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  #2361  
Old Posted Yesterday, 1:05 PM
Stockerzzz Stockerzzz is offline
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Originally Posted by Via Chicago View Post
i do and always have. and i get sign up bonuses, points, de facto rental/trip insurance, purchase protection, and an 800+ credit score ¯\_(ツ)_/¯

If you have the discipline to pay it off every month, it seems silly to use cash or debit instead. If you don't have the discipline or are prone to overspend beyond your means, than sure cut up the plastic. Whatever works for you is the correct answer, but it is possible to use CCs responsibly (and to your benefit)
Debit cards have the same purchase protection.

Using credit cards reduces the friction in each purchase which encourages overspending. Sure, you may think the points are worth it and you're outsmarting Visa (market cap: $319B) and Mastercard (market cap: $209B), but you're spending more than you normally would by using credit.

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One of the most often cited studies is one conducted by Dun & Bradstreet, where the company found that people spend 12-18% more when using credit cards instead of cash. McDonald's reports its average ticket is $7 when people use credit cards versus $4.50 for cash.
If you get 2% cash back, you need to spend $100,000 on credit cards to make $2,000. But at the same time you just overspent by 12-18%.
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  #2362  
Old Posted Yesterday, 3:25 PM
LouisVanDerWright LouisVanDerWright is offline
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Quote:
Originally Posted by Stockerzzz View Post
Debit cards have the same purchase protection.



Using credit cards reduces the friction in each purchase which encourages overspending. Sure, you may think the points are worth it and you're outsmarting Visa (market cap: $319B) and Mastercard (market cap: $209B), but you're spending more than you normally would by using credit.



If you get 2% cash back, you need to spend $100,000 on credit cards to make $2,000. But at the same time you just overspent by 12-18%.
Don't confuse the fact that people with access to financial institutions tend to be higher income and more likely to spend more money with a "cash discount". People aren't spending more at McDonald's with a credit card because MCD is upcharging them for using a card. They are spending more because people with cards tend to have more money and therefore spend more money. Think of it this way, zero percent of panhandlers who drop into McDonald's for a meal use credit. Their bill is probably whatever change they've managed to gather. That has nothing to do with the benefits of cards vs cash.
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  #2363  
Old Posted Yesterday, 3:30 PM
Vlajos Vlajos is offline
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Originally Posted by Stockerzzz View Post
Us Group 5 people pay cash via debit cards for airline tickets. We don't revolve short term debt at 19% APR. We don't pay $95 annual fees every year. And we don't try to impress others with a plastic card in our wallet that allows us to rack up debt while spending 12-18% more on each purchase than someone paying cash.

The average American has $6,375 of credit card debt, but let me guess: everyone here pays off the balance in full every month.

Group 5!
I have never paid $0.01 in interest on a credit card. I never will and it's our primary form of paying for everything.
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  #2364  
Old Posted Yesterday, 3:41 PM
Kngkyle Kngkyle is offline
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People who think they are so much smarter than everyone else because they don't use credit cards are quite amusing.
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  #2365  
Old Posted Yesterday, 4:04 PM
Stockerzzz Stockerzzz is offline
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Originally Posted by LouisVanDerWright View Post
People aren't spending more at McDonald's with a credit card because MCD is upcharging them for using a card. They are spending more because people with cards tend to have more money and therefore spend more money.
Except the study (and not McD's fact) found that people using credit versus cash spend 12-18% more.

You need to make 12-18% on points and bonuses, less the annual fees and monthly interest to come out ahead when using credit cards.
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  #2366  
Old Posted Yesterday, 4:28 PM
Baronvonellis Baronvonellis is offline
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Yea, I'll sign up for new cards that give a $500 sign up bonus plus points. I always pay off my balances. The credit card companies never make a dime off me, and I'm getting hundreds of dollars in bonuses and other benefits. They just paid for my $100 Global Entry pass just because they wanted to lol.
The sign on bonus and the points I got paid for a big part of a trip to Europe I took. If I didn't have that I would have lost out on that money or possibly decided not to go on the trip, either way its a win win for me.

I've also been able to have the credit card company successfully dispute some bogus large charges I've gotten from some unscrupulous companies. I ordered a Badgers Neon sign for my uncle, that arrived broken from China. The company didn't answer my emails when I complained, their website disappeared, so the credit card company took care of the refund for me after I mailed it back to China. The package never made it through China customs, and then China customs sent it back to me lol.
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  #2367  
Old Posted Yesterday, 5:33 PM
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Tom In Chicago Tom In Chicago is offline
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Quote:
Us Group 5 people pay cash via debit cards for airline tickets.
That's what gets you into Group 5??? Does not compute. . .

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We don't revolve short term debt at 19% APR.
I couldn't tell you what my APR is because I don't care. . . I pay the balance off every month. . .

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We don't pay $95 annual fees every year.
And you don't get two United Club passes annually either, nor do you get boarding group 2, a free checked bag or frequent flyer mile bonuses on United. . .

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And we don't try to impress others with a plastic card in our wallet that allows us to rack up debt
Who am I trying to impress?

. . .
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  #2368  
Old Posted Yesterday, 6:15 PM
LouisVanDerWright LouisVanDerWright is offline
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Originally Posted by Stockerzzz View Post
Except the study (and not McD's fact) found that people using credit versus cash spend 12-18% more.

