The credit card industry has rapidly evolved from being a convenience tool to something that grips people's finances in a tight vice.
Personal finance is not taught in school and millions of people fall into the never-ending credit spiral every year without having the right knowledge or experience to prevent them from doing so.
This spiral that leads to lives spent in perpetual debt is exactly what the credit card industry wants to happen. After all - this is how retail banks make their money.
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I've worked in the financial services industry my entire career with the vast majority spent working in credit cards.
I have held senior positions in credit card companies, worked on credit card products in the UK, United States, Canada, across Europe Asia and the Middle East.
Having worked in everything from the world's largest bank to challenger banks and fintech startups, I have seen the way the credit card industry thinks from the inside for 13 years.
Over the years I have learned a lot about the inner workings of credit cards and have worked with dozens of banks on designing and launching new credit cards over the last few years.
I am no film maker, but I do my best in this video to tell you some of the darker sides of the credit card business and how it impacts people's lives.
THE FINANCIAL PRISON
Credit cards are the most profitable part of retail banks in almost every country. These products are unique - they are legally able to charge a huge number of different fees and interest charges without explicitly having to disclose them to customers. There's about 17 common ones that many will charge but you'll have to look through your Terms and Conditions and the Summary Box to try and find out exactly what they are.
Credit cards have one business objective - to get customers to spend money and build a balance until the balance is so high they are unable to ever repay it. At this point, you can collect interest payments on the balance for months going onto years.
Unlike many other products and industries which are fundamentally bad for people's well-being such as gambling, drinking and smoking, the credit card industry seems to not be affected too much.
They are allowed to advertise without any major restrictions, the regulations keep being relatively poor at genuinely protecting consumers and the balances continue growing every single year.
Too many people end up in the Financial Prison with no hope of ever getting out and this is a problem that needs a lot more focus. If only there was somebody who wanted to address the issue without being aggressively lobbied by their ex-colleagues and friends who are all on the inside.
Chapters
Introduction - 00:00
Part 1: Credit Cards Are Special - 01:25
Part 2: The Lure - 03:25
Part 3: The Setup - 06:11
Part 4: The Trick - 08:36
Part 5: The Financial Prison - 10:54
Copyright © Sasha Yanshin
CAMERA GEAR I USE (in newer videos)
○ My camera - https://bit.ly/sasha-camera
○ Main lens - https://bit.ly/sasha-lens
○ Microphone - https://bit.ly/sasha-mic
○ Tripod - https://bit.ly/sasha-tripod
○ Memory card - https://bit.ly/sasha-card
○ Ring light - https://bit.ly/sasha-light
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DISCLAIMER: Some of these links may be affiliate links. If you purchase a product or service using one of these links, I will receive a small commission from the seller. There will be no additional charge for you.
Personal finance is not taught in school and millions of people fall into the never-ending credit spiral every year without having the right knowledge or experience to prevent them from doing so.
This spiral that leads to lives spent in perpetual debt is exactly what the credit card industry wants to happen. After all - this is how retail banks make their money.
Liked this video?
👍 Like this video (it REALLY helps!)
❤️ SUBSCRIBE - I have a lot more videos (including On The Money series)
💬 Leave a comment with your thoughts on the credit card industry
I've worked in the financial services industry my entire career with the vast majority spent working in credit cards.
I have held senior positions in credit card companies, worked on credit card products in the UK, United States, Canada, across Europe Asia and the Middle East.
Having worked in everything from the world's largest bank to challenger banks and fintech startups, I have seen the way the credit card industry thinks from the inside for 13 years.
Over the years I have learned a lot about the inner workings of credit cards and have worked with dozens of banks on designing and launching new credit cards over the last few years.
I am no film maker, but I do my best in this video to tell you some of the darker sides of the credit card business and how it impacts people's lives.
THE FINANCIAL PRISON
Credit cards are the most profitable part of retail banks in almost every country. These products are unique - they are legally able to charge a huge number of different fees and interest charges without explicitly having to disclose them to customers. There's about 17 common ones that many will charge but you'll have to look through your Terms and Conditions and the Summary Box to try and find out exactly what they are.
Credit cards have one business objective - to get customers to spend money and build a balance until the balance is so high they are unable to ever repay it. At this point, you can collect interest payments on the balance for months going onto years.
Unlike many other products and industries which are fundamentally bad for people's well-being such as gambling, drinking and smoking, the credit card industry seems to not be affected too much.
They are allowed to advertise without any major restrictions, the regulations keep being relatively poor at genuinely protecting consumers and the balances continue growing every single year.
Too many people end up in the Financial Prison with no hope of ever getting out and this is a problem that needs a lot more focus. If only there was somebody who wanted to address the issue without being aggressively lobbied by their ex-colleagues and friends who are all on the inside.
Chapters
Introduction - 00:00
Part 1: Credit Cards Are Special - 01:25
Part 2: The Lure - 03:25
Part 3: The Setup - 06:11
Part 4: The Trick - 08:36
Part 5: The Financial Prison - 10:54
Copyright © Sasha Yanshin
CAMERA GEAR I USE (in newer videos)
○ My camera - https://bit.ly/sasha-camera
○ Main lens - https://bit.ly/sasha-lens
○ Microphone - https://bit.ly/sasha-mic
○ Tripod - https://bit.ly/sasha-tripod
○ Memory card - https://bit.ly/sasha-card
○ Ring light - https://bit.ly/sasha-light
Full list of gear here: https://kit.co/sashayanshin/sasha-video-gear
DISCLAIMER: Some of these links may be affiliate links. If you purchase a product or service using one of these links, I will receive a small commission from the seller. There will be no additional charge for you.
