Toto, I don't think we're in China anymore - US companies adopting social credit score system

[leadeater]

3 minutes ago, Waffles13 said:

Either way, the net total of how much I've already spent and how much I'm going to owe is exactly the same. 

Not if you didn't pay off the CC balance because of it, which is the point I'm saying and the risk I am pointing to. It's great to say you can always pay off the balance, the issue is that's just saying it, it not happening can and does happen.

[Unixsystem]

38 minutes ago, leadeater said:

Not if you didn't pay off the CC balance because of it, which is the point I'm saying and the risk I am pointing to. It's great to say you can always pay off the balance, the issue is that's just saying it, it not happening can and does happen.

Says who? Bad thing happens, you use the bank balance that you intended to use to pay off the credit card to in fact pay off the credit card as planned, and then you are in the exact same scenario as if you didn't have a credit card.

 

If you never overspend then you can always pay off the credit card balance, no exceptions. An unexpected expense that isn't covered by savings is going to screw you no matter what, credit card or no. 

[mr moose]

13 minutes ago, Waffles13 said:

If you never overspend then you can always pay off the credit card balance, no exceptions. An unexpected expense that isn't covered by savings is going to screw you no matter what, credit card or no. 

Only for a limited number of people,  there are more people who get into trouble with CC's then there are people who come up short in an emergency.  Being able to manage money is not a skill that everyone has and that is why CC's exist. People constantly need access to money they don't have, which puts them behind, every little step is a little bit further behind until they are in trouble.  If even only the majority could manage a CC so they never paid more than if they were using their own money then CC wouldn't exist. 

 

I don't have  CC, haven't had one in decades.  I am in a superior financial position to many of my colleagues who use them on higher wages even with the points and rewards.   Nothing is free, everything costs something. So the rewards you get must be added into the cost somewhere.

[Unixsystem]

54 minutes ago, mr moose said:

Only for a limited number of people,  there are more people who get into trouble with CC's then there are people who come up short in an emergency.  Being able to manage money is not a skill that everyone has and that is why CC's exist. People constantly need access to money they don't have, which puts them behind, every little step is a little bit further behind until they are in trouble.  If even only the majority could manage a CC so they never paid more than if they were using their own money then CC wouldn't exist. 

 

I don't have  CC, haven't had one in decades.  I am in a superior financial position to many of my colleagues who use them on higher wages even with the points and rewards.   Nothing is free, everything costs something. So the rewards you get must be added into the cost somewhere.

I don't care about the majority. If people want to be irresponsible with their money, that's their prerogative. It's like saying that cars can be dangerous and some people aren't able to drive safely, so therefore cars are bad and people should avoid them. Some people, sure, but it's disingenuous to say that because something can cause problems that it's not worth using at all. 

 

There is a cost to using credit cards: the massive amount of transaction fees that are collected on every purchase made using them. That cost is 100% assumed by vendors that accept credit as payment. The main reason that so many stores have store-specific cards is because the fees are either lowered or wiped completely while customers use that specific card. 

 

And yes, as I've already addressed multiple times, the credit card companies also make money by preying on people who can't manage their money. At no point have I said that the companies themselves are moral or out for the customers best interest. However that doesn't mean that you can't take advantage of the incentives that they hand out to lure in the vulnerable without falling victim to the reckless spending that they are probably hoping for. 

 

As I keep saying over and over, I'm talking about the benefits of using a credit card properly. What other people do with their money doesn't concern me, but it's irresponsible to go around telling people that credit is somehow an inherently bad or dangerous concept just because some people are unable to follow a handful of simple rules that will legally guarantee them rewards for minimal extra work. 

[leadeater]

12 minutes ago, Waffles13 said:

Some people, sure, but it's disingenuous to say that because something can cause problems that it's not worth using at all. 

Who said that they shouldn't be used at all? I've said not all usages of them is necessarily wise and a credit first, credit focused, economy is not good. That's not saying don't use them, my personal non usage isn't saying I believe everyone should not. There are are businesses that will only accept a credit card, these for me I have always had done on a company credit card or through other business arrangements.

