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Awesome article. Kudos for sticking to your guns, and I hope your revenues skyrocket, even though credit cards are the worst financial decision anyone could eve

Awesome article. Kudos for sticking to your guns, and I hope your revenues skyrocket, even though credit cards are the worst financial decision anyone could ever make. I'd rather YOU make money on their bad decisions than Chase or Citi.

gfodor 14y ago
Saying credit cards are bad financial decisions is like saying getting a drivers license is a bad safety decision. Beyond the fact that you can use credit cards to your financial benefit, simply getting the card has no consequences whatsoever. (Unless you buy into the 'you must keep a balance to maintain good credit' myth.)
- crikli 14y ago
  Your simile doesn't work. One needs a driver's license to drive. One does not need a credit card to make purchases. And getting card actually can be a bad financial decision as too many cards can negatively affect a credit score.
  - Smudge 14y ago
    But not having any credit cards can also negatively affect your credit score.
    - alanfalcon 14y ago
      And not having a credit score can be a wonderful way to live life.
      - anthonyb 14y ago
        Until you need to borrow money for a car or a house...
        PythonDeveloper 14y ago
        You don't need a credit score if you can pay 50% down, which you may be able to do if you didn't pay all your money to the credit card companies.
        Locke1689 14y ago
        I've never paid a dime to my credit card companies.
        goatforce5 14y ago
        My credit card company paid $800 towards the airfare of my recent trip to Oz thanks to reward points. I pay my card off multiple times per month. They don't get a chance to charge me interest. (Just checked and I have $300 worth of points waiting to be spent on travel. That's my upcoming Boston trip covered.)
        crikli 14y ago
        If a purchase requires you to borrow money, seriously ask yourself if you need to make the purchase. Could you (the royal you) buy a cheaper car, borrowing less or paying cash? Could you sustain another year in your current living situation? The problem with debt-financed purchasing is that while it expands short-term options if not managed properly it can severely limit long-term options.
        jaems33 14y ago
        I think most people need to borrow money to buy a property or start a business.
      - hollerith 14y ago
        Until you want to rent an apartment in a place where there is a lot of competition for apartments, like the Bay Area.
  - goatforce5 14y ago
    One needs a driver's license to drive. One does not need a driver's license to travel.
  - PythonDeveloper 14y ago
    One does not need a drivers license to drive. One merely needs a vehicle. The fact that not having a credit card damages your credit score should be enough to make even semi-intelligent people realize that credit score is not a fair and equitable measure of one's ability to pay on time.
    - Locke1689 14y ago
      Who cares if it's fair if that's what's used? Sounds like you're a bit hung up on how things should be rather than how things are.
- ghshephard 14y ago
  Getting a drivers license is perhaps the worst safety decision a modern human can make. The reality is that your _average_ person, if they have something, will use it. Whether that's a drivers license or a credit card is immaterial. This, of course, contrasts with something like a condom, where, if you are going to have sex (unlike driving, or purchasing on credit) - you are going to do it, regardless of whether you have the license/plastic (no pun intended) - so you may as well do it safely. It's very difficult (impossible?) to go into debt to a credit card company, if you don't have a credit card. Likewise the vast, vast majority of people who don't have Drivers Licenses (by choice, as opposed to having them taken away) - tend not to cause fatal accidents.
  - gfodor 14y ago
    People get drivers licenses in order to drive, and they get credit cards to take on debt, build their credit, or make payments quicker and easier. Drivers licenses don't make people drive poorly nor do credit cards make people make poor financial decisions. If you're going to convolute the two through some form of causality, the argument you could make is that people who are apt to make poor financial decisions are more apt to pile up credit cards. Your claim that getting a drivers license is the "worst safety decision a modern human can make" is pure hyperbole. What about not putting on a seatbelt? What about not checking their tires and brakes regularly? What about failing to adjust their mirrors? Those are the actions that reduce safety, not getting the license, much like buying that HDTV you cannot afford reduces financial standing, not getting the credit card.
    - ghshephard 14y ago
