> Are bank accounts necessary to live?
No. The human species thrived for more than 170,000 years without bank accounts.
> the last thing I want is that
Debt is a necessary evil for many people living in our civilization because houses are expensive and the price keeps going up.
> can't I buy stuff with cash
Yes. But it's probably safer to keep money in a bank account or brokerage account than stuffed in your mattress.
> Like a house
Legally, you can use cash for everything. Practically, you can't.
> What is a credit score?
It's a number assigned to you by a company that decides how risky it is to lend you money.
In today's society, yes you need a bank account. Debt is not a bad thing if you manage it correctly. At 15, you will soon be in a position to earn some money with a job. A lot of employers use direct deposit because it is cheaper than issuing checks. You will need a bank account to receive the direct deposit. If you have any spare cash now, ask your parents to help you open a bank account. When you are 18, you may be able to get credit. The easiest way to get a credit card is to have the credit limit tied to the balance in your bank account. The bank knows that it will get paid if they are holding the funds. Use the card to make small purchases. Pay off the bill in full every month. Do not skip any payments. This responsible behavior will increase your credit score. Creditors use the credit score to decide whether to give you a loan. Eventually, you will be able to increase your credit limit beyond your bank balance and buy more expensive things. Just make sure that you will be able to pay the full balance in a few months, at most. Otherwise, the interest will kill you. I could go on and on.
Bank accounts are a useful tool with which to handle money with. You don't have to borrow money if you run a current account or a savings account with a bank. You can however acquire a credit score by borrowing money and paying it off before any interest becomes due. You can set up an automatic arrangement to pay off the entire sum owed each month. A good credit score is more or less essential if you need a mortgage to buy a house as most people do.
Yes unfortunately, but as long as you get a checking account with no minimums and no fees then you won't ever owe any money from a bank account. And as long as you never apply for a credit card or apply for any loans then you will never go into debt. It's actually really easy to stay away from debt if your smart with the money that you make. But many people think they NEED this or that and put it on their credit card and little by little they put themselves into debt.
You can use cash all you want
Remember you would have to save $5500 a year for 4 year
to pay cash for a modest new car, you would have to save
$12,000 a year for 30 years to afford the average house
Cash does not always make sence
people who walk around with large amounts of money get robbed and maybe even shot. credit is just borrowing money that you are agreeing to give back at a later date for a fee. your credit score is your past borrowing record. like if you borrowed money and paid it back in the past then you are not as great of a risk as a total stranger. it is best not to borrow unless you have to and never let the amount get to large and do not borrow at a high interest rate. most people who get in trouble just lie to them self and borrow to much and buy things they do not really need.
The average house in California costs $820,000
Do you have $820,000 in cash to pay for a house?
They are good as long as you use then right. It is vital in success as long you are responsible.
