Credit cards shouldn’t just “look pretty”

In addition to his son Xiao Zhou’s reasons, several “accomplices” played a role in bringing down Mr. Zhou’s credit card overdraft in Shanghai.

    The system loophole of credit card management is the biggest “accomplice”. The credit card overdraft limit is determined based on the cardholder’s income status, credit status, and the guarantor’s income status and credit status. However, cardholders can apply for credit cards from multiple banks, but banks do not know whether a natural person has already applied for credit cards in other banks and continues to grant credit, even regardless of the cardholder’s overdraft status in other banks. Such system flaws and loopholes are one of the reasons for the “tragedy” ” of Mr. Zhou’s family.

    Vicious competition for credit cards among banks is another “accomplice”. In recent years, the amount of credit card issuance has achieved leapfrog growth, while the knowledge and awareness of credit consumption of ordinary people are still at the level of a few years ago. Due to the complicated and cumbersome rules for using credit cards, ordinary consumers are often difficult to understand their meaning, knowing only one of them, but not the other. This kind of “sapling-fueled” growth has caused one person to have multiple cards, a large number of credit cards have been “shelved”, and the number of sleep cards is staggering. More importantly, there is a lack of supervision in the card issuance process. When marketing personnel spares no effort to promote credit cards, they only emphasize the convenience of credit cards, and they are vague or obscure about the charging items and the precautions related to card use. In this case, it is not surprising that Xiao Zhou was able to apply for 13 credit cards after overdue repayment on 12 credit cards and bad credit records, and easily overdraft more than ten thousand yuan.

    A credit card is a form of credit. The word Credit comes from Latin and means “trust”. In 1920, a shopping cart with the words “Shop Now, Pay Later” written on a chip similar to a metal badge, the credit shopping system, was introduced to the United States. It is said that the first credit card was issued by the Food Truck Club, and the inventor of this card was the founder of the Food Truck Club, Frank McNamara. Different stories are circulating on the Internet about his invention, but they are all closely related to eating. Later, his credit card company used the food-related name.

    There is a story that goes like this. When Frank treats a guest to dinner, he forgets to bring his wallet, and it is embarrassing to pay the bill. Tongda’s boss said, “I know your reputation has always been very good. Let’s pay together next time.” Frank was inspired by this accident. He cooperated with his friend Schneider to create a “dining car club” in New York, serving 200 people. Members are issued a card that proves their identity and ability to pay, allowing them to dine at 27 New York restaurants without carrying cash, and only need to settle their bills with the Diners Club once. This network became the restaurant car letter of credit company and the first credit card company.

    In 1958, American Express issued a real credit card (Amex) – the Express Card. Widely accepted in the United States for distribution use. Over time, by 1959, it was BankAmericard (which changed to Visa in 1977) that allowed the slow payment of credit card balances. A credit card is different from a bank card. The bank card must pay off the arrears once a month, while the credit card allows the cardholder to recycle the balance of the arrears, and the price must pay interest on the arrears. When the development of credit cards in the mid-1970s, the purpose of making money and profit replaced the original intention of convenient portability and circulation.

    Cashback by credit card, interest-free installment, gift-giving activities with points… In the community, on the side of the road, and in the shopping mall, the enthusiastic explanations of the staff at the credit card processing point are still in my ears. However, when compared to credit cards with “no interest for deposits and fees for withdrawals”, as well as various fees such as annual fees, handling fees, penalty interest, and late payment fees, these discounts are simply insignificant, and they just “look beautiful”.

    There is no free lunch in the world. Faced with the dazzling promotions of banks, consumers should keep their eyes open and not fall into the trap of being greedy for temporary bargains. There are many types of credit cards, and consumers are mostly ignorant. In addition, cardholders may also lose a lot of money due to stolen credit cards. Although the situation of Lao Zhou’s family is only a case, it is enough to prove the loopholes in the current credit card management.

    For the understanding of credit cards, in addition to deepening the bank, cardholders must also deepen their understanding. Gradually, we will find that personal payments are not the happiest when spending money, but the happiest when their spending matches their income the most.

    Now that we have reached the E era, credit cards do provide us with convenience, but I would like to conclude with a sentence that Warren Buffett said: “Look at the card slaves around you after they enjoy the short-lived pleasure of shopping. , leaving long-term pain.”