      I'll stand by my original comment - no other single decision that a modern adult can make, than driving (or riding) in an automobile, will more negatively impact their health, or more likely result in a fatality. If you take a representative sample of people who do what you suggest (seat belts, mirrors, tires, breaks) versus a sample of people that I offer (people who just don't drive - I.E. Walk) - I guarantee you there will be far fewer fatalities and injuries in my group, particularly in the 15-44 age range. This ties _directly_ with credit cards - in that if you take a sample of people who do what you suggest (use credit cards properly/responsibly) versus a sample of people who do what I suggest (just don't get a credit card) - I believe my group will be better off financially. To be truly scientific - we need to do a randomized trial - take a good sized group - and bucked them into two trials for 20 years - one group without cars, one group with. Another group with credit cards, another group without. I'm confident that the non-car driving, non-credit card using group will experience fewer fatalities and be financially stronger. I'm not arguing that you _shouldn't_ use a seatbelt, and that it doesn't help you (it does!) - I'm arguing that once you've started driving/riding, you've already increased your chance of fatality in a way that wearing a seatbelt can't reduce.
- ry0ohki 14y ago
  If you don't read the details that's not always true. Some people get suckered into cards with annual fees. Also there is always a credit checked performed. If you sign up for a bunch of credit cards for the free incentive money, all those credit checks and 0 balance / high credit limit can have a (temporary) effect on your credit score.
- lusr 14y ago
  While I think credit cards have great benefits (see stevenwei for an excellent summary), getting the card does have a consequence in my experience: every card I've ever had has an annual maintenance fee (perhaps not the case in the USA?).
  - bgruber 14y ago
    In the us, few cards besides AMEX have annual fees. The credit card companies make most of their money on people who fall behind on their payments and end up paying a ton of interest, and i would guess that annual fees aren't attractive to those customers. New college students are a prime example. While this sucks for the system as a whole, on an individual level it does mean that those of us who have a reliable income (or FU money) can use credit cards very differently. They provide convenience, consumer protection, usually some kind of 'reward' (travel points or such), and yes, a 30 day grace period in which you can do something else with your money though I usually don't think of it that way. In fact, from an individual standpoint the only reason I can think of to use a debit card rather than credit here is a complete lack of financial responsibility/will power.
Locke1689 14y ago
Credit cards are amazing. I pay my balance in full every month and American Express pays me money. It's bloody fantastic. Edit: Oh, and I forgot to mention that the law is on my side with charge backs and I'm not liable for fraud.
- 205guy 14y ago
  Yes, and AMEX is just creating money out of thin air in order to pay it to you? No, they just charge the merchant 5% of the transaction, one of the highest in the industry. Guess who raises their prices by 5% everywhere, before you pay by AMEX? The real problem is that everyone pays this price, and it leads to price inflation even if you pay cash (yes, dealing with cash transactions has a price for the merchant as well, but that one's already built into their costs). The laws should be changed so that merchants are allowed to charge more for CC transactions. I don't understand why the government has allowed the CC industry to forbid that (seems to work for gas stations).
  - ImprovedSilence 14y ago
    It's a tragedy of the commons no doubt, but I'll be dammed if I'm gonna pay the full 5% increase by paying cash, instead of using my card, getting 1% back, and only paying the 4% increase. C'est la vie.
  - Locke1689 14y ago
    Your comparison is "world without credit cards" vs "world with credit cards." That's not reality. The reality is "world with credit cards." It's crazy to pass on using a credit card correctly in a world with credit cards.
  - sliverstorm 14y ago
    Ok, so prices go up a little. But on the other hand, we have the convenience of plastic. Convenience is not worthless. What's that, we all should just use debit cards instead? Hmm, I thought debit cards used the VISA or MasterCard networks?
stevenwei 14y ago
I really don't understand this sentiment. I prefer carrying around credit cards compared to cash, it's more convenient and I don't have to worry about whether I have enough cash on hand when I need to make a large purchase. I feel safer using a credit card compared to my ATM card due to the chargeback and fraud protection provided by the credit card company. There's less money "at risk" if someone steals my credit card or skims my cc number (which has happened to me at a restaurant before - I paid with a credit card and the guy wrote down the number while handling my bill. A week later he attempted to use it at Best Buy to buy a laptop, which was caught by my credit card company's fraud department.). I earn frequent flyer miles by spending with my credit card, which (combined with signup bonuses) earns me several free plane tickets every year. Since I fly semi-frequently this is a major cost savings for me. I pay off my credit card balance in full every month, never incurring interest. In doing so, I show a consistent payment history and build my credit score. I don't particularly need it right now, but if I ever need to take out a mortgage, finance a car, or take out any other kind of loan, having a high credit score will benefit me in the long run. I literally cannot think of a reason why this is a bad idea, or why anyone would consider this a bad financial decision.

