the government, far more so than the current system in the US where you know what? Corporations do their best to get what they want from it. Citizens United is one obvious thing, but there are plenty of others, like all the mortgage foreclosure fraud which the banks perpetuated upon the people with the aid of the state. YAY capitalism! Exploiting people just as much as you can imagine.
  But no, capitalists don't want to let people live their life, they've intruded upon many many cultures and civilizations, and resent being told to keep out, that they can't have things. Don't believe me? Just go ask some indigenous cultures. What's left of them.
3. Re:Banks, always looking for a way to price people by Darkness404 · 2012-01-22 10:11 · Score: 2
  
  There is a difference between influencing or not supporting. By its very nature, taxation does not let you not support a regime. There is no way that I can live my life while remaining in the US and not pay for bullets/missiles to ruin other countries. It simply is impossible.
  
  Not supporting is much more powerful than influencing and it allows everyone to decide for themselves without forcing it on others. My decision not to support X corporation will not affect someone else who has no problems supporting X corporation. Of course, if by me and others not supporting it, it can no longer remain profitable and closes that is fair enough, but my decision in and of itself doesn't affect someone else who may enjoy supporting X corporation.
  
  The US is not a capitalist state. There is nothing legal that says that the business philosophy of the US is capitalism. If you look in the constitution it never says anything about it being a capitalist state. On the other hand, if you look in the legal documents of the USSR, North Korea, Vietnam, etc. they will all say that they are communist states, while (aside from perhaps some successor states to former communist states) no state practicing "capitalism" ever declares it. Capitalism is simply the default method of organization that everyone innately participates in. So long as we all have different talents and exist in a society larger than say a single family unit, division of labor and voluntary trade will exist. Such simplicity is the core of capitalism. Someone has something that you value, be it knowledge, talent, time, energy, products, etc. and you have something that they value, therefore it benefits both of you if you trade.
  
  But no, capitalists don't want to let people live their life, they've intruded upon many many cultures and civilizations, and resent being told to keep out, that they can't have things. Don't believe me? Just go ask some indigenous cultures. What's left of them.
  
  Is completely false because the nations that did that did not do it because of their economic system, but rather by their government system. Even then, the only major ideology that truly embraces (pure) capitalism is the libertarian philosophy (speaking from a US point of view of course, the word libertarian means different things in other cultures) which are completely non-interventionist and would let people live however they want. It is the statists that want to conform.
  
  If you want Marx's communism, you need a (minimal) government and one that embraces capitalism because it is the only way that would provide enough choice to allow for Marx's vision of communism to exist. If government enters into communism you simply get Stalin 2.0 or Kim Jung-Il 2.0. So, paradoxically, a philosophy of capitalism is needed if you really want communism to succeed. Because capitalism is the only national economic system based on voluntary trade, it is the only system conductive for a non-totalitarian communist commune to exist.
  
  --
  Taxation is legalized theft, no more, no less.
4. Re:Banks, always looking for a way to price people by 0123456 · 2012-01-22 10:37 · Score: 1
  
  If you had read Marx, you would realize that his communism was revolved around truly voluntary exchanges, and then a little critical thinking would tell you that the states of the USSR and North Korea are (or were) authoritarian regimes, and not at all communist.
  All communist states are authoritarian, because you can't have a voluntary communist state. Capitalist behaviour is prohibited by force in a communist state, whereas you're free to set up a communist commune in a capitalist state so long as you buy the land first and 'progressives' haven't eliminated property rights.
5. Re:Banks, always looking for a way to price people by Anonymous Coward · 2012-01-22 12:46 · Score: 0
  
  All states are authoritarian. There are no voluntary states. Maybe a few voluntary communities, but not states. It's got nothing to do with being communist or capitalism, and no, communism does not have to prohibit anything by force. That's merely a result of the people in charge of the putatively "communist" states (which also claimed to be Republics and Democracies), deciding to do things their way. Go figure.
  Good luck with the commune idea, I guarantee that you'll find the "capitalists" are all too eager to bring it down. Not necessarily because of any philosophical dispute, though, but because it gets in their way. See Kelo in the US for one example.
  And what did it become? A dump.
6. Re:Banks, always looking for a way to price people by Anonymous Coward · 2012-01-22 13:09 · Score: 0
  
  Certainly to achieve Marx's ideal you would want a minimal government with aspects of what is ideal in capitalism, but you know what? That goes for every ideal. The larger it grows, the further it is from whatever pure seed was intended in the first place.
  Anyway, I'm pretty sure that capitalism has been the avowed practice of the United States, in some form or another. Certainly in the political forums. You think that Calvin Coolidge wasn't stating a philosophy of America when he said "After all, the chief business of the American people is business. They are profoundly concerned with buying, selling, investing and prospering in the world." ? Or the thousands of others who have expressed similar sentiments. That many of the same people who would swear up and down on a stack of Bibles that it is the case would also do it for Christianity reflects something, but I'm not sure what. Maybe that they're just as hypocritical as many of the tyrants proclaiming that they are the Democratically elected leader serving their people and protecting them with Communism...but maybe something else.
  It not being enshrined in the official documents...matters not a bit. It's still a core tenet of America. And I really think your definition of capitalism is not the one used by many others, so I'll just say...that's not what they mean, or even what they do.
  For example, capitalism based on voluntary trade? Not in reality. Maybe in the ideal, but if you want to complain that reality and philosophies rarely reach congruence, you'll find no shortage of similar failings.
  There's a reason why I said capitalists, though perhaps I should have said it like "capitalists" because that might give the emphasis on the falseness needed. You think it was the government that drove many of the expeditions? Not in the whole. It was the standard capitalist greed motive. They went out, and they set about getting what they wanted.
  And yes, it does include co-opting the state from time to time. Who knew?
  Oh well, if you want to eliminate the coercive state of affairs involving modern nation states, you'll be doing just what Marx wanted to do. He did want everybody to be the captain of his own labor. He was against the states, and I'm sure had he been alive to see it, he'd have been appalled at Stalin and Mao. So it seems you might be in agreement with him.
Bitcoin to the rescue again by Anonymous Coward · 2012-01-22 08:03 · Score: 0

Get a phone for just 10BTC per month for a prepaid a sim for just 0.1BTC per minute/text.
Let me get this right by Anonymous Coward · 2012-01-22 08:04 · Score: 3, Interesting

So, phone companies are selling who i call, how long and where did i make the call to this companies? Isn't that invasion of privacy?
1. Re:Let me get this right by Anonymous Coward · 2012-01-22 08:08 · Score: 0
  
  Dear Customer,
  You agreed to this last time you renewed your contract with us. Didn't you read it?
  --Phone Company
2. Re:Let me get this right by PPH · 2012-01-22 08:08 · Score: 0
  
  Want a loan? Give us access to all your phone records. Or no loan for you!
  
