Why is the anti-credit card argument so binary?

[Brontoburglar]

I guess I could put this in the Facebook thread, but I'm inspired by TB.

I've noticed more "Credit cards are bad live only on cash!" arguments on FB recently. And I know they're inspired by Dave Ramsey, so perhaps I'm answering my own question with his name.

But for every one it's "get rid of credit cards entirely to live debt free!" There's no recognition that there's a significant portion of the populace who responsibly uses credit cards and pays them off every month. And that it's entirely possible to be "debt free" and use credit cards.

Shit, because of what I do I fund free vacations simply by using credit cards. And I pay those cards off every month. So not only am I "debt free" outside of my mortgage, I'm actually spending less money than I would otherwise because my travel and hotel is paid for when I go places.

And I also realize this is a microcosm of the black/white world a lot of people live in. But it's something that's fascinated me recently. Perhaps the influx is also because people are also still inspired by their New Year's resolutions.

[howard]

Credit cards levy a tax on commerce that is secret/hidden from almost everyone. That is the service fee that merchants must remit to the banks on each and every credit card transaction.

The amount of this fee has climbed in the five decades since the introduction of the credit card. The larger the percentage of transactions made by card rather than cash, the more that tax/fee climbs. Rest assured, this fee will climb higher as they fulfill their monopoly goal.

Your 'cash back' is a rebate of part of the tax you have already paid. Yet, you have been convinced this is 'free money', when in fact you pay a smaller tax to the banks than the rest of us.

This is only one of the arguments against credit card usage. But it is the one that has resulted in a huge transfer of wealth from all of us to the friendly banking system.

True, I usually pay the same tax when I use cash. But frequently I get a cash discount. And it is a small means of resistance against the fucking system that is draining us all.

eta: sorry, I did not directly answer your question. It is not binary.

[The Sybian]

I guess I could put this in the Facebook thread, but I'm inspired by TB.

I've noticed more "Credit cards are bad live only on cash!" arguments on FB recently. And I know they're inspired by Dave Ramsey, so perhaps I'm answering my own question with his name.

But for every one it's "get rid of credit cards entirely to live debt free!" There's no recognition that there's a significant portion of the populace who responsibly uses credit cards and pays them off every month. And that it's entirely possible to be "debt free" and use credit cards.

Shit, because of what I do I fund free vacations simply by using credit cards. And I pay those cards off every month. So not only am I "debt free" outside of my mortgage, I'm actually spending less money than I would otherwise because my travel and hotel is paid for when I go places.

And I also realize this is a microcosm of the black/white world a lot of people live in. But it's something that's fascinated me recently. Perhaps the influx is also because people are also still inspired by their New Year's resolutions.

The only thing I know about Dave Ramsey is that our old friend without hyphens was a big fan. Without seeing any of these messages, I assume they refer to not racking up credit card debt.

[govmentchedda]

Credit cards levy a tax on commerce that is secret/hidden from almost everyone. That is the service fee that merchants must remit to the banks on each and every credit card transaction.

The amount of this fee has climbed in the five decades since the introduction of the credit card. The larger the percentage of transactions made by card rather than cash, the more that tax/fee climbs. Rest assured, this fee will climb higher as they fulfill their monopoly goal.

Your 'cash back' is a rebate of part of the tax you have already paid. Yet, you have been convinced this is 'free money', when in fact you pay a smaller tax to the banks than the rest of us.

This is only one of the arguments against credit card usage. But it is the one that has resulted in a huge transfer of wealth from all of us to the friendly banking system.

True, I usually pay the same tax when I use cash. But frequently I get a cash discount. And it is a small means of resistance against the fucking system that is draining us all.

eta: sorry, I did not directly answer your question. It is not binary.

Fixing the tax you reference here would require a massive revolution against using credit cards. If that tax is built in, why not take advantage?

[howard]

I would restate that as a massive revolution against the banks. And the politicians owned by them, like Joe Biden, the former senator from Mastercard (most of the credit card companies are based in Delaware.)

This is but one of many arguments supporting such a revolution.

[mister d]

If you take a step back, they're really not all that different than the predatory payday loan places except with mostly more well-to-do clientele and a window for them to save themselves.

[Brontoburglar]

Well, it really is free money when I'm getting the points for business expenses.

