I have a Credit Card, but I don't really use it. Why should I use it? I have never really receive much teaching on the topic, but somewhere on my inside, I just know that I hate the concept of buying on credit. It is just so stupid! It is based on a false concept, at least seen from a human perspective. What do I mean?
- I don't have the money now, so I will borrow $1000 to buy something, and pay it back later.
That is the concept. But, if you actually believe that you have the power to pay it back so quickly (that you do not turn it into a big debt), then why don't you just save the money and buy it with the money you actually have instead?
It is just so stupid! We believe that we will be able to pay it back monthly, instead of trusting that we can save the same amount monthly and pay it at once, without adding any interest.
But, somehow, many people just don't get it. Instead, they own lots of credit cards and they spend their money in all directions, and later have a hard time paying it back. Not only do they have a hard time paying it back, but instead of paying $1000, they are actually paying $1200 (or more).
In Money, Explained on Netflix
In this episode on Netflix about credit cards, we learn a lot more about how the credit card business works in the USA and about people who have learnt to take advantage of it, and also about people who have been suffering (and still suffer) from the consequences. ANd let me tell you, the latter part is by far the biggest group.
Often you can pay back without any interest within 40 days (or who knows how many days), and those who are good at paying back are called transactions. But, the banks don't make money on those, so they are not really the best customers. A good customer is the so-called "revolvers", those who are unable to pay back within time. They are often fooled by the monthly paper saying "minimum amount you have to pay" and then they pay this amount. The only problem is that if they do so, they will not pay back their loan within 40 days, but it can take many years, and by the time you finish, you have paid so much more!
This episode was really about the American market, but there is still a lot to learn about the psychology behind credit cards, and if you are a person who regularly use credit cards, you might learn a few tricks and heed some of the warnings presented in this episode as well!
I can warmly recommend it!
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