How Millennials Became Spooked by Credit Cards • Hacker News Board

Re: How Millennials Became Spooked by Credit Cards

#31

Post by cmurf » Mon, Aug 15, 2016, 6:29 PM UTC

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…

There is no such thing as free. I think your comment emphasizes the fact most credit card users think these kickbacks really are free, when they cost everyone a lot more money in the form of 2-5x higher fees for every transaction.

A month's worth of interest? At 0.1% per year these days? Please.

Re: How Millennials Became Spooked by Credit Cards

#32

Post by icebraining » Mon, Aug 15, 2016, 6:29 PM UTC

Vexs wrote: post #21

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 everyon…

Don't most credit cards offer rewards? If so, it's not true that it's the same thing, especially if there's no discount for paying with cash/debit.

Re: How Millennials Became Spooked by Credit Cards

#33

Post by infinite8s » Mon, Aug 15, 2016, 6:31 PM UTC

jawns wrote: post #19

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…

One thing that even people who consider themselves financially savvy (e.g. those who pay off the credit cards in full each month rather than carrying a balance) often fail to realize is that credit card companies are middlemen; the fees they charge the merchant -- typically around 3% of each transaction -- ultimately get paid for by someone, and that someone is you. If we all were less beholden to our credit cards, a…

Most credit card merchant agreements prohibit merchants from offering a discount or lower price for paying in cash.

Re: How Millennials Became Spooked by Credit Cards

#34

Post by StillBored » Mon, Aug 15, 2016, 6:31 PM UTC

Vexs wrote: post #21

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 everyon…

Debit cards have traditionally had less fraud protection in the US, and I don't think any of them have a rewards program.

So, why should I use one over my credit cards automatic 1% (or more) in cash back?

If I want cash equivalent, I use cash...

Re: How Millennials Became Spooked by Credit Cards

#35

Post by brightball » Mon, Aug 15, 2016, 6:31 PM UTC

sotojuan wrote: post #5

This is interesting and I am glad less people are using credit cards. It's really not a good idea for the majority of people in my experience. I got mine when I was 20 and I've never paid it late or gone over my limit. Most of the time I coordinate my payments with the day I get my direct deposit (I've tried automatic payments, but too paranoid that they might not work!). Discover gives me pretty good Amazon cash bac…

Like many other things, it boils down to impulse control.

It's a lot easier to look in your wallet and see how much you have left to spend (and then decide you shouldn't) vs holding a credit card and deciding you can pay for it later.

Re: How Millennials Became Spooked by Credit Cards

#36

Post by h4waii » Mon, Aug 15, 2016, 6:32 PM UTC

jawns wrote: post #19

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…

One thing that even people who consider themselves financially savvy (e.g. those who pay off the credit cards in full each month rather than carrying a balance) often fail to realize is that credit card companies are middlemen; the fees they charge the merchant -- typically around 3% of each transaction -- ultimately get paid for by someone, and that someone is you. If we all were less beholden to our credit cards, a…

In an ideal world, sure, but as it stands today, purchasing an item for $5, $50, or $5000 is the same cost regardless if you pay cash, debit, or credit.

Does it suck that a small business can't accept cash at a discount if they accept credit, due to merchant rules? Yes, I'm sure it does, but as a purchaser, I can get rewards for using a piece of plastic vs paper money?

I acknowledge and agree with the principle though -- no single snowflake.

Re: How Millennials Became Spooked by Credit Cards

#37

Post by Theodores » Mon, Aug 15, 2016, 6:32 PM UTC

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…

In the USA there is no chip and pin, the whole system is based on trust. Therefore, having credit cards exposes you to fraud. Some people may prefer to not have that attack vector to live within their means on a debit only account. Also some people may prefer to just look after their stuff and not bother with insurance and other financial products. With this mentality the benefits of a credit card are about as much use as 70's style Green Shield Stamps. For the generation not able to get on the property ladder much of the consumerism that goes with it is irrelevant.

Re: How Millennials Became Spooked by Credit Cards

#38

Post by infinite8s » Mon, Aug 15, 2016, 6:32 PM UTC

wyager wrote: post #26

ourmandave wrote: post #16

Earlier quoted context omitted.

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 th…

Exactly. Basically everybody without a cash back card is subsidizing cash back for those who do (ultimately in terms of higher prices).

Re: How Millennials Became Spooked by Credit Cards

#39

Post by space_ghost » Mon, Aug 15, 2016, 6:32 PM UTC

Mc_Big_G wrote: post #4

Boohoo. Millennials don't want to be enslaved by debt and the corporations that profit from it. I've told my kids since they could understand that credit cards are evil and are to be avoided like the plague unless you pay them off religiously every month. I'm glad to see they're listening.

I watched my parents struggle with credit card debt for decades - there's no way I'm going through that. Also, even though I've never had a credit card in my life, I had no trouble getting a home mortgage with a fantastic interest rate. This article smells like it was written directly by the Credit Card Industry, which isn't what I would expect from a reporter that's obsessed with Bitcoin.

Re: How Millennials Became Spooked by Credit Cards

#40

Post by nugget » Mon, Aug 15, 2016, 6:33 PM UTC

Blackthorn wrote: post #25

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?

Look up ''churning'' which is the pursuit of mega signup bonuses in order to magnify the rewards. I've earned >1 million points and miles through this method in the last few years, easily $10k+ worth of travel, although I keep it up now more so because it has become a fun hobby and I enjoy it.