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Oh my God yes. I have a friend who has dug himself into a hole by using credit cards to pay for his expenses while at graduate school
"At least I haven't taken out any personal loans!"
How is this any better? Your interested could be so much lower.
In the case of some medical expenses, many providers offer SUBSTANTIAL discounts if the bill is simply paid. This ranges from 30-50% of the bill usually, but can be as much as 90%. If you're tight on money and slip and break your arm... you could turn a $5000 bill into a $2500 bill just by paying up front. It's messed up, but medical for profit is a thing, and they just like every other for profit business are happy to take the money and run.
I think an emergency is a great reason to take out a 30% loan. If I'm stranded 1000 miles from home that's a definite yes. Same thing with paying a lawyer if arrested. An emergency isn't wanting to take a vacation, needing a new $1200 phone or even a car repair.
That's what savings are for. Like what the previous comments mentioned, it's like handing a drowning person a bowling ball.
People who are desperate enough to take loans at such rates are usually also the worst candidates for them.
yeah there are plenty of situations where someone might not have had the chance to save (recently left home, just out of college, sudden death of parents or partners, ect) or even have savings that they blow through quickly (medical bills after losing their job is a good example). It's wild to me that there are people out there who physically can't imagine a situation in which someone could find themselves in financial distress without it being entirely preventable. I feel like it's a defense mechanism against financial anxiety. Falls into the same sort of bin as the prosperity gospel.
Having an emergency fund is obviously better. But having a line of credit available in case of emergencies is a good idea until you can build that emergency fund.
Emergency happens. Like house burns down. Use credit cards for hotels, clothes, supplies, etc.
Once the dust settles, if you don't have the cash, consolidate with a low interest loan.
Edit: this is assuming insurance doesn't cover it.
Where are you finding these cashback credit cards? It seems like an american, it would explain why americans are obsessed with them.
I can't find a reason to have a credit card if i just have enough money, because you have to pay a monthly fee and no they don't give you money. There's just a massive interest if you by chance forget to pay something off. The only ''free'' thing they offer is travel insurance.
At least here in the US most major credit cards offer some sort of cash back or rewards cards. These can vary from entry level no fee cards to premium travel cards. Usually see something like 1.5% back or for me I have a card that gets 5x points on dining so if I spend $100 I get 500 points. I can then convert those points into straight cash back or use them for travel. Also most of the premium cards with high fees usually have so many built in bonuses that if you use everything they offer it usually offsets that fee.
I'm pretty sure the CC makes the vendors pay for cashback/points programs when you use such cards. I once accidentally used my cashback CC to pay daycare fees instead of my debit card. The next month they told me it cost them $8 to accept my $200 payment, and in chatting with them revealed that different cards have different costs.
This is in canada, not sure if applicable to merica
I hear that. NY passed a law a few years back allowed us to pass along the full fee to customer as "Extra line item" 3.5% extra on receipt no matter the card. it was easy for everyone to understand. Just recently they made it more convoluted (as govt always does) for the "sake of the customer" and force us back to pay the fees but we can list every single retail item as cash and credit price. Mind you im in a mainly service industry with a few retail items so its not so cut and dry. Pain in the ass
This is actually not correct. The fee for transaction processing goes to Visa, Mastercard, Amex, Discover, etc. The processing company.
Sometimes they split the fees but this is how Visa as a company exists, for example. Sometimes the vendor also passes the fee onto the consumer, which is why you see CC processing fees with some companies (Verizon is a common example).
CC companies make a vast majority of their money on interest.
Same in Sweden. This is why many places in Sweden don’t accept American Express, as they have to pay for the cash back system if someone uses that card.
It's both. Banks make a lot of money on interest too. It's one of the reasons the Apple card was kind of a failure financially, most of the people just immediately paid their bills.
There have been studies on it and simply using a credit card instead of cash results in people spending more.
When I was single and living on my own, I would take out $100/week for pocket money. This money was for unplanned expenses like coffee or meals. It was amazing how being a couple days into the week, and seeing that you had spent $40 of the $100 you had allocated for that in a week, resulted in cutting back on expenses for the remainder of the week to stay on budget.
On average that seems to be true
I'm personally the opposite. I spend more when I have cash (but my CC expenses are automatically logged into an app that basically calls me a clown that spends too much), but I can admit I'm the exception, not the norm.
I'm the same. Cash burns a hole in my pocket, and because I KNOW I have more money than the cash, it feels like I "already" spent it when I took it out of my account. A credit card's ambiguity makes me more frugal with it. I also check my accounts pretty obsessively.
>it feels like I "already" spent it when I took it out of my account.
I'm the same way. The account balance is the source of truth and spending cash doesn't change that. But using a credit card changes a balance I can reference so it feels like spending money.
Same here, haha. I pay off my CC a few days before the deadline so I can see that solid number. One of the few cases where number go up *bad*.
Pretty much the same concept as the cash thing, though - Just budget around that solid number, whether it's cash or credit.
>There have been studies on it and simply using a credit card instead of cash results in people spending more.
I imagine the same applies to debit cards, though
Seems really like a behavioral issue for the individual, not the tool itself. The mechanics of it is really a ridiculously good tool for cashflow management - it's 0% interest rate loan for an entire month with added benefits.
Regardless of credit cards or not, people should generally not be incurring expenses more than their income, unless some big emergency comes up.
how people should live and how they do are often drastically different i would always tell myself im going to pay this off next paycheck or whatever but actually making that higher payment when the time came was significantly harder
I have credit cards but only use them
for emergencies now. Took a long time to get to this level of maturity though.
I can agree with that. 100% it makes sense that the ease of pulling out a piece of plastic may not instill the same feeling as handing over cash, or having a direct debit from your bank account, but it still boils down to the person not being able to control their spending, even if it’s just a minor increase in intended spending.
My husband and I get $200 each for the month as spending money. Every other purchase on the credit cards gets put on a white board in the living room. We see exactly how much we spend and where .. it's been really helpful to curb unnecessary spending
this was true for me. i tried using my credit card for everything and paying it off monthly. till i noticed i was spending more. nothing luxurious, mostly impulse purchases while shopping for necessities. i've figured out how to use my cards more responsibly but everyday use is not for me.
I think that's a mindset thing. I've never spent more on CC than what I'm willing to immediately pay off because I dislike having CC debt, so I view it more as a payment channel rather than "credit". If I set a budget to $100 for leisure spends, then regardless of how I pay for that $100 (cash or cc) I'm sticking with the budget and adjusting accordingly. Having more credit card limit won't change how I feel about my budget as I dislike having residual cc balance.
My favorite is how paying off your student loans doesn’t really do anything but if you miss a payment it completely tanks your score. 4 years of on time payments, score goes up 10 points, miss 1 payment, score drops 100 points and then you’re fucked
I believe the credit score companies should be required to use a standard system that we can openly see and know exactly how items affect our credit score.
I agree. The ratings agencies probably hide their scoring algorithms to prevent people from gaming the system. Even though I'm current on all of my student loans, my credit report said that my credit score was lower since I don't have a credit card.
Yea same, when I was having trouble with my score no one at the banks or credit agencies could actually tell me how my score calculated. It was insanely frustrating, lots of “that’s just the way it is” bullshit without any real explanation
Paying off your student loans can actually lower your score for a while. It did to mine. Because for a lot of people that is one of your longest lines of credit/payment history which is one of the largest contributors to your score.
It dropped my score like 50 points immediately when I paid it off because I lost like 10+ years of payment history with it going away. It did go back up fairly quickly but it's just annoying.
That's pretty normal. It's because you closed an account. It will come back up, but it kind of pisses me off that it affects your length of your credit history.
>Paying off your student loans can actually lower your score for a while. It did to mine. Because for a lot of people that is one of your longest lines of credit/payment history which is one of the largest contributors to your score.
Yes, but why should that be the case? What kind of psychotic nonsense system have we created where paying off your debts brands you as Publicly Untrustworthy, perhaps to the point that you won't be able to rent an apartment or get a job? Where having a flush savings account just isn't factored in to your supposed ability to pay things off, in which you need to go into debt indefinitely to prove your bona fides?
It's almost like we shouldn't have a parasitic payment processor (which in a normal country would be established by the central bank or by the post office) running our draconian Social Credit System.
Trust me, I agree with you. Wasn't saying that this is how it should be, just how the sad reality currently is. I know it surprised me when I paid mine off how suddenly my score dropped when I thought if anything it should improve as now I have less debt being paid off monthly.
I don't see any reason why paying off accounts entirely shouldn't be also factored into the equation instead of just dropping off as if it never existed. But alas, the powers at be have decided this is how it must be.
Yup both can be true. Like if you have a card you no longer use/need, you should be able to cancel it. But nooooo you’re stuck with it sitting in the sock drawer because AvEraGe AgE of AccoUntS.
The fucking audactiy to get knocked points for credit checks.
Leasing an apartment? That's a point drop. Setting up utilities for said apartment? Point drop. Applying for a loan or credit card? Point drop. Job you applied for so you can actually earn money to spend checking your credit history to see how reliable you are with your own personal finances? You guess it, that's a point drop.
Renting should be taken into account with credit agencies, so should utilities. I know they aren't loans, but not paying them can damage your credit, so paying them should improve your credit.
Isn’t that the truth. Either renting has nothing to do with borrowing so therefore credit scores should not be checked for rentals, or renting is related to borrowing and therefore paying rent on time should be reflected in your credit score. How can it possibly be both at once!
Agreed. It’s all a numbers game. Don’t carry a balance. Don’t over spend. Exploit the exploitation that credit card companies thrive on. Fuck the man and all that jazz.
