I think this ia a bit naive. Some kind of credit's required to get through the ups and downs of the normal business cycle. Otherwise, "gee, can't make payroll in the last week of a quarter, whack the staff and rehire them in 3 weeks..." Many historians argue that an organized financial market (England, Holland) enabled rapid economic growth and resulting political growth.
Yeah, credit used badly is a problem, but used correctly or well it's grease for the system.
If there is no credit, is there any loans? If there are no loans, there's no income from "cash reserves" - how can you pay anything if you're unable to make money from the deposits people have given you?
I think you'll have a different argument and a different result if you wish credit CARDS to go away, rather than credit. If you had to go into somebody's office and sign forms, etc, then you'd think twice about charging the next latte...
As I recall, credit cards came from the revolving credit various stores started at some point in the past. They've grown a bit in use and scope since then :-).
If there are no loans how to do you start the business to make the cash reserves? If there are no loans how do people get an education when they can't afford one? If there are no loans how do people get to work before they have a car to save up enough cash to buy a car?
All these things were done before massive consumer debt, and people with enough self discipline are continuing to do them now.
> how to do you start the business to make the cash reserves?
Not all businesses have this luxury, but fortunately for most of us software has an extremely low startup cost. Start with what you can afford and expand as you can afford it.
> how do people get an education when they can't afford one?
My wife payed $0 for her undergrad degree by getting good grades. Her second Masters was essentially covered by her employer. I payed $4,000 for a Masters in CS by working my tail off while I went to school.
> how do people get to work before they have a car to save up enough cash to buy a car?
Take the bus, slug (if its available in your community), ride a bike, or put some walking shoes on. I work with several engineers who are humble enough to ride their bikes to work. I have a neighbor who walks to work every day. Put away your money and before you know it you can buy a car. The concept of savings is really not that absurd.
Yeah, credit used badly is a problem, but used correctly or well it's grease for the system.