I know it's hard to believe but some people aren't interested in borrowing money for any reason at all. Why should someone who prefers to pay as he goes, be forced into borrowing anyway? Why should he have to be more vigilant than those who are comfortable with debt?
I have no problem with paying for using someone else's money...I do have a problem with being forced into doing so when I never asked for it. If credit card issuers can decline a transaction, why can't banks do the same for debit cards?
blackangst1
Lifer
- Feb 23, 2005
- 22,902
- 2,359
- 126
I agree. I prefer cash or its equivalent.
And Im not keen on the interworkings of the debit process, but I know debit transactions can be declined due to lack of funds. Of course we know this doesnt always happen, but it DOES happen.
Credit cards are really only borrowing money if you fail to pay the balance at the end of the month imo. I know technically you are borrowing the money for 30 days. But at 0% interest if you pay it off at the end of the month. That is cheap money.
That said I agree with the rest of your post. All I can say is your safest bet is to use cash if a credit card is not an option or if somebody refuses to get one. And I did forget about that declining vs not declining. Why is it Debit cards arent declined when the funds run out but Credit Cards will?
I suspect because it is your money while a Credit Card it is their money. The banks maximum exposure is the small charge should you walk. Where as to hit a limit on a credit card exposes them to several thousands of dollars if you walk.
So for the small risk of losing the small charge they can possibly gain a large % return with an overdraft fee.
They're a business. Life used to always be such that one gave themselves a few extra days on a deposit for safe measures. Somewhere along the way the commoner began expecting and demanding businesses bend over backwards to please them. I don't know.
Using a credit card most certainly is borrowing. It may be borrowing without charge during the billing period but is borrowing. In fact, it is no different from getting a no-interest loan from your brother with a promise to repay on payday. Money costs money. And just as your brother forgoes interest during that time, the credit card issuer also has an opportunity cost associated with carrying your balance. Your brother just does without for a few days, finance companies make it up elsewhere.
IMHO, the fact that you don't consider using someone else's money for 20 days or so as borrowing, says a lot about the culture of debt and freeloading that has been fostered over the past two or three decades. And the hysteria about credit card regulation, on the part of issuers, legislators, and individuals all assumes that "everyone" is comfortable with using debt to live beyond his means.
People may justifiy all this borrowing by citing the advantages of rewards points and other enticements but the bottom line is that it is borrowing so that they can pay tomorrow (or later) for what they buy today. Rewards points and such are even more insidious in that foster the notion that by participating in all this borrowing, card holders are entitled to things that they haven't actually paid for (or that paying more for what the need entitles them to "freebies").
So entering into a short term interest free loan that is paid in full at the end of the month is now "free loading" and living beyond ones means?
Reward points are an enticement by the credit card companies to gain your business. No different than best buy's reward zone or if they have a 10% off sale this weekend. Are those companies utilizing sales and reward points fostering the freeloading entitlement society you fear?
I see that you are confused, but yes it is. There is always a cost associated with using someone else's money. And if you count on using someone else's money for some period of time without paying that cost, is indeed freeloading. If you borrow money from your brother, he loses interest on his savings or postpones buying something he might want. Credit card companies make it up elsewhere -- as in egregious fees to those who aren't as well placed.Originally posted by: Genx87
So entering into a short term interest free loan that is paid in full at the end of the month is now "free loading" and living beyond ones means?
You don't understand why anyone would use a debit card. I on the other hand, don't see why anyone would use a credit card -- either use your own money (cash or debit) or get a proper loan from a financial institution. If you think about it, the industry has set things up so that those who go into debt have nominally better protection than those who pay their way.
I didn't say that I was fearful ... I am disdainful of a society where those who have money think that they are smart by using it to get something "for free". These things are almost never free to the society, and are paid for hundreds of others.
My major problem with this is that most people don't even recognize what is going on. People at all levels of the economy are paying for all the "free" airline tickets being redeemed and other "rewards". Thanks to the credit card industry, everyone who buys something at a business that accepts credit cards is paying higher prices to make it more convenient for thoser who use them, people who are in debt are deluded into thinking they are "saving", airline employees are paying in lower wages and benefits to accommodate all the non-revenue travel, etc. It's a vicious cycle...the result of which is an indebted nation.
That's what business is, and it happens in the private sector as well as the public sector. A company's best customers no matter what the industry usually get free perks paid for by everyone else.
It's certainly not right either to separate out the credit card companies and make them out to be the bad guys in all this.
It can happen but many banks are organized to do otherwise. In most cases, a customer has to know to explicitly decline the unwanted "protection" and it some cases, banks have refused to allow it at all. With the prospect of explicit regulation, many have suddenly become aware of this hypcrisy and are "voluntarily" changing their ways.
It's not usually supported by the force of public law. For example, I can ask a retailer for a cash discount but in most states, he is prohibited by law from offering one.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
I use debit for most because I simply hate borrowing money to pay for gasoline and vegetables. Psychologically it has been a boon for our finances to run on cash and stop dicking around with the entire idiotic lend-me-money-for-three-weeks-then-I'll-pay-you-back rubbish in credit cards. I used to do the credit card game and pay most of it off each month or all of it but I ultimately got sick of it.
The main problem I have with credit cards now is that they are so ubiquitous that merchants have invariably added in the extra couple % that they trim off the top into prices so even if you pay with cash you generally pay the same as if you were paying with credit. In this manner those who cannot live without constantly borrowing money and "living behind" instead of ahead of their pay check have increased the costs for those of us who otherwise don't want to borrow money to pay for a bottle of coke.
The question should not be why are debit cards around, the question should be why are credit cards around and the answer is simply people suck sh*t at living within their means.
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 25K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes Discussion Threads
- Started by Tigerick
- Replies: 21K
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
-
Facebook
Twitter