I drew the cartoon above first but it didn’t make much sense (a homeless person can’t afford to be a credit card using merchant), so I rewrote it. Here’s the second version:
Credit cards are convenient, but they can be very expensive. If you are a consumer, paying with credit card is convenient, but if you don’t pay off the balance every month, you will get charged outrageous interest fee to the bank (21%! That’s why banks love giving you credit cards. It’s a great investment for them.)
And, if you are getting a credit card for the first time, make sure you shop round, try to get the one that gives you some kind of reward. Look for the one that you will get the most out of, matching your spending pattern. For example, if you shop lot at a particular store, they might have a credit card that gives you lots of bonus point everytime you shop there.
If you are a merchant, you will get charged merchants transaction fees. Walmart recently stopped accepting Visa because the fees are too high. And a lot or people tend to overspend using credit card than hard cold cash. If you watch Gail Vaz-Oxlade’s show, “Money Moron” or “Til Debt Do Us Apart”, you see many couples spend way beyond their means and have excess credit card debt (interest rate on credit cards are outrageous). So the shock treatment Gail uses on them is to make them pay everything only by cash.
Holiday season is starting, watch out for maxing out on your credit card! Set a goal and budget and stick to it.