5 ms·

No, cars and houses are still common to finance, but those are obviously usually much rarer events and of some great magnitude. And given the usual lack of much

by anyfoo 6y ago

No, cars and houses are still common to finance, but those are obviously usually much rarer events and of some great magnitude. And given the usual lack of much of a "credit history", banks rather look at your income, assets, and other things. Business credits exist too of course, but I'd guess that the proportion of the population doing that is even less (and Germans are already much less likely to buy houses or apartments than people in the US). Of course if you did have a credit somewhere, and you defaulted/didn't pay, it's bad, and there is a credit bureau tracking that and more ("SchuFa").

thepasswordis 6y ago
I think there might be some confusion happening here. Nearly every “basic” transaction (like buying coffee) is done with what might appear as a “credit card”, but it is actually a debit card. Some people use “credit” for these daily sorts of purchase, but at least among the people I know, this is extremely rare.
- astura 6y ago
  >Some people use “credit” for these daily sorts of purchase, but at least among the people I know, this is extremely rare. Really depends. If you know mostly college students, and younger, lower income people, yeah, most are paying with debit. If your circle is high income and older, then it's mostly credit. Especially people who do frequent business travel.
- dexterdog 6y ago
  You and I don't know the same people. I use a credit card for everything and pay it off at the end of the month. I know nobody who uses a debit card like that unless their credit cards are maxed out.
  - throwawayboise 6y ago
    Young people with no credit history can get debit cards if they open bank accounts. I'm not really sure it helps their credit score but it's convenient. The first real credit card a young person gets will have a very low limit, maybe only a few hundred dollars, so they are not all that useful at first other than to start establishing a credit history.
    - matttb 6y ago
      Debit cards do not help credit score. If your score is too low or non-existent you often have to get a 'secured' credit card which means you have a limit (often it's still a low limit which I don't understand), and that limit is how much cash you let the company hold for you. It doesn't seem any different to me than having a bank account + debit card. When you're done using a 'secured' card you get your initial money back
  - tharkun__ 6y ago
    Then 'it worked'. That's the whole point of credit cards. They're trying to dissociate the buying and the paying such that it's easily possible to 'overbuy' and slip into the credit card hell of perpetually trying to pay it off. The closer you are to 'living pay check to pay check' the easier it is to get you into this. And I suppose for some people it takes multiple larger purchases to get you into it. Popular culture, TV shows, Twitter nowadays etc. don't help and 'legitimatize' it (everyone's talking about it that way, so everyone must be doing it that way, so it's OK to do it that way). You might be good at "paying it off at the end of the month". A lot of people easily slip into credit card hell that way, because they _can't_ pay it off at the end of the month, because they didn't realize how much of their credit they should really be using. Credit card says you have $2000? Let's spend $2000. At the end of the month I only have $1500 left in my account? Oh crap! Personally I pay it off in sort of regular intervals, since it's all right there in my online banking. I've never waited for a "credit card bill", even when they still sent them to me in actual dead tree form.
    - Ayesh 6y ago
      It's just being financially responsible. I use my credit card for the purchase buffer the other mentioned, and I've set it to the exact amount is taken from my bank account on the due date. I also track my expenses and categorize it, so I have a clear idea what's happening in the budget.
    - elyobo 6y ago
      I pay it off in full when it's due, and have done almost without fail for years. In two cases I stuffed up (paid the previous month's bill instead on one, can't recall the other), in both cases I hit them up and they ended up refunding my interest anyway. The points for regular spend, the sign up bonuses, and the interest savings (the average balance on my card ends up saving me interest on my mortgage) put me well ahead. Credit cards are a solid because many (most?) people use them poorly, but it's certainly possible to use them wisely.
  - devin 6y ago
    Same. Debit cards carry a lot of risk that I can offload by using a credit card. If someone gets ahold of your debit card info, there is very little recourse once the money has left your bank. Not so with credit cards. In addition, credit cards carry a whole bunch of rewards (earning points you can redeem for travel or gift cards, cash back, upgraded status with airlines and hotels, no foreign transaction fees, and the list goes on) you can’t get with debit cards.
    - viraptor 6y ago
      > If someone gets ahold of your debit card info, there is very little recourse once the money has left your bank. This gets repeated, but it's not true everywhere. Some banks may not care or maybe it's harder in some countries. But for example in the UK I could easily revert a few £k the same day without issues. I'd love to read more about where the differences come from, but the blanket statement is not 100% correct.