  --
  Have gnu, will travel.
3. Re:Let me get this right by Kenja · 2012-01-22 08:23 · Score: 1
  
  First off, the theoretical you we are talking about agreed to this with the terms of service for your phone. Secondly, how is this more of an invasion then needing your social security number, two years pay history and a full credit report?
  
  --
  
  "Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
The Laws Of Personal Finance by Chemisor · 2012-01-22 08:08 · Score: 3, Insightful
1. Avoid all debt
2. Avoid all debt
3. Avoid all debt
4. Profit!
1. Re:The Laws Of Personal Finance by Kenja · 2012-01-22 08:24 · Score: 1
  
  Without a history of debt and repayment you will have a hard time getting a loan for a house etc.
  
  --
  
  "Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
2. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 08:31 · Score: 5, Informative
  
  In civilised countries you only need steady income and a valid payment plan.
3. Re:The Laws Of Personal Finance by Darkness404 · 2012-01-22 08:32 · Score: 1
  
  Or how about:
  
  Buy low, sell high.
  
  Buy high, sell higher.
  
  Buy when undervalued, sell when overvalued
  
  Buy, add value, resell.
  
  Profit.
  
  Depending on what you do, debt may be, or may not be a bad thing. There are things that are pretty stupid to get into debt (meaning with interest) such as cars, furniture, TVs, computers, etc. but lets say you have a skillset to work with aging luxury cars and restoring them and selling them at a much higher price. If you don't have enough capital to buy the raw materials you need for this business, or enough capital to buy enough inventory of cars, not going into debt means not making a profit. Whereas you can get into debt, buy these things and quickly pay it off when you sell it because you are adding value to the car beyond the sum of its parts (and beyond the interest rate).
  
  --
  Taxation is legalized theft, no more, no less.
4. Re:The Laws Of Personal Finance by WillHirsch · 2012-01-22 08:54 · Score: 1
  
  I believe not getting a loan for a house was step two ("Avoid all debt").
5. Re:The Laws Of Personal Finance by idbeholda · 2012-01-22 08:59 · Score: 1
  
  SHHH! Don't tell him our secrets!
6. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 09:01 · Score: 0
  
  That may work for you, but most of us don't have >100.000 euro in our bank accounts when we want/need a house. So, that would we're paying rent until we do. Which means hundreds of euros a month that COULD go into paying back a house, but aren't.
7. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 09:09 · Score: 2, Interesting
  
  Loan? Did you somehow miss the first three sentences of GP's post? If you can't afford a house, don't buy one.
  Speaking of home loans, I wonder how affordable homes would be if it were not for banks artificially giving everyone the "buying" power to get one (temporarily).
  The typical home loan (30 years of debt) is financially insane, and has made home ownership (i.e. with no debt on the house) harder for everyone. Some of the price inflation caused by loans could be witnessed after the 2008 home mortgage "crisis" (market correction), but real estate is still vastly overinflated due to the ready availability of ridiculously enormous personal loans.
  In actuality, the banks risk nothing on the loan (if you default, they repossess and keep your payments too), they only take a risk on the market (resale of the home being what you borrowed), which is only a risk to the degree that the market as a whole fluctuates up and down, owing to the huge diversity of loans that are made... and when the market is really down, the taxpayers bail you out.
  Loans are a scam, perpetrated by banks, exploiting the financially unwise, to use against the rest of society. The only function that money lending serves is to give you the money you need to compete with someone who has access to the same services. The "winner" is the person who is therefore willing to sacrifice more in an unforeseeably long term. This has a negative evolutionary effect by giving economic preference to irresponsible people who spend what they're not sure they'll have (gamblers), rather than to responsible people who only spend what they can afford (planners). What it means in the end, after the bankruptcies, is that the responsible people end up paying one way or the other to cover the debts of the people who failed to repay what they agreed to. In the meantime, before the house of cards falls, the irresponsible people get to live it up, while the responsible people continue to lead humble lives.
  In the end, the only people who win from money lending are the lenders. At least the way it works today, where the lender isn't actually lending you anything, they just trade you the money for collateral and simply trade the collateral back over the lending period. They would at least be less predatory if they took on an actual risk. That in turn would make them exercise better discretion about who to lend to, which in turn would reduce the inflationary effect on the market.
8. Re:The Laws Of Personal Finance by hercubus · 2012-01-22 09:37 · Score: 1
  Avoid all debt [ homeless / live in a box ]
  Avoid all debt [ walk / never own a car ]
  Avoid all debt [ lose / no credit benefits ]
  Profit! [ small / less profit and quality than you could have ]
  congrats! you're now a small, on-foot, homeless loser who minimized a trivial expense and lowered your income potential and your quality of life. w00t?
  okay, seriously, debt is a tool, not a sin. as a tool, you can injure yourself with it or build something useful. and to throw another cliche, for every problem there is a short, simple solution that's wrong. or in your case, not exactly wrong, just sub-optimal
  H. A. N. D.!
  --
  -- How I want a drink, alcoholic of course, after the heavy lectures involving quantum mechanics.
9. Re:The Laws Of Personal Finance by TheRaven64 · 2012-01-22 09:51 · Score: 4, Informative
  
  I'm not sure how you get from the first three to the fourth one. For example, I took out a mortgage a little under two years ago to buy a house. As a result, I am now paying in mortgage interest less than a third of what I was paying in rent. Because the house I bought has better insulation than the place I was renting, my gas bill has gone down. Because I bought new appliances when I moved, rather than using the old ones that came with my rented flat, my electricity bill is also down. And yet, I am quite clearly not avoiding all debt - I have more debt now than I have ever had, yet my monthly cost of living is much lower and, as a result, I am paying back the mortgage quite quickly. In a few years, it should be fully paid off. At that point, my cost of living will be even lower. In contrast, if I'd avoided all debt, I'd still be slowly saving up to buy a house, while paying someone else for the privilege of living in a property that they owned.
  
