Hacker News Reader

As a young person, not sure I follow the credit card thing - I guess I can see how it extends my spending power by N% per dollar spent (where N is your rewards percent), but other than that, and it makes spending more convenient, but it's just a debit card with better protections and a longer interval before the money is withdrawn from my account. N is fairly small and it only applies to money spent, not money earned.

View on HN

For disciplined spenders who use the credit card for convenience, spend carefully and pay it off every month, you are correct. But for people who tend to maintain a balance and who spend with less care and discretion, it enables them to spend more than they would if they had to spend cash, and, the things they buy effectively cost more due to interest expenses.

Either or both of those behaviors reduces the amount available to save and invest, which goes directly against growing wealth. It is really important to start saving and investing early, and that is when this behavior can cause the most harm. Averaging over the population, credit card debt is a drag on savings and reduces wealth. Since credit card debt has expanded into such a large number over the last 40 years or so, it has a more pronounced effect on younger persons.

Reply on news.ycombinator.com