" I use my credit card for the miles"

[keelba]

On the news radio the other day, they were asking the rhetorical question, "Do you prefer to make most of your purchases with cash or plastic?" Then they followed it with sound bytes. The one that stood out was, "I use my credit card for the miles." This pissed me off. Why can't people understand that those miles are not free, that we all have to pay for this person's fucking miles? I just wish people weren't so damned stupid.

The overall consensus of the news article was that some people prefer plastic because of the perks and not having to always carry around cash. While others preferred to use cash because they felt like they weren't spending real money when using a credit card, which was dangerous because they'd always spend too much. That's what I like about Bitcoin. It doesn't have the perks of a credit card but it does prevent you from having to stop by the ATM and pull out cash all the time. However, I consider lower prices due to the merchant not having to pass his costs on to me a perk. Bitcoin also solves the problem of not feeling like real money because you see your balance go down in your wallet the minute you spend from it.

[royston]

The credit card companies normally charges the merchants 3-5% over the transaction cost.

If I use a credit card which gives me cash-back, and I pay off the card balance every month, why should I use cash instead?

[jackthebeanstalk]

Every perks have their prices, I guess not many people know or care

[01BTC10]

I use mainly cash. I don't like the fact that you can track all my habits by looking to my bank statement. Since Canada removed penny from circulation most store round the change to the customer advantage. I'm also enjoying to fill a pot with my daily change.

[AliceWonder]

I use mainly cash. I don't like the fact that you can track all my habits by looking to my bank statement.

Bingo.

It was really embarassing about two years ago when I made an appoinment for phone sex, called the service, and my card was declined.
I had money in the bank, WTF?

So I go in to the bank and ask, and they declined it because it was a phone sex service and just the other day I had ordered a french maid outfit from Thailand and these purchases were not typical of me at the time so they thought my card had been stolen.

Um, how do they know what is typical of me and what business is it of theirs?
And why should I have to go into my bank to explain to a customer service rep that yes, I bought a maid outfit and wanted to call a phonesex line?

I don't like credit cards, I appreciate their concern for my safety but I still don't want them tracking what I spend money on.

[threeip]

Um, how do they know what is typical of me and what business is it of theirs?
And why should I have to go into my bank to explain to a customer service rep that yes, I bought a maid outfit and wanted to call a phonesex line?

I don't like credit cards, I appreciate their concern for my safety but I still don't want them tracking what I spend money on.

Oh you didn't know? 'The bank' always has your best interests at mind - they know you, man 

[tysat]

The credit card companies normally charges the merchants 3-5% over the transaction cost.

If I use a credit card which gives me cash-back, and I pay off the card balance every month, why should I use cash instead?

Exactly!

I feel like I'm giving away money if I don't get the rewards from my card.  I lose nothing using them because I pay them off every month, and I get back a 1-2% on everything because I charge it all.

[CryptoMinter]

If I want to support the business, I use cash. If I don't, I use a credit card.

Most merchants indiscriminately pass on the cost of credit transactions to all consumers which puts cash customers at a disadvantage. Besides that, try purchasing some every-day items with cash like an airfare. You'll have to go to the airport, park ($), walk inside, wait in a giant line depending on the time of day, and pay an in person ticketing fee. Bitcoin would help with this at least, but today it's not there.

To be honest, credit cards have empowered consumers with extra protections though arbitration in the credit companies. If you get scammed out of cash (or bitcoins) you have to pursue a case in court which can be difficult, time consuming, etc. A credit card can issue a chargeback or provide consumer protection insurances (extended warranty, theft insurance, etc) which seems bad for merchants and good for consumers (legitimate use only). Even with all the benefits of bitcoins today, without effective escrow on everyday transactions, it is consumer-unfriendly compared with credit cards. As much as I like bitcoins, it will take a drastic change in the consumer ecosystem before I go buy a new TV with bitcoins or cash instead of my AMEX.

[ex-trader]

Credit/debit cards are used so much since they work. I get protected against scams or bad goods, get free miles so I can fly my family on holidays and it's so simple to pay in person or by phone/internet. Cash is nice to use occasionally (it feels more real) but only when necessary for small purchases and I certainly wouldn't do big expenditures in cash, plus you cannot use over certain limits anyway (try buying a car with banknotes!).