You need to make 12-18% on points and bonuses, less the annual fees and monthly interest to come out ahead when using credit cards.
Lol dude, did you even read what I said? WHY is one group spending more than the other? If you buy a burger cash and I buy with my card do I pay $1.50 while you pay $1.15? No...

So the reason the ticket is bigger for cardholders is because the card holders buy MORE food at McDonald's probably because they are wealthier and aren't ordering off the dollar menu but going for the big Mac meal with a chocolate shake instead of buying the cheaper end of the menu and less of it. That has literally nothing to do with whether you use card or cash and everything to do with who tends to use cards vs who tends to use cash.

It's absolutely astounding to me that you are having a hard time with this... I spend literally six figures on business cards annually and no, I'm not spending 18% more than if I wrote a check, I wouldn't being doing it if that were the case. When I go to Home Depot, a 2x4 is $2.49 whether it buy it card or cash. The card company makes money by charging the merchant for access to it's payment system usually taking up to 2.5% of the transaction as fees. Big retailers like Home Depot usually beat those fees down to 1% or less because they do so much volume. So when I go swipe $27,000 worth of appliances at Home Depot, I'm not spending 18% more on them, Home Depot is getting 0.75% or something like that less because they have to pay a fee to AMEX. I pay literally nothing for the service because I pay in full and I get 1 point per $ spent. That's not much on small amounts of money, but adds up fast on business spending.

Last edited by LouisVanDerWright; Yesterday at 9:34 PM.
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  #2369  
Old Posted Yesterday, 6:28 PM
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Steely Dan Steely Dan is offline
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Quote:
Originally Posted by LouisVanDerWright View Post
I spend literally six figures on business cards annually
wait, what?

6 figures on your business cards?

do you have them printed on solid gold?




edit:

whoops, you're obviously talking about credit cards for your business, not your "business cards". i totally misread that, my bad.
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  #2370  
Old Posted Yesterday, 7:35 PM
Baronvonellis Baronvonellis is offline
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Although the sad fact is the guy buying off the dollar menu who is lower income is probably the guy carrying a credit card balance and paying 22% interest on his balance and getting screwed over by the credit card companies and they are the least able to afford it. For people that can't pay off their balances it's better to use cash to not get screwed over with interest, and only use credit for emergencies.

Louis you should be getting at least 2% cash back if your spending so much for your business.
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  #2371  
Old Posted Yesterday, 9:42 PM
LouisVanDerWright LouisVanDerWright is offline
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Quote:
Originally Posted by Baronvonellis View Post
Although the sad fact is the guy buying off the dollar menu who is lower income is probably the guy carrying a credit card balance and paying 22% interest on his balance and getting screwed over by the credit card companies and they are the least able to afford it. For people that can't pay off their balances it's better to use cash to not get screwed over with interest, and only use credit for emergencies.

Louis you should be getting at least 2% cash back if your spending so much for your business.
Financial literacy is probably the most frustrating thing about this country. We are so caveat emptor as a society that we don't even teach basic financial math in schools. We would be a lot better off as a society if we didn't waste so much output every year on soul sucking leaches who make money off people's ignorance. People should have to pay for their behavior, but they should at least be given a basic knowledge of how the system works...

Quote:
Originally Posted by Steely Dan View Post
wait, what?

6 figures on your business cards?

do you have them printed on solid gold?




edit:

whoops, you're obviously talking about credit cards for your business, not your "business cards". i totally misread that, my bad.
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  #2372  
Old Posted Today, 1:18 AM
Stockerzzz Stockerzzz is offline
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MIT did a study that proves that credit cards increase spending by assigning cash and credit cards to two separate groups.

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This means that the "median respondent'' who was willing to pay up to $25 for the Celtics tickets under the cash condition would have been willing to pay up to $41 in the credit card condition.
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In summary, this is the first study that demonstrates that willingness-to-pay is increased when customers are instructed to use a credit card rather than cash. The results are surprising both due to the size of the premium and the ubiquity of credit card use. The variance we observe in the premium provides a hurdle to other explanations and a means of validating alternative hypotheses.
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  #2373  
Old Posted Today, 1:22 AM
the urban politician the urban politician is offline
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  #2374  
Old Posted Today, 6:17 AM
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emathias emathias is online now
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Anyone else read the Opinion piece in Crains entitled "Amazon's HQ2 Will Help Other Cities, Too"?

Anyone who did read it, feel like it was an argument that anyone who's actually good at their job should leave Chicago? That's how it came across to me. I'm not one who believes the local papers should be actively boosters for the City, but it might be nice if they didn't print things that are actively tearing the city down.

For those without a subscription and can't figure out how to get behind the paywall for free, here's the second paragraph:

Quote:
Right? Not exactly. As well-compensated employees drive up costs in these cities, they will create incentives for workers and companies who can't afford San Francisco rents or Google salaries. “Trickle down economic development” will create winners out of the cities that aren’t landing new tech jobs or headquarters.
The implication seems to be that Chicago is one of those second-tier cities and will only ever get second-tier jobs and pay second-tier wages. And if that be true, and you're a first-tier worker, why on Earth would you even consider staying in Chicago?

I don't disagree with the idea that wages will trickle down to other cities, but the timing and placement of this opinion piece seems to me to be meant to apply to Chicago. So my question is why would Crains do that?
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