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Being in debt for 30 days without paying any interest is still being in debt.

If I owe someone $100 then I have a debt of $100, even if I've also got $100,000 in my bank account.




Not in the sense we're discussing here. Pedantically, yes. Practically-speaking, no. If you pay your monthly statement in full each month, you're no worse off than paying cash for those same things.

Or look at it this way, are you in debt to your electric company, cell phone provider, or water utility? You use those services but don't pay for them until a month or more later. Technically you are, but I doubt you'd feel the need to prepay for those services just to make sure you have no debt.

In this context of this thread, someone made the claim that credit scores are "an enforcement system to ensure you're constantly in debt." That's an overly-cynical look at it. I see them as a simple risk indicator.

A lot of people have this mistaken beleif that paying more interest on loans will "buy" a higher score. It's just not true.


Yeah, there is actually plenty of reason to criticize credit scores (do we really think it's good that if you struggle to pay off some debt you should also start getting shut out of job opportunities or housing?), but that's not a real issue with them.


Not if you have cash already in hand to pay off the debt.

(Then you can siphon back a fraction of the card interchange fees already baked into the price of goods sold via rewards/cash back. Just another regressive aspect of our financial system.)




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