As for the fact that someone else pays for this service, this is the same as any business, where there elements of cross-subsidy. Every year I pay my car insurance and don't crash I'm subsidising someone who did. Everytime I go to an 'all-you-can eat' buffet I try to make sure someone is subsidising me by eating more than average.

I'm a consumer not a Bitcoin evangelist. I'll pay for something with my Bitcoins when it offers me an advantage to do so, either in speed, cost or security. Right now, for me personally, I've never come across that situation.

[malevolent]

I certainly wouldn't do big expenditures in cash, plus you cannot use over certain limits anyway (try buying a car with banknotes!).

Why wouldn't you be able to use cash? Unless you are buying a new and/or expensive car it is sometimes more comfortable (less time waiting till it arrives in the bank) + less people know what you do with the money.

I bought my motorcycle with cash without a problem.

[ex-trader]

I certainly wouldn't do big expenditures in cash, plus you cannot use over certain limits anyway (try buying a car with banknotes!).

Why wouldn't you be able to use cash? Unless you are buying a new and/or expensive car it is sometimes more comfortable (less time waiting till it arrives in the bank) + less people know what you do with the money.

I bought my motorcycle with cash without a problem.

In many countries car dealers (and watch dealers) get funny about taking large cash payments, due to money laundering rules, about 15,000 euros in Europe for example.

Also who wants the risk of holding that much cash without insurance? Also the dealer won't want the risk of holding that much cash either.

[malevolent]

In many countries car dealers (and watch dealers) get funny about taking large cash payments, due to money laundering rules, about 15,000 euros in Europe for example.

Also who wants the risk of holding that much cash without insurance? Also the dealer won't want the risk of holding that much cash either.

Yeah, I know about the 15k € limit but that's only for companies, I'd rather buy it from a private person, it will be cheaper I probably won't get scammed buying something that will fall apart after a month (knowing what kind of dealers operate in my country).
And even if someone would want to buy a car from a dealer with cash in excess of 15k €, if the dealer is a nice person it won't be a problem.

Another solution: structuring, works in countries with non-overzealous financial regulation.

[atomium]

This is why bitcoin is going to disrupt the currency industry, people prefer cards over cash because its easier and now people will prefer bitcoin over cash because its cheaper and faster.

[CurbsideProphet]

The credit card companies normally charges the merchants 3-5% over the transaction cost.

If I use a credit card which gives me cash-back, and I pay off the card balance every month, why should I use cash instead?

Not only that but if you're financially responsible, you can use a CC as an interest free loan.  Citi just gave me a 0% loan for 18 months.  The catch of course is that you need to pay the balance in full before then but that's why I say you need to be financially responsible.

[BitcoinAshley]

Credit/debit cards are used so much since they work. I get protected against scams or bad goods, [...]

The problem is, the fraud committed through those protection services cost the businesses lots of money, and everyone's costs are raised, including yours.

Chargebacks are nice to baby us in case we don't do our research and do businesses with companies that end up scamming us. And the occasional "I didn't see that coming!" But in the real world, there is a cost for that - and that is the fraudulent chargebacks that many legitimate businesses have to endure and these losses are prices into the goods they sell. Your fraud risk is just being massively elevated and then hidden in the prices of your goods and services rather than being controlled by you individually (i.e. limiting your risk due to incentive.)

As for stolen funds protection (french maid outfit + phone sex hotline) your card company shouldn't have to decline "non-typical purchases" (and risk your embarrassment) because the card shouldn't be so insecure in the first place. With cash, it has to be physically stolen from you. With bitcoin, the seller never gets any number that gives them permission to move your coins. Using a credit card is like giving the privkey in your wallet.dat to every single company you do business with.

[mitty]

Credit/debit cards are used so much since they work. I get protected against scams or bad goods, get free miles so I can fly my family on holidays and it's so simple to pay in person or by phone/internet. Cash is nice to use occasionally (it feels more real) but only when necessary for small purchases and I certainly wouldn't do big expenditures in cash, plus you cannot use over certain limits anyway (try buying a car with banknotes!).

As for the fact that someone else pays for this service, this is the same as any business, where there elements of cross-subsidy. Every year I pay my car insurance and don't crash I'm subsidising someone who did. Everytime I go to an 'all-you-can eat' buffet I try to make sure someone is subsidising me by eating more than average.

I'm a consumer not a Bitcoin evangelist. I'll pay for something with my Bitcoins when it offers me an advantage to do so, either in speed, cost or security. Right now, for me personally, I've never come across that situation.

