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Well, most people
need to be able to obtain credit at some stage or another if only for a mortgage
or a car loan. If you use the Internet to buy things you will almost certainly
need a debit or credit card. Also, having the ability to raise funds in an
emergency is very useful.
Credit cards are
also essential for certain services such as car hire in certain places. Apart
from these things you could get away without actually needing that much credit.
Believe it or not, people survived quite happily without credit in the past.
Many older people still shun the idea of using any form of credit. However, most
people and businesses take the convenience of credit for granted, so it pays to
understand why some people can obtain it and others can't.
Interestingly, in
the UK, purchases made using credit cards are insured so that, for example, if
you book a holiday and it is cancelled due to unforeseen circumstances you can
claim the cost of the holiday back from the credit card company! This in itself
is a good enough reason to carry at least one card! These 'chargebacks', as they
are called, are one of the reasons that it is so difficult for a business to
obtain 'merchant status' i.e. to allow their customers to pay with credit cards.
If the bank that is offering the merchant account thinks the business is not
reputable then it would refuse merchant status on the grounds that it would lose
too much money from excessive chargebacks. This quirky UK law is, however, good
for the holders of credit cards!
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