  --
  I am TheRaven on Soylent News
10. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 10:15 · Score: 0
  
  1. Rent an apartment
  2. Buy a cheap second hand car or use public transit. (oh, I forgot, they don't have decent public transit in the U.S. do they?)
  3. Get a free credit card and use it rarely, or pay the bills on time, always, so you don't pay interest.
  4. Save up the all the money you save, not having to pay interest on various loans.
  5. Buy a house when you have the majority of the sum (or all of it) already in your bank account.
  6. Profit!
11. Re:The Laws Of Personal Finance by 0123456 · 2012-01-22 10:33 · Score: 3, Informative
  
  That may work for you, but most of us don't have >100.000 euro in our bank accounts when we want/need a house.
  Which isn't a problem, because houses would be cheaper. Loans make things more expensive by creating artificial demand.
  You'd think that after the recent housing debacle people would understand that.
12. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 11:05 · Score: 1
  
  This is exactly the kind of unwise thinking that leads people down the road to debt and financial ruin, taking the rest of society with them.
  1. Nobody "needs" a house.
  2. You don't need a house.
  If you take out a mortgage, you are going to pay more for the interest than you would for rent. It's tens or even hundreds of thousands of euros that you're using to pay for a loan, that you COULD have used to rent for many years while:
  1. Being free of debt.
  2. Having more money available to invest.
  3. Therefore, being able to create more money.
  4. Having the flexibility to move as you please.
  5. Allowing you to better pursue opportunities elsewhere.
  6. Therefore, being able to create more money.
  The fact that you think a loan represents some kind of "savings" over renting only goes to show that you are either very young and naive about these matters, or that you are a fool with money. Home ownership is a very expensive liability with a massive up-front cost, ongoing maintenance costs including insurance and taxes, in addition to continuing monthly payments that are higher than you would pay for an equivalent rental. It is something that should only be done not just because you can afford it but because you really want it and you understand all the risks. We're not talking about the necessity of log cabins when living on the prairie, we are talking about living in civilized places where you have all kinds of options to put a roof over your head. Committing yourself to buy something that you can effectively rent for less is not a matter of financial hardship. Also, if you're talking about the typical 30-year mortgage, you'll have one foot in the grave by the time it's actually paid off and actually "saving" you from monthly payments.
13. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 11:16 · Score: 0
  
  New electrical appliances saving you power? Seriously? You can do better than that.
  A 1KW kettle/microwave/toaster/etc is still drawing 1KW, no matter how new it is.
14. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 11:17 · Score: 0
  
  this isn't universally true. I have high risk tolerance and I've taken advantage of personal loans to a) generate income in excess of loan interest b) purchase property for well less than appraised value (3/8x) and c) cycle money through a variety of accounts to get approximately a 4% discount on everything I buy or 18% discount on flights ( I vary between the two depending on my needs) It's absurd really, but easy to take advantage of. I have paid about $10 in bank fees in my life, probably about a decade ago retrieving money from international ATMs.
15. Re:The Laws Of Personal Finance by marcosdumay · 2012-01-22 11:30 · Score: 1
  
  Owning your home gives you the ability to lose your job and not be a homeless.
  But, of course, if you have a mortage, you won't have that ability either. I said owning it, not renting it from the bank.
  
  --
  Rethinking email
16. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-22 12:27 · Score: 1
  Avoid all debt
  Avoid all debt
  Avoid all debt
  Profit!
  That's a gross oversimplification.
  I took on a fair bit of debt to put myself through school*. I now have a Masters in a professional field and am making $20,000 more a year than I likely would if I had not gone to school. I figured it out and it will take about 12 years for the added cost of school, interest, and opportunity cost to be worthwhile, but after that it's all gravy. Debt allowed me to do this.
  Some day in the near future I will buy a house. I could save up for 25 years. Or I could buy it with a mortgage now and start putting part of the money I pay to rent now into equity. If I'm realistic and modest in my purchase this will basically turn into a long-term, stable savings account with a decent rate of return. Debt will allow me to do this.
  I have a credit a credit card with a modest limit. I pay it off at the end of the month most of the time. The 1% cash back I get covers the cost of those few months where other priorities prevent me from paying the card off in full. My card gives me a convenient means of payment while avoiding the $0.65/transaction fee all the banks around here charge on debit cards. My card also allows me to buy things online, rent cars, and a host of other benefits. Debt allows me to do this.
  *I also worked through school and in the summers. It was not enough to fully cover the costs of school and living. I could have worked more, but that would have cut into my learning (and yes, some semblance of a happy life that included time for friends), which was the point of the whole exercise in the first place. So don't anyone give me that shit about how student loans are stupid, as posters on Slashdot seem to like to say.
17. Re:The Laws Of Personal Finance by tepples · 2012-01-22 13:19 · Score: 1
  
  Having the flexibility to move as you please.
  When you "move as you please" to follow the jobs, don't you have to find a new job for your SO and a new school for the kids? And last time I checked, a tenant lacked authority to modify the building and had to pay the landlord's marked-up charges for pulling, say, Cat-6 or HDMI cables through the wall.
18. Re:The Laws Of Personal Finance by TheRaven64 · 2012-01-23 00:51 · Score: 1
  
  Kettle, microwave, and toaster, sure (although I actually only own one of those). I was thinking of fridge, freezer, washing machine. The new fridge and freezer have better insulation and more efficient compressors, so they draw less power. The washing machine is also more efficient. Actually, the oven in my new house is also better insulated, so I use less electricity heating my kitchen and more heating my food - I couldn't put anything plastic in the cupboard next to the oven in my old house because it got too hot.
  
  --
  I am TheRaven on Soylent News
19. Re:The Laws Of Personal Finance by Anonymous Coward · 2012-01-23 10:59 · Score: 0
  
  No one said debt for business is silly.
  We are talking about being endebted for living expense.
Meaningless by Anonymous Coward · 2012-01-22 08:09 · Score: 0

I have a terrible credit rating because I've never needed credit. I use pay as you go on my mobile phone because it works out cheaper (no other reason), but like most store purchases use cash to pay for top up credit. You get nothing useful from that.
Seriously by Billly+Gates · 2012-01-22 08:10 · Score: 4, Insightful

FUCK OFF
I normally do not use those strong tones in my slashdot replies but what I do, and what videos I watch are no ones business! Why is this even for sale?
When employers tried to call your doctors and pyschologists to weed out applicants with potential issues like depression people were outraged and HIIPA became law. The medical industry hates it but it was a must as in an alternative universe anyone who has taken an anti depressent would be labeled a credit risk and unemployable or someone with ADD would be unemployable and another credit risk etc.
I think the same should apply. I mean what is next? Installing video cameras that view into your house all over the street? Maybe looking for who you invite over or what you do in the bedroom next?

--
http://saveie6.com/
1. Re:Seriously by Anonymous Coward · 2012-01-22 09:13 · Score: 0
  
  I mean what is next? Installing video cameras that view into your house all over the street? Maybe looking for who you invite over or what you do in the bedroom next?
  You must have missed the last 10 years. British CCTV, Google Streetview, iPhone GPS tracking, Facebook, fuckbook, whatnot. It's already taken care of.
2. Re:Seriously by mjwx · 2012-01-22 13:03 · Score: 1
  
  I normally do not use those strong tones in my slashdot replies but what I do, and what videos I watch are no ones business! Why is this even for sale?
  This is not for the US. Nor any other western nation so calm down.
  
  In the west banks can already buy this kind of detailed personal information without having to ask phone companies for it.
  
  Countries mentioned in the fine summary are places like India, Brazil and the Philipines, in these places people dont have ready access to legitimate sources of credit. As a result, they cannot get a credit history easily. But they have a phone history, I'm not sure about India or Brazil, but Filipino's live on the phone, just going over avg spend should give some insight into their ability to manage finances.
  
