Latest / Ridiculous History / The Ridiculous History of Credit Cards

Transcript

The Ridiculous History of Credit Cards · Ridiculous History

• 0:00
  Speaker 1: Ridiculous History is a production of iHeartRadio. Welcome back to
• 0:27
  Speaker 1: the show Ridiculous Historians. Thank you, as always so much
• 0:31
  Speaker 1: for tuning in. Credit on the production goes to our
• 0:34
  Speaker 1: super producer, mister Max Williams.
• 0:37
  Speaker 2: Swipe my credit cards. I don't know if it is.
• 0:45
  Speaker 1: Get to the magnetic stripe. There's a story behind that.
• 0:47
  Speaker 2: It was that come hithertone, Max, I dig it very
• 0:52
  Speaker 2: very sylvia of you, sir.
• 0:54
  Speaker 1: I am Ben Bullen, joined as always with the man,
• 0:57
  Speaker 1: the myth, the legend, mister Noel Brown does mister Brown.
• 1:02
  Speaker 2: Yes, sir, I've got to ask you. Do you have
• 1:06
  Speaker 2: credit cards? You know I do?
• 1:08
  Speaker 3: And it's funny. It's funny you should ask. Not really,
• 1:11
  Speaker 3: it's actually very in character that you had asked.
• 1:15
  Speaker 2: Podcast.
• 1:16
  Speaker 3: It's totally cool, man, we see through your ruse. Ben Bowlin,
• 1:20
  Speaker 3: you'll reindeer games.
• 1:21
  Speaker 2: Well, give me some credit. I will.
• 1:23
  Speaker 3: I'll give you all the credit. I'll give you more
• 1:25
  Speaker 3: credit than you deserve. No, untrue, you deserve every scrap
• 1:28
  Speaker 3: of credit.
• 1:29
  Speaker 2: Though. Thank you very much.
• 1:30
  Speaker 3: Is heaps I heap it upon you, but no to
• 1:32
  Speaker 3: answer your question, I I remember a time where I
• 1:37
  Speaker 3: felt so scared about my financial future. And then I
• 1:40
  Speaker 3: was like, oh, I haven't done any of the things.
• 1:42
  Speaker 3: I'm not going to have any credit established. And you know,
• 1:45
  Speaker 3: at this point, I think I was in my teens.
• 1:47
  Speaker 3: Looking back on it now, though, I realized I kind
• 1:49
  Speaker 3: of did everything at the exact appropriate time. I got
• 1:52
  Speaker 3: my first you know, debit card and stuff when I
• 1:55
  Speaker 3: was a teenager, and then I didn't get a credit
• 1:57
  Speaker 3: card until I was probably you know, twenty, maybe eighteen nineteen,
• 2:01
  Speaker 3: something like that. But for any kids out there, you
• 2:05
  Speaker 3: young people out there, it is a good idea to
• 2:07
  Speaker 3: get and utilize a credit card very responsibly early in life,
• 2:12
  Speaker 3: because you're establishing a credit history and you can't just
• 2:16
  Speaker 3: build that out a whole cloth.
• 2:18
  Speaker 2: It's a history, and you want to kind of build
• 2:20
  Speaker 2: on that.
• 2:20
  Speaker 3: So yeah, I think I do remember having a period
• 2:24
  Speaker 3: though where I was in not crippling credit card debt,
• 2:27
  Speaker 3: but more than I.
• 2:28
  Speaker 2: Would have been comfortable with.
• 2:30
  Speaker 3: And thankfully, through the magic of podcasting, I've pulled myself
• 2:34
  Speaker 3: out of that. And now I do have two credit
• 2:36
  Speaker 3: cards that I earn points with, so I try to
• 2:39
  Speaker 3: use them and then pay them off and reap those points.
• 2:42
  Speaker 1: Maybe children also make your parents and authority figures get
• 2:47
  Speaker 1: you a prepaid credit card. The rat race has begun,
• 2:50
  Speaker 1: says America.
• 2:52
  Speaker 2: It's time to run and scamp or Max, You're not
• 2:56
  Speaker 2: like it, but we're in it. You know, there's nothing
• 2:59
  Speaker 2: we can do about Yeah, give.
• 3:00
  Speaker 4: It to us. I mean, so, as I've joked on
• 3:03
  Speaker 4: here before, I am the fiscal education business and Greek guy.
• 3:07
  Speaker 4: I have actually five credit cards at this point, now
• 3:10
  Speaker 4: I have I don't carry any bounce on any of them.
• 3:12
  Speaker 4: But I have one card that I only use for travel,
• 3:16
  Speaker 4: has great travel points, and it's got like benefits of unredewing,
• 3:19
  Speaker 4: and so I'm playing this trip. And it's then kind
• 3:21
  Speaker 4: of a hellish process of booking, like some state in
• 3:27
  Speaker 4: New York.
• 3:28
  Speaker 2: And last night finally.
• 3:30
  Speaker 4: Got confirmation ten thirty pm, super tired, barely awake, I went,
• 3:34
  Speaker 4: I booked the stuff, and then I realized after I
• 3:36
  Speaker 4: booked it that my debit card and my credit card
• 3:38
  Speaker 4: looked very similar. And I booked it on the worst
• 3:41
  Speaker 4: possible of all of my cards, so meaning a higher
• 3:45
  Speaker 4: interest rate, lower points, just a waste of time or
• 3:49
  Speaker 4: is it one of.
• 3:50
  Speaker 2: Those ones where you have to pay in blood at
• 3:52
  Speaker 2: the end of the month, the blood price I mean
• 3:56
  Speaker 2: I get to quarterly quarterly, Yeah.
• 3:59
  Speaker 1: Because you chased the blood, how about you? Man, oh man,
• 4:02
  Speaker 1: thank you so much for asking. Well, Yeah, so I
• 4:05
  Speaker 1: have I have several cards in a specific arrangement.
• 4:10
  Speaker 3: I don't And by that I mean, I bet you
• 4:12
  Speaker 3: mean in your wallet even an order you know of operation,
• 4:15
  Speaker 3: that you've got them stored in.
• 4:17
  Speaker 1: Order of operations fits for sure. I definitely I don't
• 4:20
  Speaker 1: use them to the point where the credit card or
• 4:25
  Speaker 1: the credit rating system here in the US is a
• 4:28
  Speaker 1: bag of badgers all its own. It's a future episode.
• 4:31
  Speaker 1: But I recently got news, and this happens every so often.
• 4:35
  Speaker 1: I'll get news from one of the credit card companies
• 4:39
  Speaker 1: that they're going to deactivate my account because I have
• 4:43
  Speaker 1: not used the card, but in activity, they're going to
• 4:48
  Speaker 1: hold my credit card or my credit score ransom unless
• 4:52
  Speaker 1: I mess with them a little.
• 4:54
  Speaker 2: And so then I'll go to a.
• 4:56
  Speaker 1: Place and buy something gum, right whatever, right and uh
• 5:01
  Speaker 1: And just for the record, Noel did say gum like
• 5:03
  Speaker 1: chewing gum, not a gum.
• 5:05
  Speaker 2: I said a gum. Yeah, don't come after us, and
• 5:10
  Speaker 2: then we'll uh.
• 5:11
  Speaker 1: And then what I'll do is immediately go and pay
• 5:15
  Speaker 1: that pay that off, usually before it even posts beat
• 5:19
  Speaker 1: the interest rate, and uh, it's always kind of a
• 5:22
  Speaker 1: haha moment. But that's because credit cards and the credit system,
• 5:27
  Speaker 1: I think, became their own sort of fascinating, at times
• 5:32
  Speaker 1: scary and certainly ridiculous game. I mean, how would we
• 5:43
  Speaker 1: explain a credit card to someone from nine hundred BCED.
• 5:49
  Speaker 3: I promise to pay you for this later, uh, and
• 5:53
  Speaker 3: am legally bound to do so by contract.
• 5:57
  Speaker 2: I got to jump in here.
• 5:59
  Speaker 4: No, I know you've playing fall At four more recently
• 6:01
  Speaker 4: have you run into It's not a random encounter, it's
• 6:03
  Speaker 4: an actual plan accounter. The guy trying to pitch you
• 6:06
  Speaker 4: on a CAP's credit card. I have not, so it's
• 6:10
  Speaker 4: an I don't I don't want to spill too much
• 6:11
  Speaker 4: of it. But it's an eastern Boston by the by
• 6:16
  Speaker 4: the coast. You can run into a guy who is like,
• 6:18
  Speaker 4: for one hundred and twenty five caps, I'll give you
• 6:21
  Speaker 4: this car that's worth one hundred caps.
• 6:22
  Speaker 2: You can use anywhere, but the convenience, it's obviously a griff.
• 6:25
  Speaker 2: Sounds like a Magic Beans kind of scenario. Bro, I
• 6:29
  Speaker 2: promise you, if we run into it, buy it.
• 6:32
  Speaker 4: Because twenty five caps isn't worth that much, because it's
• 6:34
  Speaker 4: just like the jokes they build into the game behind
• 6:36
  Speaker 4: that card is more than worth.
• 6:38
  Speaker 2: It for the ready. But when they're when they're fired,
• 6:42
  Speaker 2: they're fire.
• 6:43
  Speaker 3: And honestly, some things they've done to sort of fix
• 6:45
  Speaker 3: Fallout for have really made it a much more playable game.
• 6:48
  Speaker 3: I'm a little annoyed by all the reminders that my
• 6:50
  Speaker 3: villages are being sacked because I really don't freaking care about.
• 6:54
  Speaker 2: That aspect of the game.
• 6:55
  Speaker 3: Yeah, find those notifications to be a little they take
• 6:58
  Speaker 3: me out of it. But I'm looking forward to playing
• 7:00
  Speaker 3: Nuca Cola World and I'm about to start the far
• 7:03
  Speaker 3: hardware deals.
