...and Cash Is Better than Credit

...although you wouldn't know it from the credit industry's assessment.

I heard a story today about a man who didn't believe in using credit cards. A man who bought his siblings' shares of a house they had inherited and paid cash. Whenever he wanted a new car, he would save for it.

Then there came a day when he needed a loan. He went to the bank, they looked at his credit score and turned him away. He got a couple of cards, hoping to build some credit. He bought his groceries and put some gas in his car.

And paid off the bills every month. Oops!

The bank told him he still didn't have the credit score he needed. He needed to start carrying a balance on those cards in order to get credit.

I know this is almost common knowledge anymore, but who really believes this is a good practice?

Once a week, I still cut hair. I don't take plastic and, until last year, no one had ever written a bad check to me. I'm hoping I've seen the end of bounced checks, but who knows?

To me, cash is king. Unfortunately, there are times when people need to borrow. You got accepted into a great college, but your parents can't help pay? Fill out your FAFSA. You want to buy a house? Either you'll need to have saved $100,000+ or you'll be applying for a mortgage. Cars...well, the two I own cost me a total of $360, so I'm kind of over financing something on wheels. I really hate car payments. But most people want to drive a car with a/c and a warranty, so most people finance their cars.

I know credit history is the only thing banks have to base their decisions, but we need a better system.

Any ideas?