This sorta meshes with how I tend to think of cash. I essentially consider withdrawn cash as already "spent" the moment it leaves my account. So when I do get around to spending that cash (especially on something frivolous) there's less of a hangup over it.
Cash Amnesia
111–120 of 166 posts
Re: Cash Amnesia
#112Earlier quoted context omitted.
When I first moved to North America, the idea that a credit card company was allowed to give people cash back, offer insurance, etc. for using their cards seemed like some bizarroworld "how is this legal" concept. Having lived here for decades, it still is. It's like an alcohol shop rewarding its most alcoholic customers by giving them free booze. And then if you sign up for a new card, or you cancel a card, some ran…
I've lived in the USA my whole life, and I still think it's bizarre and ought to be illegal. It's basically a bribe. The worst part is, as long as it is legal, it just makes sense use it - because most things are the same price either way, so it's essentially a small discount on everything. So, I simultaneously use it regularly and hope it becomes illegal.
Without some other changes to the system, like direct consumer banking and fraud protection through the fed, making points illegal would just be a big windfall for credit card companies, as they would remain the most convenient way to pay for things, while being able to keep like 2% more of what they charge merchants.
Re: Cash Amnesia
#113Earlier quoted context omitted.
I've lived in the USA my whole life, and I still think it's bizarre and ought to be illegal. It's basically a bribe. The worst part is, as long as it is legal, it just makes sense use it - because most things are the same price either way, so it's essentially a small discount on everything. So, I simultaneously use it regularly and hope it becomes illegal.
Without some other changes to the system, like direct consumer banking and fraud protection through the fed, making points illegal would just be a big windfall for credit card companies, as they would remain the most convenient way to pay for things, while being able to keep like 2% more of what they charge merchants.
This is already a completely solved problem in most of the world. They simply cap the fees card companies can collect from merchants by law.
Re: Cash Amnesia
#114Earlier quoted context omitted.
"You're taking a lot of drugs, we're going to make sure you keep taking them by giving you free drugs" is extremely different from "you're buying a lot of bras, we're going to give you a free bra". This should not even require pointing out, but apparently it does.
But, you are begging the moral question in assuming that credit cards are obviously like "drugs". For me, a credit card and a debit card are just different accounting systems for the same thing. Either one has zero interest when I manage my expenditures properly and do not carry a debt. Either one could trigger penalties and/or interest if I outspend my budget. I still prefer the credit card because of the frequently…
Except this isn't about you. There are plenty of folks who can responsible take drugs, too, doesn't make trying to keep folks hooked any less destructive and predatory. All you're being is an outlier in the highly lucrative debt trap that credit cards offer the average credit card owner.
Congrats on not falling for it; for you, a thousand people who do.
Re: Cash Amnesia
#115Earlier quoted context omitted.
I've lived in the USA my whole life, and I still think it's bizarre and ought to be illegal. It's basically a bribe. The worst part is, as long as it is legal, it just makes sense use it - because most things are the same price either way, so it's essentially a small discount on everything. So, I simultaneously use it regularly and hope it becomes illegal.
Without some other changes to the system, like direct consumer banking and fraud protection through the fed, making points illegal would just be a big windfall for credit card companies, as they would remain the most convenient way to pay for things, while being able to keep like 2% more of what they charge merchants.
Yeah, you might be right. But I'd be less inclined to use a CC if I wasn't getting cash back, so they'd face more competition from debit cards, cash, etc. And, if they refused to lower their fees, I think some (more) merchants would just stop accepting credit cards.
Re: Cash Amnesia
#116Earlier quoted context omitted.
When I first moved to North America, the idea that a credit card company was allowed to give people cash back, offer insurance, etc. for using their cards seemed like some bizarroworld "how is this legal" concept. Having lived here for decades, it still is. It's like an alcohol shop rewarding its most alcoholic customers by giving them free booze. And then if you sign up for a new card, or you cancel a card, some ran…
I straight use credit cards as insurance, especially against scams. I specifically dont use a debit card at all and dont carry it. I only have it to pull money out and it stays locked in a safe at home. CC's allow me to ensure things like Amazon sellers arent scamming you, or worse, random websites with awful return policies. With a CC merchant that have a motivation to work on your behalf (ie: to get you to pay them…
(Under Danish laws...)
I do the opposite: my main debit card is in my wallet, and is used for almost all purchases. Once it's done, I'm holding the groceries and my money is spent — I don't think about it again.
The credit card is at home, and also in my password manager. I use it for the riskier purchases, primarily airline tickets from non-EU airlines and small European budget airlines, and expensive concert tickets.
Re: Cash Amnesia
#117This sorta meshes with how I tend to think of cash. I essentially consider withdrawn cash as already "spent" the moment it leaves my account. So when I do get around to spending that cash (especially on something frivolous) there's less of a hangup over it.
Same—though I didn't used to do that back when 1) I had a whole lot less money, and 2) I used cash way more often.
Now, if I have cash, it's almost always because I intend to spend it, usually for some purpose or activity or over some time period. It's not going back in the bank. Any left over or if plans change, I'll just spend it on whatever. It's "already spent". If it leaves the bank account, it's gone.
Re: Cash Amnesia
#118Earlier quoted context omitted.
Out of curiosity, how old are you? I’m in my thirties and think the same.
I don't think it's tied that much to age, but rather local culture. For example this mindset is prevalent in Germany and Switzerland to the point where many locals look at you weird when you ask them why they prefer cash. (There are other historical reasons here too, but that doesn't take away from the main point.)
> when you ask them why they prefer cash
Would they also say they spend cash more loosely than card? That's the phenomenon being described, not absolute preference.
Re: Cash Amnesia
#119Necessary caveat on the current state of irreproducibility and outright fraud in Behavioural economics. See, for example, the thread a few days back about Dan Ariely:
Re: Cash Amnesia
#120Earlier quoted context omitted.
Without some other changes to the system, like direct consumer banking and fraud protection through the fed, making points illegal would just be a big windfall for credit card companies, as they would remain the most convenient way to pay for things, while being able to keep like 2% more of what they charge merchants.
Yeah, you might be right. But I'd be less inclined to use a CC if I wasn't getting cash back, so they'd face more competition from debit cards, cash, etc. And, if they refused to lower their fees, I think some (more) merchants would just stop accepting credit cards.
I think essentially everyone would keep using their credit cards just as much, because debit cards are significantly riskier (to the consumer) from a fraud standpoint, and cash is significantly less convenient.
Merchants can already stop accepting credit cards due to the fees. Why don't they? Because it would make their customers mad. Few businesses have customers who are more loyal to them than they are to their own (even minor) convenience. I do have a local restaurant I go to that doesn't accept credit cards and is packed nonetheless, but it's a rare feat. The points have a little bit to do with this, but not nearly as much as the convenience.
What would change is that credit card companies would have more trouble luring people to switch away from their existing card to a new one. But they'd have a huge amount of extra money to spend on advertising to make up for that.