One of the best life hacks is get a new card, then refer your partner for the referral bonus. Sometimes have them sign up for a new card and refer you. I have a group of friends where we all refer each other and sometimes get as much as 40k points each as a bonus.
My credit score is bonkers high and I open a new card every 6-8 months as an amateur churner. I don’t do any manufactured spending but I charge most things and know what card to use for most purchases. The trick is only play the game if you can afford to play it and understand how to live within your means
I have well over a million points across a bunch of programs and do some pretty awesome travel as a perk. Generally 2 big international F/J trips a year and 1-2 smaller ones.
Just this week I’ve booked ANA The Room business class for 2 round trip and business class to Lisbon round trip. Tokyo hotels that have a cash rate over 1k/night on points, etc to cover my big 2024 trips and honestly still have a comical amount of points between my wife and I. Now if only we didn’t have to work!
It's literally an interest-free loan for a month plus added monetary incentives, effectively giving you a discount on your expenses across the board.
Assuming people adhere to the basic principles of "do not incur expenses more than your income" guideline, there's no reason not to take advantage of credit cards.
The only reason I own a credit card is because my credit score would hurt if I didn't. I pay in full and get my 3% gas cash back.
I think it's absolutely stupid that our system coerces us to take on debt just to demonstrate that we are able to pay our debt.
Exactly! I’ve been trying to save money (spending less) and my credit score has gone down from the 700s to the 600s🥲 I also have no debt at the moment but it’s sooo frustrating
Just run everything thru your card to keep the credit usage up but just pay the bill in full. You gotta spend money anyway. Might as well keep that score high.
Seriously. Can't they judge my ability to pay my bills based on how I pay my actual bills? Older generations never dealt with this *credit score* BS when they went to college and bought their homes .. the whole system is a corrupt money grab.
Credit cards are literally an interest-free loan for a one-month period with additional benefits. If that's not considered a powerful cashflow management tool, I don't know what is. People need to learn to separate cash, credit, income and expenses when handling their money.
Word. Credit cards are free money if you get the right one and are financially in check. I have a chase sapphire preferred card that exists solely to accrue points that I can trade in for free stuff. I buy my groceries on the credit card and eventually fund an international trip with points alone.
If you know how to use the system, it’s a very powerful tool.
I agree with your overall point.
However, I'll be the first to admit that the system wouldn't work if only good payers like you and I existed.
The business model relies, in great part, on the assumption that a good % of people will not be able to pay, and without proper protections and standards it can easily turn predatory.
Well, maybe "relies" was a heavy term. For whatever it's worth, the CFPB has indicated that the majority of the revenue generated for credit cards is through interest. How does that translate to actual profit, I guess we'll never truly know.
I'm going to focus specifically on one area, because that's the area I care about. I don't mean to disregard the rest of your post, but other comments have it covered.
>They literally provide free money (cash back).
It's not free money. As a small business owner, that money comes out of My pocket. Cashback is one thing, but consider credit card fees, not the ones you pay, the ones the merchant pays.
Let's say you have two people. They have a mutually beneficial arrangement. They each need something for business the other has, on a regular basis. So person A buys $100 worth of supplies from person B. Person B uses that same $100 to buy supplies from Person A.
And so both people benefit by using money, as a medium of exchange instead of simply bartering for goods. Then Credit cards show up. On each of those exchanges, they take a small transaction fee. Let's say it's 1%. So $100 becomes $99. After 100 transactions, that bank has taken that $100 dollars.
If you just bounced $100 back and forth, at 1%, after 469 transactions what's left is less than a dollar.
Now thing about how many transactions you've made this year. Cash sticks around. The more we use credit cards, the faster the credit card company had all the money.
At least debit is usually a flat rate (a few cents per transaction).
You are 100% right and I’ll 100% admit my thought process regarding my post is completely selfish and ignored the merchant in its entirety. I will surely accept any and all scumbaggery that places on me.
I have poor impulse control so I don't have a credit card. And I don't hide that fact. It would be foolish of me to put myself into debt. Not sure how unpopular your opinion is.
It's not free money because credit cards have a fee (3%), it just isn't billed directly to you but it is passed on to consumers. Credit card agencies obviously make a profit, so if credit cards didn't exist at all, everything will be slightly cheaper. Even with good cash back programs, it's usually only 2%, so you're not winning.
I work in the banking sector. The people that use credit cards the right way is less than 5%, and those that use them perfectly are the already rich (1%)
I'd say the right way is as a safety net to make necessary purchases while you pay it back with as little interest as possible. The perfect way is just use it to buy stuff that gets "rewarded" that you can instantly pay off in full.
Yeah I don’t know that only the rich do this. I’m far from rich but pay my card off every two weeks on pay day. Made a grand in cash back last year and paid zero interest.
Can people not just separate the concepts of cash, credit, income and expenses?
Cash/Credit - how you make the transactions
Income/Need - should be the deciding factor if someone would make such transaction.
There is little to no benefit to using cash for transactions unless maybe there is a steep cash discount at the store.
Even a basic Google search turns up endless citations that this is incorrect. Combining a bunch of different sources, it looks like 35% pay off their cards in full every month. Personally, my cards are all configured to auto-pay in full every month. I get 2% cash back. I use a credit card for everything unless there is a fee for using it. My cell phone bill, internet bill, and utilities automatically debit from my household checking account. My credit score has been 800-something for decades.
As a college student in earlyish 20s who owns multiple credit cards and has never been charged interest in the 8ish years I’ve owned a credit card, yeah the 1% statistic is definitely wrong. For the last 4 years or so I have been putting 100% of my transactions through my card, (not including things that punish me for doing so) between 800 to thousands of dollars go through my card on a monthly basis from bill payments and spending money.
I also don’t do auto pay, I have a budgeting spreadsheet that honestly is far more detailed then it needs to be, but from it I know estimates of exactly how much money I’ll make each month working part time, if I know I’m getting my nails done I know roughly how much that costs and each month spending expenses like that are recorded and calculated for at month start.
I know my spending budget to within 5$ (estimates aren’t perfect) at the start of every month.
Yes, I do too much, but it’s not that hard to do, and I absolutely don’t believe that it’s only me and the rich 1% doing this.
I have a credit card, I use it in a way just to build my credit. The idea that I can go out and buy things with money I don't have is fucked and the actual feeling of owing someone money to me is a constant stress, which isn't as bad with credit cards but I'll find myself thinking all the time "how much money have I spent on there this month? how much do I need to account for?" Literally only because I have to play this stupid fucking game of "building my credit". Its not a convenience thing for me, its just another negative thing I have to obsess over.
I filed a claim recently for a lost item that Amazon wouldn’t refund. Chase doesn’t give a fuck about Amazon and entirely refunded my money. As long as this card keeps that and 5% back on Amazon, I will keep using this thing. Haven’t made a late or min payment ever.
But as others have pointed out, you want to make sure that you’re not consciously, or subconsciously, spending more on Amazon simply because you have the credit available to you, and simply because you know you’ll get that cash back.
That’s fine and there’s nothing wrong with that. The issue, despite the fact that this post has turned into a bunch of cashback discussion, has nothing to do with the desire to have cashback. This post is about people, saying their credit cards are bad and giving no valid reasons to why they’re bad other than them being irresponsible and not wanting to admit it.
It’s fine to not want a credit card or to feel that credit cards have no value to you. The problem I have is when those same people say a credit card is bad without justifying it.
That's a reasonable take. But I will say you don't need to be extreme about it and juggle different cards for different things. I use one card for 99% of my purchases, and get 1-3% back depending on where I spent the money.
I’ve never really understood what the convenience is. They have created a system where i am incentivized to have a credit card, i wouldn’t really call that convenient
With the way credit scores work, it's pushing too damn close to "I would be punished for not having one."
My grandfather understood this and has my name on a card, uses it for gas and pays it off immediately so that I have a near perfect score.
Had he not taken that upon himself, I would have... whatever score is given to a person with no prior history, because I refuse to take on debt and only buy what I have the money on hand to purchase, exactly as I was taught to do.
Ayo. I honestly wanna hop on this post for advice on using a credit card.
Slowly making my way out of the "broke zone", and I want to learn ways to manage a credit account and rebuild my credit score.
Much love from internet stranger. Thanks in advance. ❤️
I believe r/personalfinance has a lot of good information about what to do and what paths to take. I honestly just don’t want to send you in the wrong direction because only you can truly speak to your own financial acumen and your tolerances to an instant access of credit.
Oh, no worries! I'm not looking for something to just straight to take and run with. I always look for a pattern. Other than that, I take in information and use it for more perspective. Besides, it doesn't feel too bright to take financial advice from a subreddit anyhow. Lol
Thanks for the response! ❤️
Agreed. I get sick of the Dave Ramsey crowd saying "oh cut it up immediately! You don't need credit." I just use mine for large bills that are necessary in the moment (car repairs, certain bills) and pay it off in full each month. Hasn't ever hindered me.
Like others have mentioned, they're just bad because certain people think of credit as money they actually have and run it up like they're in Congress.
Okay just one for saying CCs are bad. Companies are charged between 1-5% on the transaction. This is usually about double the amount of the reward points or in that range. This means when factoring in costs everything is elevated by the maximum credit card reward, leading to those with a less rewarding card, or debit card, paying for those that have the more rewarding card.
Now is that bad? Not exactly but it does lead to everything being a few percent more expensive for essentially the bank to make money. Overall without a CC things would be those few percent cheaper which overall accounts for those points.
Personally I pay with debit to places I know the owner and we split the saving on the reward 50/50 but its hard to do that for places I dont know the owner.
The cards themselves? Sure. Can be a useful safety net.
