Fools with tools – credit cards

Making Sense of Cents recently posted an article about things to never put on credit cards.  Here’s a review of her never-do list:

  1. Furniture.
  2. Wedding expenses.
  3. Medical bills.
  4. Vacations.
  5. College costs.
  6. Clothing.
  7. Down payments.

At one time or another, I’ve used credit cards for all of these things and much more.  To be honest, who cares what you put on your credit card.  I think the important thing is to pay it off – period.  In my book, credit cards can be better than cash.  It’s the fool with a tool you have to worry about.

Credit cards can make life convenient:

  • They can offer protection against theft or fraud.
  • For travelling and accommodation purposes, most companies will not take a reservation without one.
  • They can offer a good way of keeping a detailed record of your spending.
  • They can help you build up a (good credit) history for future transactions.  Certainly cash can’t do that.

I can’t imagine my life without credit cards.  I’ve used them to reserve a hotel room half-way around the world.  I’ve bought concert tickets.  I buy gas for my car every week on a credit card.  Credit cards can be an excellent money management tool if used wisely.  Just don’t be a fool with a tool.

Scotiabank PassportTM Visa Infinite* Card

(Disclosure:  no credit cards were harmed by this post but consumer spending habits might have been.  If you’re struggling with debt please consider consulting with a financial professional.)

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, we're inching closer to our ultimate goal - owning a 7-figure investment portfolio for semi-retirement. We're almost there! Subscribe and join the journey. Learn how I'm getting there and how you can get there too!

45 Responses to "Fools with tools – credit cards"

  1. I liken just about every financial product as a tool. Used correctly, it can be beneficial and/or helpful. Used incorrectly and it can come back to bite you in the butt. Know what it is designed to do and learn how to use it correctly.

    Reply
  2. Some people get caught up in the ” I must earn points” and charge more than they should. I have also found most small businesses pay 2% to a credit card company so if you have a purchase of say $2000 ask to pay by debit or cash and request the discount 7 of 10 times I have got it .

    Reply
    1. The way I see it, and I love points as well, the “must earn points” must also mean “I must spend money to earn points”. I’m not sure that’s win-win unless you have the money to begin with!

      Reply
      1. As the credit card has become so ingrained in our consumerist society, I know I’ll never win the credit card debate, nor produce any converts, so I’ll simply leave it at this: the overwhelming majority of CC users consider ‘price to self’ only, and will never seek to understand ‘total cost’.

        Over the course of the last five years I’ve pursued hundreds of personal finance blogs and exactly zero of them put forth a negative argument against credit card usage, all were in favour due to all the same perceived benefits to self (e.g. “free” cash back). Even those which did recognize ill effects did so in the most narrowest scope (e.g. high interest rates).

        I can forgive the financially illiterate general public, but it’s a bit astounding that PFers, who put so much time and attention and effort into dissecting all other areas of money, never take steps to fully research and understand what some use almost exclusively in their daily lives. In this instance, PFers are basically cheerleaders for something they know little about (think tip of the iceberg).
        (Would be an interesting poll to see how many CC pundits have actually read and understood all copies of their entire credit card agreement forms; my guesstimate, well under 50%.)

        Credit cards are very rudimentary, but any kind of innovation would most likely erode profits, thus we are stuck with a purposely flawed consumer product (not tool).

        As my new motto goes — marketing beats math!

        Enjoy the Grey Cup!

        Reply
        1. SST, do you ever find it interesting the people without money (i.e., maxing out their CCs and only pay back minimums) are the same people subsidizing the folks that can afford to pay cash – people with money? I find that very predatory in the CC industry, credit industry in general.

          The credit card industry is a HUGE marketing machine. I would agree, for many things, marketing beats math 🙂

          Reply
        2. Hey SST
          Who are you referring to as the “financially illiterate public”? Is that everyone that posted a positive view on cards that does not own a financial blog?

          Secondly on the top 100 frustrating topics to write about in Canadian finance centric issues I would rank cards at around #97.

          You and I disagreed about inflation before. I think that’s a much bigger issue. If it wasn’t, why the flak over $15/min wages. Shouldn’t that $10 or $12 per hour still suffice if everything still cost the same as it did 5 years ago?

          Why do 80% of government employees get a defined benefit pension? Funny I don’t have that but my taxes sure pay for that. 60% of Canadians have no company pension at all. I don’t think that’s fair. Particularly when I’m standing in line or just been transferred for the 8th time calling into a government agency the speaks condescendingly to me and works in slow motion.

