4 ms·

Credit cards exist because it used to be very difficult to check the balance of an account in realtime during transactions. This is no longer an issue. It's tr

by davej 15y ago

Credit cards exist because it used to be very difficult to check the balance of an account in realtime during transactions. This is no longer an issue. It's true that some people need to purchase items on credit but the reason that they're so popular now is less to do with having a line of credit and more to do with the legacy of the technology.

smiler 15y ago
The primary reason _is_ for people to spend money they don't have. Secondary reason is that CC offer easier charge back, customer protection etc.
- davej 15y ago
  That may be true now. I was specifying the reason that they came into existence in the first place (as opposed to debit cards), not why people use them now. My opinion is that the reason credit cards remain so popular now is because of Visa's policy that forbids merchants from charging a different price for credit card transactions. As a consumer, when you pay by cash or debit then you are effectively subsidizing purchases by credit card. Credit cards wouldn't be so popular if the consumer was made to bear the true cost of their chosen transaction method. I think many would prefer to use a debit card and be reimbursed the difference for the transaction fee (vs. credit card) but Visa's policies don't allow this and unfortunately it's not viable for most businesses to simply stop accepting credit cards. Edit: I was wrong, while retailers can't add a surcharge for credit cards, they can offer a discount for cash/debit/cheque transactions: http://usa.visa.com/personal/using_visa/checkout_fees/index.html http://usa.visa.com/personal/using_visa/checkout_fees/index....
  - smiler 15y ago
    I don't know of the laws in various countries, but this already happens on major purchases here in the UK - flights, holidays etc. You will be charged a surcharge for using a credit card, or a fixed fee. Eg £4.50 for a CC, free for a debit card.
  - mhb 15y ago
    Merchants are allowed, by the credit card companies, to offer a discount for cash.
blahedo 15y ago
I think that "the reason" will vary from person to person. For me I prefer my credit card to debit because of consumer protections and chargeback ability; but I definitely know a lot of people that use their credit card as an actual line of credit.
chollida1 15y ago
> It's true that some people need to purchase items on credit but the reason that they're so popular now is less to do with having a line of credit and more to do with the legacy of the technology. I don't know if that is true. My wife and I make a fari bit of money but we use credit cards so we don't have to worry about cash flow. If I want a new mac I just go out and buy it. I don't have to worry if I have enough money in my account at that exact moment or not because I know that at the end of the month when the credit card bill comes I"ll have enough to cover it. We might be an exception because my wife divides our income into several buckets as it comes in and then pulls from those buckets to pay the credit card bill at the end of the month, so I know very well what my monthly budget is . TL/DR we use credit cards as a line of credit to smooth over cash flow throughout the month as do most afluent people I know.

by davej 15y ago

smiler 15y ago

The primary reason _is_ for people to spend money they don't have. Secondary reason is that CC offer easier charge back, customer protection etc.

davej 15y ago
That may be true now. I was specifying the reason that they came into existence in the first place (as opposed to debit cards), not why people use them now. My opinion is that the reason credit cards remain so popular now is because of Visa's policy that forbids merchants from charging a different price for credit card transactions. As a consumer, when you pay by cash or debit then you are effectively subsidizing purchases by credit card. Credit cards wouldn't be so popular if the consumer was made to bear the true cost of their chosen transaction method. I think many would prefer to use a debit card and be reimbursed the difference for the transaction fee (vs. credit card) but Visa's policies don't allow this and unfortunately it's not viable for most businesses to simply stop accepting credit cards. Edit: I was wrong, while retailers can't add a surcharge for credit cards, they can offer a discount for cash/debit/cheque transactions: http://usa.visa.com/personal/using_visa/checkout_fees/index.html http://usa.visa.com/personal/using_visa/checkout_fees/index....
- smiler 15y ago
  I don't know of the laws in various countries, but this already happens on major purchases here in the UK - flights, holidays etc. You will be charged a surcharge for using a credit card, or a fixed fee. Eg £4.50 for a CC, free for a debit card.
- mhb 15y ago
  Merchants are allowed, by the credit card companies, to offer a discount for cash.

blahedo 15y ago

I think that "the reason" will vary from person to person. For me I prefer my credit card to debit because of consumer protections and chargeback ability; but I definitely know a lot of people that use their credit card as an actual line of credit.

chollida1 15y ago

> It's true that some people need to purchase items on credit but the reason that they're so popular now is less to do with having a line of credit and more to do with the legacy of the technology. I don't know if that is true. My wife and I make a fari bit of money but we use credit cards so we don't have to worry about cash flow. If I want a new mac I just go out and buy it. I don't have to worry if I have enough money in my account at that exact moment or not because I know that at the end of the month when the credit card bill comes I"ll have enough to cover it. We might be an exception because my wife divides our income into several buckets as it comes in and then pulls from those buckets to pay the credit card bill at the end of the month, so I know very well what my monthly budget is . TL/DR we use credit cards as a line of credit to smooth over cash flow throughout the month as do most afluent people I know.