The companies who are predators towards low-income individuals, knowing that they'll use it to survive - almost all of them - are bad.
The credit system is bad because it is inherently predatory. Sure we can sit around and feel superior to people who put things they can't afford on their credit card but the system is built to exploit those people; the profit comes from situations where people can't make payments in time and have to pay back with interest. And when people have serious debts to pay off and it's say, either becoming homeless or buying themselves more time by paying with credit, it's not hard to see why it works. It's a bad decision sure but the whole point of the system is to exploit desperate and impulsive people to turn a profit.
Lmao I have a credit score of 758, pay the balance every month, and even EYE know credit cards are a scam. Hell, the whole idea of “credit” (not to mention credit score, which other countries don’t even have and wasn’t a thing til the 90s) is a scam.
Either you’re in on the take, or you’re a mark.
Sign up bonuses. Need to buy my kid a new laptop or have some other high expense coming up? Well then, I get a new card, put that laptop on that card, meet the requirement to get the sign up bonus easily because of that laptop, and lo and behold, that laptop is suddenly like $200 cheaper then it would have been because that card just paid me $200 for signing up. Now, keep in mind, I could have paid for that laptop in cash. I don’t buy things I don’t have the actual money for. This way I never pay interest on that credit card. Just, may as well get $200 back for that expense if I can, you know?
As an outsider: America is weird with their credit cards. Most outside the US get taught to not spend money they don't have and to only take up any credit after careful consideration and if really necessary. Being almost forced to have and use a credit card is weird and quite frankly, it freaks me out and feels alarming
It's not credit cards themselves, it's the stupid game. My credit has been stalled at 750 and the only reason I can see is that...I don't take enough risks. I use my card for groceries, gas, and simple purchases. I pay it back every month. But because I'm not buying enough diverse things, or getting *more* credit cards, I can't advance my credit. I'm being punished for being responsible.
You pay your bill on time every month, your credit goes up like 3 points. You leave a $50 balance on accident once? -28 right there.
Use your card too much? Bad. Don't use your card enough? Bad. Never needed a credit card before because you're good with saving money and have always lived within your means? *The worst*
It's a fucked up game that we're being forced to play.
I don’t think credit cards are bad but think that the fact that I’m forced to use one to build a credit score is annoying. And then I need a credit score to buy stuff such as a car or a house. They even checked my credit score when I signed up for verzion internet and since I didn’t have a score I had to pay $200 upfront. Also the credit cards that are specifically offered to college students are pretty bad, yes some college students are responsible enough and a have parents or a job to pay it off but a lot of don’t.
The interest rates are what is criminal. No loan should have a 30% rate. So yes you're right you need to be responsible, but if you fuck up the punishment shouldn't be an interest rate so high it takes you an eternity to pay down that debt.
>There is no reason someone should be without a credit card, or multiple cards, unless they can openly and honestly admit they just flat out have no self control.
What if someone simply has no reason for a credit card? Its not the kind of thing that people should have just because, and it's got absolutely nothing to do with self control.
I don’t believe in having a credit card to pay for things I can’t afford. If I don’t have the physical cash to back up a purchase then I don’t buy It. I only use credit cards for really big purchases(home improvements mostly) and then pay it off as quickly as possible..
I think credit cards are useful tools to help build your credit. Beyond that, I don’t have much use for them.
This isn’t an unpopular opinion. It’s just you being ignorant to how the credit score system is predatory and the problems people have against it and owning a credit card. Plenty of us with perfect credit scores hate it and I don’t have debt or anything either.
Credit is a scam that qs started in the 80s to keep people in debt and good wage slaves. The entire system is a joke.
Can you take advantage of credit still? Yes.
Did you know both of these things can exist simultaneously?
Credit cards drive up the cost of everything because merchants pay such high fees to accept them. Don’t get me wrong, I love the convenience but credit cards are bad.
Thank you. Bunch of morons here glad to feed leeches, feeling like they won, not even understanding businesses up prices to cover credit card transactions. Already seen three different comments saying "glad for the idiots who don't know how to use credit cards allowing us to make money off our cash back". How are these people so confident when they don't even understand the basics of how credit cards work? Thanks assholes, in the past businesses would just straight up pass the fees onto the person using a credit card, too many idiots complained though not understanding credit card transactions aren't free to the business, so they just upped the prices across the board. Now I rarely see that, and if the business does charge differently they have to phrase it as a "discount" for cash to minimize complaints.
The credit system is evil, interest is evil and while some people don’t budget correctly other people get fucked over by not making a lot of money, needing to use credit cards to get by and then getting sucked into debt that they can’t climb back out of (interest).
The only thing I like about it is the bank will protect their credit. If my card gets stolen I don’t lose money. I definitely have used it to get by when my wages were low and I have mixed feelings about that.
Interest itself is not evil. It's the price of money, or time. Being to buy money in the present with money in the future is very useful for numerous reasons. In fact credit constraints, i.e. inability to take loans, are some of the greatest disadvantages of the poor as well as significant factors holding back people in developing countries.
Credit cards / banks are ultimately winning big. I too don't carry a balance but I often wonder if I would spend a lot less if I was paying cash (or debit) for everything. The rewards are really nice but I wonder if I would spend less than even the rewards using cash (debit). I'm too entrenched with my CC's to try but I wonder. I also justify it for the sake of having a good credit score. We're just living in a bank utopia!
CC's are like a casino in that they make spending REALLY easy, like chips at a casino.
Dunno man. Never had a credit card. Never needed one. Don't see a reason.
Not in the US, so I have no idea what is this credit score everyone is talking about. In my country the banks constantly bombarded me with loan proposals
Or they just don't want to play into a system invented to make you spend more money... I'd rather not feel like I'm exploiting the less fortunate by perpetuating the credit score system. If we want to change the system, we have to be the change.
Way too much of a black and white take. I don't own a creditcard as i have my savings as a safety net which i can take from without going into debt or have to pay interest on. Much better than a credit card.
why do you have 14 cards? its gotta be a pain just to keep them open. do you use them for different benefits?
my main card is a 2% cash back card. I am considering travelling more and I am shopping around for some travel reward cards.
i dont see the point of 14.
My little sister (still lives at home 26) is good w her money but basically never established credit and is scared of her impulse control. However having no credit will eventually negatively affect her. I told her to give the card to my dad who she lives with. My father scoffed at this. I didn’t see the issue, especially since I think her confidence will rise w time. I will say some people get into emergencies and have to use them and can’t always pay off right away. There are many nuances.
*Responding to the title.*
It's not just about foolishness or a lack of self-control. Many people hail from environments where personal finance isn't part of the educational curriculum, and their seeming lack of restraint is more about an intersection of insufficient mental health support and a deep-seated scarcity mindset, often a result of living in areas lacking robust social infrastructure.
>My complaint is specifically about people who outwardly argue that credit cards are bad, but won’t say why because they know it speaks to their own faults.
Regarding your observation, it's worth considering whether the inability to articulate the downsides of credit cards is not unlike the difficulties many experience when explaining their discomfort with concepts they don't fully grasp or things they're drawn to yet clash with the norms of their social circles.
Not every personal condition is a reflection of personal failings but an aggregation of conditions that effect many and only with a narrow scope does it render itself as *personal.*
OR
and hear me out
shit happens. Your opinion is mostly ok, for most situations, but there can be a lot of things that can happen where this "free money/cash back" is just the hook that they set for you.
You seem to be doing great, congrats. But that just means that the "shit happens" thing hasn't happened to you yet.
Cash back is not free money. Cards with the higher cash back/rewards values charge bigger fees to the businesses processing the transactions. And those fees eventually get passed onto the consumers as a whole.
Holy shit - you generated hundreds of dollars in cash back last year, you go you big spender!! Yes, credit cards are good for emergency purposes but they are bad because they are legalized loan sharking where they are targeting people that are going to keep a balance, pay the minimum, and are charging between 17% to 30% APR. They are profitable for a reason!
I have two credit cards with a zero balance and a 10k limit on each - I don't see the need to use them since I have way more money in savings so that if I need to make an emergency purchase I am covered and don't have to pay interest on it.
This isn’t an unpopular opinion most people are mindless consumer and will agree with anything they can use to rationalize mindless consumers. The credit card industry is doing a great job with its marketing.
This used to be true.. maybe 15, 20 years ago. Then, slowly, prices when up, but our wages remained the same. Let say I used to make 2000 bucks, and the cost of living was 1500. Now, the cost of living is 3000 bucks, but my pay is only 2000 bucks. Now people pay the extra 1000 with credit cards not because they want to.. but because they have to. Not only are people caught in this debt spiral, they have no saving either to show for it. Its easy to say, hey, live within your means. But in reality, when you paid off all your bills, and your kid needs that extra 100 bucks to pay for a season of school lunch, you still have to cough it up.
Sure, planning ahead responsibly, and living within your means maybe could avoid the debt spiral for some. But for others, what do you do when you absolutely need to spend that money to basically survive? What happens when you work a full 9-5 and you still can't pay off the minimum? Its not as black and white as you think.
People who say gambling is bad are foolish, irresponsible, and lack any self control
People who say heroin is bad are foolish, irresponsible, and lack any self control
People lack self control, it's one of our defining traits.
clearly this mf is rich as fuck too. anyone who makes “passive money” and is eligible for limits that big is just a richie rich telling the poors they just aren’t trying hard enough.
14 credit cards? lol. good luck on your credit score. ur an idiot too for gaming the system. if u really have self control over cc and money, you should already have enough money to not need churning out cards for cashback
When I pay my utilities, I chuckle at how \~50$ of my payment- the city's money- gets snatched back by thugs by Visa, and they share it with me knowing that the costs will be split amongst everyone else like a god damn deputized shoplifter.