 

I pointed to specific examples like buying food on credit cards as an example I believe is not a wise usage unless there is a specific reward given to you by that store, not the credit card company, that is of great benefit to do so. Problem is most of these come with a minimum spend requirement, to entice you to spend more than you otherwise would. Not spending more is typically net greater than getting that reward, if you always spend enough to get that reward then makes no difference.

 

I do not consider simply paying off the balance as proper usage because there is usages I don't consider as wise to put on a credit card in the first place. That is the disconnect I think you are having with what I have been saying.

[Unixsystem]

1 minute ago, leadeater said:

Who said that they shouldn't be used at all? I've said not all usages of them is necessarily wise and a credit first, credit focused, economy is not good. That's not saying don't use them, my personal non usage isn't saying I believe everyone should not. There are are businesses that will only accept a credit card, these for me I have always had done on a company credit card or through other business arrangements.

 

I pointed to specific examples like buying food on credit cards as an example I believe is not a wise usage unless there is a specific reward given to you by that stores, not the credit card company, that is of great benefit to do so. Problem is most of these come with a minimum spend requirement, to entice you to spend more than you otherwise would. Not spending more is typically net great than getting that reward, if you always spend enough to get that reward then makes no difference.

 

I do not consider simply paying off the balance as proper usage because there is usages I don't consider as wise to put on a credit card in the first place. That is the disconnect I think you are having with what I have been saying.

I'm referring to you saying it's wrong to use it for everyday purchases. I've provided numerous examples of why it is at worst exactly the same as using debit and at best gives you either minor or major benefits, and you haven't given me a single concrete reason why it's a bad idea other than "its not wise". 

 

Seriously, give me a single scenario where a responsible use of a credit card is in any way worse than the responsible use of a debit card or cash, everything else being equal.

[leadeater]

11 minutes ago, Waffles13 said:

and you haven't given me a single concrete reason why it's a bad idea other than "its not wise". 

Yes I have you just don't like the reason given. You don't have to agree with my reason but the point is if you always have a large amount of balance on your credit card then that is the balance risk you carry if something were to happen. If by and large you do not have a high balance on the credit card your risk is obviously lower. You can still gain rewards for using your credit card without using it for all and everything.

 

Even a lot of the rewards that exist I get on my Visa debt card anyway, I get payment discounts on some bills for using the Visa debt rather than direct debit for example. 

 

Edit:

And I'm saying it not wise as a general statement advice, not directly about you even though you raised that is how you use it. Not everyone is you, not everyone is in the same financial situation. You can say you don't care about anyone else but I'm not talking about you I'm discussing the broader situation. 

[mr moose]

3 hours ago, Waffles13 said:

I don't care about the majority. If people want to be irresponsible with their money, that's their prerogative. It's like saying that cars can be dangerous and some people aren't able to drive safely, so therefore cars are bad and people should avoid them. Some people, sure, but it's disingenuous to say that because something can cause problems that it's not worth using at all. 

No one is arguing that.  We are saying you can't avoid the costs, nothing is free.  If you think you are getting something for free you are either getting it of the back of people who can't manage their money or you are paying for it elsewhere (likely both). 

3 hours ago, Waffles13 said:

There is a cost to using credit cards: the massive amount of transaction fees that are collected on every purchase made using them. That cost is 100% assumed by vendors that accept credit as payment. The main reason that so many stores have store-specific cards is because the fees are either lowered or wiped completely while customers use that specific card. 

And that cost is added to the price of the goods which you pay, the bank also scrape back any loses through other charges.

 

3 hours ago, Waffles13 said:

And yes, as I've already addressed multiple times, the credit card companies also make money by preying on people who can't manage their money. At no point have I said that the companies themselves are moral or out for the customers best interest. However that doesn't mean that you can't take advantage of the incentives that they hand out to lure in the vulnerable without falling victim to the reckless spending that they are probably hoping for. 

 

As I keep saying over and over, I'm talking about the benefits of using a credit card properly. What other people do with their money doesn't concern me, but it's irresponsible to go around telling people that credit is somehow an inherently bad or dangerous concept just because some people are unable to follow a handful of simple rules that will legally guarantee them rewards for minimal extra work. 

