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Why would I use credit card at all? Sure it does help when traveling but not much use for it otherwise
by nixass 4y ago
Why would I use credit card at all? Sure it does help when traveling but not much use for it otherwise
- philip1209 4y agoFor consumers in the USA, there's a negative take rate. You get cash back if you pay with a card.
- PaulDavisThe1st 4y agoDon't think of it as a credit card. Think of it as payment mechanism. It comes with certains costs (to some users, and to all merchants) and also with certain benefits. It also comes with a certain aggregate cost to the whole of society, since essentially prices are increased to cover fees, and then some fraction of the fees are refunded to the wealthiest users (redistribution, just more subtle than taxes).
- JumpCrisscross 4y ago> Why would I use credit card at all? Float. If I charge $10k to a card, I get an interest-free loan until the balance has to be paid off. In a zero-rate environment that's meaningless. But even at the 30-day's 2.22% [1], that's almost twenty bucks. I'm probably paying about 1% more for the CC fees, but I can use my card that gives me 1.5% back on everything. [1] https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202208 https://home.treasury.gov/resource-center/data-chart-center/...
- GekkePrutser 4y agoThat seems so much hassle for so little. But in Europe credit cards don't give cashback.
- novok 4y agoYour going to pay with some sort of payment card, and credit cards are easy to sign up for and less hassle to use with payments than debit cards, which require you to tap in a pin all the time. Also less fraud protection, etc.
- GekkePrutser 4y agoHere in Europe it's the complete opposite. They're hard to sign up for (banks don't like giving them) and you get registered for the loan which means you will have a harder time getting a mortgage or car loan. The more loans you already have the harder it gets. I heard in the US it works the opposite way. And the pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't. But the same goes for both. And we don't get much additional fraud protection or other benefits like insurance on them that we don't get with our debit cards. I'm surprised the payment systems are so completely opposite. Despite being the same tech from the same companies. The only reason I have one is that my work insists that I get an Amex due to some dirty deal they have. Which is a horrible card for traveling in Europe, nobody accepts it besides hotels. Try getting a taxi in Paris for example.. I also had my personal one as my debit sometimes didn't work but these days it works everywhere.
- JumpCrisscross 4y ago> pin is required here on both (and rightly so IMO to protect against skimming). Only for minor contactless payments it isn't. Across Italy, France, Britain, the Netherlands and Portugal, over the last thirty days, I never had to provide a PIN over contactless. This was true for minor purchases to €5,000+.
- GekkePrutser 4y agoIs that with your phone perhaps? With those there is no pin needed because you already authenticate on the phone itself. I don't have to with Samsung Pay either. But on the card itself I have to above €75 (or after transactions accumulating to that amount)
- lxgr 4y agoIs this a US issued card by any chance? The issuing country/bank determines whether a PIN can/must be used. Mobile wallet based payments also don't need one, usually (since authentication already happens on the customer's device).
- 4y ago
- xboxnolifes 4y agoWhy would I not use a credit card? It's essentially a better debit card in every scenario, except for when paying with a credit card has an additional fee.
- einpoklum 4y ago1. Extra hassle of interaction with a second company other than your bank, extra credentials, tracking balances, etc. etc. When I was living in the Netherlands I had my bank-account-attached Maestro card (or sometimes cash) and that was that. Except when foreign companies needed a credit card. 2. Fees. The whole point of credit cards - for the CC companies of course - is fees.
- awillen 4y agoPretty much every major bank in the US issues credit cards, so you don't need to deal with a second company. For most consumers, there are credit cards without fees (the CC companies charge fees to merchants, but unless you're dealing with a place that offers a cash discount, that doesn't affect you at all).
- searchableguy 4y ago> Fees. The whole point of credit cards - for the CC companies of course - is fees. On the merchant side, yes. On the consumer side, no. There aren't many examples than Amex which is mostly popular in US charging high fees for their credit cards. Most credit card companies make money from merchant run programs and overdraft & interest on late payments and penalties. They make half of their profit from vulnerable and poor people to pay rewards.
- einpoklum 4y agoMerchants can forward the fees they pay onto you. And, in fact, some definitely do. So cash/debit card price would be X, credit card price might be X + 1% or X + 3 EUR or whatever. Others just refuse to accept credit cards: Direct debit or cash only.
- 4y ago
- kube-system 4y ago1. Free one month loans 2. The law requires banks to pay for any fraud
- skimo8 4y agoI use it for cash back. It helps to significantly offset sales tax for me. Yes, the money is always coming from somewhere and arguably products might be cheaper without credit cards. However, it’s the game we’re in, so why leave money on the table?
- misterprime 4y agocash back *rewards. Please don't use your credit cards for cash advances unless you REALLY know what you're doing and why.
- asiachick 4y agoI assumed they were referring to the % cash "back". For example the Apple Card > Get up to 3% cash back on every purchase you make https://apply.applecard.apple/ https://apply.applecard.apple/ I've always assumed I'm paying that 3% so might as well try to get some of it back.
- Silhouette 4y agoFor anyone downvoting the solid advice in the parent comment, please be aware that "cash back" has been a widely used term in some countries for getting a shop where you're paying by card to charge an extra amount to your card at the same time and give you that amount in cash. It was a popular alternative to ATM use here in the UK for a long time for example. However if you were paying using a credit card instead of a debit card then the same (often very expensive) charges and interest rates would apply as if you used your credit card to get cash at an ATM and sometimes people didn't realise that and thought it was a free and convenient way to withdraw extra cash (as it typically would have been if paying with a bank debit card instead).
- skimo8 4y agoApologies - I was indeed referring to the cash back rewards.
- kingrazor 4y agoI use one for two reasons. One is that it puts a layer between my purchase and my bank. Any fraudulent purchases can be dealt with before any money is taken from my account. The second is for the rewards and the ability to build credit.
- searchableguy 4y agoPredictability in cash flow and free rewards in India. Most places do not charge extra for credit cards and nor do you pay annual credit card fee in most cases. It's an interest free loan for upto 45 days. Many banks will provide 3.5 - 6% interest without risk. If you spend a lot monthly, it's a free nice dinner every month without doing anything. If you can use the capital, it can be worth more. They provide free lounge access and food at airport + concierge service for discounted bookings at hotels. Chargeback protection is necessary in India.
- blackoil 4y ago> Chargeback protection is necessary in India. Why?? Practically all transactions using debit card/UPI require PIN/OTP.
- searchableguy 4y agoScam and fraud from companies and vendors. I've had official employees from a big company try to scam me. I now only pay using credit card.
- fomine3 4y agoOnline payment?