Comments by "Matthew Nirenberg" (@matthewnirenberg) on "People Still Don't Understand Visa" video.

  1. Because it means they only have to pay out money from their account at the end of the month when the bill arrives in the mail and is due. That means that they're still accruing interest on their savings based on a higher amount (as some accounts pay / accrue interest biweekly or monthly), it reduces the total number of transactions (i.e. fewer transaction fees) into one large transaction, builds their credit score (assuming they pay the bill in full, on time before its due), and they then accrue points for simply doing their normal spending which over time they can redeem for goods, holidays or gift cards. Using a debit card means transaction fees and your bank balance instantly reduces which means you accrue less interest on your savings than you otherwise would, you incur more fees as you have more transactions and you accrue not a single point for your effort. Also, debit cards don't really provide much protection against fraud/unauthorized transactions, etc. where as credit cards add a layer of protection and the ability to dispute unauthorized transactions which just isn't possible in most places with debit cards. In all seriousness, most businesses will charge you the same price whether you pay by credit, debit or cash, so you're not getting charged more unless you're paying with a known high-fee card like Amex. If you do the right thing and pay the entire bill when it arrives, in full, immediately, then you won't be carrying any balance and thus not paying any extra fee. If you annual spending is over a certain amount then most cards will waive the 'annual fee' so that doesn't cost you. Not to mention with credit cards you can accrue points simply for doing your usual spending. Once you've earned enough points you can redeem them for products, holidays or gift cards. The points are basically paid for as part of the merchant fee's which is why its basically something like 'spend $100, earn 10 points' in most cases. It costs you the end user nothing extra as the merchant has their product prices set to cover the fee's they incur regardless of how you pay. If you borrowed from friends or family, they're having to bare the transaction fees for withdrawing the money, then you have to withdraw the money from your account to pay them back - that's all fee's being incurred by the individual on all ends. Why would you go out of your way to pay fee's? Yes cash is good but not when your incurring fee's so often. I don't know which country you're from but you seem to either not trust yourself with a credit card (that's perfectly fine as its always better to avoid debt than to be stuck in debt), or you don't understand credit cards and debit cards correctly. Maybe your country is the exception to the rule and banking is done significantly differently to the rest of the world in regards to interest on savings, fees and fraud protection.
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  2. Not sure which country you're from but pretty much all countries in the 1st world & 2nd world accept and use credit cards. Even if they're not common, they're likely available. If you use them properly by only spending what you can afford and paying the bill in full the moment it arrives, what's there not to love? You have fewer transaction fee's on your savings account as the money sits there longer which earns you more interest, you build a credit score (you'll never get a mortgage or professional loan without one; nor will investors, employers or businesses work with you if you don't have a good credit score), and you accrue redeemable 'reward points' at no direct cost to you the end user (the points are paid for with part of the merchant fees). Not to mention, most credit cards will waive their annual card fee if you always pay the bill in full the moment it arrives and your annual spending is over a certain amount they set.
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  3. Out of curiosity, why? Plenty of people use them to their advantage because they're responsible and pay the bill in full the moment it arrives, which means they enjoy all the benefits without the problems. If you don't trust yourself to be responsible with a credit card, then that's perfectly fine - don't get one. That however doesn't make people 'beyond stupid'. Responsible people use credit cards because: * It puts their regular spending into on transaction (i.e. paying the bill in full the moment it arrives) * It gives them fraud protection that debit cards generally don't have * They earn reward points (the points are paid by part of the merchant fee's) for doing their regular spending that they can redeem for products, holidays or gift cards. As the points are paid from part of the merchant fees, not having a credit card doesn't make the products any cheaper * They build and maintain their credit score - its essential for business, employment, mortgages, etc. * If their annual spending is over a certain amount set by the credit card company, the annual card fee is usually waived so that's suddenly not an extra expense. * Its beats carrying thousands of dollars of cash in their wallet daily. * Credit cards shouldn't (and generally don't) incur more fees as products are already priced to build in merchant fee's, as long as you don't 'carry a balance' then you're not paying any extra fee's for using a credit card. Debit cards generally result in your bank charging you a heap more transaction fee's (one for every transaction as debit cards don't charge a 'merchant fee') so your bank balance drops faster. Having one large transaction at the end of the month means fewer fee's, and you earn more interest during the month providing you earn savings on your interest on a bi-weekly or monthly cycle.
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