You say there are benefits.   But are they really benefits or is it just marketing that's worked on you because they throw you a reward point or discount here and there?   That % discount on your bill isn't actually a discount.  Either the price was inflated before hand or their is a 3rd party arrangement in place that recoups that discount from you elsewhere.   For whatever reason my old internet bills cost 1.5% more if I paid by CC, but fee free if I pay via paypal.  I know for a fact paypal has generally higher transaction fees and debits directly from my VISA debt account anyway.  Someone is making money on a 3rd party deal there and I can assure you Telstra aren't losing on it.

 

 

[dfsdfgfkjsefoiqzemnd]

3 hours ago, Waffles13 said:

I don't care about the majority. If people want to be irresponsible with their money, that's their prerogative. It's like saying that cars can be dangerous and some people aren't able to drive safely, so therefore cars are bad and people should avoid them.

Except that cars are actually a valuable tool, they get you to wherever you want to go and most can haul luggage as well.  The whole credit score system on the other hand is something that serves no real purpose whatsoever, it's a made-up system that preys on the weak and uneducated, and yet another thing you need to pay attention to.  Most of the world manages just fine without that artificial numbers game.

[Unixsystem]

57 minutes ago, mr moose said:

You say there are benefits.   But are they really benefits or is it just marketing that's worked on you because they throw you a reward point or discount here and there?   That % discount on your bill isn't actually a discount.

I've made well over $1500 in a few years. Maybe for someone as apparently rich and successful as you that's pocket change, but for the rest of us that's not something to shake a stick considering it cost literally nothing other than hitting a few buttons on my phone twice a month.

 

4 hours ago, leadeater said:

 

Honestly at this point I'm just getting sick of spending all my work breaks making the same arguments over and over about how you can use a credit card without incurring any debt only to be told "but debt is bad though", so I'm just gonna duck out here. It's obvious that no one is changing anyone else's mind and as much as I appreciate a good debate, at this point it's just getting stale.

 

If anyone else is still reading this shitshow of a thread, especially anyone who's in their early adulthood, just do your own research. I'm not saying that you should run out and get a credit card; there are several good arguments against using credit (mainly related to privacy), although I haven't seen anyone even mention them in this discussion. However, don't let people who happen to be further along in their career and therefore feel that they know everything about finance scare you into feeling one way or another about an incredibly basic and useful tool. I posted a few sources a few pages back, you can check those out, go read Linus's post, just go google around for techniques on how to use a credit card effectively. There are a number of both short term and long term benefits (especially if you're in a country like the US where credit score matters), and it's really not as complicated or dangerous as people want to make you think it is.

[mr moose]

8 minutes ago, Waffles13 said:

I've made well over $1500 in a few years. Maybe for someone as apparently rich and successful as you that's pocket change, but for the rest of us that's not something to shake a stick considering it cost literally nothing other than hitting a few buttons on my phone twice a month.

Yes, and how much have you spent to "make" that much back?  How much of that spending wasn't already inflated?  It's got nothing to do with being rich. Just understanding that the only reason these reward programs exists is becasue they con you into thinking your getting something for nothing or at best your benefiting from other people getting caught in a debt cycle because life's too expensive when your poor. 

 

[leadeater]

1 hour ago, Waffles13 said:

Honestly at this point I'm just getting sick of spending all my work breaks making the same arguments over and over about how you can use a credit card without incurring any debt only to be told "but debt is bad though", so I'm just gonna duck out here. It's obvious that no one is changing anyone else's mind and as much as I appreciate a good debate, at this point it's just getting stale.

My entire point is credit is not zero risk, I'm not saying it's some massively huge risk that is highly likely to burn you but it's not a zero. The way you're treating it or at least presenting it is that it's a non zero risk which isn't true. I think you're just seeing the word risk and applying a greater meaning to it than I am using it as. The main problem is the consequence of the risk is very high, low risk high impact.

 

I also don't disagree with how Linus said he uses it either, I just know it's not widely done that way. If you need to build a credit score it's a good safe way to do it as long as you stick to it and keep the balance to as near zero as possible or have a positive balance.

