How Not to Fall for Credit Card Tricks

Question: Are credit card companies trying to trick us?

Peter Pham: They are not necessarily tricking you; I think what it is is the redemption is pretty big. And if you are a person who really never gets on an airplane, why get an airline reward card? Or if only stay at a specific hotel or if you really want cash, it really makes a difference because each one redeems differently in each one of those categories and also you're spending patterns. Do you go out to restaurants? Do you travel? Are you grocery shopping? Are you buying with these things?

A lot of these cards have very complicated reward bonus, like 3 points for every dollar spent here, 2 points for every dollar spent here. It makes most people pretty dizzy. What we are trying to do is just very simply present that to you what you should be doing to earn the most amount of money from using your credit card.

Question: Is it wise to own more than one credit card?

Peter Pham: There are a couple of things. One is a couple credit cards is okay, in my opinion; probably two. I, for example, have a Visa and an American Express. It does a couple things. One it does help build your credit. I do pay off my credit card every month. In having that gap of how much of a credit line you have versus how much you spend. Your debt to available credit ratio is something that will help build your credit and I prefer to use my credit card mostly for receipts and tracking as an individual, but paying off those credit cards means I get to earn a tremendous amount of reward points and then I get to go spend on when I actually have time to travel outside of work on vacation.

So I think credit cards have its place for folks that are disciplined and having multiple credit cards is okay as long as you don't let yourself get out of control. It's okay for a lot of folks to have a gas card, a credit card that they use for buying every day groceries and items, and another credit card maybe just for travel. But I definitely recommend people kind of keeping control of credit cards getting out of control.

Question: What can we do about the glut of choices out there?

Peter Pham: I think the big companies believe that lots of choices are good but fundamentally a lot of it is built around quantity of services and products. Selling packages and a great example would be television services. Are you Comcast, DirecTV, Dish; what should you do when all I want to do is watch ABC and NBC? Understanding all of your options gets more and more complicated because, a, of competition and, b, I think they're trying to create more dynamic pricing in the marketplace to get more customers, sell kind of promotionally pricing and products, package it sexy or so that it can market. It actually is the opposite. What happens in the market is you get more confused and people understand, "Wow. This new service or plan is now out. How is that different from what I currently have? Is it the same thing and they're just calling it something different, which by the way a lot of cases is what happens, or is it really better or is it worse?" So then you have consumers just kind of confused.

There's a lot things happening to credit card merchants. One is the Credit Card Act of 2009 to credit card holders bill of rights. A lot of it is pushed through by Congress and the House really trying to legislate some rules around helping consumers understand these bills and not getting exhorted interest rates, not gaining penalties on late fees, et cetera.

There's a lot of really interesting laws that are going into effect which again adds to a layer of confusion for people to say, "Well, which cards are fair, which ones aren't, which ones are complying with the law and which one's are good for me as an individual." So we're big proponents of that and we actually have an interactive credit card bill holders bill of rights on our website where we track every single card and which rules they're following and which ones they are not.

The industry is coming along but fundamentally no matter what service that we go and help people with, what we're finding is gosh the number of choices are unbelievable. So working with professor [Richard] Thaler, looking at data, how do we help.? How do we really help consumers figure all this out because if you look at your wallet and you look at your bills that you pay every month, we're touching things that are 20, 30 percent of household income.

Recorded on November 4, 2009

The founder of personal finance tool Billshrink on how to avoid getting caught in the tangle of complicated reward bonuses.

Are we really addicted to technology?

Fear that new technologies are addictive isn't a modern phenomenon.

Credit: Rodion Kutsaev via Unsplash
Technology & Innovation

This article was originally published on our sister site, Freethink, which has partnered with the Build for Tomorrow podcast to go inside new episodes each month. Subscribe here to learn more about the crazy, curious things from history that shaped us, and how we can shape the future.

In many ways, technology has made our lives better. Through smartphones, apps, and social media platforms we can now work more efficiently and connect in ways that would have been unimaginable just decades ago.

But as we've grown to rely on technology for a lot of our professional and personal needs, most of us are asking tough questions about the role technology plays in our own lives. Are we becoming too dependent on technology to the point that it's actually harming us?

In the latest episode of Build for Tomorrow, host and Entrepreneur Editor-in-Chief Jason Feifer takes on the thorny question: is technology addictive?

Popularizing medical language

What makes something addictive rather than just engaging? It's a meaningful distinction because if technology is addictive, the next question could be: are the creators of popular digital technologies, like smartphones and social media apps, intentionally creating things that are addictive? If so, should they be held responsible?

To answer those questions, we've first got to agree on a definition of "addiction." As it turns out, that's not quite as easy as it sounds.

If we don't have a good definition of what we're talking about, then we can't properly help people.

LIAM SATCHELL UNIVERSITY OF WINCHESTER

"Over the past few decades, a lot of effort has gone into destigmatizing conversations about mental health, which of course is a very good thing," Feifer explains. It also means that medical language has entered into our vernacular —we're now more comfortable using clinical words outside of a specific diagnosis.

"We've all got that one friend who says, 'Oh, I'm a little bit OCD' or that friend who says, 'Oh, this is my big PTSD moment,'" Liam Satchell, a lecturer in psychology at the University of Winchester and guest on the podcast, says. He's concerned about how the word "addiction" gets tossed around by people with no background in mental health. An increased concern surrounding "tech addiction" isn't actually being driven by concern among psychiatric professionals, he says.