      - allset_ 6y ago
        It's true in the US. If someone manages to steal your debit card data and your PIN, all the banks say "well your PIN was used, so it must have been you" and you're SOL.
        karakot 6y ago
        It probably depends, my debit card got skimmed and they got $500 from it (max daily cash limit). The bank returned my money no question asked.
        devin 6y ago
        Yes, the limit is often the difference. Multiply your $500 by 10 and I'm curious how a small to mid-size credit union treats it. If it's a cobranded card, it's one thing. If it's a "Friendly Bank of Central Virginia" debit card, you may have less luck.
      - devin 6y ago
- anyfoo 6y ago
  That does not match my experience at all, even before coming here. Credit cards, as far as I could see, are actually credit cards most of the time, and I have been explicitly told that I should start "building credit" by paying as much with a "real" credit card as possible. "Credit card bills" also seem to be a regular part of everyday conversation here, in sitcoms, on Twitter...
  - astura 6y ago
    >I have been explicitly told that I should start "building credit" by paying as much with a "real" credit card as possible. You've been somewhat misinformed. You build credit by obtaining the credit line and just having it available for a long time, not by using it "as much as possible." Actually purchasing items with your credit card is not required.[1] In fact, "maxing out" your credit cards (when your bill closes using 85%+ of your limit) actually can reduce your score (but only for the month(s) your cards are "maxed out.") FICO scores aren't a black box, they publish exactly what they take into account - https://www.myfico.com/credit-education/whats-in-your-credit-score https://www.myfico.com/credit-education/whats-in-your-credit... [1] with the caveat that some credit card issuers will close dormant accounts after a couple years.
    - Nextgrid 6y ago
      In the UK, there is no such thing as FICO. The "score" the credit bureaus tell you is completely made up and is designed to encourage you to check back regularly so you can see and "engage" with the "offers" (aka ads/spam) next to it. It will vary by a dozen points every month or so. Lenders get a raw copy of your report when you apply for credit, which contains things like credit account history (max limit, % of limit used, late payments if any, etc) and then run their own scoring algorithm on it. Those are black boxes. In the UK, getting a credit card and using it regularly seems to be the common advice for building credit, which makes sense considering the scoring algorithms themselves aren't public (and differ by lender).
    - jbeam 6y ago
      >Actually purchasing items with your credit card is not required. Pretty sure you need to make at least a $0.01 purchase for the purpose of having a payment, otherwise you won't have a payment history.
- vngzs 6y ago
  If I buy coffee, I buy it on a credit card. Every daily purchase uses a credit card. Why? I want a buffer between me and the purchaser. I don't want them to be able to take money from my bank. https://youtu.be/vsMydMDi3rI?t=2595 https://youtu.be/vsMydMDi3rI?t=2595 Now, if I shop online, I used to put it on a credit card. Now I generate a virtual debit card using an online service and pay with that. The logic is the same.
  - anyfoo 6y ago
    That is actually the one thing I grant credit cards to be superior in. Back before I moved here, I was traveling with friends to the US. We knew credit cards were prevalent in the US, so I got a "normal" credit card from my bank, and one of my friends got a debit type credit card. We later got some fraudulent charges on it, which got resolved for either of us, but for me the money was never gone (I had not paid the bill yet), while for my friend it took a while to get the money back on their account. Another fun difference: When during our trip, waiters and cashiers would not just take the credit card, but walk away with it, we were horrified. In Germany, you never give your card away to anyone. You stick it in a terminal and type in your PIN.
    - throwawayboise 6y ago
      Yes, the European/Canadian way to do credit cards at a restaurant is nice. The card never leaves your posession. I wish that would get adopted here, but restaurants will resist having to buy the handheld devices. I like restaurants where you get the bill at the table but pay at a desk near the front door, avoiding the problem of handing your card to the waiter.
      - drdec 6y ago
        Many "family" restaurants in the in my area of the US have tablets at the table which allows you to pay your bill when you are ready to leave with a credit/debit card with no interaction with the server required. Family restaurant means a chain like Applebees for those unfamiliar with the term. The tablets are also a revenue-generating device as you can play games on them for a fee. They also have surveys so you can give feedback on the service, this has become somewhat controversial (see https://www.eater.com/2018/6/22/17492528/tablets-restaurants-surveys-score-servers https://www.eater.com/2018/6/22/17492528/tablets-restaurants...).