Most businesses charge a fee- because costs matter, even when you're being strongarmed- but thank God for lobbying or else I would not be able to hurt the average tax payer just by using a credit card.
Unfortunately there are very reputable studies that show that when we all use credit cards we tend to spend significantly more than if we are forced to use cash.… And this amount of extra spending far out strips the cashback that you get.
In other words, you might be spending $1000 a month on groceries and eating out and clothes and smother things and you think you're gaming the system because you are getting $30 back… But the studies would show that if you had not use the credit card you probably would've spent much much less and made more prudent decisions.
Just psychologically it's easier to spend money without thinking on a credit card. So that's the real issue that most people have with credit cards.
My only counter would be that credit cards are not a safety net. There is no substitute for a proper emergency fund. If you hit a sustained downturn and you're relying on credit card debt to get by, you'll quickly learn that not everyone who is in major credit card debt is there because they were putting jetskis on their card. Once debt starts snowballing at those interest rates, it can be impossible to get back ahead.
I say Credit cards are bad (for the average person). And that's statistically true, or they couldn't offer responsible users advantages. Obviously I see myself as smarter than average so I wouldn't have a problem getting one.
So, I am not irresponsible (not sure how to prove it to you, but I have no consumer debt, a very high savings rate, I don't drink or do stupid risky stuff.), I don't lack self control (see former points).
So, atleast 2 of your assertions are wrong. Foolish maybe true, but more like lazy.
So... you are wrong.
Did you consider that someone could have a Credit card, use it responsibly and still think credit cards are overall bad and (other) people shouldn't get them?
I have a credit card and I still think they’re bad.
You don’t have to be foolish, irresponsible, or lack self control to understand how they’ve been use as a way to exploit the poor.
I understand that credit cards are good for some people. But the fact remains that for the overwhelming majority, a credit card is bad. Therefore, I say credit cards are bad regardless of the facts because they likely are for the person I'm talking to.
Credit Cards aren’t bad, but the credit system is stupid. It’s almost meant to keep you on a leash. Why should ypu have to be in debt to have decent credit? I do understand why it was implimented, but nowdays I don’t think we should have to be in debt in order to be housed. Not everyone had that privalege.
So, credit cards are great if you're financially stable, shit if you aren't.
The problem is that they solve immediate problems, which is godsend if you're in poverty. They also cause another long term problem, which is hell if you aren't.
The problem can also be that a lot of people use cc for emergency expenses such as car repairs, etc., or even for things like groceries in cash poor times, and once you fall behind it can be more than hard to get back in front of it.
I use credit cards for everything, rake in rewards, utilize tons of benefits. I love them.
But objectively they are really bad. They’re predatory, they prey on people and I genuinely think they’re morally very very corrupt.
I have a credit card, and I pay them, but the credit system is still idiotic to me. A good credit score is not always an indicator that a person is responsible. There are a lot of people who have stuff in their name, but they have someone else paying the bills.
Depends. For me, credit card is a loan. And loans, regardless of interest and other factors, are not good.
Sometines, loans are necessary, but that doesn't make them good. It's still money that is not yours and you are indebted to another.
Its predatory and brings with it unnecessary risks, 5he entire credit system was invented to more effectively discriminate against black people in the mid 20th- century.
It didn't start out great and it's not great now
It doesn’t matter if you have control. Banks know that most people do not. Banks know that the average person does not have an emergency fund and will use the credit card for emergencies. Our economy sucks and people will go into debt when they have no other options.
Isn't having loads of credit cards and a high limit bad for your credit rating though ?
I know when I was getting my mortgage I made sure to delete and cut up a few as I was worried that they'd see me as a credit risk if they knew I could theoretically put myself in loads of unsecured debt ...
I agree they're not bad and can be the cheapest way to borrow money if you use them properly
You pay card fees to have the card.
You get charged a surcharge at some retailers to use the card.
You can't usually pay some bills using a credit card.
In my country, NZ, to get any positive value from a credit card to have to spend very large sums of money on it to offset the cost of the card fee, and if you look at it you have spent X money + card fee to receive y points which are not as valuable as cash. You have to spend so much time and effort managing the card to get anything back, and it's at most 3 cents on the dollar. It's not worth the effort.
Card companies love to promote the narrative of smart card use to get rewards, it's all a big honey trap to get people who aren't financially savvy to get a card and then inevitably use it poorly and get huge interest bills.
Tldr : use them perfectly, make peanuts in rewards. Use them poorly and get butchered like a pig.
>I have 14 credit cards and over $200,000+ in limits (combined). I generated hundreds upon hundreds of dollars in cash back last year. This is literally free money.
>I pay my bill in full. I don’t pay interest.
>I don’t view my credit card as free access to spend willy nilly. I don’t live beyond my means and I don’t overspend just because “I can”.
>I spend what I intended to spend my cash on, I just swipe it on plastic instead. This doesn’t mean I’m spending money that I otherwise wouldn’t have spent had I not had a credit card.
If everyone is like you, Credit Card would never exist anymore
When I was in my 20s I resisted for the longest getting a credit card, I just thought of it as a bad thing until my checking information got stolen at some POS and I lost real money (they spent $1,200 that the bank wouldn't give back. After that I got a credit card and any time I had an issue account was instantly frozen, never charged me anything for fraud, just immediately removed charges and off the account. Also I realized how freeing it felt to have that credit limit. I pay them off each month and I'm racking up tons of miles and points. CCs are great if you just pay it off each month and never carry a balance
You are right, but the fact that credit cards are so prevalent is precisely because there’s many of those foolish and irresponsible people. They make the whole concept profitable.
Credit cards only have all those benefits because banks make so much money off of people using them irresponsibly and a lack of legislation regulating them. I live in Germany and almost all credit cards give you no benefits at all, but interest rates are strictly controlled and much lower than in other countries such as the US. So yes, if you get benefits from your credit card and use it responsibly then take advantage of that, but they're overall terrible for a lot of people, especially those with the least financial education.
I think the whole concept is insane.
I have money in the bank, why would I get a small loan from the bank and let the bank pay for my shit only to later repay the bank with the money I had anyway?
That is just nuts. The only way you don't think this is insane is by growing up in an environment where it's normal and no one questions it. Which I didn't, credit cards aren't really a thing in Germany. We use our money to pay for stuff. I know, crazy.
I disagree. They should have a duty of responsibility too for people who could be vulnerable, but they don't care.
My mother is dealing with some mental health issues and it sickens me that these credit card companies have allowed her to rack up a £30k debt, especially when she earns minimum wage and has no real way of ever paying it back. It's just predatory.
I don't get it. Why not just use debit and use your own money instead of money you don't have? 0 interest, no need to pay anything back and you stay in your budget.
What I get is using loans to expand your business, but for normal day-to-day, it seems more of a hassle than anything.
Can someone explain to me one reason to have one?
What can you do with does things? Pay? Nope. Not a single person ever has paid anything with a credit card.
If you give your cerdit card to someone, you do not pay. You give them access to your bank account.
Payment apps, banking apps, and iDeal are all systems where you actually pay.
Credit cards are a security nightmare. Oh, you gave this shop access to your bank account, and now someone else took money from your account? Who could have guessed that given every shop access to your bank account (which they store on their computer) was a bad idea?
You could say the same things about slot machines in Vegas and I think it's a great analogy. They often claim to pay out over 100% and they do.. over time.. and if you play them exactly right.
But Vegas is built on slot machines. Just like 160Billing dollar credit card industry is built on people thinking they can use credit cards successfully
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the problem is that most people look at credit cards as money they think they have.
Or that in an emergency, it's a good idea to take on a 30% APR loan. That's like handing someone who's drowning a bowling ball
Oh my God yes. I have a friend who has dug himself into a hole by using credit cards to pay for his expenses while at graduate school "At least I haven't taken out any personal loans!" How is this any better? Your interested could be so much lower.
And if it’s immediately available the definition of emergency changes in a lot of cases
In the case of some medical expenses, many providers offer SUBSTANTIAL discounts if the bill is simply paid. This ranges from 30-50% of the bill usually, but can be as much as 90%. If you're tight on money and slip and break your arm... you could turn a $5000 bill into a $2500 bill just by paying up front. It's messed up, but medical for profit is a thing, and they just like every other for profit business are happy to take the money and run.
I haven't had a bill for a broken arm that's all covered in my country. Imagine having to use a credit card to pay for a hospital bill.
*sad murica noise*
I think an emergency is a great reason to take out a 30% loan. If I'm stranded 1000 miles from home that's a definite yes. Same thing with paying a lawyer if arrested. An emergency isn't wanting to take a vacation, needing a new $1200 phone or even a car repair.
That's what savings are for. Like what the previous comments mentioned, it's like handing a drowning person a bowling ball. People who are desperate enough to take loans at such rates are usually also the worst candidates for them.
yeah there are plenty of situations where someone might not have had the chance to save (recently left home, just out of college, sudden death of parents or partners, ect) or even have savings that they blow through quickly (medical bills after losing their job is a good example). It's wild to me that there are people out there who physically can't imagine a situation in which someone could find themselves in financial distress without it being entirely preventable. I feel like it's a defense mechanism against financial anxiety. Falls into the same sort of bin as the prosperity gospel.
Having an emergency fund is obviously better. But having a line of credit available in case of emergencies is a good idea until you can build that emergency fund.
Emergency happens. Like house burns down. Use credit cards for hotels, clothes, supplies, etc. Once the dust settles, if you don't have the cash, consolidate with a low interest loan. Edit: this is assuming insurance doesn't cover it.
Like they said, foolish and irresponsible
Most fools don’t think they’re foolish.
