Do you prefer cash or credit/debit cards ?

[Pachipro]

Personally I use credit cards almost 100% of the time, even for things less than $10 because of their convenience and for the fact that it is not withdrawn from my account until the 25th of the month. Therefore, my money makes more interest as no cash is used for an entire month.

Also, here in the US (most people are unaware of this) all prices of goods, at all stores, including gasoline has that 2-4% tacked onto the price in case someone uses a credit card. If they pay cash, or use their debit card they are paying 2-4% extra (or whatever the credit card company charges the particular store) as the money is handed over immediately in the form of hard cash or withdrawn from your bank account immediately. I call it "the credit card tax". Therefore, I use a credit card to my utmost advantage. Plus I get points for goods or airline miles for every dollar I spend. I even bought our last two cars with a credit card!

However, when I do use a credit card it I think of it as cash and NEVER, EVER buy anything, including a car, on credit as I simply abhor buying something for more than it's selling price over time. If I can't pay for it at the end of the month, I can't afford it. Simple as that. Too bad the majority of Americans don't think that way.

I learned this lesson of borrowing when I was in the military in Japan at the age of 18. I was only being paid $367/month in 1973. I spent all my money and borrowed $50 from a friend until I got paid again. When payday came I paid him back his $50 and was pretty pissed that I now had $50 less for an entire month and really had to budget myself and couldn't party at Japanese bars and clubs much that month! From that day forward I learned to budget my money and was never in debt to anyone again.

As nice gaijin so eloquently stated above, the majority of Americans live their lives on borrowed money and 80% of Americans do not save anything of their paychecks as they are too much in debt for their houses, cars, furniture, school, etc. Living on borrowed money is an American institution as the US government leads the way in spending borrowed money and leads us to believe that it is quite alright. Plus credit is so easily given here and people are led like sheep to believe that they must have that particular item now even though they can't afford it.

I think come the end of this year or the first quarter of '06 there will be a severe decline in the American economy as the trade deficit is at record highs, gasoline will be over $3/gal and is mostly bought on credit recently, declaring bankruptcy wiill be virtually impossible come October and, also in October, the minimum payment for credit card balances will rise from 2-4%, virtually doubling the majority of Americans payments overnight. And most ignorant Americans don't even know about these new laws.

The Japanese are very smart in this regard as, even though their economy has been in the sewer these past 17 years, the average Japanese has not felt it due to their preponderance for using cash for most purchases, budgeting wisely, and staying out of debt. Thus prices have remained largly unchanged and in fact have even gone down, especially for real estate.

Thanks to learning this most important lesson during my years of living in Japan, if the American economy tanks tomorrow, or gasoline goes to $5/gal it will not affect me in the least as I owe nothing to no one including my own house.

What really bugged me about this story was the sentence,

"While Americans pile up mortages and credit card debt, Japanese are reluctant to borrow at all, creating the problem of economic stagnation."

Why should this lead to economic stagnation? Whose law is it that people must continue to spend in order to expand one's economy? Why in hell must people be led into thinking that we must spend, spend, spend, even if we don't have the money in order to stave off economic stagnation? Why does this sentence lead one to believe that saving one's money is bad for the economy? To me it is just another way they lead the sheeple to the slaughter house by putting them in debt for their own corporate greed.

To me Japan has faired quite well these past 17 years and can do without the massive debt of the the US population thank you.

[Maciamo]

Personally I use credit cards almost 100% of the time, even for things less than $10 because of their convenience and for the fact that it is not withdrawn from my account until the 25th of the month. Therefore, my money makes more interest as no cash is used for an entire month.

Same for me, but the interest rates in Japan stand at virtually 0%, so I just do it for the form.

Also, here in the US (most people are unaware of this) all prices of goods, at all stores, including gasoline has that 2-4% tacked onto the price in case someone uses a credit card. If they pay cash, or use their debit card they are paying 2-4% extra (or whatever the credit card company charges the particular store) as the money is handed over immediately in the form of hard cash or withdrawn from your bank account immediately. I call it "the credit card tax".

I don't think this happens in Europe, as many shops still charge a few % extra for small payments (under a few euros/$). That's why debit cards, and in some countries rechargeable chip cards (similar to Suika or Edy in Japan), are so popular, as there is no minimum limit and no extra.

However, when I do use a credit card it I think of it as cash and NEVER, EVER buy anything, including a car, on credit as I simply abhor buying something for more than it's selling price over time. If I can't pay for it at the end of the month, I can't afford it. Simple as that. Too bad the majority of Americans don't think that way.

I think that most of the Europeans I know think like that too. I come from a banker's family and studied economics, but I didn't even know it was possible to spread credit card payments over several months before coming to Japan. That says a lot about the local culture.

As nice gaijin so eloquently stated above, the majority of Americans live their lives on borrowed money and 80% of Americans do not save anything of their paychecks as they are too much in debt for their houses, cars, furniture, school, etc. Living on borrowed money is an American institution as the US government leads the way in spending borrowed money and leads us to believe that it is quite alright.

Good that these people exist to allow credit card companies to survive. With European and Japanese customers almost never buying on credit, they would all go bust. That's why I said it's no wonder all these companies are based in the USA, as international as they may be.

The Japanese are very smart in this regard as, even though their economy has been in the sewer these past 17 years, the average Japanese has not felt it due to their preponderance for using cash for most purchases, budgeting wisely, and staying out of debt.

My feeling was that the Japanese relied much more on borrowed money than Europeans. This is maybe because I come from the Benelux, which along with Switzerland is known for taking good care of money (not to say that people are stingy/thrifty by nature). But it is also because of the ubiquitous credit companies in Japan, such as Puromisu, Yen Shop, Aiful or Acom, that lend money at rates such as 20 or 30%, and still manage to prosper. I had never seen such credit companies in Europe as it's illegal to lend above the official interest rate (in Japan that would be under 2 or 3%).

[RockLee]

I lost my visa card when I was in China, and let me tell you, if you have cash, you're happy !! Luckily I had my friends to lend me money + I payed my hotel and airplanetickets.It's true you just have to call and get your visacard blocked, but still...when you lost it, and you don't have friends, you're in BIG TROUBLE !! so 50/50 is a good deal

[deadhippo]

But it is also because of the ubiquitous credit companies in Japan, such as Puromisu, Yen Shop, Aiful or Acom, that lend money at rates such as 20 or 30%, and still manage to prosper. I had never seen such credit companies in Europe as it's illegal to lend above the official interest rate (in Japan that would be under 2 or 3%).

i think the credit card interest rate in japan would also be illegal in most countries
i borrowed money via my credit ard (by accident) and had to pay an exorbitant amount of interest for just one month
i was so shocked i called and complained
then checked my credit card documents and found out that the rate was indeed that high

[Tsuyoiko]

Generally speaking, I don't spend money full stop. I carry about GBP3 with me, enough for bus fare and a coffee, but I don't usually spend even that. I spend most money online by debit card, same for food shopping. On the rare occasions that I buy new clothes I usually draw out the cash, and spend only that amount. I have never had a credit card. I don't believe in debt at all. I had my student loans, as they were a good deal at the time, with little chance of me having to pay them back. And I have my mortgage, but I am saving very hard towards paying that off as well. Debt is BAD!!!