  Personally I think that easy credit in these places is an incredibly bad idea. Scratch that, I think easy credit is an incredibly bad idea. Being able to handle credit correctly is a rare skill in western nations where there is a high level of education, in developing nations where there is a much lower level of education it can be disastrous to the lives of ordinary working people.
  
  --
  Calling someone a "hater" only means you can not rationally rebut their argument.
3. Re:Seriously by Anonymous Coward · 2012-01-22 17:39 · Score: 0
  
  in developing nations where there is a much lower level of education it can be disastrous to the lives of ordinary working people.
  That's why it's a "good market". The creditors don't GaF if you can pay or not. When enough people get their asses in debt they create this thing we call a problem where, if everyone is in debt, and cannot make money, the economic structure (ie, 1/2 billion people) that hold up the market (that was built by the credit boom) can fall apart.
  Then again, this is China, Brazil, and India we're talking about. Their leaders will tell the creditors to GTFO and they don't get squat. Unlike here in the U.S. where we just give them the money they're asking for, through our tax dollars.
You could *gasp*, save. by Colin+Smith · 2012-01-22 08:26 · Score: 3, Insightful

Course that would only be a sane thing to do if interest rates were positive and reasonably above the real rate of inflation.

--
Deleted
1. Re:You could *gasp*, save. by Anonymous Coward · 2012-01-22 08:51 · Score: 0
  
  Would you take a 0% interest rate loan (30-day) and put the money in a 2% money market account? Unless you suspect that the money market is about to collapse, you would be a fool not to. That is precisely what using a credit card for day-to-day expenses and paying it off at the end of the month amounts to. Except you also get a nice collation of all your expenses in a small number of places.
2. Re:You could *gasp*, save. by Anonymous Coward · 2012-01-22 09:21 · Score: 0
  
  So do you max out your credit card every month and put the money in the bank? By that logic, you'd be a fool not to.
  It sounds like keeping a negative buffer of money to me.
3. Re:You could *gasp*, save. by Anonymous Coward · 2012-01-22 09:35 · Score: 0
  
  The money is lost if you do that. His point is that he saves some money on the spending he does. He could pay by cash and lose out on that interest, but he doesn't. I do the same thing, I'd be stupid not to.
4. Re:You could *gasp*, save. by im_thatoneguy · 2012-01-22 09:59 · Score: 0
  
  Course that would only be a sane thing to do if interest rates were positive and reasonably above the real rate of inflation.
  If you don't pay your credit card until your due date then you've been able to hold onto your money for an extra 2 months and collect interest. Using a credit card *is* a form of saving and then you blow it out of the water with credit card rewards.
  Let's take a hypothetical situation. I get paid on the first on the month and my credit card bill is on the 30th of the month.
  My bank account on Day 1 is $10k.
  On day 1 I also buy a boat for $10k.
  My checking account has let's say a .1% interest rate per month.
  On day 1 of the next month I receive my credit card statement due at the end of the month. And I receive another $10k. Let's say I have rent and need groceries. I spend $5k on necessities and bills due at the end of the month.
  On the due date I pay my credit card and spend my last $5k on that month's bills.
  That's: $10k * ( 1+ (.001 * 2))
  $10k * 1.002 = $10,020 for my first pay check over 2 months with interest.
  +
  ($10k - $5k) * 1.001 = $5,005
  + $10k * 1% for Credit Card rewards = $100
  =
  $15,025 bank account - $15,000 expenses + $100 credit card cash back = $125 profit *per month*.
  Now let's do that with cash.
  $10k comes in. You spend it the first of the month. No more interest.
  $10k comes in. You spend it the next month of the last month's bills. $5k.
  =
  $5 interest after 2 months.
  vs $125 interest after 2 months if you buy on credit.
  That's 25x the return by using a credit card and exploiting the "Free loan" that you get to hold your cash in your bank account before paying off your credit card. Now you could say "Well don't buy a boat." or "Wait 2 months then buy the boat."
  But that's 2 months without a boat and you get less interest as you would get having a credit card. Remember when you spend with a credit card you get 1% instantly return instantly. If your bank offers 1% APR you have to let your money sit for a *YEAR* before you get that interest. And with a revolving account where you continually pay off the credit card 2 months after the fact you perpetually have money in your account and buy instantly. So you actually double your interest.
5. Re:You could *gasp*, save. by tomhudson · 2012-01-22 10:49 · Score: 2
  
  Or you tell the boat dealer you're paying cash. They no longer have to pay 3% to the credit card company off the top for their cut. They also like having cash because they can use it immediately (no waiting for a check to clear, etc).
  So you get the boat for $9,700, an immediate savings of $300 (plus whatever retail sales taxes would have been on that $300), as opposed to getting "cash back" of $125 3 months later.
  Cash is king for a reason. Even Best Buy will knock off a few percent on a big-ticket item if you're paying cash as opposed to a credit card.
6. Re:You could *gasp*, save. by im_thatoneguy · 2012-01-22 10:54 · Score: 1
  
  I've often asked about these discounts and rarely been actually offered one. Especially for day-to-day purchases. The "$10k" was a hypothetical nice easy block of purchase. More likely we're talking about Groceries, phone bills etc.
7. Re:You could *gasp*, save. by tomhudson · 2012-01-22 11:09 · Score: 1
  
  Example: I got $40 off my plasma tv at Worst Buy. Similar amount on a camcorder at Future Sh*t. You have to not only ask, but be ready to walk.
  One of my daughters did the same thing when she was buying a TV, living room set, etc - drove the guy nuts - "How much more will you knock off if I also buy this?" He had to work for his sale, and she saved hundreds of dollars.
  If you don't ask, you don't get. They've already sunk $x of time into the deal - they'll work the numbers with their boss to come up with enough savings to salvage it. Anyone who pays the sticker price for a large purchase is paying the "Stupidity Tax".
8. Re:You could *gasp*, save. by arkane1234 · 2012-01-22 11:42 · Score: 1
  
  it's not just for investment, it's great for not worrying about the hills & valleys of weekly/bi-weekly/monthly paychecks.
  
  --
  -- This space for lease, low setup fee, inquire within!
9. Re:You could *gasp*, save. by Rockoon · 2012-01-22 12:35 · Score: 1
  
  The typical person doesnt even believe me when I tell them these things.
  
  They think of a store as a service, rather than a trading opportunity. These are the same people that don't believe that participating in trade is most-often win-win, and maybe when they do it it isn't.
  