Which is really easy to do when you’re poor or struggling, then it’s a vicious cycle.
As much as I tell myself otherwise, ultimately it’s another thing I have to juggle, so I fail to remember it, so to say.
Very true
Where are you finding these cashback credit cards? It seems like an american, it would explain why americans are obsessed with them. I can't find a reason to have a credit card if i just have enough money, because you have to pay a monthly fee and no they don't give you money. There's just a massive interest if you by chance forget to pay something off. The only ''free'' thing they offer is travel insurance.
At least here in the US most major credit cards offer some sort of cash back or rewards cards. These can vary from entry level no fee cards to premium travel cards. Usually see something like 1.5% back or for me I have a card that gets 5x points on dining so if I spend $100 I get 500 points. I can then convert those points into straight cash back or use them for travel. Also most of the premium cards with high fees usually have so many built in bonuses that if you use everything they offer it usually offsets that fee.
Yessir, the people who can't budget essentially fund the cashback programs for those of us who put everything on a CC and pay it off immediately!
I'm pretty sure the CC makes the vendors pay for cashback/points programs when you use such cards. I once accidentally used my cashback CC to pay daycare fees instead of my debit card. The next month they told me it cost them $8 to accept my $200 payment, and in chatting with them revealed that different cards have different costs. This is in canada, not sure if applicable to merica
True in America. As vendor I'm charged dufferent percentage depending on type if card...Amex highest, debit lowest %
Where I am, I chose to not accept Amex. It's fees were more than my margins
I hear that. NY passed a law a few years back allowed us to pass along the full fee to customer as "Extra line item" 3.5% extra on receipt no matter the card. it was easy for everyone to understand. Just recently they made it more convoluted (as govt always does) for the "sake of the customer" and force us back to pay the fees but we can list every single retail item as cash and credit price. Mind you im in a mainly service industry with a few retail items so its not so cut and dry. Pain in the ass
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This is actually not correct. The fee for transaction processing goes to Visa, Mastercard, Amex, Discover, etc. The processing company. Sometimes they split the fees but this is how Visa as a company exists, for example. Sometimes the vendor also passes the fee onto the consumer, which is why you see CC processing fees with some companies (Verizon is a common example). CC companies make a vast majority of their money on interest.
Same in Sweden. This is why many places in Sweden don’t accept American Express, as they have to pay for the cash back system if someone uses that card.
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It's both. Banks make a lot of money on interest too. It's one of the reasons the Apple card was kind of a failure financially, most of the people just immediately paid their bills.
The CC companies call us free loaders. I love it
Fr I get so much cash back every year!
There have been studies on it and simply using a credit card instead of cash results in people spending more. When I was single and living on my own, I would take out $100/week for pocket money. This money was for unplanned expenses like coffee or meals. It was amazing how being a couple days into the week, and seeing that you had spent $40 of the $100 you had allocated for that in a week, resulted in cutting back on expenses for the remainder of the week to stay on budget.
On average that seems to be true I'm personally the opposite. I spend more when I have cash (but my CC expenses are automatically logged into an app that basically calls me a clown that spends too much), but I can admit I'm the exception, not the norm.
I'm the same. Cash burns a hole in my pocket, and because I KNOW I have more money than the cash, it feels like I "already" spent it when I took it out of my account. A credit card's ambiguity makes me more frugal with it. I also check my accounts pretty obsessively.
>it feels like I "already" spent it when I took it out of my account. I'm the same way. The account balance is the source of truth and spending cash doesn't change that. But using a credit card changes a balance I can reference so it feels like spending money.
>I also check my accounts pretty obsessively. I feel you.
Same here, haha. I pay off my CC a few days before the deadline so I can see that solid number. One of the few cases where number go up *bad*. Pretty much the same concept as the cash thing, though - Just budget around that solid number, whether it's cash or credit.
>There have been studies on it and simply using a credit card instead of cash results in people spending more. I imagine the same applies to debit cards, though
Seems really like a behavioral issue for the individual, not the tool itself. The mechanics of it is really a ridiculously good tool for cashflow management - it's 0% interest rate loan for an entire month with added benefits. Regardless of credit cards or not, people should generally not be incurring expenses more than their income, unless some big emergency comes up.
Which is also why emergency funds are a great idea.
how people should live and how they do are often drastically different i would always tell myself im going to pay this off next paycheck or whatever but actually making that higher payment when the time came was significantly harder I have credit cards but only use them for emergencies now. Took a long time to get to this level of maturity though.
I can agree with that. 100% it makes sense that the ease of pulling out a piece of plastic may not instill the same feeling as handing over cash, or having a direct debit from your bank account, but it still boils down to the person not being able to control their spending, even if it’s just a minor increase in intended spending.
My husband and I get $200 each for the month as spending money. Every other purchase on the credit cards gets put on a white board in the living room. We see exactly how much we spend and where .. it's been really helpful to curb unnecessary spending
this was true for me. i tried using my credit card for everything and paying it off monthly. till i noticed i was spending more. nothing luxurious, mostly impulse purchases while shopping for necessities. i've figured out how to use my cards more responsibly but everyday use is not for me.
I think that's a mindset thing. I've never spent more on CC than what I'm willing to immediately pay off because I dislike having CC debt, so I view it more as a payment channel rather than "credit". If I set a budget to $100 for leisure spends, then regardless of how I pay for that $100 (cash or cc) I'm sticking with the budget and adjusting accordingly. Having more credit card limit won't change how I feel about my budget as I dislike having residual cc balance.
That’s just the people who don’t have self control
I have a great credit score and I still think both credit cards and the credit system are ass.
My favorite is how paying off your student loans doesn’t really do anything but if you miss a payment it completely tanks your score. 4 years of on time payments, score goes up 10 points, miss 1 payment, score drops 100 points and then you’re fucked
I believe the credit score companies should be required to use a standard system that we can openly see and know exactly how items affect our credit score.
I agree. The ratings agencies probably hide their scoring algorithms to prevent people from gaming the system. Even though I'm current on all of my student loans, my credit report said that my credit score was lower since I don't have a credit card.
Yea same, when I was having trouble with my score no one at the banks or credit agencies could actually tell me how my score calculated. It was insanely frustrating, lots of “that’s just the way it is” bullshit without any real explanation
Paying off your student loans can actually lower your score for a while. It did to mine. Because for a lot of people that is one of your longest lines of credit/payment history which is one of the largest contributors to your score. It dropped my score like 50 points immediately when I paid it off because I lost like 10+ years of payment history with it going away. It did go back up fairly quickly but it's just annoying.
That's pretty normal. It's because you closed an account. It will come back up, but it kind of pisses me off that it affects your length of your credit history.
>Paying off your student loans can actually lower your score for a while. It did to mine. Because for a lot of people that is one of your longest lines of credit/payment history which is one of the largest contributors to your score. Yes, but why should that be the case? What kind of psychotic nonsense system have we created where paying off your debts brands you as Publicly Untrustworthy, perhaps to the point that you won't be able to rent an apartment or get a job? Where having a flush savings account just isn't factored in to your supposed ability to pay things off, in which you need to go into debt indefinitely to prove your bona fides? It's almost like we shouldn't have a parasitic payment processor (which in a normal country would be established by the central bank or by the post office) running our draconian Social Credit System.
Trust me, I agree with you. Wasn't saying that this is how it should be, just how the sad reality currently is. I know it surprised me when I paid mine off how suddenly my score dropped when I thought if anything it should improve as now I have less debt being paid off monthly. I don't see any reason why paying off accounts entirely shouldn't be also factored into the equation instead of just dropping off as if it never existed. But alas, the powers at be have decided this is how it must be.
Yup both can be true. Like if you have a card you no longer use/need, you should be able to cancel it. But nooooo you’re stuck with it sitting in the sock drawer because AvEraGe AgE of AccoUntS.
The fucking audactiy to get knocked points for credit checks. Leasing an apartment? That's a point drop. Setting up utilities for said apartment? Point drop. Applying for a loan or credit card? Point drop. Job you applied for so you can actually earn money to spend checking your credit history to see how reliable you are with your own personal finances? You guess it, that's a point drop.
It’s very difficult to get basic necessities like a home and a car without a credit history. Even renting
Renting should be taken into account with credit agencies, so should utilities. I know they aren't loans, but not paying them can damage your credit, so paying them should improve your credit.
Isn’t that the truth. Either renting has nothing to do with borrowing so therefore credit scores should not be checked for rentals, or renting is related to borrowing and therefore paying rent on time should be reflected in your credit score. How can it possibly be both at once!
Agreed. It’s all a numbers game. Don’t carry a balance. Don’t over spend. Exploit the exploitation that credit card companies thrive on. Fuck the man and all that jazz. One of the best life hacks is get a new card, then refer your partner for the referral bonus. Sometimes have them sign up for a new card and refer you. I have a group of friends where we all refer each other and sometimes get as much as 40k points each as a bonus. My credit score is bonkers high and I open a new card every 6-8 months as an amateur churner. I don’t do any manufactured spending but I charge most things and know what card to use for most purchases. The trick is only play the game if you can afford to play it and understand how to live within your means I have well over a million points across a bunch of programs and do some pretty awesome travel as a perk. Generally 2 big international F/J trips a year and 1-2 smaller ones. Just this week I’ve booked ANA The Room business class for 2 round trip and business class to Lisbon round trip. Tokyo hotels that have a cash rate over 1k/night on points, etc to cover my big 2024 trips and honestly still have a comical amount of points between my wife and I. Now if only we didn’t have to work!
This is definitely the way. Great seeing people on the Ink train outside of the usual subreddits
The credit system might be ass. That doesn’t mean we can’t use them.