          A billion dollars got wasted on a gas plant cancellation in Ontario. I’m pretty pissed about that too. I’m not happy at how much tax I pay now, the paltry tax break given to the middle class, will plans to create other taxes slowly roll out that will take 10 X the break given. Let’s start with the doubling of the land transfer tax. Much more relevant topic.

          I could easily pick quite a few more topics. Your credit card topic… Yes I see your point. It hurts some. But many things in life do. It will never get any traction.

          I read a quote somewhere around the midpoint of the recession. It was a Wall Street type explaining that the markets weren’t there to help people insomuch as to find ways to take money from the weaker players and filter it back to the top.

          There are so many ways people get taken adavantage of these days this just does not register on any radar.

          Reply
  3. I paid my entire wedding and honeymoon with my credit card. Did the same for all the new furniture we bought when moving in our new house. Because of the generous cashback on my card, I’ve accumulated more than 1500$ of “free” money in the last two years and haven’t paid a single cent of interest. Also used the extended warranty on a few occasions. Guess I’m not a fool and I like this tool.

    Reply
  4. I’m on the opposite side of the spectrum when it comes to using credit card. I try to put everything on credit card to take advantage of the cash back. I always pay the balance in full so I don’t get hit by the high interest rates. We watch out our expenses already so I don’t buy the idea that using credit cards will make us spend more money. Like Big Cajun Man said, credit card can be a great tool if you know how to use it properly.

    Reply
  5. I agree with your comments but would go further. I think his comments are appropriate only for those with spending control problems, I recommend the following approach for anyone else:
    Assumptions:
    1. Balance paid each month without exception.
    2. Spending not to exceed income, ever.
    with that in mind:
    1. Carry a 1.5-2% (or better), no fee, cash back card
    2. Charge EVERYTHING (even a stick of gum)
    3. Always use the card, never debit.
    4. Always charge big items (insurance premiums, dental, major purchases).
    5. Invest the cash back whenever possible.

    I receive a few hundred dollars of free money each year.
    Further, if provides extra purchase insurance and accountability plus a one source itemized list of all yearly spending.

    What’s not to like?

    Reply
  6. I love using my cash back credit cards so much. As long as we are disciplined and not incurring unnecessary fees and interest, credit card is one of the best thing ever happened in this modern society. Thanks for sharing!

    Cheers!

    BSR

    Reply
  7. I’ve done all the items “not to do” that have come up in my personal life. Used my card for a car down payment. I knew I had a bonus coming from work but wouldn’t receive it for a week or two, so I charged it.
    ALWAYS charge vacations to your card. Assuming your card has the travel insurance suite (as mine does) – charge the vacation, get flight/baggage delay/lost insurance, travel medical insurance, car rental insurance, etc. All from just charging it to the card.
    I also always use (and recommend) using your card for any big-ticket purchase like appliances and iPads and furniture. First, price protection if the product goes on a better deal in the near future and second (most important), double the warrantee. Bonus, if you have purchase assurance, someone steals your iPad, they will replace it for free.

    Plus that sweet, sweet cashback on the purchases! 😉

    Of course, all these are only good if you’re card has the mentioned insurances (probably all annual fee cards, or would have to have several different free cards to get all mentioned above), and you pay the bill to avoid interest, and charging it to plastic doesn’t make you spend more.

    But honestly, all the included insurances on my cards has saved my butt too many times to count.

    Reply
  8. Sorry, should have included in my other (lengthy) comment. A little tip: keep track of your purchase price protection usage (if your card offers it). If you have the space within your limit available (I think most cards max at $500 or $1000 per year), use your card to buy your iPad, whatever in early December before the crazy Christmas rush. Then call the credit card company on Boxing Day with the best deal out there and they’ll refund you the difference.
    This way you get the Boxing Day deal without the crazy Boxing Day shopping experience. 🙂

    Reply
  9. Like most of the others here I see no problem with putting any and every purchase on my cash back card. (Including a used car and a spa once) I just set it to autopay every month as I have since I first had a card and pay off the balance.

    I just got my latest cash back reward. $200.00. I would pay the same amount if I used cash or debit. So why not take what you can get? Act like you are the CRA.

    Reply
    1. Thanks for the comment Jess. I think if you pay off your CC every month, use it for whatever you wish. No point being points-hungry though. That’s just means you’re spending more money to get more points.
      That’s a marketing machine playing with you.