  --
  "His name was James Damore."
10. Re:You could *gasp*, save. by tomhudson · 2012-01-22 12:49 · Score: 1
  
  Here's an opportunity to make some (tax-free) money (because only an idiot would report it, unless you set it up as a "business", and take enough deductions to more than offset the income). Tell them that, next time they have a big purchase, you want to go with them and negotiate the price. They pay you 75% of what they save, as the cost of their "education" - they still come out ahead by 25% on this first purchase, and way ahead in the future since they can now do it themselves in the future.
  Of course, too many people regard haggling as "degrading" - whereas the merchants do it all the time with their suppliers, so they actually respect you more if you bargain. And the next time they see you, they'll most likely offer a better price up front. Besides, in the end, the money saved in your purse or wallet counts for more than their respect anyway.
11. Re:You could *gasp*, save. by Anonymous Coward · 2012-01-22 14:39 · Score: 0
  
  Or you tell the boat dealer you're paying cash. They no longer have to pay 3% to the credit card company off the top for their cut.
  Most merchants pay less for MC/Visa. Costco has an offer for small businesses that is under 2%, so a larger store with bigger sales volume will probably pay less for in-person sales.
  They also like having cash because they can use it immediately (no waiting for a check to clear, etc).
  Many businesses don't like having cash on hand. There's the risk of theft from employees, risk of robbery, etc.
  And for large purchases (like your boat dealer), there are additional headaches dealing with anti-moneylaundering rules that apply to large cash transactions.
12. Re:You could *gasp*, save. by tomhudson · 2012-01-22 15:30 · Score: 1
  
  The good thing about cash is that it is liquid. Go to any used car lot - pay cash and you can bet that the salesman will get that commission in cash as well.
13. Re:You could *gasp*, save. by Rie+Beam · 2012-01-22 16:03 · Score: 1
  
  It depends on the availability of someone at a store who is actually granted the ability to haggle. A low-level clerk is probably going to be bound by what the register will allow them to do and have no incentive to haggle, as they receive a flat paycheck regardless of what gets sold. A manager or someone in sales, on the other hand, is probably much more likely to do so, but only assuming they have a corporation flexible enough to offer anything other than a "shut the customer up" discount.
  Real haggling is a rare thing nowadays because the business relies on its price points when making, well, business decisions. It's not in their best interests to constantly have the price of their goods set by the consumer.
14. Re:You could *gasp*, save. by Anonymous Coward · 2012-01-22 23:15 · Score: 0
  
  Consumer Cost Containment.
  I like it.
15. Re:You could *gasp*, save. by Anonymous Coward · 2012-01-23 02:40 · Score: 0
  
  He sounds sensible so I imagine he does save. If so, it doesn't detract from his statement at all. Savings should be tucked away immediately and not thought of until you need them. If you're constantly factoring your saving into your spending habits then you're not saving.
16. Re:You could *gasp*, save. by adolf · 2012-01-23 04:52 · Score: 2
  
  I one worked in retail, and part of my job was being "a low-level clerk," ringing up things ranging from digital cameras to groceries to home electronics (including, as it were, TVs).
  There were softkeys on the register which would allow me to select various levels of discount: IIRC, 2%, 5%, and 10%. I could also directly adjust the price downward by up to $2, per item.
  I could do this all without involving management, through a system termed by the corporate overlords as "Cashier Empowerment." (Accomplishing a greater discount required a phone call and a key.)
  The usual reasons for doing this were minor customer complaints or disagreements. It's cheaper and faster to sell a widget for the $12.50 that the customer swears it was marked at, than to send someone over to investigate the physical price tag and sell it at the $13.50 that it rang up as, and the customer is happy because they feel that they're being treated fairly.
  It also keeps customers happy when you can instantly knock 10% off of an item whose box has been opened, and increases the odds that they'll come back in the future.
  I gave discounts whenever it was the right thing to do, and only time I heard about it from management was when they thanked me for keeping folks happy. And more to the point: If I were still in that line of work, I wouldn't be surprised if I was directed to give a small discount for cash when asked by a customer.
  If Best Buy, Scam Central, or some other retailer doesn't do this (or something like this) with relative ease, then it's their own problem. Take your money elsewhere.
  
  --
  Kid-proof tablet..
Re:Things you cannot do without a credit card by Kenja · 2012-01-22 08:29 · Score: 1

Wow, your bank must suck. Mine will give me a credit the same day I report a disputed charge on my debit card. What's more, there are no fees and most importantly no interest.

--

"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
95% of money is based on debt by Colin+Smith · 2012-01-22 08:30 · Score: 1

98% in the EU.
Your chances of avoiding all debt are small.

--
Deleted
Re:Things you cannot do without a credit card by mehrotra.akash · 2012-01-22 08:32 · Score: 1

What's more, there are no fees and most importantly no interest.
So, essentially same (or actually worse) than a credit card?
Re:Things you cannot do without a credit card by Kenja · 2012-01-22 08:36 · Score: 1

What's more, there are no fees and most importantly no interest.
So, essentially same (or actually worse) than a credit card?
Your credit card charges no interest and no fees? Sorry don't believe you.

--

"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Yeah, by no-body · 2012-01-22 08:37 · Score: 1

Give me your phone number and I tell you your credit worth.
Start it in another country where it's possible, then expand...
How exactly is that data available?! by tmontes · 2012-01-22 08:51 · Score: 2

Almost enough said.
Assuming such correlation is useful for credit analysis, how does someone other than the telcos access that kind of information to produce such evaluations?! I'd say it is private information. Correct me if I'm wrong...
1. Re:How exactly is that data available?! by ark1 · 2012-01-22 09:24 · Score: 1
  
  Somewhere in TOS there is likely a clause which allows the telecos to "share" your private information with anyone willing to pay for it.
Re:Things you cannot do without a credit card by zippthorne · 2012-01-22 08:54 · Score: 3, Insightful

Pretty much all credit cards charge no interest if you pay in full every month. And many charge no fees to the cardholder. Indeed quite a few even give a small part of the fees they charge merchants to the cardholder to keep their business; as "rewards."
If you're not paying off your credit card in full every month, then you should consider rolling that debt into a longer-term debt product with a lower and more stable interest rate anyway. CC's charge usury rates if you keep a balance. Not quite as bad as payday loans, though.

--
Can you be Even More Awesome?!
Re:Things you cannot do without a credit card by allanw · 2012-01-22 09:10 · Score: 1

I use my Amazon card exclusively for all my purchases now. No fees and the cashback structure is very nice. Since I pay off my balance monthly there's absolutely no downside to using it, but I gain convenience and 1/2/3% cash back on my purchases.
I re-read the headline by SlippyToad · 2012-01-22 09:14 · Score: 0

I thought I saw "banks using phone use to gouge"
And I said -- this is news?

--
One day I feel I'm ahead of the wheel / the next it's rolling over me / I can get back on / I can get back on
Next : Fortune telling from turd by unity100 · 2012-01-22 09:30 · Score: 1

For this is where we are headed to. it is utterly stupid to think that people behave the same way in every aspect of life.

