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Comment by tekla | Hacker News Reader

I get a 2-3% discount on everything with credit cards. There is literally no downside to using credit cards

The downside is that widespread usage of credit cards increases prices by 2-3% and disproportionally impacts those who can't get a credit card with the same rewards. You are getting a 2-3% discount on the backs of the poor.

The taxes of those who are eligible for credit cards pay for the poor. So what?

The amount of time people spend applying for and maintaining welfare makes up for whatever you think your tax contribution is worth. It's even at best.

Recent profile on one program and the kind of gatekeeping people face: https://www.youtube.com/watch?v=wJDk-czsivk

If my 6 figure tax contribution is not worth much, can I keep it? I'll even go back to using debit cards to make it fair.

Wait until you find out about the 4-7% network fees that BNPL provides charge merchants.

Getting a 3% discount with "net 30" payment terms is great. However, you have to have the discipline to pay off the card every month. I understand why people advocate against credit cards if they don't have the discipline to not overspend.

I suspect the downside to using credit cards comes when you don’t pay (or can’t pay) the bill during the interest free period or at the end of each month.

How is that different from not having the cash to buy something in the first place?

It’s a downside to credit cards, as opposed to “no downsides” to credit cards.

It's not a downside. The credit card didn't make you spend money you didn't have, you did.

If you are physically giving up cash, it is much easier to figure out if you have insufficient cash to make a purchase. With a credit card, it is less obvious to figure out that the balance on the card now exceeds the cash you have to pay it off. It can be done, true, but it requires a level of diligence that most people don't have.

Even people who do have that diligence can be caught out. You do the calculation, make the purchase and a week later encounter an unexpected expense like your car breaking down, or you lose your job. You may now find yourself unable to make the full repayment despite having thought about the purchase before making it.

Not having the cash in the first place doesn't result in a debt with unbounded interest repayments.

As long as you don’t lose your income. And then your savings. And then have to decide whether to use your depleting reserves to pay mortgage/rent or buy groceries. Guess which one you put on the credit card?

So basically the credit card allows me to continue to survive if I don't have liquid cash?

Damn, sounds like a good deal.

That’s a reasonable perspective, but my point was that it allows someone to sprint off a cliff that they otherwise might slow down for, and all of this was in a comment thread that started with someone critiquing people in $80k trucks getting handouts.

Those are people who sprinted off the cliff.

If you lose your income and your savings, you've got major problems anyway.

Not paying the credit card bill has consequences, but having the option to choose whether to pay timely for expenses you already incurred offers flexibility.

If you had paid cash for your groceries the day before you got laid off, the cash is gone; if you paid on a credit card, you have an unsecured debt, but you can use your cash for other things, if need be.

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