• 7:04
  Speaker 4: Yeah, I mean the whole settlement thing. It's like the
• 7:07
  Speaker 4: Scarrim Civil War. It's the part of the game that
• 7:09
  Speaker 4: I wish I could just take out.
• 7:10
  Speaker 3: But I mentioned the magic Beans scenario because I think
• 7:13
  Speaker 3: that's actually a pretty cool, you know, sort of allegorical
• 7:17
  Speaker 3: stand in for a credit card.
• 7:19
  Speaker 2: It's sort of like this promise of future prosperity.
• 7:24
  Speaker 3: It's a way of buying in to being one of
• 7:27
  Speaker 3: the swells, even if you can't actually afford it. Right now,
• 7:31
  Speaker 3: that's at its worst, right the way we've described it
• 7:33
  Speaker 3: at the top of the show. We're trying to pitch
• 7:35
  Speaker 3: it as more of a financially responsible tool that you
• 7:38
  Speaker 3: can use to build your credit and then become one
• 7:41
  Speaker 3: of those swells. But when people use it to reach
• 7:44
  Speaker 3: an economic status that they actually can't afford, that's when
• 7:47
  Speaker 3: things get real nasty, and therein kind of lies the grift.
• 7:51
  Speaker 1: Right. Here's how it works. These credit cards are extremely
• 7:56
  Speaker 1: common throughout the world, in the United States in particular.
• 8:00
  Speaker 1: The u United States is the home of the modern
• 8:02
  Speaker 1: credit card, as we'll see, But the basic idea is simple.
• 8:06
  Speaker 1: Think of Popeye. We'll have an episode on Popeye coming
• 8:08
  Speaker 1: along too. Wimpy will gladly pay you on Wednesday or
• 8:13
  Speaker 1: whatever for a Hamburger earlier in the week. That is
• 8:16
  Speaker 1: the heart of the credit card. A company provides you
• 8:19
  Speaker 1: with a certain amount of credit, a floating IOU opportunity,
• 8:23
  Speaker 1: and with this account you can pay for things without
• 8:27
  Speaker 1: spending cash on hand at the time of purchase. In theory,
• 8:32
  Speaker 1: when everything works well and is not predatory, you pay
• 8:36
  Speaker 1: back what you owe at the end of each cycle,
• 8:38
  Speaker 1: which is usually a monthly billion cycle for the company,
• 8:42
  Speaker 1: and the company makes a bit of a profit, a
• 8:44
  Speaker 1: bit of a vigorous by charging interest on the money
• 8:47
  Speaker 1: that you have borrowed for the amount of time that
• 8:49
  Speaker 1: you borrowed it. There are also other fees, like maybe
• 8:52
  Speaker 1: annual fees, maybe you know, any other kind of.
• 8:55
  Speaker 3: For the privilege of a certain type of card, like
• 8:58
  Speaker 3: I believe American Express is an annual fee, but you're
• 9:01
  Speaker 3: also supposed to pay your ballance off every single month,
• 9:05
  Speaker 3: that's the idea, and if you don't, that interest rate
• 9:08
  Speaker 3: can be rapacious.
• 9:10
  Speaker 1: So the idea then is that these other fees could
• 9:13
  Speaker 1: be what we would call financial accoutrement. It's simple enough
• 9:18
  Speaker 1: in theory, but it gets much more complicated in credit
• 9:22
  Speaker 1: an incredibly quick rate. Interest rates speaking, rates can vary widely.
• 9:27
  Speaker 1: Some can be profoundly dangerous, predatory, usurious. A lot of
• 9:32
  Speaker 1: cards have countless perks, like we mentioned Skymiles. You might
• 9:35
  Speaker 1: get annual gifts, discounts on other financial products which improve
• 9:40
  Speaker 1: with the perceived eliteness of the card. Some cards are
• 9:44
  Speaker 1: only for specific demographics of income or credit or profession.
• 9:48
  Speaker 1: Some cards are invitation only. In short, it's a messy,
• 9:51
  Speaker 1: messy bowl, a very expensive, very profitable spaghetti.
• 9:55
  Speaker 2: So how do we get here?
• 9:57
  Speaker 3: Well, it turns out, like most things, we go into
• 10:00
  Speaker 3: our ridiculous history, the origins of credit gods are more
• 10:04
  Speaker 3: ancient than one might think, you know, as is the
• 10:09
  Speaker 3: origin story of currency itself. The moment currency became a thing,
• 10:13
  Speaker 3: someone kind of probably figured out, probably several people in
• 10:16
  Speaker 3: parallel that, you know, I could lend the currency to
• 10:20
  Speaker 3: people and make money on that alone, because I have
• 10:24
  Speaker 3: more than they do. They need what I have, therefore
• 10:27
  Speaker 3: I can capitalize on them.
• 10:30
  Speaker 1: Yeah. In the ridiculous cinematic universe, I like to picture
• 10:33
  Speaker 1: sort of a Space Odyssey two thousand and one moment,
• 10:37
  Speaker 1: but instead of a monolith, there was the idea of
• 10:40
  Speaker 1: invisible value. Someone came up with the idea of cash,
• 10:43
  Speaker 1: someone else wanting to borrow it. This third guy, who
• 10:46
  Speaker 1: might be an alien shows up and says, hey, I
• 10:50
  Speaker 1: have an idea, and then you know, off to the
• 10:54
  Speaker 1: races ticket in teams.
• 10:56
  Speaker 3: Let's check out the Point Sky, which is a great resource,
• 10:59
  Speaker 3: by the way, for the kind of stuf we're talking about.
• 11:00
  Speaker 2: In terms of which card you might want to get,
• 11:03
  Speaker 2: what kind of works.
• 11:04
  Speaker 3: You might be seeking. It's good stuff, he says. It's
• 11:07
  Speaker 3: not really one single company. There is one single points
• 11:10
  Speaker 3: guy but I like to think of it that way,
• 11:12
  Speaker 3: so we'll go with this, he said. The Mesopotamian and
• 11:15
  Speaker 3: harpen civilizations use clay tablets to track their trade and transactions,
• 11:19
  Speaker 3: much like modern day credit cards, according al Gosha, And
• 11:22
  Speaker 3: by the way, think about the flintstones. We've ever seen
• 11:25
  Speaker 3: a credit card depicted on the flintstones. It's a big,
• 11:28
  Speaker 3: giant piece of stone, a piece of slate, probably, so
• 11:33
  Speaker 3: much like modern day credit cards.
• 11:35
  Speaker 2: These the clay tablets.
• 11:36
  Speaker 3: According to Jonathan Mark Kinoyer, an archaeologist and professor of
• 11:40
  Speaker 3: anthropology at the University of Wisconsin Madison, earthen tablets bore
• 11:45
  Speaker 3: seals from the two civilizations and were used out of necessity.
• 11:48
  Speaker 2: What does that sound like, Ben, The seals almost like a.
• 11:52
  Speaker 3: Bank insignia or the particular whoever issues your credit card.
• 11:57
  Speaker 3: The volume of goods being traded between them was so
• 12:00
  Speaker 3: large that paying with physical money would have been too cumbersome.
• 12:03
  Speaker 1: Yeah, it's part of why currency is a thing, right,
• 12:08
  Speaker 1: even gold backed currency. You can't give people.
• 12:12
  Speaker 2: Really difficult to part it around ten thousand bucks worth
• 12:16
  Speaker 2: of gold.
• 12:17
  Speaker 1: So if we fast forward later in the Babylonian age
• 12:20
  Speaker 1: or in the Babylonian Empire. We see that the Code
• 12:23
  Speaker 1: of Hamerabi, which is fascinating one of the earliest examples
• 12:29
  Speaker 1: of modern law, or the predecessor thereof. The Code of
• 12:32
  Speaker 1: Hamarabi has a lot of rules and it mentions the
• 12:38
  Speaker 1: concept of credit, and it talks about credit in terms
• 12:41
  Speaker 1: that we would associate today with things like loans. They
• 12:46
  Speaker 1: had rules around what happens when you don't make good
• 12:49
  Speaker 1: on a loan you owe, or which you are fraudulent.
• 12:52
  Speaker 2: The rules were strict.
• 12:54
  Speaker 1: They're mirrored in a bit diluted, more civilized form in
• 13:00
  Speaker 1: n credit card protections and regulations, and as we know,
• 13:04
  Speaker 1: you know, consumer credit. The concept of it made agriculture possible.
• 13:11
  Speaker 2: Totally in a very real way.
• 13:13
  Speaker 3: Well, I mean to think about it in general, like
• 13:15
  Speaker 3: you know, in order to start a business, Let's think
• 13:18
  Speaker 3: of agriculture as like one of the earliest forms of
• 13:20
  Speaker 3: like setting up shop. You need capital, and you can't
• 13:24
  Speaker 3: make capital if you don't have the business. It's sort
• 13:27
  Speaker 3: of a chicken or the egg kind of scenario. So
• 13:30
  Speaker 3: you need someone to be an investor in you, aka
• 13:34
  Speaker 3: loan you some money. And if that's done at a
• 13:36
  Speaker 3: reasonable rate and you're good at agriculturing, you can pay
• 13:40
  Speaker 3: that back lickety split, and then before you know it,
• 13:43
  Speaker 3: you're raking in the corns or whatever it might be
• 13:46
  Speaker 3: and reaping the benefit, reaping the harvest, et cetera.
• 13:49
  Speaker 1: Right, Yeah, let's go to Lewis Mandel, financial economist and
• 13:54
  Speaker 1: author of a book called the Credit Card Industry, a
• 13:57
  Speaker 1: history which we read for this show. Consumer credit, he says,
• 14:00
  Speaker 1: is characteristic of agrarian societies. Quote, they very often have
• 14:06
  Speaker 1: to finance agricultural operations by borrowing money for seeds and
• 14:11
  Speaker 1: other things to keep them going until harvest. Just like
• 14:14
  Speaker 1: a credit card interest rate. As long as the weather
• 14:17
  Speaker 1: is okay, then you're gonna make good at the end
• 14:20
  Speaker 1: of the year. So the idea is ancient, but the
• 14:22
  Speaker 1: application changes in step with technology. I love that you
• 14:27
  Speaker 1: mentioned American Express on the way there. We got to
• 14:30
  Speaker 1: mention our Knights Templar episode from Stuff they Don't want.
