The technological innovations of the last fifteen years, from advertising enshittifcation to AI cheating, have largely been a disaster. We are sadly at the point where, as Ted Gioia says, “mo…
There are no free money. These are loans. And making them attractive with cashbacks and rewards is done to trap unresponsible spenders. 95% of the time you don’t need to borrow money from the bank, unless you are in emergency or you are to invest these to achieve some payback (e.g. a loan to open your business).
These are loans. And making them attractive with cashbacks and rewards is done to trap unresponsible spenders
I am aware, which is why I specifically said
This is bad advice for anyone with good credit and spending habits.
For people who aren’t irresponsible spenders, it’s a bad financial decision not to take the short term bank loan. Sure, I don’t need to spend the banks money because I have enough in my checking account to cover it. But by not doing so, I lose money on any transactions that don’t charge me a fee to run my card.
If you’re not responsible enough to use a credit card and not destroy your finances, absolutely do not use them. But for those of us who are, it’s a dumb idea to eschew it just because you have the money on hand. Like I said, I haven’t paid interest in a decade and have made thousands from my normal spending habits.
If I followed your advice, I would be objectively worse off, because I’d be losing money from my rewards for no benefit whatsoever. And I can guarantee I’d be materially worse off, since my credit card is the reason my credit is as good as it is, and that bullshit has a pervasive and perverse effect on your life. It’s not only loans that are impacted, but insurance, housing and employment can be as well. So maybe I should have left good credit off, since responsible spending will build your credit up even if it is bad currently.
TL;DR - responsible credit card use is a good thing, and foregoing it just because you have money on hand is a bad financial decision. Pay that shit off immediately and there’s no material downside and you still get all the benefits.
Irresponsible vs responsible is how the credit card companies frame it, but I think most of the time it’s about luck. The kind of luck where the primary income gets hit by a car or someone in the family gets cancer.
There are no free money. These are loans. And making them attractive with cashbacks and rewards is done to trap unresponsible spenders. 95% of the time you don’t need to borrow money from the bank, unless you are in emergency or you are to invest these to achieve some payback (e.g. a loan to open your business).
I am aware, which is why I specifically said
For people who aren’t irresponsible spenders, it’s a bad financial decision not to take the short term bank loan. Sure, I don’t need to spend the banks money because I have enough in my checking account to cover it. But by not doing so, I lose money on any transactions that don’t charge me a fee to run my card.
If you’re not responsible enough to use a credit card and not destroy your finances, absolutely do not use them. But for those of us who are, it’s a dumb idea to eschew it just because you have the money on hand. Like I said, I haven’t paid interest in a decade and have made thousands from my normal spending habits.
If I followed your advice, I would be objectively worse off, because I’d be losing money from my rewards for no benefit whatsoever. And I can guarantee I’d be materially worse off, since my credit card is the reason my credit is as good as it is, and that bullshit has a pervasive and perverse effect on your life. It’s not only loans that are impacted, but insurance, housing and employment can be as well. So maybe I should have left good credit off, since responsible spending will build your credit up even if it is bad currently.
TL;DR - responsible credit card use is a good thing, and foregoing it just because you have money on hand is a bad financial decision. Pay that shit off immediately and there’s no material downside and you still get all the benefits.
Irresponsible vs responsible is how the credit card companies frame it, but I think most of the time it’s about luck. The kind of luck where the primary income gets hit by a car or someone in the family gets cancer.