Cleveland Real Estate News

This is a story about my Mother.  And a story about credit.  I’m inspired by an article in today’s PD on Beachwood Mall’s rule regarding purchase of a gift certificate for it’s stores. If you have green money, don’t bother, you need a credit card. Many of you have probably already seen it; and if you read the whole article, you find you can still go to individual stores in Beachwood Mall and pay with green money and come out with a gift certificate. But it has caused a lot of us to think, yes?  There is even a line from the article worth repeating here “This is an extremely plastic age, but that should not preclude you from using cash”(This from a Legacy Village rep).  Yeah, I am a real estate agent in the trenches and like many other Ohio bloggers I have wept over the foreclosure issues and lamented our fiscal irresponsibility and how ingrained it is in all of us.  It brings me to a family story:

In the days when Higbee and May Company became transformed into the stores we know now, my Mother never had a reason to shop much. She was a bit infirmed already. Sometimes when I would trek in from Maryland to visit, we would  venture out to a mall. One day a few years later she said to me, ‘when we go to Dillard’s, I want to get a new charge card. I still have my old one and I’m sure it’s not any good now.’  We picked out a few purchases (she did) and sauntered up to the counter to pay and apply for her new store card. The sales lady helped her fill out an application and we waited a minute for the computer….to tell us she had been declined.  My Mother, who grew up during the Depression and was used to cash and carry, but who had a Sears card and a few department store cards, and who promptly paid off every bill when it came in….had been denied a charge card. Because she had no credit! Neither she  (nor my Dad) had ever acquired a ‘real’ credit card. I can still see the look on her face, as if she had been scolded by the Principal at school. She was incredulous. 

I tried to explain it to her, that they can’t find any records about her so that’s just as bad as having terrible credit, having no credit.  She was crushed. And I could see by the look in her face that she felt an era had passed and that the result, in her mind, was not a better place to be.  I was sad for her! Yet I understood why it happened. Intellectually.

I don’t necessarily understand why it HAS to happen, but it’s now all too familiar.  Some people are still ‘cash and carry’. Someone may be just out of college, and has not applied for a credit card yet. Alternatively, someone may just believe that in order to be fiscally responsible and not in debt, they want to avoid the credit card route and just have an ATM card.

Mortgage people try to explain the situation when it occurs. Get a card, use it to buy gas, pay it off each month but use it. Because otherwise when you apply for  your mortgage they will not be able to see a credit record which means you may as well have a 450 credit score.  Or maybe you do!  I get it.  But I don’t, ya know? It’s all part of what has gotten us to this golden age of plastic.

So what do I wish for everyone for the New Year? Yes, fiscal responsibility, but also a way in which our financial lives can be tracked so that we can be rewarded for this cash and carry lifestyle again.  No one should have to be in their 70s and experience what my Mother did at the department store. Not after getting through the Depression with dignity, WWII by rationing and recycling metal, not by being a responsible adult for many decades. 

In the meantime, if you see buying a home in your future and you have no credit, take heart.  You can save money in a 401k or savings account and still get that one credit card and use it to buy gaseoline or weekly groceries and then pay it off each month. Establish a good credit history because that is what the credit gods want you to do to prove you can own a home. Sometimes it seems more like a house of  cards rather than a plastic golden egg, that charge card with 29% interest on your purchases.  But keep the faith. Peace Out – 3C