17 ms·

You're still not quite getting it. If people have to choose between going into debt from a finance charge or starving on the street with no roof over their head

You're still not quite getting it. If people have to choose between going into debt from a finance charge or starving on the street with no roof over their head they will choose the former. It's not about financial education it's about hard choices of the underprivileged.

koonsolo 9y ago
I'm not talking about starving on the street, I'm talking about everybody in US using credit cards for payments and repay. I'm talking about shops offering their own credit cards. You know when US people use their credit card? Every day. You know when Europeans use their credit card? When abroad. And our credit gets instantly paid by our normal bank account. For us, a credit card is the same as a debit card but with a delay on it.
- icebraining 9y ago
  We just have other types of debt. I know so many people paying 120-150% of the price of their TVs, vaccuum cleaners, kitchen appliances (like the €1224 Thermomix, which they've somehow convinced everyone must have), etc thanks to loans offered by subsidiaries of large banks and pushed by the shops.
  - huac 9y ago
    This is basically Affirm's business too.
- morgante 9y ago
  > You know when US people use their credit card? Every day. You know when Europeans use their credit card? When abroad. To me, that's just evidence of how backwards many Europeans are in their approach to credit cards. You seem to have an attitude that credit cards are inherently evil. They're just tools, which can be misused (and put you into debt) or used for maximum convenience (accruing rewards and protections along the way). I challenge you to explain why the easy availability of credit and a highly functional credit market is a bad thing instead of throwing out blanket statements like that credit scores are "crazy."
  - iagovar 9y ago
    Debit cards are widely used in Europe (maybe not in Germany), but people, when they want credit just goes to the bank and take a loan or something like that.
  - kuschku 9y ago
    Credit cards always have a cost. You get 1.5% to 2% of your money back in rewards for a 3% fee. In Europe, fees are limited to far below that, and the European debit cards are limited to below 1% in fees. You don't get rewards from credit cards in that situation. In fact, credit cards always end up losing you money. Credit cards are the tragedy of the commons - if no one used them, everyone would profit. But as long as some use them, everyone gets an advantage from using them. > I challenge you to explain why the easy availability of credit and a highly functional credit market is a bad thing instead of throwing out blanket statements like that credit scores are "crazy." Because it is risk. You have insanely high interest rates, high fees, you have a massive risk, and the security is basically nonexistent. To pay money online, you usually use a standardized API that uses proper cryptography, and signs with a key embedded in your device or your debit card on a reader. With a credit card, you pay with a simple number that anyone can just steal, and if you don't take care, you're fucked.
    - morgante 9y ago
      > With a credit card, you pay with a simple number that anyone can just steal, and if you don't take care, you're fucked. You seem to deeply understand credit cards. There is practically no risk to using them. As a consumer, your fraud liability is zero and entirely shifted to the merchant. Of course you should pay off the bill every month. I never pay interest, rewards more than cover any fees I pay (I average 4-5% return on credit card spend), and I really don't know what risk you're talking about.
      - kuschku 9y ago
        > As a consumer, your fraud liability is zero and entirely shifted to the merchant. If you have one with chip+PIN, as all in Europe, 100% of liability is with the customer. So you have to check the statement every month, go through a lengthy process to appeal false charges, and end up not getting your money back either. Especially as you have to deal with your bank to get the money back instead of the CC company here, and the bank has a far easier process for reversing debit transfers than CC bills.
- lotsofpulp 9y ago
  Using a credit card is not the same as going into debt to make your purchase. In the US, you can easily get 1% to 4% back from the credit card company by using your credit card, and so you actually save money by paying with your credit card. Whether or not you want to pay off the balance at the end of your credit card's billing cycle decides whether or not you are going into debt, but many, many people pay it off. It's also safer to use a credit card for purchases than a debit card, since your cash isn't touched and you can just call the credit card company to dispute a charge.
  - josiahpeters 9y ago