[Brontoburglar]

The only thing I know about Dave Ramsey is that our old friend without hyphens was a big fan. Without seeing any of these messages, I assume they refer to not racking up credit card debt.

They do. But "don't rack up debt" is not an anti-credit card argument. Can it be? Of course. But they're frequently presented as the same, when quite frankly they should be separate arguments.

[mister d]

You get points and that's nice, but from a universal standpoint, far more people are hurt by credit cards than helped, and the harm far exceeds the gains. Credit cards wouldn't exist otherwise.

[brian]

I exploit the credit card rewards and I don't feel the least bit bad about it. I probably make several hundred dollars a year. Just like I "exploited" the federal tax credit for an electric car to bring my tax percentage to 3.6 percent. If you don't take advantage of the systems in place (legally) then you're a sucker.

[sancarlos]

The only thing I know about Dave Ramsey is that our old friend without hyphens was a big fan. Without seeing any of these messages, I assume they refer to not racking up credit card debt.

They do. But "don't rack up debt" is not an anti-credit card argument. Can it be? Of course. But they're frequently presented as the same, when quite frankly they should be separate arguments.

Yep. I almost always pay with a credit card. Always pay off the entire balance every month. No interest charges. Yes points. Works for me.

[degenerasian]

Same here.

[Gunpowder]

Credit cards levy a tax on commerce that is secret/hidden from almost everyone. That is the service fee that merchants must remit to the banks on each and every credit card transaction.

The amount of this fee has climbed in the five decades since the introduction of the credit card. The larger the percentage of transactions made by card rather than cash, the more that tax/fee climbs. Rest assured, this fee will climb higher as they fulfill their monopoly goal.

Your 'cash back' is a rebate of part of the tax you have already paid. Yet, you have been convinced this is 'free money', when in fact you pay a smaller tax to the banks than the rest of us.

This is only one of the arguments against credit card usage. But it is the one that has resulted in a huge transfer of wealth from all of us to the friendly banking system.

True, I usually pay the same tax when I use cash. But frequently I get a cash discount. And it is a small means of resistance against the fucking system that is draining us all.

eta: sorry, I did not directly answer your question. It is not binary.

While I don't doubt this, and I've noticed tons of places that used to have CC limits remove them as I'm sure they've started to lose sales, Bronto I think is only referring to the generic "don't use credit cards, they will ruin your financial life!" people out there screaming to pay everything in cash. But if you can pay everything in cash, you can probably also responsibly use credit cards.

[BSF21]

Echo the rest above. Credit cards are only inherently evil if you choose to abuse them, much like anything else an adult has access to.

What some people fail to remember is that money/loans aren't free. There should be a cost to delay payments on something. Whether you let that get out of control or not is on you.

I like the points, and I've also used a card to split up a large purchase before into 2 or 3 chunks because paying the 7$ in interest each month was worth it to not take a huge hit to my savings account all at once.

Anyone got a good card to switch to btw? I use the Chase Freedom but I'm sure there are better rewards elsewhere...

[degenerasian]

You get points and that's nice, but from a universal standpoint, far more people are hurt by credit cards than helped, and the harm far exceeds the gains. Credit cards wouldn't exist otherwise.

Yup.

Although if there were no credit cards wouldn't there just be something else? Like loan sharks?
Here in Calgary payday loan places (which you mentioned above) are popping up everywhere. The KFC near me shut down and was replaced by a 300 for 20 loan place. These days I think people need their fixes by whatever means.

[duff]

The wife and I rarely use credit cards. We went through the whole Dave Ramsey Financial Peace stuff. It helped us get out of debt, although we very little to begin with. I can't fathom people having tens of thousands of dollars of credit debt. I get some of it is student loans and shit, but that is different then maxing out four or five credit cards. I just don't see how people believe that that is a good thing. In general credit cards are bad. I have one that I use for job travel and occasionally for other things. We always pay it off before the month end. But not everyone is able to do that. It snowballs into a crushing life of paying the minimum or a bit more. If you can pay with cash then you should do so. I have been told you will spend less if you only carry cash. Less impulsive buys. You can also get better deals when you pay straight cash, especially on large items. Of course I may be brainwashed into believing all this. Who knows?