--
Read radical news here
My Private Phone Records by Doc+Ruby · 2012-01-22 09:34 · Score: 1

If any telco shares my phone records with anyone or anything outside itself, I'm suing.
If I volunteer to release those records to a specific other person/thing, because I want to use it to prove something, that's my privilege if the telco allows access to it. But never before than.
I have the rights to be secure in my person, home, papers and effects. And I have a government we created to protect those rights.

--
--
make install -not war
Re:Things you cannot do without a credit card by TheRaven64 · 2012-01-22 09:42 · Score: 1

My credit card charges no fees (to me - it does charge them to the merchants). It charges me no interest as long as I pay the bill within 14 days of the statement, which happens automatically via direct debit. This means that every payment I make on it actually leave my bank account 14-35 days after I make the purchase. For example, when I travel somewhere that is paying expenses, I can often get claim them back and have the repayment money entering my account before the original payment actually leaves. My mortgage has an offset facility, so any money in my current account is subtracted from the mortgage total before I pay interest. That means that, effectively, anything currently on my credit card is paying me interest at the rate of my mortgage. Oh, plus I get 1% back from everything I spend on the credit card.

--
I am TheRaven on Soylent News
Another Step to Total Information Awareness by dangle · 2012-01-22 10:03 · Score: 3, Insightful

I'm not a tinfoiler (in fact, part of my job is to try to help tinfoilers) but this is just another (? inexorable) step towards total information awareness. MasterCard and others have demonstrated an almost spooky ability to make future predictions based on seemingly irrelevant data, predictions that hold true and provide valuable guidance for large populations, despite the fact that individuals will be harmed. With a little more database interconnectivity, coupled with a gigantic complex of computers, there's no limit...
-Dan
1. Re:Another Step to Total Information Awareness by Anonymous Coward · 2012-01-22 16:47 · Score: 0
  
  Exactly my thoughts... And although I don't know exactly what type of data is being analyzed it seems that who you talk to is more relevant then how long you talk to them for. Say you talk a lot to someone who has not paid back loans in the past.....
Are GPSs legal in China? by Anonymous Coward · 2012-01-22 10:08 · Score: 0

They may have issues in China, where GPS usage is forbidden...
third world derivatives anyone? by Anonymous Coward · 2012-01-22 10:22 · Score: 0

so i can see these loans being "bundled" into a single security and then that security being resold
to spread out the risk. i mean what could go wrong with that idea?
This is a poor indicator of credit. by Anonymous Coward · 2012-01-22 10:54 · Score: 1

This is bullshit. The last thing I want is some bank deciding that because I don't use a mobile phone the way they like I get a shittier interest rate on a loan or no loan. Device usage does not have a 1:1 correspondence with credit risk. Certainly, you could say that someone who regularly charges up a sim card is able to sustain that cost, but it says nothing about whether they can afford other items.
This is a slippery slope. We do not want banks limiting people's options based on actuarial bullshit about their phone usage that is not relevant. I don't have a cell phone because I choose not to be interrupted by one, not because I can't afford one. It's responsible management of my resources and lifestyle; it's unfair for some bank to decide no cell phone = bad credit.
Re:Things you cannot do without a credit card by marcosdumay · 2012-01-22 11:17 · Score: 1

1 - In Brazil that's quite easy.
2 - Yep, you either pay up front, or have a credit card.
3 - Our companies are making it hard to buy a ticket without a credit card, but there is no TSA here to be concerned about.
About buyer protection, if there is fraudulent activit with your debit card at Brazil, and the bank does not advances you the disputed value, you can call our central bank and odds are somebody will go to jail because of that. Few things work around here, that is one of those.

--
Rethinking email
Getting money in and out of Ally by tepples · 2012-01-22 11:42 · Score: 1

Why don't you control yourself for a few months
Controlling oneself for a few months is often easier said than done. Consider what would happen if one's means of transportation to and from work were to break down, or one's health were to break down.

Right now, Ally gives 0.8% on it's CHECKING accounts... more than any brick & mortar banks are giving on even their savings or 1year CDs right now
But as I understand it, in order to get cash or checks into Ally, you have to deposit them into a bank with a local branch and then ACH the money to Ally. Then the local bank ties up $1500 of your money in a minimum daily balance.
1. Re:Getting money in and out of Ally by evilviper · 2012-01-22 15:06 · Score: 1
  
  But as I understand it, in order to get cash or checks into Ally, you have to deposit them into a bank with a local branch and then ACH the money to Ally.
  Completely untrue. With any online banks, you can endorse and mail checks directly to them. Many even send you prepaid envelopes.
  If you really have to deal with cash, you could go to the nearest gas station and turn it into a money order for a $1 fee.
  
  --
  Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
2. Re:Getting money in and out of Ally by Anonymous Coward · 2012-01-23 07:30 · Score: 0
  
  Someone needs to learn how to do a Cash Advance on a Debit Card (these are free at Wells Fargo and Key Bank and probably at most major banks, but I have not tried them all), as long as the bank issuing your Debit Card doesn't charge a fee for this it's absolutely free and no cash limits. Yeah you have to do a little planning but not much, if you're near an ATM you're usually near a branch, you just have to do it during business hours (which is every day but Sunday until 6:30 at most major banks).
  You should never need to us an ATM, even if your bank is online only.
Property tax is not unlike rent by tepples · 2012-01-22 13:21 · Score: 1

Owning your home gives you the ability to lose your job and not be a homeless.
You still rent the land on which your house sits from the government. Stop paying property tax and see to what extent you "own" a piece of land that you hold in fee simple.
1. Re:Property tax is not unlike rent by marcosdumay · 2012-01-23 05:22 · Score: 1
  
  Around here government can't just take your property if you stop paying the tax. I don't know how it is on other countries.
  But, anyway, in practice, even if one should consider property taxes a form of rent, it is a cheap rent. You won't get homeless because of taxes.
  
  --
  Rethinking email
Interest, rent, what is difference? by tepples · 2012-01-22 13:28 · Score: 1

Rent an apartment
If the interest on a mortgage is less than rent, how would one be better off renting? What is the fundamental difference between interest and rent?

oh, I forgot, they don't have decent public transit in the U.S. do they?
Correct. Citilink buses in Fort Wayne, Indiana, for example, do not run at night, on Saturday evenings, on Sundays, or on major holidays, and the routes serving outer parts of town don't even run on Saturdays.
1. Re:Interest, rent, what is difference? by AJodock · 2012-01-25 03:59 · Score: 1
  
  There are lots of extra bills included with owning a house. Most rentals cover at least some if not all utilities, and even if your rent doesn't cover heating/cooling a house typically costs a lot more per month to keep warm/cool compared to a 2 bedroom in a complex. Add in various forms of insurance, taxes, appliances, and the possibility of random huge upkeep charges (i.e. pipe in the basement bursts). When you rent the landlord has to eat all of those expenses.
  Its also a lot easier to have a roommate with an apartment to cut all of your costs in half. You could of course buy the house and rent out your extra rooms to friends, but living with your landlord tends to put a strain on friendships.
Appliances other than those that heat your food by tepples · 2012-01-22 13:33 · Score: 1