    Its not like you're just pulling free money out of thin air by using a credit card. And it seems likely that the finance institutions behind the credit cards are offering them as a product that makes money and not as an act of goodwill. If everyone paid their credit cards off at the end of the month like they say they do, do you think credit cards would be advertised or pushed as hard as they are? The finance institutions are making money on people who use them. i'm sure there are some people are responsible enough to never incur a finance charge from a credit card by always paying their monthly balance. I've never actually met one of those people. I used to say I was one of those people, but in reality if you had asked to look at my statement history I would have been embarrassed by how many times I ended up paying interest charges for things I probably shouldn't have purchased in the first place. Two years ago my wife and I cut up our credit cards, closed those accounts and never looked back. Initially that change hurt my brain and went against everything I thought I knew was normal. It was one one of the best financial decisions we ever made.
    - closeparen 9y ago
      >And it seems likely that the finance institutions behind the credit cards are offering them as a product that makes money and not as an act of goodwill. Correct, credit card companies take a fee on the transaction, which is in turn baked into the prices of all consumer goods. To pay the normal price with something other than a credit card is to miss out on what you're already paying for.
    - 9y ago
- gubby 9y ago
  Actually, the UK has credit scores and credit cards, a large proportion of people use credit cards for daily spending.
  - timthorn 9y ago
    Not only that, but your consumer rights are stronger when you use a credit card: http://www.which.co.uk/consumer-rights/regulation/consumer-credit-act#additional-protection-for-credit-card-purchases http://www.which.co.uk/consumer-rights/regulation/consumer-c...
- iagovar 9y ago
  We use debit cards though. I don't see credit cards often, but I do see everyone with debit cards. I pay almost everything with it since it's free, I can't screw up (debit cards have limits, or in any case the total amount of your bank account), easy, etc. I've been offered credit cards by my bank, but I do not trust them so I prefer to use a debit one. Also, Fnac or even supermarkets do offer cards, but I don't see the point of having them, and I'd say most people do not pay attention to this offers. I live in Spain, and I've seen a similar situation in other countries except in Germany.
  - kuschku 9y ago
    Germany also heavily uses debit cards, actually. Like 90%+ of the population have an EC card (a German debit card network), in comparison to below 8% for credit cards.
    - gaius 9y ago
      It is more subtle than you think. In the UK the Consumer Credit Act means that the protections offered to the buyer are vastly better when paying by credit card vs debit card. Particularly online, you would be foolish to pay by debit rather than credit. That also drives consumer behaviour.
- wojcikstefan 9y ago
  I'm afraid that's too strong of a generalization. I'm a European and I use my credit card daily (and getting a great value out of the benefits it provides).
pdimitar 9y ago
Quoting George Carlin: "Trust me on this one folks, raisin oats are not a major purchase. ...and you're holding up the f*cking line, too!" (talking about people paying with CCs on a queue in a retail store) "Nobody should be paying a bank 18% of interest for Tic-Tacs." Not sure how accurate he was but IMO your parent commenter was expressing a sentiment that is relevant to these quotes.
- upvotinglurker 9y ago
  In modern US stores, it's generally people paying with cash or check that "hold up the f*cking line" (paying with a credit or debit card is much faster).
  - pdimitar 9y ago
    That's a pretty interesting tidbit, thanks for sharing it. In my country paying with a CC or a debit card is at least a 2 minutes dance and it gets awfully annoying for everybody on the queue. One of the reasons why several months ago I moved on to buy stuff from local smaller stores that offer delivery at home and allow me make the order from their website -- no phone involved. And I am investing in local businesses, too, so it's a double win. Back on topic, why exactly is paying with cash slower than with a CC? Very curious.
    - upvotinglurker 9y ago
      Most stores* have a point of sale machine where you either swipe the card or insert it into a slot for a few seconds, then tap a confirmation. You may be asked to tap a PIN (if using a debit card) or write your signature with a stylus (credit card), but I'm encountering this less and less often for small transactions. I suspect the companies involved have calculated that the extra time/processing isn't worth the potential savings from reducing fraud reimbursement on these small transactions. Paying cash requires either the customer or the cashier to count out correct change, which generally takes longer than the above. Hand-writing a check takes even longer, though maybe partly because it is mostly elderly people doing it these days, and they tend to perform all activities more slowly (not that they can help it or that there's anything wrong with it). *Small businesses sometimes still have older credit card machines that are a bit slower, but the number of these I encounter is fewer and fewer.

