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[+] -27 points 2 years ago (16 children)

I don't understand, why use credit cards if 25% interest rate is charged?

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  • [–] 22 points 2 years ago (4 children)

    The interest rate is charged if you don't make your payments. Otherwise, you get rewards each time you spend which makes things a little cheaper.

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  • [–] 13 points 2 years ago (3 children)

    The “rewards” come off the backs of poor people paying these usurious interest rates.

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  • [–] 29 points 2 years ago (2 children)

    They actually cone from the charges they push onto businesses to process the payments. The interest rates are just profit

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  • [–] [S] 14 points 2 years ago (1 child)

    You’re both right. The rewards are indeed mostly covered by the processing fees, but that means after covering infrastructure expenses etc., the banks are operating at a net loss (or breakeven at best), meaning they still have to fleece someone on their interest payments.

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  • [–] 6 points 2 years ago

    Plus those businesses pass the cost on to consumers like they do with any expense.

    So ultimately, end consumers who are already being fleeced by a combination of wage theft, low wages, and high prices, are the ones who pay for everything.

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  • [–] 3 points 2 years ago (7 children)

    I use my credit card all the time, and it's set to auto pay off all of it every month, so there is never any interest charged. It basically delays the time my money leaves my bank account from the time of purchase to up to a month later, with no downside, while building credit history. The interest may be 300%, I don't care because I'm never charged it.

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  • [–] 1 point 2 years ago (4 children)

    Why even have it then, and not just direct debit? Or is that something American banks don't offer?

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  • [–] 1 point 2 years ago* (1 child)

    Increasing one's credit [score] is helpful for when citizens want to make large purchases/transactions, such as getting a homeowner's loan and car, in the US. Having lower credit is an indicator to banks that one is not "trustworthy" with their (bank's) money. And with property prices soaring and most salaries stuck in the 60s (I may be exaggerating a little, haven't checked exact numbers lately), it's hard not to NEED a loan for those. Direct debit is nice to have, but there are advantages to credit cards if the user is wise with their money/credit knowledgeable. It's systemic.

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