Board 8 > So I was reading up on credit in the US and it's kinda blowing my mind

(+) Yeah! (+)

Its important to realize half of users use them as charge cards, as in it just puts all of your transactions into one bill that you pay at the end of the month for convenience. The other half uses it as actual loans (Which is a bad idea)

Its important to realize half of users use them as charge cards, as in it just puts all of your transactions into one bill that you pay at the end of the month for convenience. The other half uses it as actual loans (Which is a bad idea)

of course they want you to do those things, because those things earn them more money

Yea if you use it correctly it is actually suboptimal to not use credit cards. You should be paying no fees and getting a percent back of your purchases back. (I get like 5% back on food)

Its important to realize half of users use them as charge cards, as in it just puts all of your transactions into one bill that you pay at the end of the month for convenience. The other half uses it as actual loans (Which is a bad idea)

I would put the split at more of a 10/90 with most people being pretty damn bad with money.

Yea if you use it correctly it is actually suboptimal to not use credit cards. You should be paying no fees and getting a percent back of your purchases back. (I get like 5% back on food)

This is kind of a bad system too. Credit card companies benefit, and so do responsible customers, but retailers definitely lose out since they're paying for those benefits, particularly smaller retailers.

This is kind of a bad system too. Credit card companies benefit, and so do responsible customers, but retailers definitely lose out since they're paying for those benefits, particularly smaller retailers.

I mean sure. But it's a lot more convenient to deal with credit cards than cash: less to get stolen etc, easier to manage, less running to the bank, don't have to worry about having change as much. Additionally retailers are able to (and some do) charge the customer an additional fee for using a card to make up the difference. Most just raise their prices wholesale though.

1. If retailers raise there prices to make up for fees, credit cards don't actually benefit the customer.
2. A debit card has all the benefits you mention without the negatives.

1. If retailers raise there prices to make up for fees, credit cards don't actually benefit the customer.
2. A debit card has all the benefits you mention without the negatives.

1. i mean i get more cash back than the standard fee. I also never said it was a positive for every customer, obviously credit cards are making their money somewhere. I just said it was suboptimal not to use one if you can use it correctly.
2. Uhh no it doesn't. Debit cards also have transaction fees (admittedly lower). And are a lot riskier if you lose them. I keep my debit card locked 100% of the time and only unlock it right when I need to use it.

This is kind of a bad system too. Credit card companies benefit, and so do responsible customers, but retailers definitely lose out since they're paying for those benefits, particularly smaller retailers.

Uhh no it doesn't. Debit cards also have transaction fees (admittedly lower). And are a lot riskier if you lose them. I keep my debit card locked 100% of the time and only unlock it right when I need to use it.

How is it riskier? The consequences are pretty much the same either way, and any decent bank will have a policy that undoes any losses, just like the credit card companies do.

1. If retailers raise there prices to make up for fees, credit cards don't actually benefit the customer.
2. A debit card has all the benefits you mention without the negatives.

When retailers raise prices to make up for fees, it's people who can't get approved for credit cards who get screwed over. They're also the least likely to have the option of shopping around.

Credit is a huge fucking scam that exists to benefit the haves at the expense of the have nots.

You can get a credit card with basically no credit history. How does it hurt the have not.

It hurts people without self control but so does alcohol, cigarettes, the lottery, fast food, fast cars, prostitution, advertisement, time shares....

should my house be more expensive if i had a lower credit score?

Stavins is the co-author of a recent paper from the Boston Fed that looked at who winds up paying for credit card reward purchases. They found that in the US, high-income consumers pay an average of $13 less per month through retail prices, and low-income people pay 60 cents more, because of swipe fees on merchants. Rich consumers spend more overall on fees, but its because they spend more in general. When it comes to a percentage of transaction values, its poorer people who lose out.

I fully understand the point of credit scores. My biggest issue with them is how fickle they are and how they're designed and used.
I love financial risk theory more than most people here, I'd argue. But that doesn't mean I have to approve of the realities of the practices.

As it stands, older people with more wealth tend to benefit. Higher interest rates penalize people for the sole reason that they don't have decades of proving their wealth or worth.

I mean proven trustworthy people get better rates because they have a history of being trustworthy. What is the alternative? How trustworthy they look? I'm sure that would end well.

I can understand the annoyance but in practicality it is necessary. Sure it could be improved but I have seen no argument of how it could be improved in a meaningful way.

The process makes sense - the problem is that it leads to bad outcomes. Poor people pay more interest than rich people. I suppose the optimal process might be something like government student loans for poorer people, where they pay no interest on their loans?

At some point is it causation or correlation. Poor people pay more interest, but at what point do we contribute some of this to financial decisions that caused them to be poor because they are paying more in interest?

There are a lot of areas where we need to make sure poor people get equal opportunities. Im not sure credit cards is one of them

At some point is it causation or correlation. Poor people pay more interest, but at what point do we contribute some of this to financial decisions that caused them to be poor because they are paying more in interest?

There are a lot of areas where we need to make sure poor people get equal opportunities. Im not sure credit cards is one of them

People who start out rich don't make better decisions than people who start out poor because they're smarter.

An example of the US actually doing this in the past is the GI bill after WW2, where vets got superior interest rates. It was highly successful.

Yea if you use it correctly it is actually suboptimal to not use credit cards. You should be paying no fees and getting a percent back of your purchases back. (I get like 5% back on food)

the second one costs $100 but we get it waved due to good credit

Can I ask which card you are using for this? Any annual fees?

Ah, I use that exact same card lol, but I don't use Merill Edge, so I just get an additional preferred rewards bonus, but it falls short of the 5% you are getting

I want to know what credit card this is because the only cards this good don't waive fees unless you convince them that you're going to cancel (and sometimes not even then).

The american economy is a huge fucking scam that exists to benefit the haves at the expense of the have nots.

Ftfy