gfodor 14y ago

Saying credit cards are bad financial decisions is like saying getting a drivers license is a bad safety decision. Beyond the fact that you can use credit cards to your financial benefit, simply getting the card has no consequences whatsoever. (Unless you buy into the 'you must keep a balance to maintain good credit' myth.)

crikli 14y ago
Your simile doesn't work. One needs a driver's license to drive. One does not need a credit card to make purchases. And getting card actually can be a bad financial decision as too many cards can negatively affect a credit score.
- Smudge 14y ago
  But not having any credit cards can also negatively affect your credit score.
  - alanfalcon 14y ago
    And not having a credit score can be a wonderful way to live life.
    - anthonyb 14y ago
      Until you need to borrow money for a car or a house...
      - PythonDeveloper 14y ago
        You don't need a credit score if you can pay 50% down, which you may be able to do if you didn't pay all your money to the credit card companies.
        Locke1689 14y ago
        I've never paid a dime to my credit card companies.
        goatforce5 14y ago
        My credit card company paid $800 towards the airfare of my recent trip to Oz thanks to reward points. I pay my card off multiple times per month. They don't get a chance to charge me interest. (Just checked and I have $300 worth of points waiting to be spent on travel. That's my upcoming Boston trip covered.)
      - crikli 14y ago
        If a purchase requires you to borrow money, seriously ask yourself if you need to make the purchase. Could you (the royal you) buy a cheaper car, borrowing less or paying cash? Could you sustain another year in your current living situation? The problem with debt-financed purchasing is that while it expands short-term options if not managed properly it can severely limit long-term options.
        jaems33 14y ago
        I think most people need to borrow money to buy a property or start a business.
    - hollerith 14y ago
      Until you want to rent an apartment in a place where there is a lot of competition for apartments, like the Bay Area.
- goatforce5 14y ago
  One needs a driver's license to drive. One does not need a driver's license to travel.
- PythonDeveloper 14y ago
  One does not need a drivers license to drive. One merely needs a vehicle. The fact that not having a credit card damages your credit score should be enough to make even semi-intelligent people realize that credit score is not a fair and equitable measure of one's ability to pay on time.
  - Locke1689 14y ago
    Who cares if it's fair if that's what's used? Sounds like you're a bit hung up on how things should be rather than how things are.
ghshephard 14y ago
Getting a drivers license is perhaps the worst safety decision a modern human can make. The reality is that your _average_ person, if they have something, will use it. Whether that's a drivers license or a credit card is immaterial. This, of course, contrasts with something like a condom, where, if you are going to have sex (unlike driving, or purchasing on credit) - you are going to do it, regardless of whether you have the license/plastic (no pun intended) - so you may as well do it safely. It's very difficult (impossible?) to go into debt to a credit card company, if you don't have a credit card. Likewise the vast, vast majority of people who don't have Drivers Licenses (by choice, as opposed to having them taken away) - tend not to cause fatal accidents.
- gfodor 14y ago
  People get drivers licenses in order to drive, and they get credit cards to take on debt, build their credit, or make payments quicker and easier. Drivers licenses don't make people drive poorly nor do credit cards make people make poor financial decisions. If you're going to convolute the two through some form of causality, the argument you could make is that people who are apt to make poor financial decisions are more apt to pile up credit cards. Your claim that getting a drivers license is the "worst safety decision a modern human can make" is pure hyperbole. What about not putting on a seatbelt? What about not checking their tires and brakes regularly? What about failing to adjust their mirrors? Those are the actions that reduce safety, not getting the license, much like buying that HDTV you cannot afford reduces financial standing, not getting the credit card.
  - ghshephard 14y ago
    I'll stand by my original comment - no other single decision that a modern adult can make, than driving (or riding) in an automobile, will more negatively impact their health, or more likely result in a fatality. If you take a representative sample of people who do what you suggest (seat belts, mirrors, tires, breaks) versus a sample of people that I offer (people who just don't drive - I.E. Walk) - I guarantee you there will be far fewer fatalities and injuries in my group, particularly in the 15-44 age range. This ties _directly_ with credit cards - in that if you take a sample of people who do what you suggest (use credit cards properly/responsibly) versus a sample of people who do what I suggest (just don't get a credit card) - I believe my group will be better off financially. To be truly scientific - we need to do a randomized trial - take a good sized group - and bucked them into two trials for 20 years - one group without cars, one group with. Another group with credit cards, another group without. I'm confident that the non-car driving, non-credit card using group will experience fewer fatalities and be financially stronger. I'm not arguing that you _shouldn't_ use a seatbelt, and that it doesn't help you (it does!) - I'm arguing that once you've started driving/riding, you've already increased your chance of fatality in a way that wearing a seatbelt can't reduce.
ry0ohki 14y ago
If you don't read the details that's not always true. Some people get suckered into cards with annual fees. Also there is always a credit checked performed. If you sign up for a bunch of credit cards for the free incentive money, all those credit checks and 0 balance / high credit limit can have a (temporary) effect on your credit score.
lusr 14y ago
While I think credit cards have great benefits (see stevenwei for an excellent summary), getting the card does have a consequence in my experience: every card I've ever had has an annual maintenance fee (perhaps not the case in the USA?).
- bgruber 14y ago
  In the us, few cards besides AMEX have annual fees. The credit card companies make most of their money on people who fall behind on their payments and end up paying a ton of interest, and i would guess that annual fees aren't attractive to those customers. New college students are a prime example. While this sucks for the system as a whole, on an individual level it does mean that those of us who have a reliable income (or FU money) can use credit cards very differently. They provide convenience, consumer protection, usually some kind of 'reward' (travel points or such), and yes, a 30 day grace period in which you can do something else with your money though I usually don't think of it that way. In fact, from an individual standpoint the only reason I can think of to use a debit card rather than credit here is a complete lack of financial responsibility/will power.