      Reply
  10. (Apologies for the delayed response, I’m busy! Paul, I’ll try to post to you on the weekend.)

    re: “do you ever find it interesting the people without money (i.e., maxing out their CCs and only pay back minimums) are the same people subsidizing the folks that can afford to pay cash – people with money?”

    Your comment reinforces the fact of how most people view credit cards, with a focus on personal price and rewards. It’s not about revolvers subsidising transactors (narrow), but users inflicting non-users (broad) and the over-all economic effect.
    (And most transactors are merely revolvers in disguise. Think of a revolver as an exponential curve and a transactor as a sawtooth wave.)

    It’s like focusing on gross market returns without ever accounting for taxes, fees, or inflation to calculate real returns. Rare is the consumer who takes an expansive and long-range view of their personal small scale financial decisions.

    It gets a bit tricky because both usage and debt load are not equally distributed throughout income quartiles.

    Basically, higher income individuals and households have higher usage, limits, and balances than the lowest income quartiles.

    In other words, it’s not the lowest quartile of revolvers who are subsidising all transactors; it is the higher income quartiles, those who can afford NOT to use credit cards, who chose NOT to use cash/debit, who are doing the bulk of the subsidising — and the bulk of the damage.

    Perhaps only half of the lowest quartile utilise credit cards, and that debt composes about half of their total debt load. We can probably safely assume they are using credit cards for necessary living expenses and not to chase “free” cash back.

    Because credit cards issue non-specific consumer debt (e.g. mortgage debt can only be used to buy real estate) as well as being consumer products (i.e. you pay to use it), they cause two layers of non-discriminatory price inflation across the entire economy.

    Thus, the credit card users in the lowest income quartile having to utilise even more credit to make ends meet, thus using even more of their income for minimum payments, thus making them even more poor. The lowest quartile cash-only members also must bear the higher costs, at the cost of becoming more poor, and whom are most likely already living at a lower standard than those in the same group who do use credit cards.

    You might think, big deal, that’s just capitalist economics at work. Thing is, by using credit cards for personal gain you are reinforcing and widening the wealth inequality gap. Your payment CHOICE of credit card is making the poor even more so.

    There are ~3 million “poor” people in Canada, and being poor is expensive for the rich but mostly for the poor.

    Just from a health care point of view, if the poor had the same basic level of health as the wealthiest, we could eliminate perhaps tens of billions of dollars in public healthcare costs per year (as well as many millions in wasted production).

    Want to pay less tax?
    Use less credit card.

    Beyond that, there are a couple other serious problems with credit cards.

    So to those who think they are getting “free” cash back or subsidised benefits…widen your focus. As an intelligent millionaire recently said, “…this is a reminder that free never exists and the price is usually something you think is no big deal but in fact is a very big deal indeed.”

    Reply
    1. You might hold the record for the longest comment on this site now 🙂

      I get that, re: higher income individuals and households usually have higher usage but the reality is, credit card companies can’t afford to give stuff back for free so indirectly, whether you’re a high-income earner or low-income earner, if you don’t pay your minimum you are in part subsidizing the points and rewards system of the card.

      Further, what I am saying is many high-income earners don’t need credit. They could likely save for transactions in advance. I would argue some high-income earners choose to use credit cards because, well, they can. Some lower-income individuals might not have that choice.

      I don’t think “big deal”, I think this is a very big deal. Are you saying by choosing to use a credit card I’m part of the social wealth inequality gap? I think that’s pushing it a bit 🙂

      Thanks for the comment.

      Reply
  11. @Paul N
    “Hey SST
    Who are you referring to as the “financially illiterate public”? Is that everyone that posted a positive view on cards that does not own a financial blog?”
    ~That might be your definition, mine differs slightly. Considering the national financial literacy rate sits at 60% and the same degree of credit card users balance monthly, I might consider the remaining 40% as the “financially illiterate public” (but probably much higher).

    “Secondly on the top 100 frustrating topics to write about in Canadian finance centric issues I would rank cards at around #97.”
    ~Is that a personal list or is there a national poll published somewhere? What are the other 99 points?

    “You and I disagreed about inflation before. I think that’s a much bigger issue.”
    ~And credit cards are a very direct contributor to inflation.