 

But there are large amounts of people that do not use credit cards well, or don't have as stable income and the majority don't have any savings to speak of which is why I say use credit cards for the purpose they are best for and not for every and all purchases. Of course you can do that, I'm just advising not to and you can still gain such rewards well enough for those credit card purchases you do do, just less than if you did all purchases with it.

 

Credit card debt is very real so that is how I treat it, I can't assume most people will not get in to it when the evidence suggest otherwise.

 

Quote

Not only do Americans now have more credit card debt than at any time in the past decade, the New York Fed’s report also shows an increasing number of credit card accounts that are at least 90 days behind on payments.

https://www.creditkarma.com/insights/i/credit-card-debt-hit-record-high-end-2018/

[ARikozuM]

The main issues with credit:

 

1) It isn't money that you have on hand. 

2) It does have to be paid back.

3) We're getting off topic.

4) The banks or CC companies are getting the money at absurdly low rates (some are as low as .4% APY). 

5) They're putting a large 10x or higher burden on customers.

 

1) Unfortunately, there aren't many jobs that are still paying more than poverty wages. Many of those jobs are for long hours that doesn't allow someone to get training for another job or higher pay. 

2) You can't pay it back if the interest accrues quickly and compounds. 

3) I can't help you guys. You're on your own. 

4) These companies are getting their money back in amounts that most of us can only dream of getting in the stock market. 

5) There's an immensely larger issue of costs outpacing wages and thus the need for credit comes into play. 

 

That's all from me. [goes back to Skyrim #statusupdates]

[jagdtigger]

35 minutes ago, ARikozuM said:

5) There's an immensely larger issue of costs outpacing wages and thus the need for credit comes into play. 

 

A good labor-union is what you need. We have one, our employer wanted to only raise the wages by the inflation+1%. Meanwhile the cost of lodgings started to eat up more than half of our wage in itself. We actually had to strike to get what we wanted, after other factories had to stop because of us they finally caved in....

Edited June 19, 2019 by jagdtigger
fixed typo....

[ARikozuM]

12 minutes ago, jagdtigger said:

A good laber-union is what you need. We have one, our employer wanted to only raise the wages by the inflation+1%. Meanwhile the cost of lodgings started to eat up more than half of our wage in itself. We actually had to strike to get what we wanted, after other factories had to stop because of us they finally caved in....

Unfortunately there's so much lobbying against unions that it's borderline ridiculous.

[thedude4bides]

7 hours ago, leadeater said:

My entire point is credit is not zero risk, I'm not saying it's some massively huge risk that is highly likely to burn you but it's not a zero. The way you're treating it or at least presenting it is that it's a non zero risk which isn't true. I think you're just seeing the word risk and applying a greater meaning to it than I am using it as. The main problem is the consequence of the risk is very high, low risk high impact.

 

I also don't disagree with how Linus said he uses it either, I just know it's not widely done that way. If you need to build a credit score it's a good safe way to do it as long as you stick to it and keep the balance to as near zero as possible or have a positive balance.

 

But there are large amounts of people that do not use credit cards well, or don't have as stable income and the majority don't have any savings to speak of which is why I say use credit cards for the purpose they are best for and not for every and all purchases. Of course you can do that, I'm just advising not to and you can still gain such rewards well enough for those credit card purchases you do do, just less than if you did all purchases with it.

 

Credit card debt is very real so that is how I treat it, I can't assume most people will not get in to it when the evidence suggest otherwise.

 

https://www.creditkarma.com/insights/i/credit-card-debt-hit-record-high-end-2018/

You know what else isn’t zero risk?  Everything you do.  Literally everything.  Even going to to sleep, there is no guarantee you’ll wake up.  It happens.  My 34 year friend went to bed and never woke up... some unknown heart thing.  Do you have a guarantee you’ll wake up when you go to bed at night?  No.  So don’t sleep is your answer?  Your whole argument is pure nonsense based on a negatively biased view of credit.

 

I can go on and on about how awesome credit is and what opportunities are only possible through credit but the blinders you wear won’t let you see it.  

[kokakolia]

On 6/18/2019 at 3:22 PM, CiBi said:

How do you only spend 300$ a month on groceries but 6$ on a pint during happy hour. The relation between those prices seems off to me.

