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Yes, it’s because Americans have to build credit or otherwise optimize their credit score to finance large purchases. In most other countries there either isn’t

Yes, it’s because Americans have to build credit or otherwise optimize their credit score to finance large purchases. In most other countries there either isn’t a credit score concept or your credit score does not have to be built up over a long period to be effective like it does here. It doesn’t help that a third of Americans dont really have savings either; credit helps them to work around this

smelendez 7d ago
I use credit for the purchase protection (I believe many debit cards have this as well but it’s easier when you haven’t yet paid the charge, and seems better enshrined in law for credit), for the rewards (which including signup bonuses can be huge), for the float period, and for security — if somebody fraudulently uses a credit card versus a debit card, there’s no actual money missing while the situation gets resolved.
- enaaem 7d ago
  Every time I had issues with fraud it was with a cc. The fraud protection is just bandage for an inherently unsafe system that you are paying for yourself. That being said, I do get that for US individuals it is completely rational to use cc's. I would do that too. If you are paying 3% Visa/MC tax anyway, then you might as well use their perks.
  - Shog9 7d ago
    What smelendez is alluding to is the matter of who is liable while fraud is being resolved. In the US, a charge on your bank card results in at least a hold on your bank account - money you can't spend on anything else until the hold is lifted. Worst-case, there can be significant fees associated with this (overdraft, declined payments, etc.). For most of us, that's a much bigger problem than a debt we may or may not end up paying interest on. From personal experience, getting a credit card company to quickly resolve fraud cases is also much easier than getting a bank to do the same, even when it's ultimately the same institution.
johnnyanmac 7d ago
Yeah, it's all a huge con. The best fiscal habits involves not spending money you don't have, so you should never need a CC to begin with. But if you take that route, you end up being unable to finance a car or apartment because companies can't snoop into how you spend money. So you're forced to either play the game or be so rich you can buy everything you need in cash (which, ironically qualifies you for the best kinds of CC's anyway). Now, if you DO manage to that threshold... you still want to delay finances. Because installments now become ways to give your money more time to make money and offset whatever you are paying for. The models and incentives are completely at odds.
ghosty141 7d ago
In germany a similar scheme exists (Schufa) but it's less important.

smelendez 7d ago

I use credit for the purchase protection (I believe many debit cards have this as well but it’s easier when you haven’t yet paid the charge, and seems better enshrined in law for credit), for the rewards (which including signup bonuses can be huge), for the float period, and for security — if somebody fraudulently uses a credit card versus a debit card, there’s no actual money missing while the situation gets resolved.

enaaem 7d ago
Every time I had issues with fraud it was with a cc. The fraud protection is just bandage for an inherently unsafe system that you are paying for yourself. That being said, I do get that for US individuals it is completely rational to use cc's. I would do that too. If you are paying 3% Visa/MC tax anyway, then you might as well use their perks.
- Shog9 7d ago
  What smelendez is alluding to is the matter of who is liable while fraud is being resolved. In the US, a charge on your bank card results in at least a hold on your bank account - money you can't spend on anything else until the hold is lifted. Worst-case, there can be significant fees associated with this (overdraft, declined payments, etc.). For most of us, that's a much bigger problem than a debt we may or may not end up paying interest on. From personal experience, getting a credit card company to quickly resolve fraud cases is also much easier than getting a bank to do the same, even when it's ultimately the same institution.

johnnyanmac 7d ago

Yeah, it's all a huge con. The best fiscal habits involves not spending money you don't have, so you should never need a CC to begin with. But if you take that route, you end up being unable to finance a car or apartment because companies can't snoop into how you spend money. So you're forced to either play the game or be so rich you can buy everything you need in cash (which, ironically qualifies you for the best kinds of CC's anyway). Now, if you DO manage to that threshold... you still want to delay finances. Because installments now become ways to give your money more time to make money and offset whatever you are paying for. The models and incentives are completely at odds.

ghosty141 7d ago

In germany a similar scheme exists (Schufa) but it's less important.