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This forces people to do things they may not be interested in otherwise, such as keeping multiple credit cards, etc. on which banks make money.
by jypepin 5y ago
This forces people to do things they may not be interested in otherwise, such as keeping multiple credit cards, etc. on which banks make money.
- avalys 5y agoGive me a break. Even if the credit scoring system incentivizes you to keep accounts open, it doesn’t incentivize you to use them. In fact, having too large a balance on your credit cards (i.e. too much usage) is a negative factor in your credit rating.
- anyfoo 5y agoIt was very weird for me when I moved to the US as an adult, and had to explicitly open "credit lines" and actively use them to build "history". In Germany, using "credit" for anything less than a house or a new car seemed rather heavily discouraged to me.
- avalys 5y agoIt was weird for me when I traveled to Germany and had to pay for almost everything in cash because the country doesn’t like electronic payments. What’s your point?
- anyfoo 5y agoMy point was that just keeping negative records, instead of forcing people to open credit lines to build history, seems to work out very well in other parts of the world. And so there may be a point to the assertion that this system of having to build "history" is to incentivize credit usage. I don't see what electronic payment usage has to do with it. There is electronic payment usage in Germany, but it's almost entirely debit cards. The reluctance to use electronic payment at all has nothing to do with whether it's one or the other.
- jypepin 5y agoSorry if this was not clear, but I did not say you have to use credit cards.
- avalys 5y agoYou said this was an incentive for consumers to “[keep] multiple credit cards, etc. on which banks make money”. Banks don’t make money off credit cards which are not being used.
- deleted 5y ago[deleted]
- anyfoo 5y agoPerson who grew up in Germany and moved to the US, here. It's also worth noting, that credit cards aren't too much of a concept in Europe at all. They do exist, but I remember them mostly being used for traveling and online payment (e.g. when the seller is international and PayPal isn't an option). I recall that before the latter was a thing, it was even rarer. My father (who traveled a lot for his job) had one, and it was "interesting".[1] My parents also strictly taught me that "taking a credit is a very bad thing, you are spending money you don't have", so credit cards had a kind of "dangerous" aura just by their name. As an adult, I of course have no trouble using credit cards here in the US (I just pay them in full all the time), and I can easily calculate that it usually makes more sense to buy houses and sometimes even cars with a low interest credit, but I am glad to have received that lesson... [1] Also taxis. Taxis were special there. Back then mobile data networks weren't a thing, so electronic payment options weren't really available for Taxis. However, credit cards had this "ratchet" thing that was entirely mechanic. Couple that with the fact that Taxis spent (and still spend) a lot of time at airports, it comes back to the "traveling" use case, but this time inbound. I have no proof, but I highly suspect that most local people paid Taxis in cash, as was (and maybe still is) much more common in Germany in general anyway.
- jameshart 5y ago> credit cards aren't too much of a concept in Europe at all. Yeah, no, that’s just a Germany thing.
- jypepin 5y agoThey are not much of a thing in France either.
- anyfoo 5y agoI don't particularly recall it being a thing in France and Italy either, both countries I have strong connections to, although admittedly I have never lived there as an adult, so I may have missed that aspect entirely. It would maybe help if you could elaborate in what European countries you say credit cards are usually used for every day payments?
- 5y ago