by anyfoo 6y ago

thepasswordis 6y ago

I think there might be some confusion happening here. Nearly every “basic” transaction (like buying coffee) is done with what might appear as a “credit card”, but it is actually a debit card. Some people use “credit” for these daily sorts of purchase, but at least among the people I know, this is extremely rare.

astura 6y ago
>Some people use “credit” for these daily sorts of purchase, but at least among the people I know, this is extremely rare. Really depends. If you know mostly college students, and younger, lower income people, yeah, most are paying with debit. If your circle is high income and older, then it's mostly credit. Especially people who do frequent business travel.
dexterdog 6y ago
You and I don't know the same people. I use a credit card for everything and pay it off at the end of the month. I know nobody who uses a debit card like that unless their credit cards are maxed out.
- throwawayboise 6y ago
  Young people with no credit history can get debit cards if they open bank accounts. I'm not really sure it helps their credit score but it's convenient. The first real credit card a young person gets will have a very low limit, maybe only a few hundred dollars, so they are not all that useful at first other than to start establishing a credit history.
  - matttb 6y ago
    Debit cards do not help credit score. If your score is too low or non-existent you often have to get a 'secured' credit card which means you have a limit (often it's still a low limit which I don't understand), and that limit is how much cash you let the company hold for you. It doesn't seem any different to me than having a bank account + debit card. When you're done using a 'secured' card you get your initial money back
- tharkun__ 6y ago
  Then 'it worked'. That's the whole point of credit cards. They're trying to dissociate the buying and the paying such that it's easily possible to 'overbuy' and slip into the credit card hell of perpetually trying to pay it off. The closer you are to 'living pay check to pay check' the easier it is to get you into this. And I suppose for some people it takes multiple larger purchases to get you into it. Popular culture, TV shows, Twitter nowadays etc. don't help and 'legitimatize' it (everyone's talking about it that way, so everyone must be doing it that way, so it's OK to do it that way). You might be good at "paying it off at the end of the month". A lot of people easily slip into credit card hell that way, because they _can't_ pay it off at the end of the month, because they didn't realize how much of their credit they should really be using. Credit card says you have $2000? Let's spend $2000. At the end of the month I only have $1500 left in my account? Oh crap! Personally I pay it off in sort of regular intervals, since it's all right there in my online banking. I've never waited for a "credit card bill", even when they still sent them to me in actual dead tree form.
  - Ayesh 6y ago
    It's just being financially responsible. I use my credit card for the purchase buffer the other mentioned, and I've set it to the exact amount is taken from my bank account on the due date. I also track my expenses and categorize it, so I have a clear idea what's happening in the budget.
  - elyobo 6y ago
    I pay it off in full when it's due, and have done almost without fail for years. In two cases I stuffed up (paid the previous month's bill instead on one, can't recall the other), in both cases I hit them up and they ended up refunding my interest anyway. The points for regular spend, the sign up bonuses, and the interest savings (the average balance on my card ends up saving me interest on my mortgage) put me well ahead. Credit cards are a solid because many (most?) people use them poorly, but it's certainly possible to use them wisely.
- devin 6y ago
  Same. Debit cards carry a lot of risk that I can offload by using a credit card. If someone gets ahold of your debit card info, there is very little recourse once the money has left your bank. Not so with credit cards. In addition, credit cards carry a whole bunch of rewards (earning points you can redeem for travel or gift cards, cash back, upgraded status with airlines and hotels, no foreign transaction fees, and the list goes on) you can’t get with debit cards.
  - viraptor 6y ago
    > If someone gets ahold of your debit card info, there is very little recourse once the money has left your bank. This gets repeated, but it's not true everywhere. Some banks may not care or maybe it's harder in some countries. But for example in the UK I could easily revert a few £k the same day without issues. I'd love to read more about where the differences come from, but the blanket statement is not 100% correct.
    - allset_ 6y ago
      It's true in the US. If someone manages to steal your debit card data and your PIN, all the banks say "well your PIN was used, so it must have been you" and you're SOL.
