Poor financial education, desire to have shiny things, can't afford......and poverty. Don't forget about poverty.
Uhm This should be required learning. Why Credit Cards Are A Scam - Honest Ads
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Poor financial education, desire to have shiny things, can't afford......and poverty. Don't forget about poverty.
Everyone in America knows that the game is rigged.
But you can't not play it. You're always at the mercy of some bullshit from the financial institutions in one manner or another. Scaremongering about credit cards doesn't take you out of the game; it just denies you the possibility of some of the few, tiny wins that are easily obtainable.
Same here. The whole concept of credit score just boggles my mind. It's just a concept to find another way to profit of people.
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If someone is living in poverty and struggling to make ends meet, then imo credit card companies should not be offering them cards, it's the one thing that really pisses me off about the companies, they will usually give them to anyone, regardless. They should have a responsibility to not give them to ppl who can't afford them.
From all your posts in here you seem to think every issue is caused by credit cards and the company who offer them. There is a level of personally responsibility that comes with credit. Willpower is required.
The minimum £5 has not been a thing since before the pandemic for at least 2 years around where I live. I never carry any cash at all these days, tap and pay is just too convenient and accepted anywhere no matter the amount.
I'm pretty sure that credit cards aren't as popular over here in Europe as they are in the US.Personally, I've never felt the need to own one as I can pay for anything I want with cash.
You can decry the need for people to use credit cards to establish a credit score all you like, but that's also true of all borrowing. The key difference is that other borrowing tends to be much lower-interest and much more highly scrutinised and regulated, because it's normally pegged to an underlying asset like a house or car that can be repossessed. The issue is that there's an entire credit / store card consolidation industry built up around keeping people trapped in credit card debt.
The fact that I've been successfully repaying my mortgage for a decade improves my credit score just like my clearing my credit card every month does. Where the equivalence stops is that my mortgage interest is in the very low single digits, whereas my credit card (if I allowed the interest to trigger) would be 15% or more. And if I stopped paying my mortgage, the bank could take my house, sell it, and get their money back. They don't want to have to do that, but it's as close to zero-risk lending as they can get. A credit card is not like that. The only underlying asset is my income. So a credit card would be one of the highest risk lending strategies that banks had in their portfolios... if there wasn't the aforementioned ecosystem of methods for transfers and consolidations of debt - which serve to lock people into a perpetual cycle.
The fact that I've been successfully repaying my mortgage for a decade improves my credit score just like my clearing my credit card every month does. Where the equivalence stops is that my mortgage interest is in the very low single digits, whereas my credit card (if I allowed the interest to trigger) would be 15% or more. And if I stopped paying my mortgage, the bank could take my house, sell it, and get their money back. They don't want to have to do that, but it's as close to zero-risk lending as they can get. A credit card is not like that. The only underlying asset is my income. So a credit card would be one of the highest risk lending strategies that banks had in their portfolios... if there wasn't the aforementioned ecosystem of methods for transfers and consolidations of debt - which serve to lock people into a perpetual cycle.
As someone from the UK I always wonder about how American credit cards seem to work. I certainly don't get any meaningful rewards for using credit cards here the same way you folks do. Is that a thing in the UK at all? Apart from better security over fraud or dodgy sellers online a credit card doesn't really benefit you in any other way here really.
In fairness, I think American Express still charges setup and higher transaction fees, so if that person is trying to use an Amex in a corner shop the £5 rule might still apply.
You are right, my bank has charges that Revolut doesnt though. So I can load up the card with cash and use contactless for everything.
The difference is that your debit card is money straight out of your bank account.
So if you suffer from fraud you could be waiting a long time to get your money back.
When I was a uni student, I was on a bus and I'd used my debit card's contactless to pay instead of an Oyster card.
I then proceded to trip over and fall walking down the bus.
unbeknownst to me my debit card had fallen down.
And I only realised about 20 minutes after I got off the bus.
Someone had taken the card and went to some restaurant and spent £60 using contactless.
It took weeks for me to get my money back.
Imagine if it was more money that I was disputing.
And I couldn't pay bills or a credit card balance.
That's why I always use credit where I can and don't even take out my debit card.
If fraud happens it's not as stressful.
Well yes. Personally I prefer how it's set up as I keep quite a good track of my outgoings.
And I don't want a nasty surprise of fraud meaning that I don't have money to pay bills for example.
Of course Credit cards are predatory.
It's a bit of a farce to say that I'm using it "properly" as their business model relies on people that get into debt.
Saying that you can pay it off every month is like plausible deniability to how they put people into pits of debt.
The very high interest rates are proof of that.
Well a chain store isn't going to do it. But I've been to plenty of places last year that have that minimum.
That's great and everything, but whenever someone goes "tut tut, you're being scammed by credit cards" it inevitably ends up driving already vulnerable people away from tools which could be used to potentially protect them in the world as it is, rather than the world as it should be. My family is filled with paranoid poor people who think they're avoiding falling prey to the man by not getting credit cards/many other things, and while I understand that yes, the man is actually out to screw them, they're still losing out in the long run.
