Rather than attacking the idea of credit and modern banking because of its misuse by people (and taking out a loan you can't pay for a la the current foreclosure, racking up credit card debt, etc. is entirely irrelevant to credit and is more a matter of self control), the ability to obtain a loan has revolutionized the standard of living for many people around the world. There is no better example of this than the work of Dr. Muhammad Yunus.
Perhaps my words were strong. I am not attacking the very idea of credit. After all, I used credit to attend college by obtaining a student loan which, as Anastasios pointed out, has an interest rate lower than the rate of inflation so, from my perspective, it's barely credit and more an agreement to pay back over time a large amount of money that will, in effect, be less than what I borrowed once all the math is worked out.
Like most things in this world, credit can be good when used in moderation. People nowadays, however, view credit as a right instead of a privilege and that has led us as a nation down the garden path of unmanageable debt. It can be a very dangerous thing and, IMHO, a thing that many people do not need, with the possible exception of a mortgage. I think many people tend to think more in terms of wants instead of needs and suffer financially as a result.
Take, for example, any number of my coworkers. They complain about the cost of parking in downtown Baltimore when every single one of the loudest voices lives very close to public transportation, be it bus, light rail, or commuter train. My firm reimburses the entire cost of a monthly transit pass (inlcuding commuter rail) but may only cover 2/3 of the cost of parking depending on the garage/lot. The passes are also tax deductible. I save almost $1000 a year in transportation costs and $300 a year in taxes. Now that my wife is working at my firm, we'll be saving over $2500/year total just by using public transportation to get to work. For those among my coworekrs who live within the grasp of Maryland MTA's service, this should be a no brainer. Sadly, it's apparently quantum mechanics.
Yes, that's anecdotal, but it's just one example of how a want can trump a need that can save you thousands of dollars a year. Of course, not everyone lives near public transportation. But those that do and don't use, and then complain about commuting costs are just examples of how screwed up our financial priorities are in this country, and that includes the notion that credit is a right rather than a privilege.
In short, credit can be a great thing. It has done wonders for many, many people the world over. But, like most, if not all, good things, it's abuse leads to the chains of debt resolution.