Comment by danenania | Hacker News Reader

Comment by danenania | Hacker News Reader

This is cool, but selfishly speaking, the area I'd really like to see Airbnb sink their teeth into is the apartment rental market. I've rented a few long-term (~3 month) sublets on Airbnb, and the process was light years better than dealing with landlords.

For example--I've avoided credit cards and loans in the past because I've been lucky enough to have sufficient savings and wanted to keep things simple. This means I have a sparse credit history. I've always had a steady income though, and have rented for many years without ever being so much as a single day late on a payment. Despite this, I get treated like I'm from outer space just because I haven't needed to put myself into debt.

It's just such an utterly stupid evaluation criteria. I'm provably a great tenant, but can easily get passed over in favor of someone who has a much worse record, but keeps their credit score high. With Airbnb, I am judged by my actual relevant track record--a lessor can see that again and again I fulfill my obligations and make a good impression. And of course, there's more accountability on the other side too since tenants can leave reviews.

There's just so much inefficiency they could clean up here.

Society operates on credit and you're only hurting yourself by not engaging in the benefits of having a credit card. Use it like a debit card and you'll earn cash back and you will build your credit.

Eh, maybe in the US. I've never owned one and likely never will.

Live within your means.

Putting exactly the same spend on a credit card rather than a debit one does not conflict with living within your means. Making use of credit facilities does not mean being in debt or doing anything wrong.

It's the same in the UK - there's a world of benefit in showing that you're able to use credit products responsibly and there is no risk or any cost if you just treat a credit card like it's a debit card.

There is a risk that you can't pay the bill. Losing your job may still mean you can at least pay the minimum but it can sometimes be the start of a slippery slope.

Anyone who says 'it can't happen to me' either has very rich parents or is a fool.

Or they never carry a balance on their card

Responsibly using CC isn't about "relying on future income to pay off present debt". If you have 5k in the bank, don't spend more than that, and pay it off at the end of the month (or if you're paranoid like I was right out of school, pay it off every week)

Yeah originally I paid mine off every few days, means there's essentially zero risk

If you can't trust yourself, sure. But most people do have the ability to simply not spend more than they have in their bank account and then pay off in full even before they receive a statement. Even if you lost your job, you'd still be fine.

> Live within your means.

Most people don't use credit cards to borrow. The point of the credit is just to hold until the end of the next month and then pay off in one go. The point of doing that is to allow a period of time to resolve any disputes for example.

Credit cards give you extra consumer power - actual extra laws backing you up (at least where I am).

I can't understand people who don't like credit cards if they say it's not living within your means.

Because a lot of people don't seem to follow that. You get paid X on the 1st, as long as you spend X-1 within the month you have no need for a credit card.

Other than showing some opaque credit agency that your ok for more credit.

What about the consumer protection aspects? You don't get that with a debit card. I suppose you don't need it in the same way you don't need lots of things, but it's ignoring legal protection you could have for free? Plus every single time you buy on credit you are subsidising my credit card rewards.

> What about the consumer protection aspects?

Which ones specifically? If they are truly for free then I don't need to pay for them by virtue of having a credit card.

> Which ones specifically?

In the UK it's Section 75 of the Consumer Credit Act, 1974.

> Under Section 75 of the Consumer Credit Act 1974, the credit card company is jointly and severally liable for any breach of contract or misrepresentation by the retailer or trader.

> You don't have to reach a stalemate with the retailer or trader before you can contact your credit card provider - you can make a claim to both the retailer and credit card provider simultaneously, although you can't recover your losses from both.

> This right is particularly useful if the retailer or trader has gone bust, or it doesn't respond to your letters or phone calls.

> Section 75 of the Consumer Credit Act also applies to foreign transactions as well as goods bought online, by telephone or mail order for delivery to the UK from overseas.

https://www.which.co.uk/consumer-rights/regulation/section-7...

> If they are truly for free then I don't need to pay for them by virtue of having a credit card.

But law says you only get these protections if you buy on credit.

>Which ones specifically? If they are truly for free then I don't need to pay for them by virtue of having a credit card.

Chargebacks, protection against a stolen card, no real money being tied up during a dispute, etc.

>If they are truly for free then I don't need to pay for them by virtue of having a credit card.

Every consumer is already paying for them because business price in the credit card fees into their retail prices. If you don't get a discount for using cash/debit, you are already paying for this protection.

In the US, by not using a card, you are still paying for the benefits without getting them.

> Chargebacks, protection against a stolen card, no real money being tied up during a dispute, etc.

I have all of this already.

And they price the risk of a card being fraudulent, which isn't specific to credit cards.

>Other than showing some opaque credit agency that your ok for more credit.

This credit agency determines your ability to rent with a low deposit and your ability to purchase a home with a loan.

It's a fail-safe.