koonsolo 9y ago

I'm not talking about starving on the street, I'm talking about everybody in US using credit cards for payments and repay. I'm talking about shops offering their own credit cards. You know when US people use their credit card? Every day. You know when Europeans use their credit card? When abroad. And our credit gets instantly paid by our normal bank account. For us, a credit card is the same as a debit card but with a delay on it.

icebraining 9y ago
We just have other types of debt. I know so many people paying 120-150% of the price of their TVs, vaccuum cleaners, kitchen appliances (like the €1224 Thermomix, which they've somehow convinced everyone must have), etc thanks to loans offered by subsidiaries of large banks and pushed by the shops.
- huac 9y ago
  This is basically Affirm's business too.
morgante 9y ago
> You know when US people use their credit card? Every day. You know when Europeans use their credit card? When abroad. To me, that's just evidence of how backwards many Europeans are in their approach to credit cards. You seem to have an attitude that credit cards are inherently evil. They're just tools, which can be misused (and put you into debt) or used for maximum convenience (accruing rewards and protections along the way). I challenge you to explain why the easy availability of credit and a highly functional credit market is a bad thing instead of throwing out blanket statements like that credit scores are "crazy."
- iagovar 9y ago
  Debit cards are widely used in Europe (maybe not in Germany), but people, when they want credit just goes to the bank and take a loan or something like that.
- kuschku 9y ago
  Credit cards always have a cost. You get 1.5% to 2% of your money back in rewards for a 3% fee. In Europe, fees are limited to far below that, and the European debit cards are limited to below 1% in fees. You don't get rewards from credit cards in that situation. In fact, credit cards always end up losing you money. Credit cards are the tragedy of the commons - if no one used them, everyone would profit. But as long as some use them, everyone gets an advantage from using them. > I challenge you to explain why the easy availability of credit and a highly functional credit market is a bad thing instead of throwing out blanket statements like that credit scores are "crazy." Because it is risk. You have insanely high interest rates, high fees, you have a massive risk, and the security is basically nonexistent. To pay money online, you usually use a standardized API that uses proper cryptography, and signs with a key embedded in your device or your debit card on a reader. With a credit card, you pay with a simple number that anyone can just steal, and if you don't take care, you're fucked.
  - morgante 9y ago
    > With a credit card, you pay with a simple number that anyone can just steal, and if you don't take care, you're fucked. You seem to deeply understand credit cards. There is practically no risk to using them. As a consumer, your fraud liability is zero and entirely shifted to the merchant. Of course you should pay off the bill every month. I never pay interest, rewards more than cover any fees I pay (I average 4-5% return on credit card spend), and I really don't know what risk you're talking about.
    - kuschku 9y ago
      > As a consumer, your fraud liability is zero and entirely shifted to the merchant. If you have one with chip+PIN, as all in Europe, 100% of liability is with the customer. So you have to check the statement every month, go through a lengthy process to appeal false charges, and end up not getting your money back either. Especially as you have to deal with your bank to get the money back instead of the CC company here, and the bank has a far easier process for reversing debit transfers than CC bills.
lotsofpulp 9y ago
Using a credit card is not the same as going into debt to make your purchase. In the US, you can easily get 1% to 4% back from the credit card company by using your credit card, and so you actually save money by paying with your credit card. Whether or not you want to pay off the balance at the end of your credit card's billing cycle decides whether or not you are going into debt, but many, many people pay it off. It's also safer to use a credit card for purchases than a debit card, since your cash isn't touched and you can just call the credit card company to dispute a charge.
- josiahpeters 9y ago
  Its not like you're just pulling free money out of thin air by using a credit card. And it seems likely that the finance institutions behind the credit cards are offering them as a product that makes money and not as an act of goodwill. If everyone paid their credit cards off at the end of the month like they say they do, do you think credit cards would be advertised or pushed as hard as they are? The finance institutions are making money on people who use them. i'm sure there are some people are responsible enough to never incur a finance charge from a credit card by always paying their monthly balance. I've never actually met one of those people. I used to say I was one of those people, but in reality if you had asked to look at my statement history I would have been embarrassed by how many times I ended up paying interest charges for things I probably shouldn't have purchased in the first place. Two years ago my wife and I cut up our credit cards, closed those accounts and never looked back. Initially that change hurt my brain and went against everything I thought I knew was normal. It was one one of the best financial decisions we ever made.
  - closeparen 9y ago
    >And it seems likely that the finance institutions behind the credit cards are offering them as a product that makes money and not as an act of goodwill. Correct, credit card companies take a fee on the transaction, which is in turn baked into the prices of all consumer goods. To pay the normal price with something other than a credit card is to miss out on what you're already paying for.
  - 9y ago
gubby 9y ago
Actually, the UK has credit scores and credit cards, a large proportion of people use credit cards for daily spending.
- timthorn 9y ago
  Not only that, but your consumer rights are stronger when you use a credit card: http://www.which.co.uk/consumer-rights/regulation/consumer-credit-act#additional-protection-for-credit-card-purchases http://www.which.co.uk/consumer-rights/regulation/consumer-c...
iagovar 9y ago
We use debit cards though. I don't see credit cards often, but I do see everyone with debit cards. I pay almost everything with it since it's free, I can't screw up (debit cards have limits, or in any case the total amount of your bank account), easy, etc. I've been offered credit cards by my bank, but I do not trust them so I prefer to use a debit one. Also, Fnac or even supermarkets do offer cards, but I don't see the point of having them, and I'd say most people do not pay attention to this offers. I live in Spain, and I've seen a similar situation in other countries except in Germany.
- kuschku 9y ago
  Germany also heavily uses debit cards, actually. Like 90%+ of the population have an EC card (a German debit card network), in comparison to below 8% for credit cards.
  - gaius 9y ago
    It is more subtle than you think. In the UK the Consumer Credit Act means that the protections offered to the buyer are vastly better when paying by credit card vs debit card. Particularly online, you would be foolish to pay by debit rather than credit. That also drives consumer behaviour.
wojcikstefan 9y ago
I'm afraid that's too strong of a generalization. I'm a European and I use my credit card daily (and getting a great value out of the benefits it provides).

