Welcome to the 21st Century America!

TheDawn said:
Virtu, credit card is really cash except you don't have to give it right away when you buy stuff. It's no different from a debit card in terms of payment. We are NOT paying more or spending more, beyond our financial standard as you say just because all of sudden we are using a credit card. Some people do but that's because they don't understand the concept of credit cards properly and they are not using it correctly. If you pay off the entire balance on the credit card by the due date just like how you paid with your debit card right away, there is NO interest rate; that 20% interest rate that you see on the credit card does NOT apply. It's as if it's not there. The 20% interest rate only kicks in if you did NOT pay off the full balance by the due date then whatever portion that you didn't pay off gets charged 20% interest.



It CAN cost you 20% interest but it doesn't mean it will for sure in reality. I can count on one hand the number of times that I have paid that 20% interest and I have used credit cards for 20+ years on everything. In North America, you can pay with a credit card everywhere even in little corner stores if they accept it. It's like a debit card but you just don't pay right away. And I get to earn interest on the cash that I keep in the account for this one month that I don't pay plus I get the added protection of not needing to pay if the purchase was made out of fraud or the purchased product was bad which I wouldn't have if I had paid with a debit card because that purchase amount is taken from my account right away.



But if it's for controlling impulsive buying, you can still control it even if you use a credit card. Debit and credit cards are just methods of payment; it's what you use to pay for something that you have already decided to buy. It's NOT a method of determination to determine whether you should buy something or not in the first place. Not using a credit card just because it will tempt you to impulse buying is like saying I shouldn't have sex because it will get me to be obsessed with sex.
More...
Again, you take your specific disciplined experience and project to the rest of the population while I keep repeating that you're the exception, not the norm, with data showing the crazy amount of credit card debt in America.
Europe allows very limited access to credit (cards) based on proven income over time. Most use debit cards drawing from their account therefore there is almost no overspending and it isn't culturally accepted to incur debt, other than buying a house or a car.
Certainly, proper cc management is best. You can defer payment to the due date, manage transaction in one statement, benefit from perks, etc. But most who do are most likely to be financially well off enough not to contemplate taking on credit at 20% interest. It's like trading on margin... Done right it's a +, but bad management can be very costly.
 
VicBee said:
Again, you take your specific disciplined experience and project to the rest of the population while I keep repeating that you're the exception, not the norm, with data showing the crazy amount of credit card debt in America.
Europe allows very limited access to credit (cards) based on proven income over time. Most use debit cards drawing from their account therefore there is almost no overspending and it isn't culturally accepted to incur debt, other than buying a house or a car.
Certainly, proper cc management is best. You can defer payment to the due date, manage transaction in one statement, benefit from perks, etc. But most who do are most likely to be financially well off enough not to contemplate taking on credit at 20% interest. It's like trading on margin... Done right it's a +, but bad management can be very costly.
More...

You don't need to be financially well-off to not take on the credit at 20% interest. I had my very first credit card when I was university student. I had zero income at the time and I still didn't take on credit at 20% interest. @deaddog here doesn't either and out of all of the people that I know, only ONE, ONE person decided to take on credit at 20% interest but that's because she was depressed and deliberately decided to not just carry a balance but accumulate a balance. The collection department from the credit card company even called her to offer to consolidate all of her credit card debts with a consumer loan with a much lower interest rate and she refused stating that she just doesn't have the money to pay. She had a job, a stable job that she worked at for 10+ years that paid her a good salary, she was single with no family or kids so she had no other financial obligations and she didn't even splurge so she had no excuse for not paying her credit card balance but she just decided to accumulate a balance and not pay. EVERYONE else that I know all pays off their credit card balance in full by the due date.

So yeah you can say I am extrapolating here but imo credit card management has very little to do with financial situation or ability to pay or abusing credit or whatever; it's a psychological issue sometimes and many times it's an attitude issue. And the level of credit card debts is in no way of an indication of the state of the economy because people carried balances in both good and bad economies. That's what I am saying. So Europe just decides to basically restrict people from using credit cards to reduce or eliminate the issue of not paying I get it but that's no indication of credit cards being bad or actually leading to overspending. People live their lives however badly they want but that doesn't mean life itself is bad.
 
Hehe. Someone should get out of the hole they are digging in.


! Reuters.png
 
You must log in or register to reply here.
Back
Top