    “If it wasn’t, why the flak over $15/min wages. Shouldn’t that $10 or $12 per hour still suffice if everything still cost the same as it did 5 years ago?”
    ~We ought to know by now that the CPI is a useless metric and more of a public image tool. No one is arguing that inflation does not exist.

    “Why do 80% of government employees get a defined benefit pension? Funny I don’t have that but my taxes sure pay for that. 60% of Canadians have no company pension at all. I don’t think that’s fair.”
    ~Apologies for the exceptionally delayed response, I was trying to find the Universal Law which states life is fair; I gave up. Life isn’t fair, a fact which renders my credit card crusade just as invalid as your anti-government/tax stance. But yet I continue.
    If you don’t like the current state of pension distribution (there is no law forcing private enterprise to provide pensions to their employees), then start your own business and give your employees government-like pensions and wages.
    If you don’t like the current state of your tax situation, then seek out every and all ways in which to lower your taxes. Have you exhausted EVERY opportunity?
    Do you know actually know how much of your tax bill pays for government wages and benefits? The healthcare portion far outstrips wages & benefits, and we spend a lot of healthcare money on the poor. As I stated previously, want to pay less tax (aka less healthcare expenditure…and cause less inflation!), use less credit card.

    “Particularly when I’m standing in line or just been transferred for the 8th time calling into a government agency the speaks condescendingly to me and works in slow motion.”
    ~Agreed. Public service has flaws, but what you describe is an operational issue, not an economic/financial issue, thus irrelevant.

    “A billion dollars got wasted on a gas plant cancellation in Ontario. I’m pretty pissed about that too. I’m not happy at how much tax I pay now, the paltry tax break given to the middle class, will plans to create other taxes slowly roll out that will take 10 X the break given. Let’s start with the doubling of the land transfer tax. Much more relevant topic.”
    ~All your complaints are about the government and taxation. You (and everyone else) have a mechanism at your disposal to remedy these complaints, it’s called voting.
    Do you vote at all levels each election? Do you communicate with your elected representatives (even if you didn’t vote for them)? Do you communicate with the persons you did vote for? Do you protest, in any form (beyond griping)? Do you write and promote an informative political blog to educate the public of these concerns?
    Thinking that the system and its players will change organically or wilfully for the better is a pipe dream. Remember, life is not fair.

    You seem to overlook the FACT that a credit card is a CONSUMER PRODUCT created by a corporation. It is NOT an inherent part of economics. We can’t choose to NOT have a government, but we can choose the form of our payments.
    Perhaps a better way is to illustrate using a different sector, food. You can eat every single meal at McDonalds and you’ll spend less time and money on the process of eating than the person who makes all their meals from scratch. McDonald’s is a long-standing cultural and corporate consumer product. Eventually you will incur higher future costs (e.g. healthcare) because of your choice to use that product in order to give yourself more immediate benefits (e.g. money and time) over the homemade meal maker.

    “I could easily pick quite a few more topics. Your credit card topic… Yes I see your point. It hurts some. But many things in life do. It will never get any traction.”
    ~Uh, no. It hurts all. Just that the people who do the most damage (high-income earners) receive the least amount of hurt, thus there is no impetuous for them to change their behaviour. They can’t see past their free car wash enough to even imagine lower their healthcare taxes.

    “I read a quote somewhere around the midpoint of the recession. It was a Wall Street type explaining that the markets weren’t there to help people insomuch as to find ways to take money from the weaker players and filter it back to the top.”
    ~And you thought otherwise? If you did, then that’s your fault for being disappointed. Of course it’s not there to help people, “Wall Street” isn’t a charity, and there will always be a much higher level of corruption in environments that have a greater access to capital. Credit card users do the exact same thing — take money from the weaker players and filter it back to the top. Where’s your outrage? Again, life isn’t fair.

    “There are so many ways people get taken adavantage of these days this just does not register on any radar.”
    ~And that’s part of the problem. It’s perhaps the easiest advantage-taker to eliminate. With almost zero effort you could cross off #97 and move on to curing the other financial ills on your list. But you won’t. The reason?

    Reply
    1. Hi SST
      I just enjoyed a nice vacation where I probably wore out my credit card somewhat. Driving north to south in the US at one point to mile “0”. I could not imagine not using a c card for those gas purchases alone. I never use my debit card simply for the reason of the direct path to my personal accounts if it gets compromised.