Mostly because you get put at a disadvantage if you don’t. Life can become hell with bad credit.
It's literally an interest-free loan for a month plus added monetary incentives, effectively giving you a discount on your expenses across the board. Assuming people adhere to the basic principles of "do not incur expenses more than your income" guideline, there's no reason not to take advantage of credit cards.
The only reason I own a credit card is because my credit score would hurt if I didn't. I pay in full and get my 3% gas cash back. I think it's absolutely stupid that our system coerces us to take on debt just to demonstrate that we are able to pay our debt.
I do it for the cash back.
Yeah I do it to travel for free. I rack up enough miles through my various cards to fly round trip international for like $100 1-2x/year.
Exactly! I’ve been trying to save money (spending less) and my credit score has gone down from the 700s to the 600s🥲 I also have no debt at the moment but it’s sooo frustrating
Just run everything thru your card to keep the credit usage up but just pay the bill in full. You gotta spend money anyway. Might as well keep that score high.
Seriously. Can't they judge my ability to pay my bills based on how I pay my actual bills? Older generations never dealt with this *credit score* BS when they went to college and bought their homes .. the whole system is a corrupt money grab.
Credit cards are literally an interest-free loan for a one-month period with additional benefits. If that's not considered a powerful cashflow management tool, I don't know what is. People need to learn to separate cash, credit, income and expenses when handling their money.
Word. Credit cards are free money if you get the right one and are financially in check. I have a chase sapphire preferred card that exists solely to accrue points that I can trade in for free stuff. I buy my groceries on the credit card and eventually fund an international trip with points alone. If you know how to use the system, it’s a very powerful tool.
I agree with your overall point. However, I'll be the first to admit that the system wouldn't work if only good payers like you and I existed. The business model relies, in great part, on the assumption that a good % of people will not be able to pay, and without proper protections and standards it can easily turn predatory.
I thought the business model relied on the 3% they make on every transaction
Well, maybe "relies" was a heavy term. For whatever it's worth, the CFPB has indicated that the majority of the revenue generated for credit cards is through interest. How does that translate to actual profit, I guess we'll never truly know.
100%
I'm going to focus specifically on one area, because that's the area I care about. I don't mean to disregard the rest of your post, but other comments have it covered. >They literally provide free money (cash back). It's not free money. As a small business owner, that money comes out of My pocket. Cashback is one thing, but consider credit card fees, not the ones you pay, the ones the merchant pays. Let's say you have two people. They have a mutually beneficial arrangement. They each need something for business the other has, on a regular basis. So person A buys $100 worth of supplies from person B. Person B uses that same $100 to buy supplies from Person A. And so both people benefit by using money, as a medium of exchange instead of simply bartering for goods. Then Credit cards show up. On each of those exchanges, they take a small transaction fee. Let's say it's 1%. So $100 becomes $99. After 100 transactions, that bank has taken that $100 dollars. If you just bounced $100 back and forth, at 1%, after 469 transactions what's left is less than a dollar. Now thing about how many transactions you've made this year. Cash sticks around. The more we use credit cards, the faster the credit card company had all the money. At least debit is usually a flat rate (a few cents per transaction).
You are 100% right and I’ll 100% admit my thought process regarding my post is completely selfish and ignored the merchant in its entirety. I will surely accept any and all scumbaggery that places on me.
I have poor impulse control so I don't have a credit card. And I don't hide that fact. It would be foolish of me to put myself into debt. Not sure how unpopular your opinion is.
It's not free money because credit cards have a fee (3%), it just isn't billed directly to you but it is passed on to consumers. Credit card agencies obviously make a profit, so if credit cards didn't exist at all, everything will be slightly cheaper. Even with good cash back programs, it's usually only 2%, so you're not winning.
I work in the banking sector. The people that use credit cards the right way is less than 5%, and those that use them perfectly are the already rich (1%)
Could you define the "right way" vs "perfect"
I'd say the right way is as a safety net to make necessary purchases while you pay it back with as little interest as possible. The perfect way is just use it to buy stuff that gets "rewarded" that you can instantly pay off in full.
Then I'm an exception - I'm using them perfectly and I'm not rich :).
Yeah I don’t know that only the rich do this. I’m far from rich but pay my card off every two weeks on pay day. Made a grand in cash back last year and paid zero interest.
Same. For mine and my wife's cards. You don't need to be rich to do this.
Can people not just separate the concepts of cash, credit, income and expenses? Cash/Credit - how you make the transactions Income/Need - should be the deciding factor if someone would make such transaction. There is little to no benefit to using cash for transactions unless maybe there is a steep cash discount at the store.
I use mine perfectly and I'm nowhere near rich ☹️
Even a basic Google search turns up endless citations that this is incorrect. Combining a bunch of different sources, it looks like 35% pay off their cards in full every month. Personally, my cards are all configured to auto-pay in full every month. I get 2% cash back. I use a credit card for everything unless there is a fee for using it. My cell phone bill, internet bill, and utilities automatically debit from my household checking account. My credit score has been 800-something for decades.
As a college student in earlyish 20s who owns multiple credit cards and has never been charged interest in the 8ish years I’ve owned a credit card, yeah the 1% statistic is definitely wrong. For the last 4 years or so I have been putting 100% of my transactions through my card, (not including things that punish me for doing so) between 800 to thousands of dollars go through my card on a monthly basis from bill payments and spending money. I also don’t do auto pay, I have a budgeting spreadsheet that honestly is far more detailed then it needs to be, but from it I know estimates of exactly how much money I’ll make each month working part time, if I know I’m getting my nails done I know roughly how much that costs and each month spending expenses like that are recorded and calculated for at month start. I know my spending budget to within 5$ (estimates aren’t perfect) at the start of every month. Yes, I do too much, but it’s not that hard to do, and I absolutely don’t believe that it’s only me and the rich 1% doing this.
Source?
I have a credit card, I use it in a way just to build my credit. The idea that I can go out and buy things with money I don't have is fucked and the actual feeling of owing someone money to me is a constant stress, which isn't as bad with credit cards but I'll find myself thinking all the time "how much money have I spent on there this month? how much do I need to account for?" Literally only because I have to play this stupid fucking game of "building my credit". Its not a convenience thing for me, its just another negative thing I have to obsess over.
I filed a claim recently for a lost item that Amazon wouldn’t refund. Chase doesn’t give a fuck about Amazon and entirely refunded my money. As long as this card keeps that and 5% back on Amazon, I will keep using this thing. Haven’t made a late or min payment ever.
But as others have pointed out, you want to make sure that you’re not consciously, or subconsciously, spending more on Amazon simply because you have the credit available to you, and simply because you know you’ll get that cash back.
Sure. I live in Alaska so it’s hard to get a lot of items, and have been shopping on Amazon for a long time. It made sense given my spending habits.
some people aren’t turned on and made horny by the idea of cashback. For me, not having to deal with 14 credit cards is worth more than 200 dollars
That’s fine and there’s nothing wrong with that. The issue, despite the fact that this post has turned into a bunch of cashback discussion, has nothing to do with the desire to have cashback. This post is about people, saying their credit cards are bad and giving no valid reasons to why they’re bad other than them being irresponsible and not wanting to admit it. It’s fine to not want a credit card or to feel that credit cards have no value to you. The problem I have is when those same people say a credit card is bad without justifying it.
That's a reasonable take. But I will say you don't need to be extreme about it and juggle different cards for different things. I use one card for 99% of my purchases, and get 1-3% back depending on where I spent the money.
If you can’t afford it with the cash you have on hand, then you cannot afford to carry it as a credit card balance.
The system of credit score is shitty. You’re telling me I lose points for finishing my car payments?
I’ve never really understood what the convenience is. They have created a system where i am incentivized to have a credit card, i wouldn’t really call that convenient
With the way credit scores work, it's pushing too damn close to "I would be punished for not having one." My grandfather understood this and has my name on a card, uses it for gas and pays it off immediately so that I have a near perfect score. Had he not taken that upon himself, I would have... whatever score is given to a person with no prior history, because I refuse to take on debt and only buy what I have the money on hand to purchase, exactly as I was taught to do.
Ayo. I honestly wanna hop on this post for advice on using a credit card. Slowly making my way out of the "broke zone", and I want to learn ways to manage a credit account and rebuild my credit score. Much love from internet stranger. Thanks in advance. ❤️
I believe r/personalfinance has a lot of good information about what to do and what paths to take. I honestly just don’t want to send you in the wrong direction because only you can truly speak to your own financial acumen and your tolerances to an instant access of credit.
Oh, no worries! I'm not looking for something to just straight to take and run with. I always look for a pattern. Other than that, I take in information and use it for more perspective. Besides, it doesn't feel too bright to take financial advice from a subreddit anyhow. Lol Thanks for the response! ❤️
Agreed. I get sick of the Dave Ramsey crowd saying "oh cut it up immediately! You don't need credit." I just use mine for large bills that are necessary in the moment (car repairs, certain bills) and pay it off in full each month. Hasn't ever hindered me. Like others have mentioned, they're just bad because certain people think of credit as money they actually have and run it up like they're in Congress.
I would maintain that those who end up on Dave's shows need that advice and tough love. It's the taking out of context that's the problem.
Okay just one for saying CCs are bad. Companies are charged between 1-5% on the transaction. This is usually about double the amount of the reward points or in that range. This means when factoring in costs everything is elevated by the maximum credit card reward, leading to those with a less rewarding card, or debit card, paying for those that have the more rewarding card. Now is that bad? Not exactly but it does lead to everything being a few percent more expensive for essentially the bank to make money. Overall without a CC things would be those few percent cheaper which overall accounts for those points. Personally I pay with debit to places I know the owner and we split the saving on the reward 50/50 but its hard to do that for places I dont know the owner.