• 14:33
  Speaker 2: You to know, absolutely the creators of the very first bank.
• 14:37
  Speaker 3: I also believe we all agreed a pretty surefire inspiration
• 14:44
  Speaker 3: for the Iron Bank in the Songs of Ice and
• 14:46
  Speaker 3: Fire novels by George R. M.
• 14:48
  Speaker 2: Martin.
• 14:49
  Speaker 3: So yeah, the Knights Templar, creators of that very first
• 14:52
  Speaker 3: Bank made to help safely, I guess, guarantee the safe
• 14:58
  Speaker 3: transit of money during the Crusades. That was a whole,
• 15:01
  Speaker 3: big part of it, and it was very, very interesting.
• 15:03
  Speaker 3: They took a little cut from those transactions. And because
• 15:08
  Speaker 3: once again they were kind of first to market. Wasn't
• 15:10
  Speaker 3: the deal that they amassed so much freaking wealth that
• 15:13
  Speaker 3: they rivaled the powers that be and therefore became a
• 15:16
  Speaker 3: giant threat.
• 15:17
  Speaker 2: Yeah.
• 15:18
  Speaker 1: Yeah, King Philip in particular did not dig these guys.
• 15:26
  Speaker 1: I think the main reason they fell, yeah, was King
• 15:28
  Speaker 1: Philip the fourth of France, because.
• 15:30
  Speaker 3: That's the deal with the Iron Bank too. And then
• 15:32
  Speaker 3: in the books is that they are basically the power
• 15:35
  Speaker 3: behind the throne. They are so wealthy they command isn't
• 15:39
  Speaker 3: it the Golden Company, or they're in charge of like
• 15:42
  Speaker 3: this entire private army that could topple the entire the
• 15:46
  Speaker 3: whatever the realm.
• 15:48
  Speaker 1: Yes, yeah, they're having kingdoms. Also, King Philip owed the
• 15:53
  Speaker 1: Templars money, which is where things started to go wrong.
• 15:56
  Speaker 1: But anyway that happened, learn more about it and stuff
• 15:59
  Speaker 1: they don't want you to know. We mentioned America, American Express,
• 16:03
  Speaker 1: I should say at the top, So let's head to America.
• 16:07
  Speaker 1: American Express specifically, and learn a little bit about them
• 16:11
  Speaker 1: because they're a big player in.
• 16:12
  Speaker 2: These early days.
• 16:14
  Speaker 3: Very interesting because a lot of the companies that we're
• 16:16
  Speaker 3: going to mention that were part of this merger are
• 16:19
  Speaker 3: to this day their own thing, or at least a
• 16:22
  Speaker 3: couple of them separately.
• 16:24
  Speaker 2: Yeah, exactly.
• 16:26
  Speaker 3: So American Express was the product of a merger of
• 16:28
  Speaker 3: three companies, Wells and Company, Livingstone Fargo and Company, h
• 16:35
  Speaker 3: and Wells Butterfield. How Wells gets to be in two
• 16:38
  Speaker 3: of these operations. These are the same Wells. It's got
• 16:41
  Speaker 3: to be and could be awkward names, very true, but
• 16:45
  Speaker 3: we certainly know I am currently not really, I'm honestly
• 16:48
  Speaker 3: out of laziness due to several acquisitions.
• 16:51
  Speaker 2: Am a member of Wells Fargo, which is they had
• 16:55
  Speaker 2: some issues.
• 16:56
  Speaker 3: Right Ben, remember with the secret fees and the inflation
• 17:01
  Speaker 3: of those fees in order to make quotas and all
• 17:03
  Speaker 3: of that.
• 17:04
  Speaker 2: Didn't work right with me. But in the buttet twitch banks.
• 17:07
  Speaker 1: Yeah, and not to keep referencing stuff there on what
• 17:10
  Speaker 1: you know, but check out the Wells Fargo episode up
• 17:12
  Speaker 1: there wherein it's proven that they non consensually created accounts
• 17:18
  Speaker 1: for holders.
• 17:19
  Speaker 2: Imagine that.
• 17:21
  Speaker 1: Yeah, well for acount, real people, real accounts that have
• 17:25
  Speaker 1: an account made exactly dummy accounts that allowed them to
• 17:29
  Speaker 1: inflate those numbers so that they could meet their sales quotas.
• 17:32
  Speaker 2: And I still have Wells Fargo as well. I mentioned
• 17:35
  Speaker 2: that episode. So okay, good to know that I'm not
• 17:37
  Speaker 2: the only rube out here. You shook a finger. Yeah, yeah, yeah,
• 17:42
  Speaker 2: jump in there.
• 17:42
  Speaker 4: I just know of they talk about that fake account
• 17:46
  Speaker 4: thing on last Week Tonight in one of the couple
• 17:48
  Speaker 4: of seasons ago. So there's good information about that last
• 17:51
  Speaker 4: Week tonight. And yeah, I mean I bank with Truest,
• 17:54
  Speaker 4: which is a weird conglomerate with a terrible name.
• 17:57
  Speaker 2: Yeah, and it's uh, it's keep it over interest.
• 18:01
  Speaker 1: Also shout out to the writers of Last Week Tonight
• 18:04
  Speaker 1: for following stuff they'll want you to know.
• 18:06
  Speaker 3: Yeah, true, no, no, no, they have very parallel stories
• 18:09
  Speaker 3: that haven't write around the same time.
• 18:11
  Speaker 2: But good information in both of those resources.
• 18:14
  Speaker 1: And so American Express was quite successful. By eighteen sixty five,
• 18:19
  Speaker 1: they had nine hundred offices in a total of ten states.
• 18:23
  Speaker 1: This was extraordinary and awesome for any financial company. At
• 18:27
  Speaker 1: this point. There were big things on the horizon. This
• 18:30
  Speaker 1: is where we start to see the early signs of
• 18:34
  Speaker 1: the modern credit card. By eighteen sixty five, they still
• 18:37
  Speaker 1: are not called American Express yet, But by eighteen sixty
• 18:40
  Speaker 1: five they introduced something called the charge coin, a literal token.
• 18:45
  Speaker 1: We'll get to it in a second. But it wasn't
• 18:47
  Speaker 1: until let's see, eighteen sixty eight they merged again and
• 18:51
  Speaker 1: they became the American Merchants Union Express Company. Five years
• 18:56
  Speaker 1: after that, eighteen seventy three, they become the American Express Company.
• 19:01
  Speaker 1: Also around this time they start creating their first money
• 19:04
  Speaker 1: orders and travelers checks.
• 19:07
  Speaker 2: Well you know what it is, too, Ben.
• 19:09
  Speaker 3: In a lot of ways, the history of credit is
• 19:12
  Speaker 3: a history of virtual payment, a history of payment without
• 19:16
  Speaker 3: actually forking over the cash.
• 19:19
  Speaker 2: Right, it's all backed by cash.
• 19:21
  Speaker 3: You're paying with a promise or a promisory note or
• 19:24
  Speaker 3: whatever it might be. But no one ever, really, I
• 19:27
  Speaker 3: don't think, even in these days, gets paid. The counts
• 19:29
  Speaker 3: are settled and they're balanced, but I don't know, like,
• 19:33
  Speaker 3: was somebody at one point or another, if you were
• 19:35
  Speaker 3: buying something on credit, delivering the loot or was it
• 19:39
  Speaker 3: just kind of like you now have credit through this creditor,
• 19:43
  Speaker 3: Like it does seem to be if it's not exactly
• 19:47
  Speaker 3: virtual money at this point, it's tending toward that direction
• 19:50
  Speaker 3: because it is a practical problem that needs to be solved.
• 19:54
  Speaker 3: To your point about carting all this gold and specie.
• 19:58
  Speaker 1: Around, also check out our earlier Ridiculous History episode.
• 20:02
  Speaker 2: What do we call it?
• 20:04
  Speaker 1: Weird things that have been used as currency?
• 20:06
  Speaker 2: I think that's right.
• 20:07
  Speaker 1: Peppercorns, coscos, the conks, yes, conk shells. So we do
• 20:13
  Speaker 1: to your point, No, we see a trend, a slow
• 20:18
  Speaker 1: trend toward the idea of money or value over the
• 20:23
  Speaker 1: physical representation thereof, and between nineteen hundred and nineteen forty
• 20:28
  Speaker 1: we see an increase in credit as a form of payment.
• 20:32
  Speaker 1: This is where we see those charge coins, and then
• 20:35
  Speaker 1: something called shoppers plates. So department stores issue these little
• 20:48
  Speaker 1: metal plates, and they've got a customer's specific number, their
• 20:53
  Speaker 1: ID number, and then a little mark a seal again
• 20:57
  Speaker 1: of the merchant.
• 20:59
  Speaker 2: But you can't really take those with you.
• 21:02
  Speaker 1: You can take the charge going with you, but the
• 21:05
  Speaker 1: shopper plate kind of stays at the store.
• 21:08
  Speaker 3: And just to go back to the whole idea of money,
• 21:10
  Speaker 3: orders and traveler checks once again, that is like a
• 21:14
  Speaker 3: way of virtually transmitting payments, and it saves you back
• 21:18
  Speaker 3: to that whole Knight's Templar thing. It ensures the safe
• 21:22
  Speaker 3: passage of those funds and the Knight's templar. It was
• 21:26
  Speaker 3: in a lot of ways about protecting people from being
• 21:29
  Speaker 3: robbed physically. In this case, it's more like, well, you
• 21:32
  Speaker 3: don't even have We'll keep the money here and we'll
• 21:35
  Speaker 3: issue you this piece of paper, this document that is
• 21:39
  Speaker 3: a stand in for the money that you can then
• 21:41
  Speaker 3: pay it on the other side of wherever you're going
• 21:43
  Speaker 3: and then will balance the accounts with them after the facts.