You never buy "just one pint". The first one is free hahaha. Also, food is painfully expensive in Canada because of price fixing due to the oligopoly between Loblaws and Sobeys. Here's an article:

Spoiler

https://www.cbc.ca/news/canada/sudbury/bread-price-fixing-class-action-1.4462416

@Waffles13 I agree that spending $500/month on necessities no matter what, and getting $10 back with credit card rewards is the ultimate purpose of the credit card from a consumer's perspective. But I would argue that you risk a lot in hidden fees and unexpected charges for that $10 after the month. It only takes one late payment to lose $10 or more on a credit card. That's unfortunately very likely to happen if you don't get into the habit of paying what you owe almost immediately, or several days before the deadlines which happen at weird dates. Hence the big speak about discipline. Because even if you have the money to pay off your credit, you'll probably get charges due to negligence. There are just too many asterisks in the credit card contract. For me, losing out on $10 each month is worth the peace of mind and security of not having to deal with a credit card. It's only $10. C'mon! 

[thedude4bides]

11 minutes ago, kokakolia said:

You never buy "just one pint". The first one is free hahaha. Also, food is painfully expensive in Canada because of price fixing due to the oligopoly between Loblaws and Sobeys. Here's an article:

  Reveal hidden contents

https://www.cbc.ca/news/canada/sudbury/bread-price-fixing-class-action-1.4462416

@Waffles13 I agree that spending $500/month on necessities no matter what, and getting $10 back with credit card rewards is the ultimate purpose of the credit card from a consumer's perspective. But I would argue that you risk a lot in hidden fees and unexpected charges for that $10 after the month. It only takes one late payment to lose $10 or more on a credit card. That's unfortunately very likely to happen if you don't get into the habit of paying what you owe almost immediately, or several days before the deadlines which happen at weird dates. Hence the big speak about discipline. Because even if you have the money to pay off your credit, you'll probably get charges due to negligence. There are just too many asterisks in the credit card contract. For me, losing out on $10 each month is worth the peace of mind and security of not having to deal with a credit card. It's only $10. C'mon! 

If you don’t tie your shoes you risk tripping on yourself.  If you don’t wash your hands you risk getting sick and spreading illness.  Are you saying if you don’t take care with your finances that there are risks?  Shocking.

 

I said it before.  Everything has risk.  Guess what? CC companies take on risk.  That’s why they charge higher interest for riskier people.  That’s what credit scores are for.  That’s actually really what this thread is about...not this ludicrous de-rail (by a moderator nonetheless) about how dangerously perilous it is to earn CC rewards.  

 

Get your credit in order.  Be responsible.  Then buy PC parts with your CC rewards and if there is any leftover donate to LMG;)

 

 

[kokakolia]

@thedude4bidesThis is not a risk situation like gambling. It’s not a betting situation where you win or lose. The rules of a credit card are not clearly stated, they are almost hidden and a bit confusing. Credit cards are so weird. The rewards are very low and you have to jump through hoops to get rewards, and if you don’t jump through the hoops, you lose money. It’s not “free money” in a sense that you add a “big” responsibility to yourself in exchange for a puny reward. 

[thedude4bides]

1 hour ago, kokakolia said:

@thedude4bidesThis is not a risk situation like gambling. It’s not a betting situation where you win or lose. The rules of a credit card are not clearly stated, they are almost hidden and a bit confusing. Credit cards are so weird. The rewards are very low and you have to jump through hoops to get rewards, and if you don’t jump through the hoops, you lose money. It’s not “free money” in a sense that you add a “big” responsibility to yourself in exchange for a puny reward. 

That's right.  It's not remotely close to gambling at all when it's a guarantee that I get rewarded for spending money through my CC.  Yes, rewards are generally less than 5%, or "low" as you say, but every 3 months I'm cashing a $200 rewards check.  

 

It requires zero hoops.  All I have to do is swipe.

 

It literally is free money to me.  I am responsible and not in a "big" way.  I just pay my card every month in full.  Not that hard to do if you don't spend what you don't have.

 

That said, if you need to spend what you don't have because of an emergency, then you are SOL without a CC.