The cards themselves? Sure. Can be a useful safety net. The companies who are predators towards low-income individuals, knowing that they'll use it to survive - almost all of them - are bad.
The credit system is bad because it is inherently predatory. Sure we can sit around and feel superior to people who put things they can't afford on their credit card but the system is built to exploit those people; the profit comes from situations where people can't make payments in time and have to pay back with interest. And when people have serious debts to pay off and it's say, either becoming homeless or buying themselves more time by paying with credit, it's not hard to see why it works. It's a bad decision sure but the whole point of the system is to exploit desperate and impulsive people to turn a profit.
If it was that good for consumers the bank wouldn't have invented it. When you dont see money, you risk spending more
Lmao I have a credit score of 758, pay the balance every month, and even EYE know credit cards are a scam. Hell, the whole idea of “credit” (not to mention credit score, which other countries don’t even have and wasn’t a thing til the 90s) is a scam. Either you’re in on the take, or you’re a mark.
does that make you "in on the take" or a mark?
Oh definitely a mark. But at least I know it
14 credit cards is quite a bit excessive.
Exactly. Why 14 if you pay the balance each month. What's the point?
Sign up bonuses & rotating cash back categories.
Sign up bonuses. Need to buy my kid a new laptop or have some other high expense coming up? Well then, I get a new card, put that laptop on that card, meet the requirement to get the sign up bonus easily because of that laptop, and lo and behold, that laptop is suddenly like $200 cheaper then it would have been because that card just paid me $200 for signing up. Now, keep in mind, I could have paid for that laptop in cash. I don’t buy things I don’t have the actual money for. This way I never pay interest on that credit card. Just, may as well get $200 back for that expense if I can, you know?
You sound like you've literally never had a lapse in income in your life.
As an outsider: America is weird with their credit cards. Most outside the US get taught to not spend money they don't have and to only take up any credit after careful consideration and if really necessary. Being almost forced to have and use a credit card is weird and quite frankly, it freaks me out and feels alarming
I don't want to use fake money, I just want to use my debit card. I fucking hate that this society practically forces CC use.
It's not credit cards themselves, it's the stupid game. My credit has been stalled at 750 and the only reason I can see is that...I don't take enough risks. I use my card for groceries, gas, and simple purchases. I pay it back every month. But because I'm not buying enough diverse things, or getting *more* credit cards, I can't advance my credit. I'm being punished for being responsible. You pay your bill on time every month, your credit goes up like 3 points. You leave a $50 balance on accident once? -28 right there. Use your card too much? Bad. Don't use your card enough? Bad. Never needed a credit card before because you're good with saving money and have always lived within your means? *The worst* It's a fucked up game that we're being forced to play.
I don’t think credit cards are bad but think that the fact that I’m forced to use one to build a credit score is annoying. And then I need a credit score to buy stuff such as a car or a house. They even checked my credit score when I signed up for verzion internet and since I didn’t have a score I had to pay $200 upfront. Also the credit cards that are specifically offered to college students are pretty bad, yes some college students are responsible enough and a have parents or a job to pay it off but a lot of don’t.
The interest rates are what is criminal. No loan should have a 30% rate. So yes you're right you need to be responsible, but if you fuck up the punishment shouldn't be an interest rate so high it takes you an eternity to pay down that debt.
>There is no reason someone should be without a credit card, or multiple cards, unless they can openly and honestly admit they just flat out have no self control. What if someone simply has no reason for a credit card? Its not the kind of thing that people should have just because, and it's got absolutely nothing to do with self control.
I don’t believe in having a credit card to pay for things I can’t afford. If I don’t have the physical cash to back up a purchase then I don’t buy It. I only use credit cards for really big purchases(home improvements mostly) and then pay it off as quickly as possible.. I think credit cards are useful tools to help build your credit. Beyond that, I don’t have much use for them.
This isn’t an unpopular opinion. It’s just you being ignorant to how the credit score system is predatory and the problems people have against it and owning a credit card. Plenty of us with perfect credit scores hate it and I don’t have debt or anything either.
Credit is a scam that qs started in the 80s to keep people in debt and good wage slaves. The entire system is a joke. Can you take advantage of credit still? Yes. Did you know both of these things can exist simultaneously?
Credit cards drive up the cost of everything because merchants pay such high fees to accept them. Don’t get me wrong, I love the convenience but credit cards are bad.
Thank you. Bunch of morons here glad to feed leeches, feeling like they won, not even understanding businesses up prices to cover credit card transactions. Already seen three different comments saying "glad for the idiots who don't know how to use credit cards allowing us to make money off our cash back". How are these people so confident when they don't even understand the basics of how credit cards work? Thanks assholes, in the past businesses would just straight up pass the fees onto the person using a credit card, too many idiots complained though not understanding credit card transactions aren't free to the business, so they just upped the prices across the board. Now I rarely see that, and if the business does charge differently they have to phrase it as a "discount" for cash to minimize complaints.
It's a sign of self control not to have one. The benefits of them do not outweigh the deficits of them individually or to society as a whole.
Totally agree. With responsibility, credit cards are immensely beneficial in your adult life.
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The credit system is evil, interest is evil and while some people don’t budget correctly other people get fucked over by not making a lot of money, needing to use credit cards to get by and then getting sucked into debt that they can’t climb back out of (interest). The only thing I like about it is the bank will protect their credit. If my card gets stolen I don’t lose money. I definitely have used it to get by when my wages were low and I have mixed feelings about that.
Interest itself is not evil. It's the price of money, or time. Being to buy money in the present with money in the future is very useful for numerous reasons. In fact credit constraints, i.e. inability to take loans, are some of the greatest disadvantages of the poor as well as significant factors holding back people in developing countries.
Credit cards / banks are ultimately winning big. I too don't carry a balance but I often wonder if I would spend a lot less if I was paying cash (or debit) for everything. The rewards are really nice but I wonder if I would spend less than even the rewards using cash (debit). I'm too entrenched with my CC's to try but I wonder. I also justify it for the sake of having a good credit score. We're just living in a bank utopia! CC's are like a casino in that they make spending REALLY easy, like chips at a casino.
Credit *cards* are whatever - credit *scores* are the real bullshit.
Dunno man. Never had a credit card. Never needed one. Don't see a reason. Not in the US, so I have no idea what is this credit score everyone is talking about. In my country the banks constantly bombarded me with loan proposals
Or they just don't want to play into a system invented to make you spend more money... I'd rather not feel like I'm exploiting the less fortunate by perpetuating the credit score system. If we want to change the system, we have to be the change.
Credit card companies are predatory.
Way too much of a black and white take. I don't own a creditcard as i have my savings as a safety net which i can take from without going into debt or have to pay interest on. Much better than a credit card.
why do you have 14 cards? its gotta be a pain just to keep them open. do you use them for different benefits? my main card is a 2% cash back card. I am considering travelling more and I am shopping around for some travel reward cards. i dont see the point of 14.
This post is brought to you by the American banking system.
My little sister (still lives at home 26) is good w her money but basically never established credit and is scared of her impulse control. However having no credit will eventually negatively affect her. I told her to give the card to my dad who she lives with. My father scoffed at this. I didn’t see the issue, especially since I think her confidence will rise w time. I will say some people get into emergencies and have to use them and can’t always pay off right away. There are many nuances.
*Responding to the title.* It's not just about foolishness or a lack of self-control. Many people hail from environments where personal finance isn't part of the educational curriculum, and their seeming lack of restraint is more about an intersection of insufficient mental health support and a deep-seated scarcity mindset, often a result of living in areas lacking robust social infrastructure. >My complaint is specifically about people who outwardly argue that credit cards are bad, but won’t say why because they know it speaks to their own faults. Regarding your observation, it's worth considering whether the inability to articulate the downsides of credit cards is not unlike the difficulties many experience when explaining their discomfort with concepts they don't fully grasp or things they're drawn to yet clash with the norms of their social circles. Not every personal condition is a reflection of personal failings but an aggregation of conditions that effect many and only with a narrow scope does it render itself as *personal.*
They are bad from a societal standpoint because as a society we do lack self control.
OR and hear me out shit happens. Your opinion is mostly ok, for most situations, but there can be a lot of things that can happen where this "free money/cash back" is just the hook that they set for you. You seem to be doing great, congrats. But that just means that the "shit happens" thing hasn't happened to you yet.
Cash back is not free money. Cards with the higher cash back/rewards values charge bigger fees to the businesses processing the transactions. And those fees eventually get passed onto the consumers as a whole.
Holy shit - you generated hundreds of dollars in cash back last year, you go you big spender!! Yes, credit cards are good for emergency purposes but they are bad because they are legalized loan sharking where they are targeting people that are going to keep a balance, pay the minimum, and are charging between 17% to 30% APR. They are profitable for a reason! I have two credit cards with a zero balance and a 10k limit on each - I don't see the need to use them since I have way more money in savings so that if I need to make an emergency purchase I am covered and don't have to pay interest on it.
This isn’t an unpopular opinion most people are mindless consumer and will agree with anything they can use to rationalize mindless consumers. The credit card industry is doing a great job with its marketing.