[degenerasian]

I find myself using debit more then credit. Just because it's instant like cash and I don't have to remember to pay my credit card off. I'm a very forgetful person so to me a credit card payment is just one more thing to have to remember.

[BSF21]

The wife and I rarely use credit cards. We went through the whole Dave Ramsey Financial Peace stuff. It helped us get out of debt, although we very little to begin with. I can't fathom people having tens of thousands of dollars of credit debt. I get some of it is student loans and shit, but that is different then maxing out four or five credit cards. I just don't see how people believe that that is a good thing. In general credit cards are bad. I have one that I use for job travel and occasionally for other things. We always pay it off before the month end. But not everyone is able to do that. It snowballs into a crushing life of paying the minimum or a bit more. If you can pay with cash then you should do so. I have been told you will spend less if you only carry cash. Less impulsive buys. You can also get better deals when you pay straight cash, especially on large items. Of course I may be brainwashed into believing all this. Who knows?

Ramsey deserves all the credit he gets for his planning (I'm not so big on the religious aspect of it, but his financial advice is sound). However you aren't getting a cash discount on groceries or dinner out or any of that stuff and you know it's in the budget, why not get a little bit back?

The idea that it snowballs into something destructive is based on someone being irresponsible. As long as you treat the credit card like an extension of your bank account and keep track, I see zero harm in using one and feel zero sympathy for people who think that they can buy whatever they fucking feel like and then get all sadface when they can't unbury themselves.

In short, if you've ever made a minimum payment on a credit card balance over 50$, credit cards aren't for you. You should stay away from cars, alcohol, and other people. In fact, people like that need to never leave the house in order to not endanger the rest of us with brains.

[Gunpowder]

I set my CC's up to pay automatically and send me reminders, etc. So that isn't much of a problem but I see the concern.

I've had my debit info stolen so many damn times, but I guess that's just South Florida for you.

[mister d]

The idea that it snowballs into something destructive is based on someone being irresponsible. As long as you treat the credit card like an extension of your bank account and keep track, I see zero harm in using one and feel zero sympathy for people who think that they can buy whatever they fucking feel like and then get all sadface when they can't unbury themselves.

This assumes everyone has the same basis in understanding and managing finances.

[BSF21]

The idea that it snowballs into something destructive is based on someone being irresponsible. As long as you treat the credit card like an extension of your bank account and keep track, I see zero harm in using one and feel zero sympathy for people who think that they can buy whatever they fucking feel like and then get all sadface when they can't unbury themselves.

This assumes everyone has the same basis in understanding and managing finances.

Yep. "Don't spend more than you make". Is that something the average person needs to take a course on?

[Gunpowder]

Well, sometimes you have to spend more than you make.

[Ryan]

The idea that it snowballs into something destructive is based on someone being irresponsible. As long as you treat the credit card like an extension of your bank account and keep track, I see zero harm in using one and feel zero sympathy for people who think that they can buy whatever they fucking feel like and then get all sadface when they can't unbury themselves.

This assumes everyone has the same basis in understanding and managing finances.

Yep. "Don't spend more than you make". Is that something the average person needs to take a course on?

There are classes on how to eat

[mister d]

Yep. "Don't spend more than you make". Is that something the average person needs to take a course on?

Personal finance solved.

[BSF21]

I manage mine OK and I'm a halfwit.

I guess I just don't understand the general "poor them" sentiment about people with CC debt. You can chalk it up to simple irresponsibility a great majority of the time. I understand sometimes emergencies happen, and you have to fix a furnace or whatever, but most of the CC debt people have is simply overspending or living outside their means. The evil of banks and CC companies is a separate discussion, but as for day to day, have a budget if necessary and stick to it. Manage that and you're 90% of the way there.

[mister d]

Sometimes people have emergencies. Sometimes they live outside their means. Sometimes they're encouraged to spend outside their means. Sometimes they legitimately don't know how to properly budget. Sometimes something something ... Every time its to the credit card company's gain. If it were just you and me paying it off every month and "being smart" and taking in the points, they wouldn't survive on interchange alone. Their profit comes from other's issues / mistakes / lack of knowledge.

[Gunpowder]

Also...don't lose your job, ever, because then you make $0 and food costs more than $0.