      It had Crossed my mind to ask you a question though? What are your thoughts on lottery tickets. Again imho this is simply a tax on the poor. Next time when you are in a variety store look at who buys $50 (or more sadly)worth of various scratch and 649 tickets. It’s usually people who should really not be spending their money on them. The people that can afford them usually buy one as a novelty or as part of a group to hedge on the odds of winning. Is this not pretty well the same analogy that you depict with your credit card posts? Or do you feel better about it knowing 70% or more of the take goes to government coffers? Do you follow the powerball lottery in the US. Look at the people in the lineups out the door and around the corner buying the tickets…

      Reply
  12. @Mark
    “You might hold the record for the longest comment on this site now.”
    ~I failed Conciseness 101. Besides, if I want to try to educate, then I have to try to explain (of which I’m slowly learning the art).

    “I get that, re: higher income individuals and households usually have higher usage but the reality is, credit card companies can’t afford to give stuff back for free so indirectly, whether you’re a high-income earner or low-income earner, if you don’t pay your minimum you are in part subsidizing the points and rewards system of the card.”
    ~True, but that part is smaller than you think, because even the revolvers (at all wealth levels) receive rewards, essentially subsidising themselves. Apart from that, we really don’t know what the cost of non-cash benefits (or what percentage of total benefits are comprised of cash benefits) are to the CC company, without getting inside the company itself. The business partnerships might come at a very marginal (or no) cost, we just don’t know.

    “Further, what I am saying is many high-income earners don’t need credit. They could likely save for transactions in advance. I would argue some high-income earners choose to use credit cards because, well, they can. Some lower-income individuals might not have that choice.”
    ~Exactly. The very key word here is: CHOICE.
    If you pay your balance every month, then it’s obvious you have the means to pay cash in the first place (the average transaction is ~$100 and a reported 60-70% of users pay monthly balances in full). A revolver basically creates and maintains a baseline level of monetary inflation, even if they do balance out monthly: if I carry $100 on my CC for 30 days, pay it off, and then charge another $100 on day 1, that debt never leaves the system, thus, inflation. The balancer is basically lowering their own self-inflicted rate of inflation by receiving benefits (and at a lesser rate if the benefits are non-cash).
    Some lower-income CC users might not have the choice to not use credit, but a high percentage of low-income individuals/household don’t even have the choice to use a credit card in the first place, they must pay cash.
    Thus, what’s happening is those who can afford to pay cash, don’t (http://www.theglobeandmail.com/report-on-business/low-income-canadians-using-more-cash/article24436964/?service=mobile). Those who can only pay with cash are carrying the brunt of the former’s induced inflation (as well as increased at-the-till costs).
    The BoC (Dec ’15) just confirmed my hunch: “The microdata also reveal substantial heterogeneity in the characteristics of credit card users: households with the highest outstanding balances are high-income renters, while spending is much higher among high-income home-owners.” The common denominator: high-income.
    (Note that I do not include corporate credit card use in this discussion because that debt is used for production instead of consumption, and thus has a high economic
    multiplier, consumer CC debt has perhaps the lowest (if not negative) multiplier.)

    “I don’t think “big deal”, I think this is a very big deal.”
    ~But are you doing anything about it?

    “Are you saying by choosing to use a credit card I’m part of the social wealth inequality gap? I think that’s pushing it a bit?”
    ~It’s not pushing at all. Its an innate operational function of the economic process. As the highly intelligent JP Koning (Moneyness) summarizes: “If you live in a nation that doesn’t allow credit card surcharges (like Canada), and you use cash to pay for most things, YOU ARE LOSING MONEY.” (emphasis his).
    Doubled up with this explanation by another smart guy, Karl Denninger (Market Ticker): “the fact is that emission of credit as leverage (rather than against an impounded asset) is always and everywhere inflationary because that is what math tells you must occur. It therefore does occur, and it damages purchasing power. Exactly where that damage shows up cannot be predicted and usually can’t be controlled either, but that it does and will happen every single time is not in dispute nor can it be, since it’s a function of arithmetic.”
    So, yes, credit card users are indeed widening the inequality gap. You might not be getting more wealthy from the deal, but the poor (and non CC users) are becoming more poor, and that is costing us all.

    Reply
    1. Thanks again for the essay SST. 🙂

      Happy New Year to you and family.

      I don’t really know what the cost of non-cash benefits of my credit cards are but they are decent rewards, and as long as they are being paid for (at least indirectly), I will use them. I certainly realize I have a choice in the matter. Some consumers do not as they could not get by without some day-to-day credit. I personally feel this is wrong and not ideal.