• 21:47
  Speaker 1: Yeah, exactly, and for a little bit of a transaction fee.
• 21:51
  Speaker 1: And if we happen to loan out some of your
• 21:53
  Speaker 1: money to other people for this part of the game, right,
• 21:57
  Speaker 1: well that's fine.
• 21:58
  Speaker 2: You'll get what you need and it's time.
• 22:01
  Speaker 1: Western Union also introduced what they were calling metal money
• 22:06
  Speaker 1: in nineteen fourteen, and this was a kind of kind
• 22:10
  Speaker 1: of elite thing, also a plate kind of situation, right exactly,
• 22:14
  Speaker 1: as a metal plate. It would give to the customers
• 22:17
  Speaker 1: they liked. And then ten years later, it's like nineteen
• 22:19
  Speaker 1: twenty four, gas companies start doing this. General Petroleum Corporation
• 22:25
  Speaker 1: issues metal cards and you could take this card to
• 22:28
  Speaker 1: your gas or your mechanic service, and you can't just
• 22:34
  Speaker 1: pay later. And these companies took this idea. This is
• 22:38
  Speaker 1: important because they took the idea of a single store
• 22:41
  Speaker 1: credit token and they let you take it to multiple
• 22:45
  Speaker 1: branches of the same business, which is.
• 22:48
  Speaker 3: A big deal because you know, prior, you know, even
• 22:52
  Speaker 3: with like company credit or like a company store script
• 22:56
  Speaker 3: or whatever, you can only use it in very specific places.
• 22:59
  Speaker 3: And the idea, yeah, what this is heading towards is
• 23:02
  Speaker 3: a more universal system of credit acceptance. And nowadays, you know,
• 23:07
  Speaker 3: if a place has you know, it's funny, isn't it funny? Ben,
• 23:09
  Speaker 3: Pretty much anywhere we'll take Visa MasterCard, but not everyone
• 23:14
  Speaker 3: will take American Express.
• 23:16
  Speaker 2: You got to check on that one, right, Yeah, part
• 23:19
  Speaker 2: of it.
• 23:20
  Speaker 1: American Express, perhaps due to their age, still has some
• 23:25
  Speaker 1: different rules, right, like higher fees in many cases for
• 23:29
  Speaker 1: the business owner. And then additionally the idea which doesn't
• 23:35
  Speaker 1: apply in every case, but the idea that one must
• 23:37
  Speaker 1: pay the entirety of the balance at the conclusion of
• 23:40
  Speaker 1: each monthly billion cycle.
• 23:42
  Speaker 4: Yeah, and jump in here real quick, as you know,
• 23:44
  Speaker 4: I managed restaurants for a number of years and at
• 23:47
  Speaker 4: the end of at the end of a shift of
• 23:49
  Speaker 4: every employee of the restaurant order, you print up the
• 23:51
  Speaker 4: entire sheet of all the transactions and you would have
• 23:53
  Speaker 4: a breakdown. Is cash, demit, credit card AMEX Alex is
• 23:57
  Speaker 4: not a separate one. And the reason why is because
• 23:59
  Speaker 4: AMES generally passes a lot more of the cost the
• 24:03
  Speaker 4: fees onto the vendor and not the consumer. That's why
• 24:07
  Speaker 4: Amex generally gives you much better rewards than a lot
• 24:10
  Speaker 4: of cards. Another one is that way is Discover and
• 24:14
  Speaker 4: the two cards I use for my day to day
• 24:15
  Speaker 4: is Amex and Discover for that reason because I get
• 24:17
  Speaker 4: great points on them.
• 24:19
  Speaker 1: Oh and we should say no credit card company nor
• 24:23
  Speaker 1: financial institution reached out to us to ask about this episode. Absolutely,
• 24:28
  Speaker 1: so we are being objective here. Those metal plates, those
• 24:33
  Speaker 1: precursions of the modern credit card, they were about two
• 24:36
  Speaker 1: and a half by one in a fourth inches. They
• 24:38
  Speaker 1: add your name as a customer, you're billing address, and
• 24:42
  Speaker 1: in department stores like your Macy's and what have you,
• 24:46
  Speaker 1: that shopper plate would be kept in the store. You
• 24:49
  Speaker 1: would go there, you would tell them who you were,
• 24:52
  Speaker 1: and they would make sure you were there by checking
• 24:55
  Speaker 1: your plate. It's simpler in some ways to like old
• 25:00
  Speaker 1: school beer gardens that might keep a specific stying for
• 25:06
  Speaker 1: regular customers.
• 25:07
  Speaker 2: Oh fun, Yeah, I never thought about that. Yeah, it
• 25:09
  Speaker 2: makes sense.
• 25:10
  Speaker 3: And let's you know, yeah that you're that you're a
• 25:13
  Speaker 3: It's almost like loyalty programs or something like yeah, sorry,
• 25:18
  Speaker 3: as a.
• 25:18
  Speaker 1: Loyalty program, like going to Lyndall calder a history professor
• 25:23
  Speaker 1: at Augustana College out in Illinois. Different stores like Macy's
• 25:28
  Speaker 1: again might also issue brass tokens or paper certificates to
• 25:34
  Speaker 1: their their very best customers, and you would walk in,
• 25:37
  Speaker 1: you would show the customer the token, you would walk
• 25:40
  Speaker 1: out of the store with whatever you want, and it
• 25:43
  Speaker 1: was assumed you would pay the thing by the end
• 25:45
  Speaker 1: of the month. If you did not, you would have
• 25:48
  Speaker 1: other additional fees. You would be in trouble and you
• 25:52
  Speaker 1: would be embarrassed at the Macy's.
• 25:55
  Speaker 3: Are we kind of been still in boom times here?
• 25:57
  Speaker 3: We haven't hit depression times quite yet. Right, We've survived
• 26:01
  Speaker 3: depress You've survived depression times.
• 26:02
  Speaker 2: We've had it now.
• 26:04
  Speaker 3: Credit now is back to being pretty cheap, pretty attainable, right,
• 26:09
  Speaker 3: I don't know that we have yet necessarily those kind
• 26:13
  Speaker 3: of usurious predatory practices. I'm sure they exist. But you know,
• 26:20
  Speaker 3: as long as there have been people slinging credit, we
• 26:23
  Speaker 3: have things that we talked about this on, stuff that
• 26:24
  Speaker 3: I want you to know too, like these rent to
• 26:26
  Speaker 3: own rent to centers, the predatory practice of that once
• 26:30
  Speaker 3: again capitalizing on this notion of you too can live
• 26:34
  Speaker 3: the American dream, you too can have the sectional sofa
• 26:37
  Speaker 3: and the and the color television. But then there's all
• 26:40
  Speaker 3: of these hidden interest rates that are absolutely backbreaking.
• 26:46
  Speaker 1: Yes, and absolutely on purpose in some ways. In the
• 26:50
  Speaker 1: early system, it was kind of like the old practice
• 26:53
  Speaker 1: of layaway in your Walmart or your kmart.
• 26:55
  Speaker 3: You know, I guess that's what I'm saying, right, It
• 26:57
  Speaker 3: doesn't seem like people are as nasty. It seems like
• 27:00
  Speaker 3: it is a little more beneficial to the consumer early on.
• 27:04
  Speaker 3: It doesn't quite devolve into some of the nasty things
• 27:07
  Speaker 3: we know until a little later.
• 27:09
  Speaker 1: Yeah, predatory rates were not as normalized at this point.
• 27:12
  Speaker 1: I think that's right, school, and maybe maybe people have
• 27:15
  Speaker 1: better financial home training, so you would be less likely
• 27:20
  Speaker 1: to agree to anything that would charge you twenty five
• 27:24
  Speaker 1: percent of a purchase, you know what I mean, Because
• 27:28
  Speaker 1: it's terrible stuff. But in nineteen forty six things were
• 27:32
  Speaker 1: still often geographically based. This is where we see folks
• 27:37
  Speaker 1: like John C. Biggins from Flatbush National Bank in Brooklyn
• 27:41
  Speaker 1: create a system called charge it charge.
• 27:44
  Speaker 2: Without an E.
• 27:45
  Speaker 1: So, you know, what's cool. Apps do the same thing today.
• 27:48
  Speaker 2: A Z and there's got to be a spot for
• 27:50
  Speaker 2: a Z in there somewhere. Yeah. Yeah.
• 27:53
  Speaker 1: And this this card came from the Flatbush National Bank,
• 28:00
  Speaker 1: and if you were a Flatbush National Bank customer, you
• 28:04
  Speaker 1: could charge purchases directly to the bank in a two
• 28:09
  Speaker 1: block radius.
• 28:12
  Speaker 2: Wow. So like in the neighborhood. It was great, very localized.
• 28:16
  Speaker 2: That's wild, isn't it funny?
• 28:17
  Speaker 3: Though, been the way the term the word charge right,
• 28:20
  Speaker 3: It used to me and I the merchant charge you
• 28:24
  Speaker 3: a price for this thing. But then it kind of
• 28:26
  Speaker 3: got flipped where the term charge came to represent more
• 28:30
  Speaker 3: of like pay later, charge it charging it must be
• 28:35
  Speaker 3: from this, Honestly, the whole expression of charge it, you know,
• 28:38
  Speaker 3: musta although if you look at it on paper, it
• 28:41
  Speaker 3: really says charget.
• 28:42
  Speaker 4: Man.
• 28:42
  Speaker 2: Let's just be honest, it says charget.
• 28:44
  Speaker 3: Yeah.
• 28:44
  Speaker 2: It's American English, which sounds like a god dang it
• 28:47
  Speaker 2: gotten target. Big Jungus and everything.