What you say is true for electrical appliances that heat your food. It isn't necessarily true for other electrical devices, such as refrigerators, lighting, dishwashers, TVs, and the like.
1. Re:Appliances other than those that heat your food by Anonymous Coward · 2012-01-22 21:48 · Score: 0
  
  Actually, it's the other way around.
2. Re:Appliances other than those that heat your food by Anonymous Coward · 2012-01-23 13:02 · Score: 0
  
  All these devices cost far less than they did 30 years ago NOT adjusting for inflation! And use half the electricity they did then. There are plenty of ways to save money to buy a home, especially now with the lowest mortgage rates in more than 40 years. Once you pay off the mortgage your budget will be even lower. Inflation will raise rent prices, while you have locked in a FIXED rate mortgage that will become even cheaper as inflation happens. What? you think there won't be inflation at any time in the next 15+ years? Study your history.
Snake oil by Mock · 2012-01-22 13:40 · Score: 1

You can't predict credit risk based on phone usage. There are far too many system inputs to even begin to separate this kind of data. You might as well argue that you can predict credit risk based on television viewing habits or toothbrush selection.
1. Re:Snake oil by Daniel+Kirksey · 2012-01-22 17:26 · Score: 1
  
  You can't predict credit risk based on phone usage. There are far too many system inputs to even begin to separate this kind of data. You might as well argue that you can predict credit risk based on television viewing habits or toothbrush selection.
  So, are you saying it's impossible to predict credit risk based on phone usage, or just that we're not yet capable of computing the number of "system inputs" necessary to make meaningful predictions? And, what do you mean by "system" input rather than just saying "input." I'd be curious to see examples of what you mean. You seem so confident and I don't know how because it seems possible to me without question, so if you care to elaborate I'd appreciate it. Thanks in advance.
2. Re:Snake oil by Anonymous Coward · 2012-01-23 08:55 · Score: 0
  
  You might as well argue that you can predict credit risk based on television viewing habits or toothbrush selection.
  You probably can.
De Gaulle and the Nixon Schock by Anonymous Coward · 2012-01-22 15:26 · Score: 0

My limited understanding is that Nixon in 1971 canceled the international gold to dollar standard. This was a result of the French trading US dollars for gold and thus causing a problem for our currency internationally. It was one of his many changes in a period known as the Nixon Shock.
Yes and that trade made sense and therefore occurred because it was clear that the US dollar wasn't really worth that much gold, so you'd be a mug not to make the trade. And it was clear that the US dollar wasn't/wasn't going to be worth that much gold, precisely because of the reckless deficit spending... does that make sense?
It is very interesting to see what De Gaulle had to say about the matter in 1965 , in light of what we all know now.
Because This Wouldn't Be Easy To Screw With by Anonymous Coward · 2012-01-22 16:26 · Score: 0

I'm sure nobody is capable of making phone calls at the right time of day for the right length to improve their credit. This definitely wouldn't end up akin to farming in many video games. No I'm sure nobody would realize that.
Since when the bank care about credit risk? by devent · 2012-01-22 18:11 · Score: 1

Since when the bank care about credit risk? They didn't care about that in the morgage crises, they didn't care for Greece or Italy, they didn't care in the credig card crisis (or the credit card buble), they didn't care for American students if they can ever pay back their loans.
In fact, the more banks lend out, the more captial they have. And if they make bad loans, they just get bail out from the government. But of course they are now sitting on so much cash (also they get interest for the money they sitting on from the fed), that they don't care to make loans anymore.

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counterfeiters' innovation by harvey+the+nerd · 2012-01-22 22:14 · Score: 1

You're looking at another banker scam, er innovation. An excuse to hijack a fresh portion of the economy with more counterfeit credits. Think people would eventually learn, and shoot/jail them for counterfeit, on sight.
Taxes drive the value of money by Nicolai+Haehnle · 2012-01-22 22:22 · Score: 1

The United States has fiat money. The value of our currency is tied to nothing at all. The value of our money is purely whimsical. So long as people have faith in the currency, it is valuable. When faith begins to fade, it will have no value.
No matter how little "faith" people have in the US$ - and what the hell does "faith" mean in that context anyway? - they will still have to use US$ to pay their taxes, because the government says so. That is the floor that prevents the value of US$ from dropping to zero, and in fact taxes are where the value of money initially came from. Taxes drive money. Not enough people are aware of that, even though it's kind of obvious once you really think it through.
1. Re:Taxes drive the value of money by Runaway1956 · 2012-01-22 23:54 · Score: 1
  
  If/when people lose all faith in a currency, inflation skyrockets. Your "base" may or may not mean anything important. When inflation really takes off, and people are spending their entire paycheck the day they are payed, so that they don't lose value overnight, you have serious problems.
  No, that has never happened in the US of A, but it has happened before. Several of Europe's currencies were valueless during the second world war - and the first for that matter. A wheelbarrow full of money couldn't buy a loaf of bread. Then, the barter system came into use, if you had anything to barter. If not - then you just made do with what you could produce yourself, or steal.
  As long as people believe that a dollar bill has value, then you can trade that dollar bill for something or real value. When people no longer believe it to be of value, then it will have no value, despite what the government might say to the contrary.
  Fiat money has no intrinsic value in this world.
  The tax man can bang on the doors of every citizen in this country, but if they don't have dollar bills with which to pay their taxes, then he'll either accept some other form of payment, or do without.
  BTW - within my own lifetime, counties and states accepted livestock and other forms of payment for taxes. As a boyscout leader in Winter Harbor, Maine, I managed to peruse some old tax documents in the city hall. A goat and half a dozen chickens was common payment for taxes due in the late '50's, although less common than in previous decades. It COULD happen again.
  And, please note - possibility != probability. I say it could happen, not that it's likely to happen.
  
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2. Re:Taxes drive the value of money by Nicolai+Haehnle · 2012-01-23 03:27 · Score: 1
  
  If/when people lose all faith in a currency, inflation skyrockets. (...) Several of Europe's currencies were valueless during the second world war - and the first for that matter. A wheelbarrow full of money couldn't buy a loaf of bread.
  Ah, but why was that? Was that because people had no faith in the currency, or was it because there simply wasn't enough bread around? War takes its toll on the production capacity of a country.
  
  As long as people believe that a dollar bill has value, then you can trade that dollar bill for something or real value.
  False. If nobody has anything of value to trade against that dollar bill, then you cannot trade it no matter how much you believe in it. When a valley in the Alps is snowed in, people there do not "lose faith" in the value of their money, but if the supply trucks are cut off, that faith isn't going to help them at all.
  It's all about supply and demand. Faith is irrelevant.
  
