Comments on: Evil Credit Cards

By: Broke MBA

Broke MBA — Sat, 10 Oct 2009 02:29:01 +0000

Joe,

Good stuff. I also make use of a credit card, although not to the extent that you do. I pay the bill in full each month when it’s used, which isn’t very often. The convenience factor is why I continue to keep mine.

I really liked your analogy about the merits of the coffee and cancer study and it does make me wonder…. Some people lack self control at best, or have more serious issues at worst. This is true regardless of their vice.

It is painful to see lives ruined due to lack of self control, regardless if it is due to debt and credit cards or drugs and alcohol. But I’m not sure I can buy into the fact that credit cards are evil. Because like alcohol, when used responsibly, they really can provide something worthwhile to the consumer. In your case, it’s rewards. In my case, it’s convenience.

By: Four Pillars

Four Pillars — Sat, 10 Oct 2009 01:56:35 +0000

Excellent stuff – this is one of the best posts I’ve read on the “how evil are they” topic of credit cards.

By: Credit Card Chaser

Credit Card Chaser — Sat, 10 Oct 2009 01:43:38 +0000

I would take issue with Baker’s underlying assumption that it is almost always the credit card company’s fault when people misuse credit cards (although there are certainly things that need to change in the credit card industry: making card holder agreements easier to understand, greater transparency, etc.) but in the majority of situations it is plain and simple up to the card holder to take responsibility for their actions.

It seems a little bit ridiculous to take this kind of position – almost like one saying that they have decided not to get a mortgage and they are now against all banks because there are some people that misuse their mortgages, home equity lines of credit, etc. I take that back the more and more I think about this – It actually is a LOT ridiculous

I agree with you in that for me to NOT use my cash back credit card would be simply a waste of money on my part – something that I am not interested in doing.

By: JOE

JOE — Thu, 08 Oct 2009 13:26:58 +0000

I understand and respect your view. You feel it’s a corrupt system, and choose to opt out of it. I feel it’s a corrupt system, and extract from it what I can. Admittedly, mine is the morally questionable position, I see that as well. I view it as pocketing some of the fee the merchant is charged and passes on to me anyway in the form of higher cost regardless of whether I pay cash or debit/credit. Absent those fees, I doubt the 2% rewards would exist.
Baker, you are a Good person, with a capital G. The world would be a better place if more people thought as deeply as you do.

By: Baker

Baker — Thu, 08 Oct 2009 12:33:11 +0000

I thought this was an insightful piece.

In regard to your comments on my decision, I don’t think that the inability to avoid debit cards altogether is in itself reason to use credit cards. In other words, the inability to avoid a lesser evil isn’t reason to support a greater one (in any topic).

Credit and Debit profit (roughly) close to the same in the fees category. Neither are perfect. Where they differ (and why credit cards offer better rewards) is that the credit card have a HUGE profit cent in charging interest.

The majority of this interest is generated by a select few that are in a cyclical and destructive habit. It’s their fault, but the companies go out of their way to support it.

The offering of rewards from profits made in this way is why I choose not to participate. I don’t want to be part of the problem in any way shape or form. 2% is not enough for me to compromise.

In a perfect world we would have more options (and they are growing) in terms of online bill paying, bank transfers, etc… We try to spend cash where we can, but have a couple thing that force us to keep debit for now.

Lastly, it’s only “free” money to you. Nothing’s “free.” For me, the source of free matters.

Good stuff!