[thedude4bides]

2 hours ago, kokakolia said:

@thedude4bidesThis is not a risk situation like gambling. It’s not a betting situation where you win or lose. The rules of a credit card are not clearly stated, they are almost hidden and a bit confusing. Credit cards are so weird. The rewards are very low and you have to jump through hoops to get rewards, and if you don’t jump through the hoops, you lose money. It’s not “free money” in a sense that you add a “big” responsibility to yourself in exchange for a puny reward. 

By the way...I meant to ask you if $200 every 3 months sounds puny to you???

 

Forgetting about rewards, which are awesome, there are many other benefits (depends on the particular card you hold).

 

A.) Car Rental Insurance.  My rental car's cracked windshield ($300 cost) was covered by my CC because it is a benefit they offer.  Thank you Amex.

B.) Warranty extension.  By default, many cards extend warranties of products purchased through them by a full year or more

C.) Some cards offer "price match" benefits.  Mine used to but pulled it because too many were taking advantage.  Must have saved me thousands over the years before they pulled it.

D.) Trip cancellation insurance... this is huge if you take a lot of trip.  I travel 4-6 times per year so it comes in handy.  Imagine spending thousands on a ski trip and you hurt yourself the day before?  Now you're out more than a broken leg... you just lost 2 grand on the trip you can't go on now.

E.) Conceirge services- I really don't use these but I hear they can be quit helpful.

 

"Credit cards are like a delightful gift from heaven.

 

If you pay your bill on time, they’re actually a free, short-term loan. They help keep track of your spending much more easily than cash, and they let you download your transaction history for free."

 

[leadeater]

8 hours ago, thedude4bides said:

 So don’t sleep is your answer?

No because I didn't say not use a credit card at all. Why do you and others keep raising this point when it's doesn't even relate to what I said. If you sleep 20 hours of the day then I'd say you're sleeping too much, now you're saying that I suggest to never sleep? Um what?

 

Edit: And yes I have a negative bias just like you have a positive bias, no one is bias free but at least do the courtesy of reading what was actually written and evaluate why it was said. I have explained why I have my bias and it's a good reason based on reality of what happens to large groups of people. The 'but I handle it fine' works for you but does that mean I should assume that it will for everyone so advise everyone to use a credit card for every purchase? That doesn't sound sensible to me.

[mr moose]

2 hours ago, thedude4bides said:

That's right.  It's not remotely close to gambling at all when it's a guarantee that I get rewarded for spending money through my CC.  Yes, rewards are generally less than 5%, or "low" as you say, but every 3 months I'm cashing a $200 rewards check.  

 

It requires zero hoops.  All I have to do is swipe.

 

It literally is free money to me.  I am responsible and not in a "big" way.  I just pay my card every month in full.  Not that hard to do if you don't spend what you don't have.

 

That said, if you need to spend what you don't have because of an emergency, then you are SOL without a CC.

There are two problems with your premise:

 

1. you seem to think all risks are equal.

2. you are under the impression those rewards are free and don't cost you somewhere else.

 

Nothing is free.

[Curious Pineapple]

13 minutes ago, mr moose said:

There are two problems with your premise:

 

1. you seem to think all risks are equal.

2. you are under the impression those rewards are free and don't cost you somewhere else.

 

Nothing is free.

Amex.... He pays for a credit card and gets given rewards. Millions of others also pay the fee and many won't be using the rewards. Plus the amount they charge merchants for accepting it. Amex are the scummiest of credit card scum out there.

[thedude4bides]

53 minutes ago, leadeater said:

No because I didn't say not use a credit card at all. Why do you and others keep raising this point when it's doesn't even relate to what I said. If you sleep 20 hours of the day then I'd say you're sleeping too much, now you're saying that I suggest to never sleep? Um what?

 

Edit: And yes I have a negative bias just like you have a positive bias, no one is bias free but at least do the courtesy of reading what was actually written and evaluate why it was said. I have explained why I have my bias and it's a good reason based on reality of what happens to large groups of people. The 'but I handle it fine' works for you but does that mean I should assume that it will for everyone so advise everyone to use a credit card for every purchase? That doesn't sound sensible to me.

So CC cards aren't the devil like you've been saying?  Or is there a middle ground where responsible use and generating $$$ from rewards is possible?