  The tax man can bang on the doors of every citizen in this country, but if they don't have dollar bills with which to pay their taxes, then he'll either accept some other form of payment, or do without.
  ... and then he calls the judge to impound their assets, which is why normal people will rather go and offer their labor in order to get money and pay taxes. Keep in mind, of course, that collecting taxes would actually become easier if people had a shitload of money due to hyperinflation.
  Look, fiat money is a creation of mankind, I totally agree. You cannot eat it or do anything with it, so it has no intrinsic value. But to go from there directly to the conclusion that the value of fiat money rests only on faith is bogus. It just does not follow logically.
  In particular, if you actually drill into hyperinflationary periods anywhere, you will quickly understand that faith had no causal role to play in any of them. The stories read remarkably similar, and they are always caused by some combination of factors including collapse of production in the economy caused by war or idiotic policies, together with currency pegs or foreign-currency denominated debts.
Modern Monetary Theory by Nicolai+Haehnle · 2012-01-22 22:27 · Score: 1

Of course this site doesn't go into too much detail but 95% of our money is magically created out of debt.
Actually, it's 100%, and there's nothing magic about that. Just as a matter of accounting, every from of monetary assets is actually somebody else's liability, i.e. debt. Those physical dollar bills in your wallet? They are a liability of the US government.
But that's no reason to go insane about it. Calm down, set aside a few hours, and read the Modern Money Primer by UMKC economist Randall Wray, or, if you don't have quite that much time, this summary on PragCap.
Stupid. Why not wait ? by Anonymous Coward · 2012-01-22 22:52 · Score: 0

Why not the money ASIDE when you have it, wait until you can then spend for what you want ? I mean that is what I do and my credit history is NIL. The only reason I would need a loan is accidental and unforeseen expanse (accident, illness, whatever) and even for that I have a small fund.
Re:Things you cannot do without a credit card by mehrotra.akash · 2012-01-22 23:57 · Score: 1

As others have said, no interest if paid on time
And no fees, its a free for life card
Even otherwise, cards without rewards are free
Banks create money, end of discussion by Nicolai+Haehnle · 2012-01-23 03:45 · Score: 1

This is simply not true. Banks cannot issue money they don't have, either physically or electronically.
You don't have to take it from me. Here is a nice visualization of what happens when a bank makes a loan. You can let economist Bill Mitchell explain it to you. Or you can read between the lines in the Basel accords, which define how much leverage a bank can have. Of course, "leverage" is the key word here - banks normally create money when they increase their leverage (technically speaking, they can also increase their leverage by changing their position to be riskier according to the Basel rules, but that is an exception rather than the rule). If you speak German, you might also want to look at this explanation of the German central bank, in particular the section on "Giralgeld". More generally, if you want to understand how money works, the best sources are the writings of Modern Monetary Theory economists, simply because they place value on explaining the down-to-earth mechanisms underlying all the fancy talk. I suggest you start here or here.
If I were you, this cross section of sources from all over the economics spectrum (from ultra-orthodox to highly unorthodox) would convince me.

Seriously, if every loan a bank made "magically created money", we'd be in such runaway inflation it would cost billions for a gallon of milk.
Since the premise of that implication is true without there being runaway inflation (though I want to emphasize that there still is no magic involved), it seems you also have to work on your understanding of how inflation works.
Look, I understand where you're coming from, and I understand you find it hard to believe the things that I'm writing. But consider the possibility that I'm right. Can you risk being wrong about that?
Two years ago, I probably would have reacted like you did (although I hope that I would have better estimated my own lack of knowledge in the matter). The fact of the matter is that, unfortunately, the macroeconomics education sucks everywhere around the world, and unless you study economics at university you never normally come across all these things. That's not your fault. In the context of the financial crisis I've become curious to understand more, and I've read up on all these things. I've come across a lot of unintuitive things along the way, and it takes time to digest everything. It took me at least a year, and I'm still learning new things.
I sincerely hope you will set aside some time to follow some of the links I listed above. It can be an amazing intellectual experience.
1. Re:Banks create money, end of discussion by man_of_mr_e · 2012-01-23 04:06 · Score: 1
  
  Wow. Just. Wow.
  You really don't understand how leverage works. Leverage does not "create money" It's a technique to utlize the money the have.
  A good example exists in the Foreign Exchange market. Where one can typically leverage their investment by as much as 10x.
  What happens is that, on paper, they "control" 10x more currency than they actually own, and thus can take the profit or loss on 10x the amount of currency as the price fluctuates. However, if the loss meets or exceeds their physical assets their position is closed out and the controlled assets resold.
  This generally only works because the assets are "liquid" and can be resold at any time for the current market price.
  Leverage is a math game, but does not actually result in any money being "created". For those that don't really understand how it works, this can seem like someone magically has 10x or 20x their money. They don't. They just have *CONTROL* over that much. Someone does actually own that money, and they are the ones that get to make the commission on the sale and resale.
  
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2. Re:Banks create money, end of discussion by Nicolai+Haehnle · 2012-01-23 21:35 · Score: 1
  
  Leverage does not "create money" It's a technique to utlize the money the have.
  Perhaps your problem is a semantic one? You have to understand that there are different notions of what money is anyway. As I have hinted at before, banks cannot directly increase the monetary base (though they can indirectly force the central bank to either increase it or miss its monetary policy target). However, the actions of banks do change the size of the money supply, because the money supply includes the size of bank deposits. In particular, the money supply grows when banks make loans, hence money is created.
  Anyway, here's one final attempt. Have you ever read this article on Money creation? Seriously, read it. It is fairly short compared to the other links I have provided to you.
  The mainstream portrayal of reserve banking is flawed as far as I can tell, but despite such disagreements about the details, all major schools of thought in economics agree that banks create money (that does not mean that banks get an entirely free lunch, as regulations are supposed to make seignorage impossible; but banks do create money, if not for their own spending purposes). Unless you at least acknowledge and somehow address this dissonance between your claims and basically all of economics, you just come off as a crackpot who doesn't understand what he's talking about.
3. Re:Banks create money, end of discussion by man_of_mr_e · 2012-01-24 07:02 · Score: 1
  
  What you're talking about is economic theory. That is, "it can be thought of" as creating money, because in some situations accounts can be "Kited", that is it can be charged on banks balance sheet but not show up on the other banks sheet for a period of time.
  If a bank makes a loan, it *has* to offset that loan with cash from some other source. It can't just make the money appear. It can make "value" appear, such as with interest, and this value is considered an asset. But it's not creating that money, it's only creating the debt to the party that owes it. The actual money has to come from that person to cover the debt.
  It's true banks can borrow against that made-up asset, but again that money comes from someone else to count against the asset.
  "In theory" this creates money, in practice it doesn't because the money suply is controlled and finite. Any made up debt must be paid by someone.
  
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