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Credit cards are on their way out

Lucia looks at credit cards for what they really are - liability cards

I often call them “liability cards”. Why? Because they are a liability. They don’t do any good to society as a whole as they allow you to spend before you earn. They encourage people to spend outside their means. I often come across the clients who are stuck in the credit card debts and the advice I gave them was to simply cut their credit cards off.

Well, but don’t they give us reward points or cash backs? This is often $100, or $75, for $1 back, or cash reward of $250 when applying for a credit card. Do you take the bait? With retail stores having to fork out an additional 2.5% of the money to the bank, the cost has been passed back to the consumers. The only winners here are the bank and the credit card companies.

I don’t like credit cards, but I have to have one. There are a lot of payments I have to make online that only accept credit cards. With the direct payment systems like “Alipay” growing in popularity, credit cards—which once used to be a symbol of status—are becoming an old fashion and we are going to see them become history, just like Kodak.

 

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Lucia Xiao Finax

Finax founder, Lucia Xiao regularly publishes thoughtful articles sharing market insights as well as tips to help you succeed.

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