pdimitar 9y ago

Quoting George Carlin: "Trust me on this one folks, raisin oats are not a major purchase. ...and you're holding up the f*cking line, too!" (talking about people paying with CCs on a queue in a retail store) "Nobody should be paying a bank 18% of interest for Tic-Tacs." Not sure how accurate he was but IMO your parent commenter was expressing a sentiment that is relevant to these quotes.

upvotinglurker 9y ago
In modern US stores, it's generally people paying with cash or check that "hold up the f*cking line" (paying with a credit or debit card is much faster).
- pdimitar 9y ago
  That's a pretty interesting tidbit, thanks for sharing it. In my country paying with a CC or a debit card is at least a 2 minutes dance and it gets awfully annoying for everybody on the queue. One of the reasons why several months ago I moved on to buy stuff from local smaller stores that offer delivery at home and allow me make the order from their website -- no phone involved. And I am investing in local businesses, too, so it's a double win. Back on topic, why exactly is paying with cash slower than with a CC? Very curious.
  - upvotinglurker 9y ago
    Most stores* have a point of sale machine where you either swipe the card or insert it into a slot for a few seconds, then tap a confirmation. You may be asked to tap a PIN (if using a debit card) or write your signature with a stylus (credit card), but I'm encountering this less and less often for small transactions. I suspect the companies involved have calculated that the extra time/processing isn't worth the potential savings from reducing fraud reimbursement on these small transactions. Paying cash requires either the customer or the cashier to count out correct change, which generally takes longer than the above. Hand-writing a check takes even longer, though maybe partly because it is mostly elderly people doing it these days, and they tend to perform all activities more slowly (not that they can help it or that there's anything wrong with it). *Small businesses sometimes still have older credit card machines that are a bit slower, but the number of these I encounter is fewer and fewer.