"These sorts of concerns about things like internet use or social media use haven't come from the psychiatric community as much," Satchell says. "They've come from people who are interested in technology first."

The casual use of medical language can lead to confusion about what is actually a mental health concern. We need a reliable standard for recognizing, discussing, and ultimately treating psychological conditions.

"If we don't have a good definition of what we're talking about, then we can't properly help people," Satchell says. That's why, according to Satchell, the psychiatric definition of addiction being based around experiencing distress or significant family, social, or occupational disruption needs to be included in any definition of addiction we may use.

Too much reading causes... heat rashes?

But as Feifer points out in his podcast, both popularizing medical language and the fear that new technologies are addictive aren't totally modern phenomena.

Take, for instance, the concept of "reading mania."

In the 18th Century, an author named J. G. Heinzmann claimed that people who read too many novels could experience something called "reading mania." This condition, Heinzmann explained, could cause many symptoms, including: "weakening of the eyes, heat rashes, gout, arthritis, hemorrhoids, asthma, apoplexy, pulmonary disease, indigestion, blocking of the bowels, nervous disorder, migraines, epilepsy, hypochondria, and melancholy."

"That is all very specific! But really, even the term 'reading mania' is medical," Feifer says.

"Manic episodes are not a joke, folks. But this didn't stop people a century later from applying the same term to wristwatches."

Indeed, an 1889 piece in the Newcastle Weekly Courant declared: "The watch mania, as it is called, is certainly excessive; indeed it becomes rabid."

Similar concerns have echoed throughout history about the radio, telephone, TV, and video games.

"It may sound comical in our modern context, but back then, when those new technologies were the latest distraction, they were probably really engaging. People spent too much time doing them," Feifer says. "And what can we say about that now, having seen it play out over and over and over again? We can say it's common. It's a common behavior. Doesn't mean it's the healthiest one. It's just not a medical problem."

Few today would argue that novels are in-and-of-themselves addictive — regardless of how voraciously you may have consumed your last favorite novel. So, what happened? Were these things ever addictive — and if not, what was happening in these moments of concern?

People are complicated, our relationship with new technology is complicated, and addiction is complicated — and our efforts to simplify very complex things, and make generalizations across broad portions of the population, can lead to real harm.

JASON FEIFER HOST OF BUILD FOR TOMORROW

There's a risk of pathologizing normal behavior, says Joel Billieux, professor of clinical psychology and psychological assessment at the University of Lausanne in Switzerland, and guest on the podcast. He's on a mission to understand how we can suss out what is truly addictive behavior versus what is normal behavior that we're calling addictive.

For Billieux and other professionals, this isn't just a rhetorical game. He uses the example of gaming addiction, which has come under increased scrutiny over the past half-decade. The language used around the subject of gaming addiction will determine how behaviors of potential patients are analyzed — and ultimately what treatment is recommended.

"For a lot of people you can realize that the gaming is actually a coping (mechanism for) social anxiety or trauma or depression," says Billieux.

"Those cases, of course, you will not necessarily target gaming per se. You will target what caused depression. And then as a result, If you succeed, gaming will diminish."

In some instances, a person might legitimately be addicted to gaming or technology, and require the corresponding treatment — but that treatment might be the wrong answer for another person.

"None of this is to discount that for some people, technology is a factor in a mental health problem," says Feifer.

"I am also not discounting that individual people can use technology such as smartphones or social media to a degree where it has a genuine negative impact on their lives. But the point here to understand is that people are complicated, our relationship with new technology is complicated, and addiction is complicated — and our efforts to simplify very complex things, and make generalizations across broad portions of the population, can lead to real harm."

Behavioral addiction is a notoriously complex thing for professionals to diagnose — even more so since the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), the book professionals use to classify mental disorders, introduced a new idea about addiction in 2013.

"The DSM-5 grouped substance addiction with gambling addiction — this is the first time that substance addiction was directly categorized with any kind of behavioral addiction," Feifer says.

"And then, the DSM-5 went a tiny bit further — and proposed that other potentially addictive behaviors require further study."

This might not sound like that big of a deal to laypeople, but its effect was massive in medicine.

"Researchers started launching studies — not to see if a behavior like social media use can be addictive, but rather, to start with the assumption that social media use is addictive, and then to see how many people have the addiction," says Feifer.

Learned helplessness

The assumption that a lot of us are addicted to technology may itself be harming us by undermining our autonomy and belief that we have agency to create change in our own lives. That's what Nir Eyal, author of the books Hooked and Indistractable, calls 'learned helplessness.'

"The price of living in a world with so many good things in it is that sometimes we have to learn these new skills, these new behaviors to moderate our use," Eyal says. "One surefire way to not do anything is to believe you are powerless. That's what learned helplessness is all about."

So if it's not an addiction that most of us are experiencing when we check our phones 90 times a day or are wondering about what our followers are saying on Twitter — then what is it?

"A choice, a willful choice, and perhaps some people would not agree or would criticize your choices. But I think we cannot consider that as something that is pathological in the clinical sense," says Billieux.

Of course, for some people technology can be addictive.

"If something is genuinely interfering with your social or occupational life, and you have no ability to control it, then please seek help," says Feifer.

But for the vast majority of people, thinking about our use of technology as a choice — albeit not always a healthy one — can be the first step to overcoming unwanted habits.

For more, be sure to check out the Build for Tomorrow episode here.

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