• 28:52
  Speaker 1: Changes in nineteen fifty post in a New York minute,
• 28:56
  Speaker 1: post World War two American man the diners Club. You know,
• 29:00
  Speaker 1: for a lot of us listening today, you may have
• 29:03
  Speaker 1: memories of your predecessors having diners Club, or you may
• 29:07
  Speaker 1: have still around.
• 29:08
  Speaker 3: I think it is I checked very very rarely. Is
• 29:12
  Speaker 3: it accepted though, I believe if it's sort of almost
• 29:15
  Speaker 3: a running.
• 29:16
  Speaker 2: Gag in a way.
• 29:16
  Speaker 3: I'm sure they've done things to try to modernize a
• 29:19
  Speaker 3: little bit, but it accepts diners Club.
• 29:22
  Speaker 2: It's very unique.
• 29:23
  Speaker 1: And to finish what I was saying, like the the
• 29:25
  Speaker 1: idea is that you might associate with older relatives, or
• 29:29
  Speaker 1: you might associate it with sketch comedy, right, because there
• 29:32
  Speaker 1: is something humorous at this point. But it turns out
• 29:36
  Speaker 1: the diners club concept is really the heart of the
• 29:41
  Speaker 1: modern credit card.
• 29:42
  Speaker 3: That makes a lot of sense. Ben founded by Frank X.
• 29:46
  Speaker 3: I knew we could drop a Zer and X in
• 29:48
  Speaker 3: there somewhere McNamara and Ralph Schneider. Diner's Club was the
• 29:52
  Speaker 3: first independent car company, soon joined by Bloomingdale's Alfred Bloomingdale
• 29:57
  Speaker 3: had a very similar idea, and we also associate even
• 30:00
  Speaker 3: to this day credit cards with department stores, the idea
• 30:04
  Speaker 3: of having a charge accounts, you know, with Bloemy's. So,
• 30:08
  Speaker 3: as the story goes, Frank McNamara, he already was a
• 30:12
  Speaker 3: very successful businessman. He had an absolutely horrifically embarrassing experience
• 30:19
  Speaker 3: at a restaurant New York called Major's Cabin Grill.
• 30:23
  Speaker 2: So it's the Major's Cabin. I got it.
• 30:25
  Speaker 3: You're in the Major's cabin. You're being grilled for He
• 30:29
  Speaker 3: had a fine meal at Major's Cabin. Then, oh, heaven's
• 30:33
  Speaker 3: to Betsy, I've forgotten me wallet. I left it in
• 30:37
  Speaker 3: me other pants. I don't know why he's talking like
• 30:39
  Speaker 3: a pirate, but he is.
• 30:41
  Speaker 1: And luckily, according to the story, and this is from
• 30:45
  Speaker 1: the Diner's Club website, his wife came to bail him
• 30:48
  Speaker 1: out and pay the tab. He had one other recourse,
• 30:52
  Speaker 1: because this was the day wherein you couldn't you know,
• 30:56
  Speaker 1: you've seen it before, folks. Somebody might try a card
• 31:00
  Speaker 1: of some sort and for one reason or another, it
• 31:02
  Speaker 1: doesn't work. They usually have another card. His embarrassment is
• 31:07
  Speaker 1: like being herded on the precipice of a cliff, and
• 31:11
  Speaker 1: his wife saves him from the chasm. But according to
• 31:14
  Speaker 1: the Good Folks Diners Club. This social trauma transformed Frank.
• 31:18
  Speaker 2: They say. A year later, in February of.
• 31:21
  Speaker 1: Nineteen fifty, he returned to Major's Cabin Grill with his
• 31:24
  Speaker 1: partner Ralph Schneider. When the bill arrived, McNamara paid with
• 31:29
  Speaker 1: a small cardboard card known today as a Diner's Club card.
• 31:33
  Speaker 1: This event was hailed as the first Supper, paving the
• 31:37
  Speaker 1: way for the world's first multipurpose charge card.
• 31:41
  Speaker 3: Not to be confused with the Last Supper, but equally
• 31:44
  Speaker 3: as historically profound.
• 31:46
  Speaker 1: Everybody's eaten. We've got a little vintage picture of the
• 31:49
  Speaker 1: Major's cabin grill. By the way, there were a steakhouse.
• 31:51
  Speaker 2: Oh you know, they were dropping some steaks.
• 31:54
  Speaker 1: I saw this, I saw another, so I got a
• 31:56
  Speaker 1: little deep in this one. Apparently there is a different
• 32:00
  Speaker 1: narrative from locals and contemporaries of the neighborhood, and the
• 32:04
  Speaker 1: story is that mc namara may have kind of created
• 32:09
  Speaker 1: his own myth because he was already friends with the
• 32:11
  Speaker 1: dude Major, the restauranteur.
• 32:14
  Speaker 2: Who oh, Major's cabin grill. You think he could have
• 32:16
  Speaker 2: given him a pass and not made a big scene.
• 32:19
  Speaker 3: He just created this scene as an apocryphal sort of story, right.
• 32:23
  Speaker 1: Even weirder, it sounds like it sounds like Majors and
• 32:28
  Speaker 1: his buddy mc namara, where they were just pals, such
• 32:31
  Speaker 1: that Majors was the only restaurant in town who would
• 32:35
  Speaker 1: be the pilot, the pilot program for this dynasye because
• 32:41
  Speaker 1: then it could be like, oh, it could be great
• 32:42
  Speaker 1: for my restaurant too. And later they made up the
• 32:45
  Speaker 1: forgotten wallet story.
• 32:47
  Speaker 3: That's what I'm saying, though. Man, if they were pals,
• 32:49
  Speaker 3: he would have let him go fetch his wallets.
• 32:52
  Speaker 2: He would have given him come back tomorrow. I mean,
• 32:55
  Speaker 2: and io you was.
• 32:56
  Speaker 3: Absolutely a thing, you know, because the credit card didn't exist.
• 33:00
  Speaker 2: Oh heavens, what a story. So what are you see up?
• 33:02
  Speaker 2: Do you? What do you think the Is there a
• 33:05
  Speaker 2: myth here or is it totally there?
• 33:07
  Speaker 3: Always is Most of these about us on these legacy companies,
• 33:12
  Speaker 3: they all feel kind of fifty may I'm not going
• 33:16
  Speaker 3: to say fifty percent, twenty percent bullshnitt, thirty percent maybe yeah, yeah.
• 33:22
  Speaker 1: And so a lot of other credit card companies tried
• 33:26
  Speaker 1: to do the same thing, and just like the early
• 33:29
  Speaker 1: days of Soda Pop, a lot of these other companies
• 33:31
  Speaker 1: failed diners Club was successful explosively, so they started with
• 33:37
  Speaker 1: two hundred people and just fourteen restaurants in the entirety
• 33:42
  Speaker 1: of New York, and by one year that number had
• 33:45
  Speaker 1: drastically changed.
• 33:47
  Speaker 3: Forty two thousand card holders with around five hundred half
• 33:53
  Speaker 3: a million dollars in transactions, three hundred and thirty businesses
• 33:59
  Speaker 3: agreeing to accept this within a single month. Five years
• 34:03
  Speaker 3: into this whole scheme, approaching half a million members, three
• 34:09
  Speaker 3: hundred thousand members.
• 34:11
  Speaker 1: Quick inflation calculator. Those great numbers store aboo beep five
• 34:15
  Speaker 1: hundred thousand dollars per month in nineteen fifty one. Is
• 34:20
  Speaker 1: a dude a boo beat about six million, twenty nine
• 34:25
  Speaker 1: thou seven hundred and sixty nine dollars and twenty three
• 34:29
  Speaker 1: cents per month.
• 34:31
  Speaker 3: Sounds like he's rocking and a rolling into what we
• 34:35
  Speaker 3: might consider the modern day of credit and credit card companies,
• 34:41
  Speaker 3: because he you know this, this is like absolutely a smash,
• 34:46
  Speaker 3: and when that happens, you start seeing people looking at it.
• 34:49
  Speaker 3: How can we improve upon this? How can we add
• 34:52
  Speaker 3: features that benefit us, the card issuers, while also selling
• 34:56
  Speaker 3: it as features that benefit the card holders.
• 35:00
  Speaker 2: Somewhere in the middle is the truth.
• 35:01
  Speaker 3: Because you know, again, with all these points and stuff,
• 35:04
  Speaker 3: you got to kind of do your homework. Just because
• 35:06
  Speaker 3: the thing offers you points, you got to balance it
• 35:08
  Speaker 3: with what the annual fee might be, with how much
• 35:11
  Speaker 3: you have to spend to get the points. Are the
• 35:13
  Speaker 3: points actually of value or is it just kind of
• 35:16
  Speaker 3: pixie dust?
• 35:17
  Speaker 1: You know? Right? And this thing to be clear, the
• 35:20
  Speaker 1: Diners Club was kind of more of a charge card
• 35:23
  Speaker 1: at this point. They would let you get away with
• 35:25
  Speaker 1: it for a little bit, but you had to pay
• 35:26
  Speaker 1: everything off at the end of the month. You couldn't
• 35:29
  Speaker 1: carry the revolving balance, which is the real difference between
• 35:33
  Speaker 1: oh yeah, a modern credit card and a charge card.
• 35:35
  Speaker 3: That is kind of where the nastiness comes in is
• 35:38
  Speaker 3: with revolving credit and not to say there can't be
• 35:41
  Speaker 3: you know, I mean, I think most all modern credit cards,
• 35:44
  Speaker 3: well no, not all. In fact, it's odd. It's more
• 35:46
  Speaker 3: unusual for them not to be so the majority are revolving.
• 35:49
  Speaker 3: But you got to be really careful and know how
• 35:51
  Speaker 3: to calculate that. APR. We'll talk about that again. Hey,
• 35:54
  Speaker 3: it's kind of cool to have a ridiculous history episode
• 35:56
  Speaker 3: that also offers a little bit of meager financial advice,
• 36:00
  Speaker 3: because this is not stuff that's taught in schools, and
• 36:03
  Speaker 3: we always talk about how that's kind of jacked up
• 36:05
  Speaker 3: that there's not Maybe there are today, But when I
• 36:08
  Speaker 3: came up, they didn't talk about APR with us.
