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You don’t really need a history. I.e. it’s very possible to get around just fine without credit card or loans. Most people I know in continental Europe just hav

You don’t really need a history. I.e. it’s very possible to get around just fine without credit card or loans. Most people I know in continental Europe just have debit cards and only buy things they have enough cash in their bank account to afford. The only exception is mortgage which is usually the only loan people take their entire life. And it’s possible to get it without having a credit score. You’ll need your complete history of employment and addresses and based on that bank can borrow you money. Perhaps car leasing is another loan people might take but that works similar way. Borrowing money to buy everything seems to be an American fetish (but also present in U.K. which is most America like part of Europe and Asia, not continental Europe though). It always seemed insane to me to have to borrow money from bank to buy a latte or groceries.

lmm 9y ago
Having my consumption expenses separate from my actual bank account is quite nice - it means my bank account statement gives me a quick summary of what I spent this month (x went to my mortgage, y went on utility bills, z went on buying things) and then my credit card statement has the details. You could see it as borrowing money for your latte but you can also see it as being billed at the end of the month for your lattes which is normal for many things. In principle I'm all about living within your means, but really why wouldn't I do things this way and get a month's grace on paying for everything and free plane tickets every so often?
- Double_a_92 9y ago
  Because I don't want to pay an extra 2% "tax" to the banks, for loans that I don't need? The only place I use a credit card is online. So i can pay quickly and worldwide.
  - lmm 9y ago
    How do you end up paying anything? I don't. A few shops charge a fee for using a credit card, in which case I'd use cash[1], but that's rare. [1] Not actually true, because I find the convenience of the card is worth it - but I understand people taking the opposite position.
    - richardknop 9y ago
      There's a risk you miss the credit card payment and have to pay exorbitant fees. Why risk it, just pay with debit and there is zero risk.
      - lmm 9y ago
        I've got a direct debit set up to my bank account, so there's no risk of accidentally not paying (of course it's possible to overdraw my bank account, but that would be possible when paying by debit card as well).
        richardknop 9y ago
        Yes I had similar setup when I had credit card in the past (when I worked in Hong Kong I had to open bank account with HSBC and my account came with Visa credit card, the debit card they issued was not Visa or MasterCard so did not work in many stores so I used credit card mostly). It was annoying as even though I setup automated direct debit I simply didn't have peace of mind. I don't trust HSBC systems to be bug free and a bug in their software which would not process by direct debit is something I'd keep worrying about. Much better not to have this additional subconscious stress. But if you are in UK or Germany or country like that there is no need for credit card really. Debit cards are ubiquitous and work everywhere (UK banks will give you a proper Visa/MC debit card, not some Mickey Mouse debit card which only works in ATMs).
        lmm 9y ago
        > But if you are in UK or Germany or country like that there is no need for credit card really. There's no need, indeed. But as I said, a month's grace on paying for everything and free plane tickets every so often.
    - Double_a_92 9y ago
      Shops make everything slightly more expensive if most people use a credit card... So you still end up paying for it.
- richardknop 9y ago
  I get the same thing with prepaid debit card. I use Monzo which sends me push notification every time I buy something and I can see my weekly / monthly / annual spending habits per category (utilities, groceries, entertainment, eating out etc). The credit card is absolutely not needed for this and most modern banks give you very detailed summaries like this via their web / mobile interfaces.
ataturk 9y ago
I find that fascinating since velocity of money is a facet of economic health and prosperity, European money velocity would appear to be lower than American. I prefer to be debt-free mind you, it's just an observation. Taking the risk of extending people credit and having some default is not the worst thing in the world. The US is way too materialistic, however.

lmm 9y ago

Having my consumption expenses separate from my actual bank account is quite nice - it means my bank account statement gives me a quick summary of what I spent this month (x went to my mortgage, y went on utility bills, z went on buying things) and then my credit card statement has the details. You could see it as borrowing money for your latte but you can also see it as being billed at the end of the month for your lattes which is normal for many things. In principle I'm all about living within your means, but really why wouldn't I do things this way and get a month's grace on paying for everything and free plane tickets every so often?

Double_a_92 9y ago
Because I don't want to pay an extra 2% "tax" to the banks, for loans that I don't need? The only place I use a credit card is online. So i can pay quickly and worldwide.
- lmm 9y ago
  How do you end up paying anything? I don't. A few shops charge a fee for using a credit card, in which case I'd use cash[1], but that's rare. [1] Not actually true, because I find the convenience of the card is worth it - but I understand people taking the opposite position.
  - richardknop 9y ago
    There's a risk you miss the credit card payment and have to pay exorbitant fees. Why risk it, just pay with debit and there is zero risk.
    - lmm 9y ago
      I've got a direct debit set up to my bank account, so there's no risk of accidentally not paying (of course it's possible to overdraw my bank account, but that would be possible when paying by debit card as well).
      - richardknop 9y ago
        Yes I had similar setup when I had credit card in the past (when I worked in Hong Kong I had to open bank account with HSBC and my account came with Visa credit card, the debit card they issued was not Visa or MasterCard so did not work in many stores so I used credit card mostly). It was annoying as even though I setup automated direct debit I simply didn't have peace of mind. I don't trust HSBC systems to be bug free and a bug in their software which would not process by direct debit is something I'd keep worrying about. Much better not to have this additional subconscious stress. But if you are in UK or Germany or country like that there is no need for credit card really. Debit cards are ubiquitous and work everywhere (UK banks will give you a proper Visa/MC debit card, not some Mickey Mouse debit card which only works in ATMs).
        lmm 9y ago
        > But if you are in UK or Germany or country like that there is no need for credit card really. There's no need, indeed. But as I said, a month's grace on paying for everything and free plane tickets every so often.
  - Double_a_92 9y ago
    Shops make everything slightly more expensive if most people use a credit card... So you still end up paying for it.
richardknop 9y ago
I get the same thing with prepaid debit card. I use Monzo which sends me push notification every time I buy something and I can see my weekly / monthly / annual spending habits per category (utilities, groceries, entertainment, eating out etc). The credit card is absolutely not needed for this and most modern banks give you very detailed summaries like this via their web / mobile interfaces.

ataturk 9y ago

I find that fascinating since velocity of money is a facet of economic health and prosperity, European money velocity would appear to be lower than American. I prefer to be debt-free mind you, it's just an observation. Taking the risk of extending people credit and having some default is not the worst thing in the world. The US is way too materialistic, however.