And don't go to college because you probably don't have a job or at least not a good full-time one while you're there.

And for Christ's sake don't get sick or buy a car that will break at some point.

[The Sybian]

Yep. "Don't spend more than you make". Is that something the average person needs to take a course on?

Unfortunately, yes. Some people live check to check and aren't smart enough to track what they put on their card and have in their bank account. Probably more of an issue with direct deposit, as they don't see their account balance or know what day their paycheck deposited. Throw in autopay for bills, and they are really lost.

I get Howard's point, and it is the old "problem of the commons." We are all paying higher prices to cover merchants fees to the credit card companies, and we'd all be better off if credit cards were removed from the system. But as it is, I'm paying the CC fee whether I pay cash or credit (except at a gas station), so I'm better off getting my points and cash back, while not having to worry about keeping cash on me.

[degenerasian]

Isn't the problem also that the 'keeping up with the Jones' is now a bigger concept in suburban life. You guys with families and kids would understand this more than me. The girl who works in the cubicle beside me has two kids, 7 year old girl and 3 year old boy. She lives in the burbs and there's a certain expectation.

She's really financially responsible and she was telling me that over the Christmas holidays they didn't go anywhere. Her husband was working on a big project and worked through the holidays and they're not big travelers anyways. When school resumed her 7 year old in grade 2 reported that in her class the teacher asked the kids what they did over the break, 20 out of 28 kids said they went somewhere far and somewhere hot. Now how do the 8 other kids suddenly feel? They want to go too! In our day those numbers would probably be reversed. The kids would play with each other over the break.

Vacations are crazy these days. Did any of our parents ever go to a resort? Now young families go at least once a year maybe twice.

She says that her daughter has wanted to go to Disneyland for years but since there is a little brother, she has to wait until he's 5.

[degenerasian]

Another story..

Isn't the credit card a good way to hide misdemeanors?
For example a married man's finances is controlled by his wife. They have thousands in the bank but he can't touch it unless it's family stuff.

He gets a secret credit card to finance his other stuff. It could be major things like gambling and hookers. It could be minor things like sneaking out for a round of golf or drinks with the boys. It's free money. Now if you were the bank teller you would think it's really stupid that his guy has 20K in his savings account and continues to carry over a 3K credit card debt but paying the minimum is good enough for him.

[Gunpowder]

Degen, what the hell can you buy on a credit card that is illegal?

"Do you take Amex?"

"No, because I'm a fuckin' HOOKER THAT YOU FOUND ON CRAIGSLIST."


Or an illegal round of golf? What?

[BSF21]

Degen, what the hell can you buy on a credit card that is illegal?

"Do you take Amex?"

"No, because I'm a fuckin' HOOKER THAT YOU FOUND ON CRAIGSLIST."


Or an illegal round of golf? What?

I think he means misdemeanors as in "little transgressions your wife would freak about". Not the hookers part, but you could cash advance against it or something? Hell I don't know.

[mister d]

Pretty sure hookers is a wife felony.

[P.D.X.]

Cash is for suckers. I only pay for things in bullion.

[mister d]

(Yes, I know.)

[P.D.X.]

It really irks me when someone proudly proclaims that they don't use/have a credit card, as if they've reached some sort of financial panacea that the rest of us plebes couldn't fathom.

(In the same vein as "I don't have a TV.")

[mister d]

"I only use my debit card because I'm the biggest fucking dummy in the world."

[Rex]

My rule is, carry enough cash so that the mugger doesn't get pissed off. That's its only purpose these days.

[degenerasian]

Degen, what the hell can you buy on a credit card that is illegal?

"Do you take Amex?"

"No, because I'm a fuckin' HOOKER THAT YOU FOUND ON CRAIGSLIST."


Or an illegal round of golf? What?

I think he means misdemeanors as in "little transgressions your wife would freak about". Not the hookers part, but you could cash advance against it or something? Hell I don't know.

yeah just cash advance the credit card. and yeah transgressions is the better word i couldn't think of.

[mister d]

My rule is, carry enough cash so that the mugger doesn't get pissed off. That's its only purpose these days.

Not being a shithead to small businesses is a pretty solid one too. Paying on your card for a cup of coffee is f'ing them out of a decent portion of the profit.