• 36:10
  Speaker 2: They didn't talk about how to get a good mortgage
• 36:12
  Speaker 2: rate or what that even entailed, or I have check
• 36:15
  Speaker 2: back in and say, hey, can you lower this exactly? Yeah,
• 36:19
  Speaker 2: you got to ask. And I will always fondly remember.
• 36:27
  Speaker 1: When I paid off credit card debt, because like a
• 36:30
  Speaker 1: lot of people, I had some credit card debt for
• 36:32
  Speaker 1: a little bit, and when I was paying it off
• 36:34
  Speaker 1: in full, I became an absolute revenge oriented monster. I
• 36:39
  Speaker 1: practiced something called malicious compliance. So I buy something that
• 36:44
  Speaker 1: was like five dollars, and then I would pay the
• 36:47
  Speaker 1: credit card company ten dollars immediately, and then I would
• 36:52
  Speaker 1: just never touch the card because eventually, at some point
• 36:55
  Speaker 1: they would send me a check for five dollars for
• 36:59
  Speaker 1: something like, yeah, five or four dollars, and I just
• 37:02
  Speaker 1: wanted to nickel and dime them on postage because I
• 37:08
  Speaker 1: took it absolutely.
• 37:09
  Speaker 2: I took it personally. Man, No, I get it.
• 37:12
  Speaker 3: But again, you know, there's a lot of positive stuff
• 37:15
  Speaker 3: to be said about a credit card system if you
• 37:18
  Speaker 3: use it correctly. And I think we've all been in
• 37:21
  Speaker 3: periods of our lives where maybe we were carrying more
• 37:23
  Speaker 3: a deva debt than we would like, or a balance
• 37:25
  Speaker 3: that we would like. So if you're anyone's out there
• 37:27
  Speaker 3: and they have that, or you have a really desperate situation,
• 37:32
  Speaker 3: there are resources out there for that too. You can
• 37:34
  Speaker 3: consolidate these things onto lower interest cards as long as
• 37:39
  Speaker 3: your credit rating isn't shot, which sometimes that comes with it.
• 37:42
  Speaker 3: You carry these balances and you don't pay, it really
• 37:44
  Speaker 3: tanks your credit. Honestly, the credit rating system might be
• 37:48
  Speaker 3: an episode undo itself. The history of that and the
• 37:50
  Speaker 3: different agencies. Yes, it's a very you know, but I
• 37:53
  Speaker 3: do recommend getting a free credit Karma account through buying
• 37:58
  Speaker 3: a car.
• 37:59
  Speaker 2: I did really that. It's not exactly perfect, but it's
• 38:03
  Speaker 2: real close.
• 38:03
  Speaker 3: It's close enough to know roughly where your credit score is,
• 38:07
  Speaker 3: and based on what the salesperson told me, it was
• 38:11
  Speaker 3: real close. And it doesn't put a hard hit on
• 38:15
  Speaker 3: your credit score every time you check your score, whereas
• 38:18
  Speaker 3: if you apply for a new credit card is something
• 38:20
  Speaker 3: called a hard inquiry that actually can lower your score
• 38:24
  Speaker 3: and those stay on your account for a handful of
• 38:26
  Speaker 3: years before they drop off, But checking your score with
• 38:28
  Speaker 3: credit Karma doesn't do that.
• 38:30
  Speaker 1: And we'll tell you also, folks about the internal system
• 38:34
  Speaker 1: that financial institutions use, which is sometimes referred to as
• 38:37
  Speaker 1: the real credit score, not the consumer facing one.
• 38:41
  Speaker 4: Yeah.
• 38:42
  Speaker 2: Yeah, I think it's a beautiful idea. Let's get on
• 38:44
  Speaker 2: the docket.
• 38:51
  Speaker 1: Well, let's also note the Franklin National Bank put out
• 38:56
  Speaker 1: something in nineteen fifty two, a card that's sometimes called
• 38:59
  Speaker 1: the first true credit card because that's the one where
• 39:03
  Speaker 1: you could buy now you could keep a revolving balance
• 39:06
  Speaker 1: and just pay with interest. They're the ones who figured
• 39:10
  Speaker 1: out that if we get people to make a minimum payment,
• 39:14
  Speaker 1: then we will keep making money off of them at
• 39:17
  Speaker 1: least twelve times a year or actually compound interest, so
• 39:22
  Speaker 1: they're making way more than that.
• 39:24
  Speaker 3: Well, I mean, what the modern credit card system sort
• 39:26
  Speaker 3: of became. It's just a much simpler route to a
• 39:29
  Speaker 3: loan that you always have a revolving.
• 39:32
  Speaker 2: Loan, you know.
• 39:33
  Speaker 3: I mean, we've we've known about loans as far back
• 39:36
  Speaker 3: as this Again, there was money, and that was something
• 39:40
  Speaker 3: you had to organize with an individual or an organization
• 39:44
  Speaker 3: or a bank or whatever. A credit card is a
• 39:46
  Speaker 3: one time thumbs up that gives you an amount that
• 39:50
  Speaker 3: you can you can't over you know, overcharge past that amount,
• 39:53
  Speaker 3: and as long as you're paying it back, you've got
• 39:55
  Speaker 3: this revolving line of credit that is essentially a running loan, right,
• 40:00
  Speaker 3: a running loan that.
• 40:01
  Speaker 1: Is advantageous to the person's supply in the initial capital.
• 40:06
  Speaker 1: And this is why a lot of Americans were skeptical
• 40:11
  Speaker 1: about this new and I dare say ridiculously American invention. Again,
• 40:16
  Speaker 1: let's not forget this is the country that tried cocaine
• 40:20
  Speaker 1: and said needs a.
• 40:21
  Speaker 2: Little more pep. So they did.
• 40:24
  Speaker 1: They weren't familiar with the concept of loans, and they said,
• 40:27
  Speaker 1: now let's make it spicy. So Time magazine talked about
• 40:31
  Speaker 1: this at length. They had an article in nineteen fifty
• 40:34
  Speaker 1: eight where they said the following credit, which was once
• 40:37
  Speaker 1: the sign that a person had troubled meeting his bills,
• 40:41
  Speaker 1: has taken on a glamorous new meaning in recent years.
• 40:45
  Speaker 1: Now a man with a credit card can rent a
• 40:48
  Speaker 1: plane or boat or car, live it up in nightclubs,
• 40:51
  Speaker 1: take a safari to Africa, and even get to Kelly
• 40:54
  Speaker 1: Girl for temporary office help why because of the credit
• 40:59
  Speaker 1: card game.
• 41:00
  Speaker 2: But isn't that describing living above one's means? Like, that's
• 41:06
  Speaker 2: what that is.
• 41:07
  Speaker 3: It's like selling that BS American dream that is all
• 41:11
  Speaker 3: based in gross capitalism.
• 41:14
  Speaker 2: You too, What the heck is a Kelly girl? Is
• 41:16
  Speaker 2: that like a girl Friday? It's like you're freaking like
• 41:19
  Speaker 2: a like a like an office assistant.
• 41:22
  Speaker 1: So in nineteen forty six, this was a hot new thing.
• 41:25
  Speaker 1: It was an agency perhaps it was like, yeah, it
• 41:29
  Speaker 1: was founded by William Russell Kelly, and you could hire
• 41:32
  Speaker 1: temporary workers to do office admin got it, secretarial where
• 41:37
  Speaker 1: we might now use a task rabbit for right, Right,
• 41:42
  Speaker 1: Because they started calling them Kelly girls because the vast
• 41:45
  Speaker 1: majority of the temporary workers were female, and because because
• 41:51
  Speaker 1: Kelly was a big company, they would accept credit cards.
• 41:54
  Speaker 3: I wonder if that's where Peggy Olsen originally came from
• 41:58
  Speaker 3: in the Mad Men series. It was a temp originally
• 42:02
  Speaker 3: like a typist, and then she, of course, you know,
• 42:04
  Speaker 3: graduated up the ranks and became a marketer or a seller.
• 42:08
  Speaker 2: But that makes sense, yeah, And they.
• 42:10
  Speaker 3: Would have been the lowest of the low in terms
• 42:12
  Speaker 3: of the office hierarchy.
• 42:14
  Speaker 1: Right.
• 42:15
  Speaker 2: It was a rough one.
• 42:16
  Speaker 1: You know, we've seen how temporary workers get treated sometimes
• 42:19
  Speaker 1: because not the best and once the idea of credit
• 42:23
  Speaker 1: cards was out there, the competition, of course begins. American Express.
• 42:29
  Speaker 1: They're already known for their travelers checks. It was even
• 42:32
  Speaker 1: within our lifetimes. It was even a pro travel tip
• 42:36
  Speaker 1: to get some MX travelers or cashier's checks because they
• 42:40
  Speaker 1: couldn't be used.
• 42:41
  Speaker 2: By people who might rob you.
• 42:45
  Speaker 1: So anyway, American Express starts their credit card program in
• 42:49
  Speaker 1: nineteen fifty eight, the Hilton hotel chain says, all right,
• 42:53
  Speaker 1: we've already got a loyalty card, we'll make it a
• 42:56
  Speaker 1: credit card as well. That same year, in fifty eight,
• 42:59
  Speaker 1: Bank of amer America, which later became Visa, they tested
• 43:03
  Speaker 1: out something they called they test out credit cards by
• 43:07
  Speaker 1: doing their own weirdly militaresque campaign. They called it the
• 43:11
  Speaker 1: Fresno Drop. So they mailed sixty thousand Bank America cards
• 43:17
  Speaker 1: credit cards to people in Fresno, California. And this was
• 43:23
  Speaker 1: not perfect, to be honest. There was a lot of
• 43:26
  Speaker 1: fraud because people felt like they were getting free money.