Exactly.

Merchants charge more to make up for the transaction fee the expect due to people using credit cards; prices would almost definitely be lower if credit cards weren't accepted anywhere.  You may as well use your credit card and reclaim some of that premium in the form of miles and other rewards.

http://en.wikipedia.org/wiki/Tragedy_of_the_commons

^ Prices would be lower if no one used credit cards but people use credit cards because there's a self-interest in obtaining the miles, rewards, etc..
You're basically paying for a service whether you use it or not.  The higher prices everywhere credit cards are accepted is in exchange for convenience, buyer protection, and rewards.  Using cash is like paying to enter a buffet and not eating anything.

The convenience of using credit cards is huge- I use my credit card whenever I can, even for the smallest of purchases.
It's a pain to have to pull out cash and put the change back in.  So much easier to slide a card and be done with it.  The fact that the CC company sees what I buy serves to my advantage as well since I can also log in and review my purchases.  I'll use cash if I need a private transaction but I don't care about privacy for the vast majority of my purchases. 

As for buyer protection/fraud prevention; it's unfortunate but true, but the majority of people will put as little effort as possible into securing their finances and will gladly pay a premium for someone else to do it for them.  The fact that people fall for Nigerian/409 scams should be enough proof that some sort of buyer protection is needed for the general public.

The fact that you're borrowing someone else's money is also to your advantage.  You're not responsible if your account is compromised and will be credited for unauthorized purchases before you ever lose a cent from your bank account.  A few months ago I went to Subway and bought a $6 sandwich.  I was charged ~$60 and didn't notice until I was looking at my credit card statement online.  I called Subway but they never did anything.  Called my credit card company and they took care of it and refunded me the difference with no additional effort on my part.

Cash (whether paper or digital) should always be an option from a security standpoint but I don't think there's any reason for most people to use it for day-to-day transactions.  I fully support Bitcoin but a solution for quick transactions and buyer protection/security is absolutely needed before it sees any major point-of-sale adoption.

Never underestimate what people will pay for convenience and protection. (and miles )

(The downside of credit cards is the ability for people to mismanage their money by carrying a balance for extended periods of time, which is where the CC companies really profit)

[domob]

Credit/debit cards are used so much since they work. I get protected against scams or bad goods, get free miles so I can fly my family on holidays and it's so simple to pay in person or by phone/internet. Cash is nice to use occasionally (it feels more real) but only when necessary for small purchases and I certainly wouldn't do big expenditures in cash, plus you cannot use over certain limits anyway (try buying a car with banknotes!).

Actually, we bought my current used car (at around 14.000 Euro at that time) with cash.  But here in Austria things are different with not so much credit cards around (mainly EC cards for purchases).  I have to say, it is a pretty interesting feeling to pay with a stash of bank notes.   (At least for me for whom such amounts are not what I have for everyday-spending.)  Maybe that would be more difficult in the US, since you guys apparently never even use the 100 $ notes (except for illicit purposes).  It was no problem at all to hand the car dealer 500 Euro notes in this case.

[kik1977]

I certainly wouldn't do big expenditures in cash, plus you cannot use over certain limits anyway (try buying a car with banknotes!).

Why wouldn't you be able to use cash? Unless you are buying a new and/or expensive car it is sometimes more comfortable (less time waiting till it arrives in the bank) + less people know what you do with the money.

I bought my motorcycle with cash without a problem.

In many countries car dealers (and watch dealers) get funny about taking large cash payments, due to money laundering rules, about 15,000 euros in Europe for example.

Also who wants the risk of holding that much cash without insurance? Also the dealer won't want the risk of holding that much cash either.

Other Countries (like Italy) have even lower thresholds (1000 EUR in the italian example) for cash transactions.

[gollum]

On the news radio the other day, they were asking the rhetorical question, "Do you prefer to make most of your purchases with cash or plastic?" Then they followed it with sound bytes. The one that stood out was, "I use my credit card for the miles." This pissed me off. Why can't people understand that those miles are not free, that we all have to pay for this person's fucking miles? I just wish people weren't so damned stupid.

Cuz people are stupid. Thats why people got 15 different credit cards to make their economy go around...

[hambalan]

Credit cards are only good for those who are financially responsible, able to exercise self control and who do not live above their means. For others, it could be a fly-trap that gives instant gratification but cause endless financial miseries down the road.