Welcome to the Listening Time podcast.
Hey English learners, this is Connor and you're listening to episode 237 of the Listening Time podcast.
I hope you're doing great today.
I hope you're excited to practice your English listening comprehension with another episode.
Today I'm going to talk about credit cards specifically in the US, because credit works a little bit differently here than it does in other countries.
There is a different level of importance placed on credit, credit scores, things of that nature.
In English, when we say things of that nature, we're saying things like that.
So I'm going to talk about the usage of credit cards here, the benefits of of using credit cards, the risks, and I'm also going to talk a little bit about credit scores.
So this will be especially important for you if you live in the US or plan on living here.
But even if you're never going to live here, that's okay.
I'm sure this will still be an interesting topic for you.
And I'll see you next time.
Also check out my advanced podcast episodes, in which I speak fast so you can take your listening to the next level.
That link is down below, as well as the link to my US Conversations podcast, in which I talk to English teachers from all over the country.
It's great practice for your listening.
And you can also find a teacher there because all of those teachers teach online.
So if you need an English teacher, you can get to know them first and then choose one of them to take classes with.
That link is down below.
Okay, let's talk about credit cards in the US.
Let me first talk about the usage of credit cards here.
At the time of recording this episode, credit cards are already the most popular payment method in the US.
So people pay with credit cards more than they pay with debit cards and more than they pay with cash.
So credit cards are like the most normal type of payment in the U.S.
I know that in some other countries cash is still more popular, or perhaps debit cards are more popular to use.
Here in the U.S., credit cards are the most popular type of payment. in a lot of places.
People almost expect you to pay with a credit card.
It's becoming less and less common to see people pull out their wallets and grab cash from their wallets and pay with that.
I see that less and less as the years go by.
And I
Digital wallets are now very popular as well.
Things like Apple Pay.
So credit cards and digital wallets make up a large percentage of transactions in the U.S.
When we say that something makes up a large percentage, we're saying that these things represent a large percentage.
So I've even seen a few places in the US.
This is very rare, but I've seen a few places in my life that don't even accept cash.
You're not even allowed to pay with cash.
Again, that's super rare, but I have seen that a few times.
So you can tell that credit cards are king in the US.
I use my credit cards for almost all of my transactions.
And my wife and I currently have four credit cards with different institutions.
So why?
Why do we have multiple credit cards and why do we use them for almost all of our transactions?
Why do we want to use credit cards?
Well, there are some benefits.
You might think that the biggest benefit for us using credit cards is that we get to borrow money now and we don't need to pay yet.
And of course, some people do this.
Some people use credit cards for this.
But I have never used ever used a credit card for this reason.
I forgot that this was even a reason that people use credit cards, because for me, I've never done this.
I pay for things with my credit card and then I pay it back almost immediately once the charge is processed.
It usually takes a couple days for the charge to be processed, processed and to show up on the statement, as we call it.
And many times I don't even wait for the charge to be processed.
I pay off my credit card even before the transaction has processed, so i don't need to use a credit card because i don't want to pay now, i want to pay later.
I don't do this And I never have credit card debt.
I never even have a balance meaning where it shows that you have used the credit card and you need to pay that money back by the end of the month or whatever.
I just immediately pay off all my credit cards.
And so you might think, why don't you just use cash then?
Why don't you just use your debit card?
Well, the main reason why I pay with credit cards is because credit cards give you rewards in the US.
So if you have a credit card here, it's almost certain that it gives you some benefit when you use it.
In my case, I get cash back when I buy things with my credit cards.
So my credit cards give me a certain percentage back of the transaction of the money that I spend.
So, for example, If I spend 100 somewhere, it might give me 150 back, or in some cases it might give me 3 back.
That might not sound like a lot, but when you pay for almost all of your daily expenses with credit cards, that adds up, meaning that money accumulates and you can earn a lot of cash back on your purchases.
And I earn different percentages of cash back for different types of transactions depending on the credit card.
For example, one of my credit cards gives me 3% cash back if I buy something at a restaurant.
So, instead of getting the normal 15 cashback that it gives me on other transactions, it gives me 3 cashback when I use it at restaurants, and the same thing goes for pharmacies.
When we say the same thing goes for something, we're just saying it's the same in this other case.
So when i use that credit card at pharmacies, it gives me three percent cash back, which is a lot, i think.
And another credit card that we just got gives us three percent cash back when we use it to buy gas.
So when we fill up our gas tanks in our car and we pay with that credit card, it gives us three percent cash back.
And there are other types of credit cards that give high percentages of cash back for other types of categories of purchases, like online retail purchases or travel purchases or whatever.
So you can use different credit cards that give you different rewards for different types of purchases and get a lot of cash back.
So this is a very big benefit.
I've been saving these points because It gives you cash back in the form of points and then you convert those points to cash.
I've been saving my points for a couple of years now, and it's actually... quite a bit of money.
So I'm hoping to use those points to buy flights because we want to go to Greece next year.
So it can be very beneficial to use credit cards because you get free money that they pay back to you.
So that's the main reason why I use credit cards.
Another benefit for using credit cards this is more just for signing up for credit cards is that many credit cards give you a sign-up bonus, meaning when you sign up for that credit card and they give it to you, if you spend a certain amount of money with that credit card within a certain amount of time like three months or six months like you need to spend one thousand dollars in the first three months or something like that if you do that, then they give you a certain amount of cash.
Like we just signed up for two different credit cards recently and one of them has a sign up bonus of two hundred and fifty dollars and you have to spend 2000 within the first six months.