• 43:29
  Speaker 1: But it was still successful enough that Bank of America
• 43:32
  Speaker 1: said we're going to expand this program. We're going to
• 43:35
  Speaker 1: do a Fresno drop across the world and now boom,
• 43:39
  Speaker 1: boom boom, we have visa and odds are a lot
• 43:42
  Speaker 1: of people listening to the show today have a visa
• 43:45
  Speaker 1: card or account somewhere attached to their identity.
• 43:49
  Speaker 3: Yeah, maybe we could talk a little bit about that,
• 43:51
  Speaker 3: But I mean, what makes visa so pervasive?
• 43:55
  Speaker 2: Do you have any insight into that bend.
• 43:58
  Speaker 3: Might be outside of the scope of this conversation. That
• 44:00
  Speaker 3: one seems to be the catch all, the biggest one,
• 44:03
  Speaker 3: the one that is accepted everywhere.
• 44:06
  Speaker 1: Well, I guess part of it is it's slightly more
• 44:10
  Speaker 1: skewed toward debit cards, right as well, Like a visa
• 44:14
  Speaker 1: is a debit cards, So already have people in the
• 44:17
  Speaker 1: door with a bank account that's a baby going down
• 44:19
  Speaker 1: or a checking the account so they can get what
• 44:22
  Speaker 1: they feels an advantageous rate on a credit card like MasterCard,
• 44:26
  Speaker 1: for instance, is much more associated with credit cards. And
• 44:31
  Speaker 1: it also says here I just did a quick search
• 44:34
  Speaker 1: that they have the lowest fees in terms of that.
• 44:37
  Speaker 1: That's really what it comes down to.
• 44:38
  Speaker 3: American Express can charge two point five to three percent
• 44:42
  Speaker 3: and merchant costs, whereas Visa and MasterCard just charge way
• 44:46
  Speaker 3: less than that.
• 44:47
  Speaker 2: Okay.
• 44:47
  Speaker 1: Yeah, and we're talking at this point about a trillion
• 44:51
  Speaker 1: dollar industry.
• 44:53
  Speaker 2: It is nuts. It might not even be real money.
• 44:56
  Speaker 2: But nobody blow on the house of cards too hard
• 45:00
  Speaker 2: or it'll all topple. Yes, that is a drug ball
• 45:06
  Speaker 2: thinko mix.
• 45:07
  Speaker 1: So there's this other thing that happens, a feedback loop.
• 45:12
  Speaker 1: Right as credit card companies grow, more and more merchants.
• 45:16
  Speaker 2: Want to be riding the wave. They accept these things.
• 45:19
  Speaker 1: They don't want to just be cash only because now
• 45:22
  Speaker 1: they're losing customers. It's like Apple pay today, you know
• 45:26
  Speaker 1: what I mean, Like more and more places take Apple
• 45:29
  Speaker 1: Pay because more and more people have iPhones. You meet
• 45:33
  Speaker 1: folks where they are and that's where you take their money.
• 45:36
  Speaker 3: Yeah, and it's just so convenient. People are just whipping
• 45:39
  Speaker 3: out the phones to do a tap pay. If you're
• 45:41
  Speaker 3: not able to accept that, you're losing out on sales,
• 45:44
  Speaker 3: you know, it's just as simple as that. Also, more
• 45:47
  Speaker 3: and more people and vendors online are taking things like
• 45:50
  Speaker 3: Venmo and cash app, and I think there's probably going
• 45:54
  Speaker 3: to become there's going to come something of a reckoning
• 45:57
  Speaker 3: with all of this stuff. Right where Venmo, you know
• 46:01
  Speaker 3: you're transferring money without paying any fees. At what point
• 46:06
  Speaker 3: is the government going to be like, that's not how
• 46:09
  Speaker 3: this works. You can't keep doing that. It feels like
• 46:11
  Speaker 3: we've been on the edge of this wild west of
• 46:13
  Speaker 3: payment the payment wars for quite a while.
• 46:16
  Speaker 2: Now.
• 46:17
  Speaker 1: Yeah, and above a certain amount for a single transfer,
• 46:22
  Speaker 1: the taxman comes.
• 46:24
  Speaker 2: That's right.
• 46:24
  Speaker 3: And I'm wondering when that happens, because I just transferred
• 46:27
  Speaker 3: somebody via Venmo a substantial amount of money for my
• 46:33
  Speaker 3: part of a vacation rental home and there were no
• 46:37
  Speaker 3: fees charged that were visible. It was just my my
• 46:41
  Speaker 3: amount that I put in in on my end out
• 46:44
  Speaker 3: the same amount on the other end. So you gotta wonder,
• 46:47
  Speaker 3: at what point is the taxman going to come?
• 46:49
  Speaker 2: You know, knocking guys are going to space Jesus. So, yeah,
• 46:57
  Speaker 2: it is a good question.
• 46:57
  Speaker 1: We know the legislation will inevitably be reactive towards the
• 47:03
  Speaker 1: technological innovation. That's something that keeps happening still, right, which
• 47:07
  Speaker 1: might in some way explain predatory usurious credit card rates.
• 47:12
  Speaker 1: We did promise that we would talked about the magnetic stripe.
• 47:17
  Speaker 1: So nineteen fifty nine, right until nineteen fifty nine, a
• 47:20
  Speaker 1: lot of these cards are paper right or their actual metal.
• 47:24
  Speaker 1: American Express introduces the plastic charge card. Diners Club follows
• 47:30
  Speaker 1: up a few years later in sixty one, and in
• 47:33
  Speaker 1: the nineteen sixties, IBM develops the magnetic stripe. Our stuff
• 47:38
  Speaker 1: A genius how stuff works is coming out here. The
• 47:42
  Speaker 1: story is like this, So designers knew magnetic tape. They
• 47:46
  Speaker 1: were all very hot about computers at IBM. What no way.
• 47:50
  Speaker 1: They knew that magnetic tape could be a great information
• 47:55
  Speaker 1: medium or conveyor of info. But they couldn't figure out
• 47:59
  Speaker 1: how to KEYP bit on the friggin card. They were baffled.
• 48:03
  Speaker 1: And then, speaking of women not getting a lot of credit,
• 48:07
  Speaker 1: an engineer's wife at IBM, uh said.
• 48:11
  Speaker 2: Why don't you just try to iron it on the card?
• 48:15
  Speaker 2: And they did.
• 48:16
  Speaker 1: They literally ironed the stripe onto a card.
• 48:20
  Speaker 2: No way, Yeah, the iron like for shirts. Yeah. And
• 48:24
  Speaker 2: that's the.
• 48:25
  Speaker 1: Story and this function for a long long time. A
• 48:29
  Speaker 1: lot of us listening tonight still have credit cards with stripes, right,
• 48:33
  Speaker 1: But more and more, I would say chips. People are
• 48:36
  Speaker 1: moving toward chips.
• 48:37
  Speaker 2: Yeah, you know what I found though, The chips wear
• 48:41
  Speaker 2: out way faster, faster. Yeah, I don't know about you.
• 48:46
  Speaker 1: I have to do that thing where it's like third
• 48:48
  Speaker 1: times the charm, try the chip several times, and you
• 48:51
  Speaker 1: have to swipe.
• 48:52
  Speaker 2: Yeah, it's weird. There's some you know, it's sort of
• 48:54
  Speaker 2: a mystery.
• 48:54
  Speaker 3: But it's like you got to try the chip a
• 48:56
  Speaker 3: certain number of times before it will allow you to
• 48:59
  Speaker 3: swipe as a secondary attempt. And it's all in the programming. Yeah,
• 49:04
  Speaker 3: I'm sure, I'm sure, but I think it's different. It
• 49:06
  Speaker 3: probably varies depending on the point of sale, you know.
• 49:09
  Speaker 4: Yeah, I've had a number of like, you know, gas stations,
• 49:12
  Speaker 4: and I remember my first chip card. The chip like
• 49:16
  Speaker 4: died so quickly, and it was like this gas if
• 49:18
  Speaker 4: I went to all the time and I put in
• 49:20
  Speaker 4: one time and the guy's like, uh huh, all right,
• 49:22
  Speaker 4: second time.
• 49:22
  Speaker 2: Third time, all right, and then swipe.
• 49:24
  Speaker 1: And then also you've got to check for the fraud, right,
• 49:28
  Speaker 1: just very quickly. You need to check whenever you're going
• 49:30
  Speaker 1: to swipe something, especially at a gas station, any point
• 49:33
  Speaker 1: of sale like that, even the chip. Now, what you
• 49:36
  Speaker 1: need to do is take your hand. Make sure to
• 49:39
  Speaker 1: clean your hands later, but take your hand and give
• 49:41
  Speaker 1: that little bad boy a jing jiggle because if it
• 49:44
  Speaker 1: jiggles too much. It might be a skimmer.
• 49:47
  Speaker 2: Oh yeah, that's absolutely thing.
• 49:49
  Speaker 3: And we've talked again, how do we keep this just
• 49:51
  Speaker 3: very much in the wheelhouse of stuff that I want
• 49:53
  Speaker 3: you to know.
• 49:54
  Speaker 2: I have talked recently about these.
• 49:56
  Speaker 3: New long range skimmers that can be a thing and
• 49:59
  Speaker 3: that can actually grab data off of those RFID chips.
• 50:03
  Speaker 3: So you might even consider having one of those wallets
• 50:07
  Speaker 3: that shields electromagnetically shields that thing.
• 50:10
  Speaker 2: Again, we're not suggesting that anybody live in.
• 50:13
  Speaker 3: Fear of being ripped off all the time, but it's
• 50:15
  Speaker 3: just good to have your wits about you and know
• 50:18
  Speaker 3: you know what's going on out there.
• 50:19
  Speaker 1: Don't live in fear, but live informed and be prepared
• 50:22
  Speaker 1: not to sound too much of an eagle scout about it.