Locke1689 14y ago

Credit cards are amazing. I pay my balance in full every month and American Express pays me money. It's bloody fantastic. Edit: Oh, and I forgot to mention that the law is on my side with charge backs and I'm not liable for fraud.

205guy 14y ago
Yes, and AMEX is just creating money out of thin air in order to pay it to you? No, they just charge the merchant 5% of the transaction, one of the highest in the industry. Guess who raises their prices by 5% everywhere, before you pay by AMEX? The real problem is that everyone pays this price, and it leads to price inflation even if you pay cash (yes, dealing with cash transactions has a price for the merchant as well, but that one's already built into their costs). The laws should be changed so that merchants are allowed to charge more for CC transactions. I don't understand why the government has allowed the CC industry to forbid that (seems to work for gas stations).
- ImprovedSilence 14y ago
  It's a tragedy of the commons no doubt, but I'll be dammed if I'm gonna pay the full 5% increase by paying cash, instead of using my card, getting 1% back, and only paying the 4% increase. C'est la vie.
- Locke1689 14y ago
  Your comparison is "world without credit cards" vs "world with credit cards." That's not reality. The reality is "world with credit cards." It's crazy to pass on using a credit card correctly in a world with credit cards.
- sliverstorm 14y ago
  Ok, so prices go up a little. But on the other hand, we have the convenience of plastic. Convenience is not worthless. What's that, we all should just use debit cards instead? Hmm, I thought debit cards used the VISA or MasterCard networks?

stevenwei 14y ago

I really don't understand this sentiment. I prefer carrying around credit cards compared to cash, it's more convenient and I don't have to worry about whether I have enough cash on hand when I need to make a large purchase. I feel safer using a credit card compared to my ATM card due to the chargeback and fraud protection provided by the credit card company. There's less money "at risk" if someone steals my credit card or skims my cc number (which has happened to me at a restaurant before - I paid with a credit card and the guy wrote down the number while handling my bill. A week later he attempted to use it at Best Buy to buy a laptop, which was caught by my credit card company's fraud department.). I earn frequent flyer miles by spending with my credit card, which (combined with signup bonuses) earns me several free plane tickets every year. Since I fly semi-frequently this is a major cost savings for me. I pay off my credit card balance in full every month, never incurring interest. In doing so, I show a consistent payment history and build my credit score. I don't particularly need it right now, but if I ever need to take out a mortgage, finance a car, or take out any other kind of loan, having a high credit score will benefit me in the long run. I literally cannot think of a reason why this is a bad idea, or why anyone would consider this a bad financial decision.