With a credit card, you've introduced a new failure mode where you can end up in debt. If you do it right, you won't, but the cc companies know that a lot of people will mess it up--that's their business model.

It's a bit like with alcohol. If you never drink, you can be 100% confident you'll never become an alcoholic. If you do drink, even a little bit, that chance goes up. Plenty of people are able to drink responsibly, sure, but I can understand wanting to avoid the possibility entirely.

> It's a fail-safe.

But it's more dangerous than using a debit card where a stolen card ties up real money during the dispute window.

Also, you can have a credit card limit set low enough that maxing it out still means you can pay it off.

"But it's more dangerous than using a debit card where a stolen card ties up real money during the dispute window."

That's true--my solution to this is not keeping too much money in my checking account.

Say you're self-employed and your best client suddenly stops paying. They have a good track record and assure you it's just a technical blip or something. You have bills to pay so request an increase in credit limit. Then your client's blip turns into something much worse, and on it goes...

That's how people become unstuck. Very few people start off with bad intentions.

>Live within your means.

Using a credit card does not mean living outside of your means. I have used a credit card for 20ish years and have never carried a balance.

Credit cards let me finance most of my purchases 20-30 days and the merchants cover the financing costs.

That's not living beyond your means.

all merchants who accept credit cards incur fees for doing so and pass that cost on to consumers. Not using credits cards is giving up the opportunity to recapture some of that cost in the form of rewards. There is not a good reason to not use a credit card as a debit card.

You are leaving money + benefits on the table by not using credit cards.

How so? If you are not disciplined, then you are gaining money by not using one.

On the other hand, my debit card is accepted anywhere where a credit card is.

(btw I'm in the EU, so I don't get the obsession with CC in the USA)

Unlike the EU, credit cards in the US have crazy perks.

2% cash back on all transactions for example mean that you're essentially getting a free discount on everything.

The difference is pretty crazy. In the Netherlands, where I live, you can't use a credit card in most supermarkets, due to the extra transaction costs. The one chain that does accept credit cards charges an extra 50 cent if you pay with credit card.

Debit cards are the standard way of paying for stuff, and are accepted everywhere. For online shopping credit cards are used a bit more often, but payment through online banking is a lot more common.

I guess in practice the system is a bit like credit cards, because it is relatively easy to have a negative balance on your checking account. There are no overdraft fees, you just pay interest on the negative balance.

Credit is determined by a lack of a 'BKR registration', which keeps track of both existing loans and payments that you missed for previous loans. If you have no 'BKR registration', you can get approved for a mortgage, a loan or a credit card, provided you meet the income criteria.

There's not a lot of "discipline" that goes into paying off your credit card each month (in the sense of practice); my credit card auto-debits from my checking account at the end of the month to pay off the full balance for that billing period, so I passively pay for my purchases shortly after making them. The only way I lose money to interest is if I actively decide to log into my account and tell the system to stop paying my balance, which is something which would be bad on a variety of levels and doesn't appeal to me tremendously, so I guess it requires discipline for me to stay out of credit card debt in the same sense that it requires discipline for me to refrain from shoving a chunk of lard into my mouth.

At a minimum, you could benefit from having a credit card that you just use to pay for a monthly subscription (e.g. Netflix, Github, Patreon) and just not use it for any other expenses; stuff it in a drawer and forget about it, or physically destroy the plastic if you don't want the temptation. (Heck, you could probably even request that your credit card have a $15 limit if you want to ensure it never gets used for anything other than your Netflix subscription.)

>(btw I'm in the EU, so I don't get the obsession with CC in the USA)

I wouldn't say that Americans are "obsessed" with credit cards any more than they're "obsessed" with shampoo. Which is to say, yes, there are some people who care a great deal about hair care products and have five different bottles in their shower, but for a lot of people it's just a basic fixture of living that you're kind of expected to deal with and isn't really in people's minds. Yes, I use it every day, but I'm not a credit card enthusiast any more than I'm a shower enthusiast.

Mostly perks. Paying it off every month is the way to go. Perhaps it's different in the EU, not sure! :)

'With Airbnb, I am judged by my actual relevant track record..'

Your credit record is based on your actual payment record. Your Airbnb reputation can be easily manipulated since you can have multiple accounts and play the review game.

“Your credit record is based on your actual payment record.”

Not mine. It has no record of any of my past rent payments, bill payments, etc. since I paid them all on time without using debt.

It is standard in the UK for regular bill payments to be recorded on a credit register regardless of how you paid those bills. Not sure if it's the same where you are? Technically, a bill is a form of debt.

My point, really, was that airbnb reviews are not a reliable measure of anyone's credit worthiness or trust other than their ability to participate in a mutual bulls..t exercise.

I would recommend to get a few credit cards so you have a credit rating. Just don't use them for credit. Make a few purchases, pay them off and life is much easier.

