FICO to incorporate buy-now-pay-later loans into credit scores

Theoretically, credit should be used for one thing: to make more money. (not less)

However, instead of using it to buy or construct a machine to triple what you can produce in an hour, the average person is using it to delay having to work that hour at all, in exchange for having to work an hour and six minutes sometime later.

At some point, you run out of hours available and the house of cards collapses.

i.e., credit can buy time in the nearly literal sense, you can do an hour's work in half an hour because the money facilitates it, meaning you can now make more money. If instead of investing in work you're spending on play, then you end up with a time deficit.

or, e.g. you can buy 3 franchises in 3 months instead of 3 years (i.e. income from the 1 franchise), trading credit for time to make more money, instead of burning it. It'd have been nice had they taught me this in school.

> Theoretically, credit should be used for one thing: to make more money.

I disagree.

You use credit to buy a car or buy a house when you don't have the cash to buy them up-front.

It's not so you can use them to make money, it's so you can use them to enjoy life.

> At some point, you run out of hours available and the house of cards collapses.

Only if you go too far. The point is to buy things knowing what they'll cost monthly and for how long, and to budget those as part of your monthly expenses. As long as you can always handle those, you will never run out of hours available and it's not a house of cards. Nothing collapses. You pay off your car; you pay off your mortgage.

You seem to be treating this as something black-and-white when it's not. It's an incredibly useful tool when used with budgeting. Not "to make more money" but to have a better life for you and your family for when it matters the most. Nobody wants to wait until the kids have graduated from college to be able to buy their first house.

And even with credit cards -- yes you generally want to be paying them off in full monthly. But if you want to take a vacation a couple months before you could otherwise fully pay for it, it's really nice to have that convenience too. Not to mention covering some expenses for a few months if you lose your job. They're a tool to be used responsibly.

If you're using credit to buy a car, most people do so in order to get to and from their place of work for the majority of their driving time. In that way, using credit to buy a car still fits into their theoretical model. For example I know plenty of people who completely got rid of their cars when remote work became more common, or at the very least consolidated to smaller cars or to less cars for a family.

Similar thinking for a house. A lot of people when buying a house go into it with the assumption that it is an appreciating asset that will gain value over time. Yes there are other factors of course like wanting to live closer to schools or in the suburbs/good areas, etc. But regardless this is commonly to facilitate a life that lends itself to you continuing to be able to make money comfortably.

Regarding vacations, no financial expert recommends using a card without the intention of not paying for it. If your plan is to book the vacation on credit for anything other than the benefits of your credit card points systems you might as well not use it at all. And all recommend not using credit cards and instead an emergency fund if you lose your job.

No. You can rent and you can take the bus. Or rent and buy a crazy cheap old used car.

A house and a decent car are not primarily about making money. They're about your quality of life.

> And all recommend not using credit cards and instead an emergency fund if you lose your job.

And if you already used your emergency fund on, say, a medical emergency...?

Yes because American public transit is so great and now you have to get up hours earlier and come home later - not great if you have kids or you actually want to spend time with your significant other.

Also what happens when that cheap old car doesn’t start in the morning when you need to get to work or pick your kids up from day care/school or need to be home when they get off the bus?

Where are you going to get the money to fix that old car?

You present some very daunting problems that the young and working class have to deal with (I know, I was both of those decades ago and struggled myself).

Credit to buy a new car though is still generally a bad solution. We should fix the other things you mentioned.

I would like to see laws allowing extreme low-cost vehicles (equivalent to golf carts, I guess) allowed on designated roads. A special inexpensive insurance proviso for them.

That you need something like $30K to buy a new car in the U.S. is insane.

> I would like to see laws allowing extreme low-cost vehicles (equivalent to golf carts, I guess) allowed on designated roads. A special inexpensive insurance proviso for them.

These already exist! You maybe haven't heard about them because they're largely a failure beyond niche applications. They're mostly used for things like hospitality shuttles, facility maintenance, meter maids, etc.

https://en.wikipedia.org/wiki/Low-speed_vehicle

https://en.wikipedia.org/wiki/Neighborhood_electric_vehicle

The problem is that they don't make sense for most people, e.g:

1. You can't operate them on high speed roads. The US has a lot of high speed roads, particularly in areas that are poorer.

2. They aren't cheaper than a used car. A street legal Cushman or GEM starts at about $16k. A brand new Nissan Versa is only about $1-2k more, is wildly better equipped, and has more accessible financing. Good $10k used cars are available on every street corner in every poor neighborhood with extremely accessible financing.

3. They are weird. It is much more socially acceptable to drive a similarly priced used car.

4. They lack features that used cars have. Many control cost by omitting basic features such as doors and climate control.

5. The places where you can use them (low speed neighborhood roads) are already more likely to be accessible by alternative means of transportation. (busses, bikes, walking)

> A street legal Cushman or GEM starts at about $16k

I see a business opportunity.