So if we do that, it will give us $250 for free.
And then another card that we got has a sign up bonus of $200.
And you need to spend $500 within the first three months.
And so those are pretty cool rewards.
And we are planning on using those signup bonuses to help us pay for our trip to Greece.
So you can see that there are financial benefits for using and signing up for these types of credit cards.
And one more minor reason why i like to use credit cards is that i do not want to pay with my debit card.
I don't want to have my debit card always on me, meaning with me in my pocket, in my wallet, because I don't want someone to steal my debit card.
That's a much bigger problem than when someone steals your credit card.
I've had my credit card number stolen a couple times and it's no big deal.
They refund you the money that the person spends with your credit card.
They send you a new one with a new number.
It's not a big deal.
Honestly in my experience, but when they steal your debit card or if they can get your bank account information somehow, that's not good.
So I just don't like to always have my debit cards on me and I don't really like to use them.
And so that's another minor reason.
Of course, there are risks to using credit cards.
You probably know them already.
If you don't use them correctly, you're going to accumulate debt.
If you don't pay back those credit cards, you're going to have debt and there are high interest rates on cards.
So if you owe money and you don't pay it back, you're going to owe even more money because of the high interest rate.
And so that's not good.
And it can also ruin your credit score.
If you don't use your cards well and you have too much debt and you're not paying on time, you're not paying back enough, this can lower your credit score.
And speaking of credit score, let's talk about this.
This is very important in the U.S.
Here in the US, you have a credit score, which is a very important number when it comes to borrowing money or other things as well, like even cash renting an apartment or a house, possibly.
And so this number, this score depends on many different factors and it constantly changes.
It goes up and down all the time, and a lot of the time you don't even know why it's going up or down.
Some of the factors are, for example, are you paying back your credit card on time?
This is an obvious one.
If you're someone who is not paying on time.
This shows lenders people who might lend you money that you are someone who doesn't pay your bills on time.
So of course, that's gonna lower your credit score.
And when your credit score lowers, lenders don't trust you as much if you have a lower credit score, because this score is meant to show lenders how trustworthy you are, how responsible you are financially.
It doesn't always represent this well, because sometimes You might have a lower score for other reasons.
Like I said, you might not even know why your score goes down or whatever.
But one of the reasons is if you don't pay on time.
Another reason that your credit score might go down is or up.
It just depends on if this is good or bad.
It could be how much of your available credit you're using.
Like maybe you're using all of your available credit and it looks like you just spend so much money and you need a lot of loans, maybe so that can affect your credit score.
The number of accounts that you have with different credit card companies that can affect your credit score.
Some lenders want to see that you have multiple accounts and a long history of borrowing money and paying it back to different institutions.
So having more accounts can affect your credit score, sometimes in a positive way.
It also depends on how long you've had those accounts for.
If they're more recent, then that isn't as positive.
But if you've had them for a long time and you have always paid back what you owe on time, that can be really good for you.
If you have a large file with a lot of credit cards and things like that.
And you've always paid everything back on time and you've had these accounts for a long time.
That can possibly help you.
And another thing that can impact your credit score is whether or not you have applied for credit recently.
If you just applied for a credit card, it's very likely that other credit card companies might deny you if you apply for another credit card very shortly after that, because in their mind they're thinking that you need money now and so you're applying for a bunch of different credit cards because you need money and that might not look good.
So All of those things, and other things as well, affect your credit score.
And, like I said, this number goes up and down and a bad credit score can prevent you from getting a loan that you need.
Maybe you want to buy a house and you need a mortgage.
This loan to buy a house. but you have a bad credit score.
And so it might be hard for you to get a mortgage because lenders don't want to lend you money because of your bad credit score.
Or if they do lend you money, you'll probably have to pay a higher interest rate, you'll have to pay more on that loan, or maybe you'll have to pay other fees, other types of charges, other money.
Or maybe there are stricter terms, meaning the rules and the conditions for your loan are stricter, like you have to do this or you can't do that, or maybe you just can't get a loan at all.
So having a bad score can really hurt you if you're trying to get a loan to buy something buy a car, buy a house, whatever.
So you can see that it's very important here in the US.
And having a bad credit score can also affect you even if you're not trying to get a loan.
Even if, for example, you just want to rent an apartment or rent a house.
For example, I'm renting a house right now and the landlord, meaning the owner of this house she owns, needed to see my credit score and my wife's credit score.
She needed to see both of our credit scores before even agreeing to let us rent this house.
Even though I showed her my income, my bank statements, to show that I have money that comes in each month.
That wasn't enough.
She needed to see our credit scores.
So we weren't even trying to get a loan, but these credit scores were still very important for us recently when we were renting or looking to rent a place.
So As you can see, credit is very important in the US and in some unique ways.
You might not ever have to think about some type of score in your country when you want to rent an apartment or whatever.
In the US, credit is very important.
And so if you live here, or if you're planning on living here, this is something that you need to consider, because maybe someday you'll want to buy a house or buy a car here and you need a loan, and if you don't have a good credit score, that can be tricky.
You might have to pay more, pay more in interest or whatever.
So this is something to consider And I'll see you next time.
That link is down below.
And also start using my US Conversations podcast if you need to train your listening to understand when more than one person is talking.
That's an essential skill that you're going to need to develop.
So you should practice that with my US Conversations podcast.
That link is also down below.
All right, thank you all so much for listening to this episode and I'll talk to you on the next episode of Listening Time.
