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How Millennials Became Spooked by Credit Cards

nytimes.com

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Re: How Millennials Became Spooked by Credit Cards

#21

Post by Vexs »

cmurf wrote: post #3

It still boggles my mind how prevalent credit cards are in the U.S. and how almost non-existent they are elsewhere, in particular Europe and Japan where debit cards are used. They don't call them debit cards, but rather cashless payment or what have you. And the merchant fees for these cards are far, far lower than credit cards which makes it even more baffling to me. ADD: "Without a substantial credit history, it is…

I honestly don't understand why they're so popular here either. A debt card is basically the same as paying with cash, because you have the money. With credit, you're still doing the same thing, but you pay later- either way you're still paying the same amount, but with credit, you can fuck yourself pretty easily.

Also, it's because credit cards are so prolific here that it's harder to take out a mortgage, if everyone has a good credit score but you, then you're not going to be at the top of their list.

Re: How Millennials Became Spooked by Credit Cards

#22

Post by briansteffens »

ourmandave wrote: post #16
h4waii wrote: post #6

What's really scary is the fact that many of these individuals don't consider the benefits and rewards of using a credit card -- free flights, cash-back, insurance and extended protection, and best of all it's not your money. You get to hold on to your cash for a month's worth of interest and you get fraud protection. Credit cards are tool and, just like most tools, should be used with proper awareness and thought-pr…

I always thought the free flights, etc. was like the casino comp'ing you free drinks.

Can't put a price on a free drink!

Re: How Millennials Became Spooked by Credit Cards

#23

Post by jasonmp85 »

bbctol wrote: post #8

The use of credit history and score to determine worthiness in all sorts of purchases is a horrible construction that must be destroyed. I got a credit card for no reason other than to build score; I've never spent money I didn't have in my life (which seems responsible to me!) but I still have to go through this silly rigmarole of purchasing and then paying off to prove to future agencies that I'm responsible.

> this silly rigmarole of purchasing and then paying off to prove to future agencies that I'm responsible

That actually sounds like a fantastic method for a lending agency to determine who is responsible and who is not.

Re: How Millennials Became Spooked by Credit Cards

#24

Post by StillBored »

h4waii wrote: post #6

What's really scary is the fact that many of these individuals don't consider the benefits and rewards of using a credit card -- free flights, cash-back, insurance and extended protection, and best of all it's not your money. You get to hold on to your cash for a month's worth of interest and you get fraud protection. Credit cards are tool and, just like most tools, should be used with proper awareness and thought-pr…

That is probably the only reason why I use credit cards. Make no mistake your paying for those perks, they are just hidden in your everyday purchases. About 15 years ago I got tired of trying to negotiate cash discounts (usually only for larger purchases), and became a loyal discover card user. So, now i'm part of the problem, and the banks are very happy to keep it that way, because they are also making a percent or so on every purchase I make...

The good news is that gas stations offering a few cents off a gallon, small restaurants, etc that have built in cash discounts seem to be more common now than they were just a few years ago.

Re: How Millennials Became Spooked by Credit Cards

#25

Post by Blackthorn »

h4waii wrote: post #6

What's really scary is the fact that many of these individuals don't consider the benefits and rewards of using a credit card -- free flights, cash-back, insurance and extended protection, and best of all it's not your money. You get to hold on to your cash for a month's worth of interest and you get fraud protection. Credit cards are tool and, just like most tools, should be used with proper awareness and thought-pr…

For a free $200 flight (on the low end), you'd need to spend (on the bottom end, with an exceptionally good 3% rewards number) 200 / 0.03 = $6667, on whatever stupid categories your credit card has for the 3%. Just how much money do you think most millenials have?

Re: How Millennials Became Spooked by Credit Cards

#26

Post by wyager »

ourmandave wrote: post #16
h4waii wrote: post #6

What's really scary is the fact that many of these individuals don't consider the benefits and rewards of using a credit card -- free flights, cash-back, insurance and extended protection, and best of all it's not your money. You get to hold on to your cash for a month's worth of interest and you get fraud protection. Credit cards are tool and, just like most tools, should be used with proper awareness and thought-pr…

I always thought the free flights, etc. was like the casino comp'ing you free drinks.

The way it works is that credit cards charge merchants ~3% per transaction. They don't allow merchants to charge proportionately more for CC transactions over cash transactions. Since it's business suicide not to take cards, everyone just charges a few percent more across the board. So basically everyone without a good card is getting fucked over, but if your card has a rewards program you can at least get some of that 3% back.

Re: How Millennials Became Spooked by Credit Cards

#27

Post by nostromo »

My sense is that Millennials have a less rosy view of their future economic situation than did generations past.

I don't know if it was coming of age during a banking crisis or huge student loans or expensive housing or what.

But obviously if you're unsure about your future earning potential you'll be more hesitant to rack up future obligations.

Re: How Millennials Became Spooked by Credit Cards

#28

Post by icebraining »

cmurf wrote: post #3

It still boggles my mind how prevalent credit cards are in the U.S. and how almost non-existent they are elsewhere, in particular Europe and Japan where debit cards are used. They don't call them debit cards, but rather cashless payment or what have you. And the merchant fees for these cards are far, far lower than credit cards which makes it even more baffling to me. ADD: "Without a substantial credit history, it is…

At least in some EU countries, we do call them debit cards, and while the percentage is much lower than in the US, a third of all adults do have (at least one) credit card.

Re: How Millennials Became Spooked by Credit Cards

#30

Post by vmarsy »

cmurf wrote: post #3

It still boggles my mind how prevalent credit cards are in the U.S. and how almost non-existent they are elsewhere, in particular Europe and Japan where debit cards are used. They don't call them debit cards, but rather cashless payment or what have you. And the merchant fees for these cards are far, far lower than credit cards which makes it even more baffling to me. ADD: "Without a substantial credit history, it is…

Fun fact, in France we call debit cards "Carte de Crédit" (or carte bleue)

Debit cards there come with the same amount of fraud protection as the credit cards, there's not really a reason to use Credit cards there.

In reply to your ADD: Because in the US, you get a "Credit score"[1] based on your credit history. And when taking a home mortgage, instead of simply asking for your past few years of income proof and other papers bankers in Europe would ask before deciding to give you a mortgage, in the US they rely on that Credit score. And the best way to "build" that credit score is to have a credit history, and the simplest way to have a credit history: use a credit card for a long time and pay on time.

Because obviously paying on time a $100 credit card bill every month is a good indicator on how you'll handle paying a couple hundred thousands loan for your house (/s)

[1]http://www.myfico.com/crediteducation/whatsinyourscore.aspx

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