Educating people to properly use the tools at their disposal doesn't work in opposition to changing the abusive system that currently exists.
I'm not talking chain. All independent corner shops and chicken shops in Luton don't have that minimum anymore.
I don't know of a corner shop where I live that takes Amex. I've seen plenty people try :p
They do it on purpose though right and target people who would be better off never having a credit card. This is the same sphere of vile business models as betting shops opening in poor neighbourhoods or loot boxes aimed at children. They're purposefully exploiting those most vulnerable.
Next time I get told £5 minimum for card, I'll let them know that they're being beaten by Luton 😋
I completely agree with you, but it's also worth highlighting that, for a poor, uneducated person, staying away from those systems that prey on them and they don't understand well, is not a bad call.
I think we should educate people on both.
-This is how the system can hurt you and how you can use it to your advantage.
-This is how it could be in a better world, and we might get there if we support the right politicians and ideas.
I think I should thank my banks a bit. Lots of charges on stuff like getting statements on paper, but no transaction charges.
Everyone does not know that the game is rigged. Cleary not, when these companies are making half a billon a day on interest.
Well, people can have credit cards and lose a job....but also these institutions are built on debt so yeah they do give people cards and loans then they shouldn't. Anyone remember NINJA mortgage that those lovely US financial organizations were offering ? No Income No Job Approved.
Of course there is a level of personal responsibility with credit and it's great that many of the people here can think like this. There are an awful lot of people out there who use credit and pay day loans monthly to get by. In America people have become conditioned to use things like credit cards to improve their score.
Of course these companies are not to blame for everything but I mean they are built on debt and need people to be in debt. It used to mortgages but then they absolutely tanked the market there. Now it's car loans and credit card debt.
I only use it for online security mostly. I pay it off as soon as possible but I do have a direct debit set up in case I missed the payment date.
I don't receive any rewards for using it. They tried doing it before but they were absolute rubbish. 1% off Sketchers shoes if you buy a second pair, valid only on Tuesday 3rd. Recieve email with offer Thursday 5th.
I don't receive any rewards for using it. They tried doing it before but they were absolute rubbish. 1% off Sketchers shoes if you buy a second pair, valid only on Tuesday 3rd. Recieve email with offer Thursday 5th.
Amex in the UK has rewards, but they aren't amazing.
If you spend a lot of money, some of their paid cards might be worth it, but I have the free Platinum one and maybe get £30 in cash back per year, plus some extra from their rewards/shop small stuff.
100% this. They're a tool, not a scam.
I think in that instance they're more likely to just say they don't accept amex, I don't think they can use the "£5 minimum spend" rule anymore
Yeah this credit card discussion comes up here every so often.
I use my discover card for everything.
1% cashback on everything and 5% cashback on certain categories every 3 months.
For example for April, May & June I get 5% cashback on gas and streaming services (Netflix, Hulu, Disney+, Spotif. Apple Musix, etc.)
The previous category was 5% cashback on grocery shopping.
Use it to buy stuff you would normally buy and then pay it off.
I use my discover card for everything.
1% cashback on everything and 5% cashback on certain categories every 3 months.
For example for April, May & June I get 5% cashback on gas and streaming services (Netflix, Hulu, Disney+, Spotif. Apple Musix, etc.)
The previous category was 5% cashback on grocery shopping.
Use it to buy stuff you would normally buy and then pay it off.
I can't stand this alarmism over credit cards.
Yes, don't just buy whatever you want and think that you can just pay it off slowly over time. The interest rates and penalties for missed payments will snowball and crush you. But if you just use it as a substitute for cash everywhere you go and pay it off at the end of the month every month, it's an extremely useful tool that can also give you some bonuses like rewards points, cash back, etc.
Yes, don't just buy whatever you want and think that you can just pay it off slowly over time. The interest rates and penalties for missed payments will snowball and crush you. But if you just use it as a substitute for cash everywhere you go and pay it off at the end of the month every month, it's an extremely useful tool that can also give you some bonuses like rewards points, cash back, etc.
I have an Amex gold card that gets paid off every month. It's a $250/year AF but the rewards outweigh the cost by far.
Scaremongering credits cards is silly. I've racked up so much money with it. When I moved into high end travel cards (CSR, and my fiance did the same) we've gotten so many free flights and hotel stays. Completely covered a 2 week trip to Hawaii for our honeymoon too (still have a shit ton of points left too).
It's a tool that needs to be used responsibly.
It's a tool that needs to be used responsibly.
I have never had a credit card and never will. My sister has had several and gotten into trouble many times. It is really easy to say "dont spend beyond your means" but lots of people get credit cards literally for that reason (with good intentions) and it goes horribly wrong. The folks who never get into problems with credit cards are usually the ones that don't really need them.
Not really credit card are a scam because the merchant pay the 2-3% fee by increasing the prices.
Worse everyone who is not financially stable to get credit cards pay into it and don't get any benefit.
Meaning people who are too poor to bet credit card pay more and don't her shit.