I know--everyone tells me this, but at this point I kind of like taking a stand against a system/culture that I consider unfair and designed to benefit banks and cc companies. While it's been inconvenient at times, I'm always able to manage.

Also, as a founder, I like to minimize the things I need to keep track of, and I prefer the simple financial discipline of only spending money I have in the bank. I do use a corporate credit card (Brex), but it's one that is specifically designed to be hands-off so that in practice it works more like a debit card.

Sidenote/plug: Brex is an awesome credit card for startups, and they have a far more enlightened approach to credit history than other cards, being started by two immigrant founders who couldn't get approved for anything despite having plenty of investment money in the bank. I was able to sign up and have a functioning card with decent limits in ~5 minutes. Pretty amazing. I have no connection to them btw (is that why I'm getting downvoted?), just a happy user.

Are you aware you can also make ~$1k just for signing up for a new credit card and using it for a few months? As long as you live within your means and spend responsibly you can get some money back from the banks by playing their games and winning. Just put it on autopay so it pays the balance in full every month.

Yeah, but for where I'm at currently it's not worth having another thing on my plate that I need to think about even a little bit, even for $1k. It also just rankles me that I should have to sign up for something I neither need nor want just to take part in a flawed and often predatory system.

I should also note that I've had multiple friends who gave me this exact advice, then ended up with thousands of dollars of credit card debt a few years later because they got carried away. No thanks. The reason these offers are made available is because cc companies know this will happen to a lot of people.

I don’t blame you, we all have a lot of things to deal with. I wouldn’t worry about ending up in debt from it if you are a tech worker with a significant financial cushion.

I wonder if there’s an opportunity here for a “free travel consultant” who will sign up for credit cards for you, take a cut, keep you up to date on the benefits you’ve accrued, and act as a travel agent, booking trips in a way that maximizes the value of the benefits. If done well, it might make life simpler instead of more complicated.

That's a cool idea--I would probably give it a try.

You can't just keep signing up for credit cards and get benefits. They will decline you soon.

True, but you can get thousands of dollars a year in benefits if you optimize it.

Sure. The "free travel consultant" just wouldn't work.

Why not? If they take 25% of a few thousand per year, that’s hundreds of dollars of annual revenue per customer - great if they can do it mostly through software.

"then ended up with thousands of dollars of credit card debt a few years later because they got carried away. No thanks. "

That really isn't necessary. I haven't paid a single cent in interest in 18 years. Get the credit card, buy a few things, pay it off and throw the card away.

If you have a business you most likely have the discipline to not be stupid.

I know it isn't necessary--just pointing out that pride often goeth before fall with these things, and since people who are otherwise financially successful are unlikely to admit to these kinds of problems, it's easy to have a skewed idea of how common they are. I know people who are financially savvy, business owners, etc., but still have had debt troubles at various points in their lives.

Probably true. After all, being in debt is the "American Way" :-)

I have a similar opinion of the credit card companies as you. But in my opinion, the way to take a stand is to get the credit card, never give them a penny of interest or fees, take all the benefits from the card, and grow the share of people with credit card customers from whom the cc companies lose money.

That's supporting the system and even hypocritical for you if you disagree with the system existing.

They take a cut from every transaction you make. They make money even when you always pay off your balances. Your benefits were paid for by the transaction fees absorbed by merchants.

So if you want to take a stand, use only cash.

Best is to have a credit card but never use it.

My husband can’t wait until his credit rating is 0 - due to not enough info because we haven’t had any debt for however many years :) I definitely get the no credit cards on principle thing! We’ll just deal with any additional hassle that comes about from not having a credit score. It won’t be the end of the world.

Dave Ramsey has encouraged millions of his followers to do the same ("indeterminable" score"). For the most part, it is not that much of a problem. Even home mortgages can done through manual underwriting.

The biggest pain point seems to be car rentals as they seem to have constantly shifting and strange rules about whether and when they accept debit cards. The next seems to be car insurance discounts as insurers seem to have strangely connected your driving risk with your credit score.

Yep, car rentals are a pain point for sure. There are companies/franchises that will accept debit cards with a deposit, but it can be really hard to get a clear answer one way or the other apart from just showing up and trying. In my experience, it has been about 50/50.

It's not very rational, since I'm perfectly happy to leave a deposit higher than some people's credit limits.

Could you share what kinds of banks will do manual underwriting? I am another person that refuses to get credit cards, but I did run into issues getting a mortgage.

All the banks that I spoke with would concede in person that I am an extremely low risk, but they all intended to sell my mortgage on the secondary market (but still do the servicing themselves). So, they wouldn't / couldn't give a mortgage to someone who doesn't fit the "normal" boxes.

Finding a bank that was willing to not sell the mortgage took a bit.

Dave Ramsey recommends Churchill Mortgage.

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