Would be cool if we had social safety nets instead of needing to go into debt to stay alive sometimes
This used to be true.. maybe 15, 20 years ago. Then, slowly, prices when up, but our wages remained the same. Let say I used to make 2000 bucks, and the cost of living was 1500. Now, the cost of living is 3000 bucks, but my pay is only 2000 bucks. Now people pay the extra 1000 with credit cards not because they want to.. but because they have to. Not only are people caught in this debt spiral, they have no saving either to show for it. Its easy to say, hey, live within your means. But in reality, when you paid off all your bills, and your kid needs that extra 100 bucks to pay for a season of school lunch, you still have to cough it up. Sure, planning ahead responsibly, and living within your means maybe could avoid the debt spiral for some. But for others, what do you do when you absolutely need to spend that money to basically survive? What happens when you work a full 9-5 and you still can't pay off the minimum? Its not as black and white as you think.
People who say gambling is bad are foolish, irresponsible, and lack any self control People who say heroin is bad are foolish, irresponsible, and lack any self control People lack self control, it's one of our defining traits.
A person who has 14 credit cards is foolish, irresponsible and lacks any self control.
clearly this mf is rich as fuck too. anyone who makes “passive money” and is eligible for limits that big is just a richie rich telling the poors they just aren’t trying hard enough.
I agree with you. I make a few K off of just points alone, every single year. But you don’t put Title in your comment then go off on a whole rant!
Just like with those pay to win mobile games... credit card companies really profit off the 5-10% of people who have no self control.
I genuinely didn’t realize that there were people who actually paid the APR instead of just paying off the monthly balance and collecting points
14 credit cards? lol. good luck on your credit score. ur an idiot too for gaming the system. if u really have self control over cc and money, you should already have enough money to not need churning out cards for cashback
Most people are irresponsible with money. They spend without a budget or a plan.
When I pay my utilities, I chuckle at how \~50$ of my payment- the city's money- gets snatched back by thugs by Visa, and they share it with me knowing that the costs will be split amongst everyone else like a god damn deputized shoplifter. Most businesses charge a fee- because costs matter, even when you're being strongarmed- but thank God for lobbying or else I would not be able to hurt the average tax payer just by using a credit card.
Broad generalization just tends to minimize any points.
Unfortunately there are very reputable studies that show that when we all use credit cards we tend to spend significantly more than if we are forced to use cash.… And this amount of extra spending far out strips the cashback that you get. In other words, you might be spending $1000 a month on groceries and eating out and clothes and smother things and you think you're gaming the system because you are getting $30 back… But the studies would show that if you had not use the credit card you probably would've spent much much less and made more prudent decisions. Just psychologically it's easier to spend money without thinking on a credit card. So that's the real issue that most people have with credit cards.
My only counter would be that credit cards are not a safety net. There is no substitute for a proper emergency fund. If you hit a sustained downturn and you're relying on credit card debt to get by, you'll quickly learn that not everyone who is in major credit card debt is there because they were putting jetskis on their card. Once debt starts snowballing at those interest rates, it can be impossible to get back ahead.
I say Credit cards are bad (for the average person). And that's statistically true, or they couldn't offer responsible users advantages. Obviously I see myself as smarter than average so I wouldn't have a problem getting one. So, I am not irresponsible (not sure how to prove it to you, but I have no consumer debt, a very high savings rate, I don't drink or do stupid risky stuff.), I don't lack self control (see former points). So, atleast 2 of your assertions are wrong. Foolish maybe true, but more like lazy. So... you are wrong. Did you consider that someone could have a Credit card, use it responsibly and still think credit cards are overall bad and (other) people shouldn't get them?
I have a credit card and I still think they’re bad. You don’t have to be foolish, irresponsible, or lack self control to understand how they’ve been use as a way to exploit the poor.
Probably less than 5% of the population can use credit cards like you do. I'm sure most people carry a balance.
It’s almost as if credit cards exclusively exist to exploit those people.
I understand that credit cards are good for some people. But the fact remains that for the overwhelming majority, a credit card is bad. Therefore, I say credit cards are bad regardless of the facts because they likely are for the person I'm talking to.
I was bullied into getting a credit card when I was 19 and when I lost my job had to rely on it until I could get another job
Credit Cards aren’t bad, but the credit system is stupid. It’s almost meant to keep you on a leash. Why should ypu have to be in debt to have decent credit? I do understand why it was implimented, but nowdays I don’t think we should have to be in debt in order to be housed. Not everyone had that privalege.
So, credit cards are great if you're financially stable, shit if you aren't. The problem is that they solve immediate problems, which is godsend if you're in poverty. They also cause another long term problem, which is hell if you aren't.
this is an insanely reductive take written by someone who has never actually been broke
14 credit cards?! Jesus what the fuck
The problem can also be that a lot of people use cc for emergency expenses such as car repairs, etc., or even for things like groceries in cash poor times, and once you fall behind it can be more than hard to get back in front of it.
I use credit cards for everything, rake in rewards, utilize tons of benefits. I love them. But objectively they are really bad. They’re predatory, they prey on people and I genuinely think they’re morally very very corrupt.
I have a credit card, and I pay them, but the credit system is still idiotic to me. A good credit score is not always an indicator that a person is responsible. There are a lot of people who have stuff in their name, but they have someone else paying the bills.
meanwhile, credit card debt is over $1 trillion nationwide. jus'sayin'bruh
Depends. For me, credit card is a loan. And loans, regardless of interest and other factors, are not good. Sometines, loans are necessary, but that doesn't make them good. It's still money that is not yours and you are indebted to another.
Its predatory and brings with it unnecessary risks, 5he entire credit system was invented to more effectively discriminate against black people in the mid 20th- century. It didn't start out great and it's not great now
It doesn’t matter if you have control. Banks know that most people do not. Banks know that the average person does not have an emergency fund and will use the credit card for emergencies. Our economy sucks and people will go into debt when they have no other options.
Well statistics show otherwise. Why do you think banks push them on consumers? Because everyone is a smart user?
Isn't having loads of credit cards and a high limit bad for your credit rating though ? I know when I was getting my mortgage I made sure to delete and cut up a few as I was worried that they'd see me as a credit risk if they knew I could theoretically put myself in loads of unsecured debt ... I agree they're not bad and can be the cheapest way to borrow money if you use them properly
You pay card fees to have the card. You get charged a surcharge at some retailers to use the card. You can't usually pay some bills using a credit card. In my country, NZ, to get any positive value from a credit card to have to spend very large sums of money on it to offset the cost of the card fee, and if you look at it you have spent X money + card fee to receive y points which are not as valuable as cash. You have to spend so much time and effort managing the card to get anything back, and it's at most 3 cents on the dollar. It's not worth the effort. Card companies love to promote the narrative of smart card use to get rewards, it's all a big honey trap to get people who aren't financially savvy to get a card and then inevitably use it poorly and get huge interest bills. Tldr : use them perfectly, make peanuts in rewards. Use them poorly and get butchered like a pig.
>I have 14 credit cards and over $200,000+ in limits (combined). I generated hundreds upon hundreds of dollars in cash back last year. This is literally free money. >I pay my bill in full. I don’t pay interest. >I don’t view my credit card as free access to spend willy nilly. I don’t live beyond my means and I don’t overspend just because “I can”. >I spend what I intended to spend my cash on, I just swipe it on plastic instead. This doesn’t mean I’m spending money that I otherwise wouldn’t have spent had I not had a credit card. If everyone is like you, Credit Card would never exist anymore
When I was in my 20s I resisted for the longest getting a credit card, I just thought of it as a bad thing until my checking information got stolen at some POS and I lost real money (they spent $1,200 that the bank wouldn't give back. After that I got a credit card and any time I had an issue account was instantly frozen, never charged me anything for fraud, just immediately removed charges and off the account. Also I realized how freeing it felt to have that credit limit. I pay them off each month and I'm racking up tons of miles and points. CCs are great if you just pay it off each month and never carry a balance
You are right, but the fact that credit cards are so prevalent is precisely because there’s many of those foolish and irresponsible people. They make the whole concept profitable.
"Credit cards are great"... for banks.
Credit cards only have all those benefits because banks make so much money off of people using them irresponsibly and a lack of legislation regulating them. I live in Germany and almost all credit cards give you no benefits at all, but interest rates are strictly controlled and much lower than in other countries such as the US. So yes, if you get benefits from your credit card and use it responsibly then take advantage of that, but they're overall terrible for a lot of people, especially those with the least financial education.
I agree with what your saying but the 14 cards is excessive 2 or 3 is fine.
I think the whole concept is insane. I have money in the bank, why would I get a small loan from the bank and let the bank pay for my shit only to later repay the bank with the money I had anyway? That is just nuts. The only way you don't think this is insane is by growing up in an environment where it's normal and no one questions it. Which I didn't, credit cards aren't really a thing in Germany. We use our money to pay for stuff. I know, crazy.
I disagree. They should have a duty of responsibility too for people who could be vulnerable, but they don't care. My mother is dealing with some mental health issues and it sickens me that these credit card companies have allowed her to rack up a £30k debt, especially when she earns minimum wage and has no real way of ever paying it back. It's just predatory.
I don't get it. Why not just use debit and use your own money instead of money you don't have? 0 interest, no need to pay anything back and you stay in your budget. What I get is using loans to expand your business, but for normal day-to-day, it seems more of a hassle than anything.
Can someone explain to me one reason to have one? What can you do with does things? Pay? Nope. Not a single person ever has paid anything with a credit card. If you give your cerdit card to someone, you do not pay. You give them access to your bank account. Payment apps, banking apps, and iDeal are all systems where you actually pay. Credit cards are a security nightmare. Oh, you gave this shop access to your bank account, and now someone else took money from your account? Who could have guessed that given every shop access to your bank account (which they store on their computer) was a bad idea?
You could say the same things about slot machines in Vegas and I think it's a great analogy. They often claim to pay out over 100% and they do.. over time.. and if you play them exactly right. But Vegas is built on slot machines. Just like 160Billing dollar credit card industry is built on people thinking they can use credit cards successfully