Personally, because of student loans, mortgage (which doesn’t really count), and trying to keep up an extravagant standard of living during lean years, justified in part by expectation of making insane amounts of money in the future.
At this point, I have no savings because I’m in debt. I don’t have any expectation that I won’t be able to come up with however much money I might have saved in the case of an emergency, so the best use of my excess now is to pay off the debt, since interest rates are not in the favor of savings.
Because credit card companies are financially disincentivized to send cards with instructions reading “How To Use Your Credit Card: Borrow our money for free by purchasing things you can afford and paying down your full balance on time, every time, leaving us to profit solely from merchant fees.”
We get to empirically test this assertion, because the new credit card regulations of the last few years have much more detail about the benefits of paying in full, on time.
The first page of the credit card bill now says how much it will cost in interest if you pay only the minimum, or only pay the minimum amount necessary to eventually pay off the debt (along with when that pay off would occur).
It’s fairly transparent. Which isn’t to say that it overcomes (or attempts to overcome) cognitive biases people have about the relative size of different numbers. But it isn’t hiding the ball.
Fair enough; I haven’t seen one personally (I have a credit card but don’t use it much and I think it would send the bills to an old address still if I did) but I’ll call it at least a partial test of the assertion on your say-so.
WHYYYYY??????
Personally, because of student loans, mortgage (which doesn’t really count), and trying to keep up an extravagant standard of living during lean years, justified in part by expectation of making insane amounts of money in the future.
At this point, I have no savings because I’m in debt. I don’t have any expectation that I won’t be able to come up with however much money I might have saved in the case of an emergency, so the best use of my excess now is to pay off the debt, since interest rates are not in the favor of savings.
Because credit card companies are financially disincentivized to send cards with instructions reading “How To Use Your Credit Card: Borrow our money for free by purchasing things you can afford and paying down your full balance on time, every time, leaving us to profit solely from merchant fees.”
Among other causes.
We get to empirically test this assertion, because the new credit card regulations of the last few years have much more detail about the benefits of paying in full, on time.
If they’re long, complicated, and/or in fine print, I don’t think that’s a test of my assertion.
The first page of the credit card bill now says how much it will cost in interest if you pay only the minimum, or only pay the minimum amount necessary to eventually pay off the debt (along with when that pay off would occur).
It’s fairly transparent. Which isn’t to say that it overcomes (or attempts to overcome) cognitive biases people have about the relative size of different numbers. But it isn’t hiding the ball.
Fair enough; I haven’t seen one personally (I have a credit card but don’t use it much and I think it would send the bills to an old address still if I did) but I’ll call it at least a partial test of the assertion on your say-so.
I don’t know if this was meant to be serious or funny, but I upvoted because it made my laugh. :D