      The abundance of cheap credit has proliferated the inequality gap and I feel the solution will not be pretty (higher borrowing rates for all) but it’s necessary. Unfortunately it won’t happen for decades to come and bubble will be catastrophic (for those with debt) when it bursts.

      Reply
  13. “The abundance of cheap credit has proliferated the inequality gap…”

    It has, but credit cards are not cheap credit and utilizing traditional credit (e.g. bank loan) does not trigger higher prices at the till like credit cards.

    Remember, the average CC transaction is roughly $100 and the most prolific CC users are high-income earners. Do those people really need to use credit to afford a $100 purchase? Do these people really need that $800/yr “cash back”?

    I guess I’m railing against conditioned short-term Capitalistic thinking: ignoring empirical evidence which shows a consumer product produces damage (increased poverty, higher prices) yet continuing to use said product for personal gain.

    All that aside, I thank you for continuing the dialogue and revisiting old blog entries. So often in the PF world new content rules the day and there is no place for conversation or idea development amongst readership.

    Reply
  14. re: Paul

    “Hi SST
    I just enjoyed a nice vacation where I probably wore out my credit card somewhat. Driving north to south in the US at one point to mile “0”. I could not imagine not using a c card for those gas purchases alone. I never use my debit card simply for the reason of the direct path to my personal accounts if it gets compromised.”

    You seem overly concerned about safety and security, and overly confident a credit card is immune to those problems. I’d seriously question that baseless bias if I were you.

    Besides that, credit card usage in the US is less damaging because vendors can induce a surcharge for CC transactors, cash price is always lower, especially at gas stations. In other words, you over-paid for all your gas.

    “It had Crossed my mind to ask you a question though? What are your thoughts on lottery tickets.”

    What do lottery tickets have to do with credit cards, besides the obvious strawman?

    Why the constant failing to address any or all of the detrimental FACTS attributed to credit cards usage?

    “Again imho this is simply a tax on the poor. Next time when you are in a variety store look at who buys $50 (or more sadly)worth of various scratch and 649 tickets. It’s usually people who should really not be spending their money on them. The people that can afford them usually buy one as a novelty or as part of a group to hedge on the odds of winning.”

    Your singular observations are incorrect and incomplete (e.g. are you able to see all the people buying tickets online?).

    According to 2014 StatsCan numbers, here’s who gambles (all forms):

    Household income:
    $80,000, 75%.

    The high-income households lost an average of 60% more in dollar terms than the low-income households. In fact, high-income households own ~50% of the gambling losses, low-income households own ~30%.

    Sure, low-income households spend more of their income on gambling than high-income households (>2% vs. <1%), but that doesn't mean they gamble more. Like saying just because poor people spend more of their income on food means they eat more food.
    "Is this not pretty well the same analogy that you depict with your credit card posts?"

    No, it's just the opposite! Credit card usage creates higher prices across the board and thus forces a financial burden on the poor (and non-CC user); gambling usage forces a loss on only the individual.

    There is also evidence out there which suggests government gambling enrich wealthy communities but not so much the poorer communities. Thus, with the high-income sectors doing the majority of the gambling, just as with credit cards, their actions are forcing a wider wealth inequality gap.

    Bottom line, high-income earners produce far more credit card related inflation and gambling losses than low-income earners. Well done! Guess financial literacy isn't all it's cracked up to be.

    "Or do you feel better about it knowing 70% or more of the take goes to government coffers?"
    More anti-government angst. doing anything to address this, yet?

    How about eliminating the sale of cigarettes instead of lotteries? Canadians spend about $15 billion on government gambling and about $30 billion on cigarettes. This equates to $11B in gambling tax revenue and $700 million in cigarette tax revenue. Except that cigarettes cost taxpayers $25 billion per year in health care and other costs, not to mention nearly 40,000 deaths and 1/3 of all cancer cases. Profit Summary: gambling +$11B, cigarettes -$24B (+Death).

    Better that 70% of the tax goes to the government than 2%, with 98% of the profit to corporations whose product is causing the literal death and destruction of our citizens and society.

    Comparatively, lotteries are a day in the park.

    "Do you follow the powerball lottery in the US. Look at the people in the lineups out the door and around the corner buying the tickets…"

    That's called greed, and it strikes in the heart of most men, be they rich or poor. The winners, thus far, are not of the poor variety — both have jobs, one a manager, they even have two houses!