• 50:24
  Speaker 3: I think that's a good expression. Don't live in fear,
• 50:27
  Speaker 3: live informed. That's really that's a T shirt right there.
• 50:30
  Speaker 1: Oh okay, we'll write it out. Hang on, I'm actually
• 50:34
  Speaker 1: in our research brief putting this in. Okay, that's very good,
• 50:40
  Speaker 1: all right, living forward, All right, we got that, folks,
• 50:45
  Speaker 1: NOL thank you so much for the shout out on that.
• 50:47
  Speaker 1: So we didn't want to leave you without a dope
• 50:50
  Speaker 1: beat the step two step two, step two, step two.
• 50:54
  Speaker 1: Wi Wick, did you ever want a black card?
• 50:57
  Speaker 2: You guys? Well, my face card is black and quite heavy.
• 51:02
  Speaker 3: It is not an official black car, which I know
• 51:05
  Speaker 3: is the invite only amx I believe, but I meant
• 51:08
  Speaker 3: to mention this earlier.
• 51:09
  Speaker 2: You know, the whole history of the plates.
• 51:12
  Speaker 3: And all of that, like, that's why amx is are
• 51:15
  Speaker 3: all about the gold and the platinum and they look
• 51:17
  Speaker 3: like But I do believe that some of the real
• 51:19
  Speaker 3: exclusive ones are printed on metal. There are ones that
• 51:23
  Speaker 3: actually have some kind of metal content. If I'm not mistaken, you're.
• 51:27
  Speaker 2: One hundred percent correct.
• 51:29
  Speaker 1: I have a hefty well, I have one of those
• 51:31
  Speaker 1: hefty amxes, and that that's like a psychological hack.
• 51:35
  Speaker 2: They want you to feel the weight of it. That's right,
• 51:38
  Speaker 2: and you yailed it.
• 51:39
  Speaker 1: With the invitation only cards, one of the most famous
• 51:43
  Speaker 1: is the Black card, friending fans of hip hop. It's
• 51:47
  Speaker 1: technically called the Centurion card from American Express. And then
• 51:51
  Speaker 1: there's the other invite cards are like the JP Morgan
• 51:55
  Speaker 1: Reserve card. Dubai has one, City Group has one. The
• 52:00
  Speaker 1: main difference is you are expected to spend a lot
• 52:03
  Speaker 1: of money with those cards, and in return they give
• 52:07
  Speaker 1: you bonkers perks, you know.
• 52:10
  Speaker 3: Damn. I think even our meager American Express Platinum cards
• 52:14
  Speaker 3: have some metal content in them. They do have a
• 52:16
  Speaker 3: bit of hef to them. I didn't think about I
• 52:18
  Speaker 3: thought I didn't think we were Dang, we're with the
• 52:20
  Speaker 3: swells already.
• 52:20
  Speaker 2: Man.
• 52:21
  Speaker 3: Nice, Not quite but no, you're right that idea of
• 52:24
  Speaker 3: a limit. But again, you know, there have to be
• 52:29
  Speaker 3: some serious perks to a card like that. Otherwise what's
• 52:32
  Speaker 3: the point. Is it just about the prestige? Like what
• 52:34
  Speaker 3: does it get you? We can mere mortals like us
• 52:37
  Speaker 3: even google that stuff.
• 52:38
  Speaker 1: Yeah, private planes, VIP services, you can call. You can
• 52:43
  Speaker 1: call a twenty four to seven line.
• 52:45
  Speaker 2: Concier type of stuff.
• 52:47
  Speaker 4: According to the Great Repository Knowledge Wikipedia, is ten thousand
• 52:53
  Speaker 4: dollars to join, with a five thousand dollars per year
• 52:57
  Speaker 4: annual fee for the Black Card.
• 52:59
  Speaker 2: Five thousand year per er.
• 53:01
  Speaker 4: Yes, as you are sold the amount of money you
• 53:03
  Speaker 4: have to spend a thing because granted, you're gonna get
• 53:05
  Speaker 4: incredible points back on it, but you have to be
• 53:07
  Speaker 4: spending a ridiculous amount of money.
• 53:09
  Speaker 2: Because it takes wealth to make wealth.
• 53:11
  Speaker 3: Well, I'm not super proud of this, but it's something
• 53:15
  Speaker 3: that I'd like to change in my behavior. But I
• 53:18
  Speaker 3: buy a lot of stuff on Amazon, a lot a
• 53:21
  Speaker 3: lot of stuff, and I have an Amazon Rewards Chase card,
• 53:26
  Speaker 3: and I rack up some serious points from all the
• 53:31
  Speaker 3: stuff that I buy, and I actually use that to
• 53:33
  Speaker 3: pay the card.
• 53:34
  Speaker 2: You can even use it.
• 53:35
  Speaker 3: It gives you monetary value points that you can go
• 53:38
  Speaker 3: back and use it to pay your credit card if
• 53:41
  Speaker 3: you want to. So you know, I have done the
• 53:44
  Speaker 3: math on that one. The interest rate's pretty low in general,
• 53:48
  Speaker 3: and it gives you those perks. And like I've I've
• 53:50
  Speaker 3: gotten to a place where I have like three or
• 53:52
  Speaker 3: four hundred dollars in points that I can use to
• 53:54
  Speaker 3: buy something for my kids, you know, or whatever. Again,
• 53:57
  Speaker 3: this is not this is having the opposite effect of
• 53:59
  Speaker 3: what I intended. I do think Amazon is a problematic company,
• 54:03
  Speaker 3: but god damn it's so convenience.
• 54:05
  Speaker 1: Especially with their new medical services. Whoe betide. Folks be
• 54:09
  Speaker 1: well aware for statistics to end in the modern day.
• 54:13
  Speaker 1: At the end of twenty twenty three, per Forbes, the
• 54:16
  Speaker 1: average credit card debt per borrower was six three hundred
• 54:21
  Speaker 1: and sixty bucks. That's about ten percent higher than twenty
• 54:24
  Speaker 1: twenty two. This is ushering in an all time high collectively,
• 54:30
  Speaker 1: and part of this is due to all the financial
• 54:33
  Speaker 1: stress of the pandemic and the inflation involved tech. Right now,
• 54:39
  Speaker 1: we are estimating that there is fifty billion dollars in
• 54:43
  Speaker 1: new debt in a single quarter of the year, which
• 54:47
  Speaker 1: leads us to a total of one point one three
• 54:50
  Speaker 1: trillion in overall US card debt. Not super great. Don't
• 54:56
  Speaker 1: live in fear, live informed. We'll get the t shir. Yes,
• 55:00
  Speaker 1: that is a good slogan, ben. I hope it doesn't
• 55:03
  Speaker 1: already exist in my but I bet it doesn't, you know.
• 55:06
  Speaker 3: And one way too to think about credits is you
• 55:10
  Speaker 3: are paying for a service, and there are times where
• 55:13
  Speaker 3: if the interest rate is low enough, sometimes carrying that
• 55:17
  Speaker 3: balance is in the end of the world if it
• 55:19
  Speaker 3: allows you to free up your cash. If I don't
• 55:22
  Speaker 3: have to pay for this now, and I've committed to
• 55:25
  Speaker 3: paying a slightly higher price for the privilege of paying
• 55:28
  Speaker 3: for it over time, that's cool. I also have a
• 55:32
  Speaker 3: line of credit through PayPal. There are a lot of
• 55:34
  Speaker 3: opportunities if you have a good credit score. PayPal credit
• 55:36
  Speaker 3: lets you buy things with zero percent interest for six months,
• 55:41
  Speaker 3: So if you pay the thing off in six months,
• 55:44
  Speaker 3: you don't pay any interest at all. So it's basically
• 55:46
  Speaker 3: like free money or free you know, free credits, and
• 55:49
  Speaker 3: that's pretty cool too, so and it accumulates or accrues
• 55:53
  Speaker 3: that per purchase, so that's something to look into as well.
• 55:56
  Speaker 1: If the rate of interest that you're paying is less
• 55:59
  Speaker 1: than the rate of inflation, which is difficult to imagine
• 56:03
  Speaker 1: these days, but if that occurs, then you're in a
• 56:05
  Speaker 1: good spot, sort of like if you are investing in
• 56:09
  Speaker 1: stocks or indexes and so on, then you want that
• 56:12
  Speaker 1: return rate to be ideally higher than the rate of inflation.
• 56:17
  Speaker 1: It's an internal battle, just like our battle on whether
• 56:21
  Speaker 1: or not we wanted to make this a two parter.
• 56:23
  Speaker 1: I think our consensus is beefy one parter BF one Pete.
• 56:28
  Speaker 2: We're beefed up with this, folks.
• 56:30
  Speaker 1: Thanks so much for tuning in. We're going to have
• 56:32
  Speaker 1: an episode on credit scores coming out. We're returning to
• 56:36
  Speaker 1: micro nations, wal also answer the question about micro state
• 56:39
  Speaker 1: versus micronation.
• 56:40
  Speaker 2: All that to come and more our ridiculous history.
• 56:43
  Speaker 1: Thanks so much to our super producer, mister Max Williams.
• 56:48
  Speaker 3: Eves, Jeff codes here and Spira aj Mohammas, Jacobs the Quizler, Jonathan.
• 56:55
  Speaker 2: Mad Dog, Strickland the Puzzler. Wait a minute, flip that reverse?
• 56:59
  Speaker 2: It wonk of those bad boys, you know what I mean. Ben.
• 57:03
  Speaker 3: Thanks to you for being the research associated extraordinariy on
• 57:06
  Speaker 3: this episode.
• 57:07
  Speaker 2: I learned a lot, and I hope y'all at home
• 57:10
  Speaker 2: did too. Thanks folks, We'll see you next time.
• 57:20
  Speaker 3: For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts,
• 57:24
  Speaker 3: or wherever you listen to your favorite shows.