It's a cultural thing. Our society is built on credit be it bank loans or credit cards. Many other countries don't operate that way. Several posts in this very thread reflect that.
Can easily get up to a £5k credit card with 0% interest for 24 months, bought my PC on one and slowly paid it off. Had the money in my current account but may as well earn interest on that whilst slowly paying a PC off over 24 months. Profit. (Not sure how it impacts my credit history, but last time I checked I was good on that and I have a mortgage anyway already).
Got to love folks using words like alarmism and scaremongering about credit cards then going on about all the free flights and 2 weeks trips to Hawaii :)
Good for you guys, really it's great that you are doing well enough to benefit but for a lot of others. Debt is something they live with and not a 'tool'. Also, not everyone is as clued in financially as you might be. Which I suppose is why videos like the one in O.P. are made. Having a system that wasn't built upon a bullshit credit rating that could be gamed this way would be better.
Listen, this isn't some sort of bleeding heart thing but lets not champion institutions that take hundreds of billions out of the economy in interest alone. Great that it's not your interest but it's someone's.
Good for you guys, really it's great that you are doing well enough to benefit but for a lot of others. Debt is something they live with and not a 'tool'. Also, not everyone is as clued in financially as you might be. Which I suppose is why videos like the one in O.P. are made. Having a system that wasn't built upon a bullshit credit rating that could be gamed this way would be better.
Listen, this isn't some sort of bleeding heart thing but lets not champion institutions that take hundreds of billions out of the economy in interest alone. Great that it's not your interest but it's someone's.
This is some Dave Ramsey level stupid shit. Credit cards are a tool, not a scam. I make a few hundred a year off rewards while buying things I would have bought anyway, and never pay a cent of interest or fees. Have some self-restraint and they're great.
No it's not, in the UK it's very easy to get an interest free card which is perfect for large purchases.
I have a few.
My American Express platinum reward card earns me about £100 a year, I use it for Costco and big purchases, paid in full end of each month.
My Nectar credit card earns me about £120 a year on my weekly shopping, alongside anything bought from Argos, and gets paid off end of every month, I use this free money to go towards the Christmas food.
My Other MasterCard is used for anything outside the above.
I was heavily in debt at 19 due to credit cards and loans to the tune of about 35k, not even my monthly pay would take me out of my £1500 overdraft, I learnt the hard way but paid it all off and now 19 years later I'm 6 years off finishing my mortgage and have £1000 a month leftover after all bills, shopping and fuel are paid for, but it would have been an easier ride in my 20's if I had learnt money sense before unlocking credit.
My American Express platinum reward card earns me about £100 a year, I use it for Costco and big purchases, paid in full end of each month.
My Nectar credit card earns me about £120 a year on my weekly shopping, alongside anything bought from Argos, and gets paid off end of every month, I use this free money to go towards the Christmas food.
My Other MasterCard is used for anything outside the above.
I was heavily in debt at 19 due to credit cards and loans to the tune of about 35k, not even my monthly pay would take me out of my £1500 overdraft, I learnt the hard way but paid it all off and now 19 years later I'm 6 years off finishing my mortgage and have £1000 a month leftover after all bills, shopping and fuel are paid for, but it would have been an easier ride in my 20's if I had learnt money sense before unlocking credit.
Where do you think the reward money come from?
Those and the processing fee are payed by you and from those who don't use credit cards (normally because they cannot afford).
If you can handle it you should use them, but not because they are free money. But because you are paying them anyway.
Credit cards are regressive in nature. With rewards and exchange fees, they transfer wealth to financially savvy owners and raise prices.
I say this as someone who takes full advantage of what they offer. I'd happily give that up if it meant more equity for those with less advantages than me. The only thing I'd hate giving up is fraud protection.
I say this as someone who takes full advantage of what they offer. I'd happily give that up if it meant more equity for those with less advantages than me. The only thing I'd hate giving up is fraud protection.
I'm getting far more back than what the processing fees are. Like right now, I'm getting 5% back on groceries. Processing fees are a fraction of that.
Credit cards use to be exclusively for well off individuals. Hence why Amex still the most desirable cardholders in the industry. The standards were lowered due in part to societal and political pressure. FWIW, debit card use far outpaces credit card usage.
If you play the game right you can.
But there is no free lunch.
If you are getting more someone is getting less.
Some are those who are not playing the game right.
Some are those too poor to afford the credit card.
It's not your bank or the merchant the one losing money.
Remeber that merchants have to agree to not charge difference prices for those who use credit cards.
Not saying that it won't work for a person. But that as instrument have a bit moral grey area.
Ps. I use them each day.
absolutely and they should only be for people who can afford them. That is just not the case anymore. Not disagreeing with you that there were societal and political pressures but the core benefactors here are the financial institutions. They have a vested interest in you not making payments...that being interest on debt.
This.
It's great that many posters here are doing well. It really is. A heck of a lot of people out there are not.
.
Nobody is too poor to afford a credit card. There are plenty of ones with no annual fee. They cost nothing to own and use.
If someone can't use them right that is their problem, not mine.