    If you'd like to continue the credit card discussion, please bring more than bias, anecdote, and straw to the table. Facts and logic are always appreciated. Thanks.

    Reply
  15. Hmmm, not sure why, but a line was cut. Here’s the edit:

    According to 2014 StatsCan numbers, here’s who gambles (all forms):

    Household income:
    $80,000, 75%.

    (Mark, you can paste that in to the original post and delete this one if you want to save room.)

    Reply
  16. Well hello SST.

    Once again I am going to have to disagree with you. I think you confuse your personal ideology with simple common sense. I use common every day examples which are easy to understand to make my points. If you want to label that as something else, then what can I do?

    Nothing new here that you or I or others haven’t gone over before, here or on the other blog where the best credit card comparison resides.

    I am not overly concerned with security. As mentioned before if I’m on vacation will I keep $3000 in my pocket driving from Ontario to key west Fla and pay everything with cash? Will my spouse go shopping in Atlanta downtown? No. It’s convenient for most everyone to use a credit card. And yes it is is safer. The positives far outweigh the negatives. For every service in life their is a cost. I think most people will agree, a cost with a value to the user.

    As for your stats… Every second every day some type of lottery ticket is purchased at a 7/11, a gas bar, a variety store, in an office pool, etc. with cash. There is absolutely no way to track the demographic makeup of those cash purchases. I have to question those stats. I think you missed the point of why I asked you that completely anyway.

    There is a cost to everything in life and a price is set for everything. Who decides what is fair for any goods or services? Is it fair an advisor charges a client a front load fee, a DSC fee, and a 2.5 % fund fee? Particularly for a fund that can’t outperform an index year after year? If I go to a strip club and they charge $7.50 for a beer is that fair. You are paying for the service with the exhorbitant price. Are credit card fees and the effect of debt on one segment of society fair? Maybe not. Maybe you feel these are straw man arguments. I disagree. We all have choices in life. No one is forcing anyone to utilize the services in any of my examples. All three come with a cost. If one finds value in anything that I disagree with so be it. In real life that’s just the way it is. (Ideology vs reality) You see no value in credit cards and in your opinion it’s a scourge on many. Most others do not.

    I will continue to use my card.
    I will utilize the perceived benefits that I value from them. The car rental waiver, the doubling of warranty periods on purchases, the cash back. Purchase protection. Numerous rewards – way too many to list. The fast replacement of it being lost. The fact I can sit on a beach all day without worry about $500 or more sitting tucked away in my car or hotel room.

    Do I feel bad for poor people and the perceived effect credit cards you claim they have? Not really. Where everyone is in their life today is not solely the fault of a credit card. Most times its based on poor choices long before they got the card. The card just amplifies their situation. I believe people need to change the way they approach their finances as a whole. Poor use of a credit card and debt is just one facet of many accumulated poor choices.

    I have to say I grow tired of this round and round discussion. I appreciate your time and view. Sorry I disagree and will never change my view. We live in a debt based society from the top down. You have a huge challenge if you want to change that. If the worlds governments can’t manage debt wisely, how do you expect their citizens too?

    I’ll let you get the last words in if you so desire. I’m out. Good luck.

    Reply
  17. We pay our credit cards off monthly. We have also taken advantage of different companies offers, like flying my family to Disney on travel rewards! Or getting hundreds of dollars in cash back each year…. http://www.greedyrates.ca is a great site to look at maximizing different possibilities. Like I said above, don’t take on the card unless you can pay off monthly. The rest is a bonus!!

    Reply
    1. Love cash back. No strings right Boyd?

      I’m a big fan of greedyrates. They have some great deals to watch out for if you’re into turning over credit cards every few years. (Not for me but I know many folks that do.)

      “…don’t take on the card unless you can pay off monthly.” Well said!

      Reply
  18. I like to take a card for about a year or so where they waive the first year’s fee. Then switch the next year to the next best offer. Right now we have a free HSBC master card travel card(first year) and a free TD Cash back Visa (first year)…the internet and other companies we pay our monthly bills with think its funny that I am switching yearly… stay ahead of the curve and maximize opportunities!!

    Reply
    1. I’ve considered the TD cash back but went with the Scotia Momentum Visa. 4% gas, 4% groceries and 2% at drug stores. Pretty solid I think.

      Reply

Post Comment