      - karakot 6y ago
        It probably depends, my debit card got skimmed and they got $500 from it (max daily cash limit). The bank returned my money no question asked.
        devin 6y ago
        Yes, the limit is often the difference. Multiply your $500 by 10 and I'm curious how a small to mid-size credit union treats it. If it's a cobranded card, it's one thing. If it's a "Friendly Bank of Central Virginia" debit card, you may have less luck.
    - devin 6y ago
anyfoo 6y ago
That does not match my experience at all, even before coming here. Credit cards, as far as I could see, are actually credit cards most of the time, and I have been explicitly told that I should start "building credit" by paying as much with a "real" credit card as possible. "Credit card bills" also seem to be a regular part of everyday conversation here, in sitcoms, on Twitter...
- astura 6y ago
  >I have been explicitly told that I should start "building credit" by paying as much with a "real" credit card as possible. You've been somewhat misinformed. You build credit by obtaining the credit line and just having it available for a long time, not by using it "as much as possible." Actually purchasing items with your credit card is not required.[1] In fact, "maxing out" your credit cards (when your bill closes using 85%+ of your limit) actually can reduce your score (but only for the month(s) your cards are "maxed out.") FICO scores aren't a black box, they publish exactly what they take into account - https://www.myfico.com/credit-education/whats-in-your-credit-score https://www.myfico.com/credit-education/whats-in-your-credit... [1] with the caveat that some credit card issuers will close dormant accounts after a couple years.
  - Nextgrid 6y ago
    In the UK, there is no such thing as FICO. The "score" the credit bureaus tell you is completely made up and is designed to encourage you to check back regularly so you can see and "engage" with the "offers" (aka ads/spam) next to it. It will vary by a dozen points every month or so. Lenders get a raw copy of your report when you apply for credit, which contains things like credit account history (max limit, % of limit used, late payments if any, etc) and then run their own scoring algorithm on it. Those are black boxes. In the UK, getting a credit card and using it regularly seems to be the common advice for building credit, which makes sense considering the scoring algorithms themselves aren't public (and differ by lender).
  - jbeam 6y ago
    >Actually purchasing items with your credit card is not required. Pretty sure you need to make at least a $0.01 purchase for the purpose of having a payment, otherwise you won't have a payment history.
vngzs 6y ago
If I buy coffee, I buy it on a credit card. Every daily purchase uses a credit card. Why? I want a buffer between me and the purchaser. I don't want them to be able to take money from my bank. https://youtu.be/vsMydMDi3rI?t=2595 https://youtu.be/vsMydMDi3rI?t=2595 Now, if I shop online, I used to put it on a credit card. Now I generate a virtual debit card using an online service and pay with that. The logic is the same.
- anyfoo 6y ago
  That is actually the one thing I grant credit cards to be superior in. Back before I moved here, I was traveling with friends to the US. We knew credit cards were prevalent in the US, so I got a "normal" credit card from my bank, and one of my friends got a debit type credit card. We later got some fraudulent charges on it, which got resolved for either of us, but for me the money was never gone (I had not paid the bill yet), while for my friend it took a while to get the money back on their account. Another fun difference: When during our trip, waiters and cashiers would not just take the credit card, but walk away with it, we were horrified. In Germany, you never give your card away to anyone. You stick it in a terminal and type in your PIN.
  - throwawayboise 6y ago
    Yes, the European/Canadian way to do credit cards at a restaurant is nice. The card never leaves your posession. I wish that would get adopted here, but restaurants will resist having to buy the handheld devices. I like restaurants where you get the bill at the table but pay at a desk near the front door, avoiding the problem of handing your card to the waiter.
    - drdec 6y ago
      Many "family" restaurants in the in my area of the US have tablets at the table which allows you to pay your bill when you are ready to leave with a credit/debit card with no interaction with the server required. Family restaurant means a chain like Applebees for those unfamiliar with the term. The tablets are also a revenue-generating device as you can play games on them for a fee. They also have surveys so you can give feedback on the service, this has become somewhat controversial (see https://www.eater.com/2018/6/22/17492528/tablets-restaurants-surveys-score-servers https://www.eater.com/2018/6/22/17492528/tablets-restaurants...).