I've had so many credit cards in my time. I've never paid a single penny of interest. Even paid off about 25k worth of a house extension with 0% cards.
Slightly ironic that the advert that popped up while watching this vid was for a Lloyds Cashback card 🤪
I get the feeling from your vids that despite working in the industry you’re not a great fan.Thanks for enlightening us.
Great video, love the format and your other videos are really interesting as well.
To be honest the pandemic was a wake up call for me. I have been using credit cards and loans for years, have borrowed and paid back thousands and when the lockdown hit last March I owed around 23k (with a total credit limit of around 54k on credit cards).
Luckily I wasn’t furloughed at the time but it finally made me think what would happen if I lost my job and I owed all this money. A year later I am down to around 11k owing with a target to clear it off by the middle to end of next year, it’s so easy to get in debt but very hard to get out.
I just want to be free now.
Money Explained on Netflix Episode 2 I found an interesting watch after this. 🙃
A few points that maybe weren't directly addressed I would add are also that:
1. That if you use a credit card for day-to-day spending you don't realise this but you basically become 1 billing cycle behind your income in that first cycle and are indefinately stuck there unless you are able to pay off a month in advance, i.e. if you didn't spend that cash in your current account.
2. The narrative around credit cards being good for your credit history and tying into mortgages and other loans only perpetuates this idea that credit is good and that you should be using it as an adult to 'invest' in your life opportunities, where is in reality this is a narrative created to sell something which for most people is a poor financial decision as actually being a wise one.
Yo Sasha, Emilia told me about you brotha 🙂
This was a great video. Nice editing! In terms of credit cards, I have about 10 lol. In all honesty, people should educate themselves FIRST before getting into credit cards, loans, and other financial adventures that might ruin their lives.
Credit is awesome if you know how to use it and what for. 🍺🍺🍺 Just subscribed!
Good video, however after just watching a couple of your videos I'm slightly confused as to your opinion. Many of your videos advocate NOT using a debit card and ONLY using a credit card to pay for things.
This is exactly how people get themselves into a 'Credit card prison' don't you think?
Great video. So so rare for the bad side of credit cards to be profiled like this. Even Martin Lewis who many say is Mr personal finance doesn't attack them. I am uk based but follow Dave Ramsey from the 🇺🇸 as he helped me stay out of debt and rewire my finances. For 🇬🇧 audiences your video should be required viewing
This is a great video.
Great thanks Great job ..i wish you good luck with you your New Channel. 😊
My credit card provider must really hate me, I have never made the minimum payment, last months minimum was about £22 and I paid £175 and have been paying hundreds back every month
Credit cards are great if you know how to use them, but for anyone who can be impulsive with their spending they are probably a terrible idea too many people end up maxing their cards out and paying the minimum.
Fantastic…. gonna get my family to watch this 👍🏻
I tried not to get a credit card, but finally had to get one as you can't rent a car in Europe without a credit card!
I made all these mistakes. At 21, I had a credit card with £5,000 limit with about £4,000 spent on it (which is funny that my limit was so high because I was a student and my only income was student loans).
Then transferred the balance to a 0% credit card and obviously spent on the new and old card as well.
Long story short, I ended up in around £8,000 of credit card debt. Only in the past year or so have i stopped spending and started paying it back. I don't want to do another balance transfer because I don't trust myself to not spend more, so I'm just paying off as much as I can. I'm now 25 and have £5,000 of credit card debt which I'm trying to clear.
I wish I saw this video when I was 18, would have saved so much money and headache!
I love the visuals where the articles are highlighting what you are talking about. However, some of the visuals make it seem a bit robotic and take away a little bit from what you are saying. I love the information and I love your channel I am not trying to be negative.
Great video – keep going 🙂
I’ve watched all your videos and by far this is the most comprehensive channel from this particular sphere of knowledge.Your work is highly appreciated!
If you don’t understand credit works then you shouldn’t have a credit card. People fail to understand that credit cards aren’t free money. I have 15 credit cards including 4 Amex cards and have never paid interest on any card. Just like everything else it is a tool that can be utilised if you know what you’re doing. This video looks too much at the disadvantages (scare tactics) of credit cards and less about the positive impact they can have if used properly.
Sasha you are doing a great job !! This new video format are awesome.. The information is an eye opener.. Keep up the good work 👍
Great video! Loved the new format!
Nevermind the credit card, let's talk about my overdraft debt 😅 It's dope to see a channel like this so new! Keep killing it, buddy!
Great video man, please make more
As Martin Lewis has said: "Debt (including credit cards) is like fire; handled with care it is a useful tool, not handled properly you can get burnt."
This is fantastic mate. Saw you on reddit. I fell into the trap that you mentioned earlier of 0% transfer and running up debt on the other card. Now they're both cut up in the bin. I've been in perpetual debt in my 20s but no more. Thank you for this video.
Great to see a UK based YouTube channel on finances. There’s not too many over here and I reckon it isn’t too long before this channel explodes with growth…Great video and I like the new format. This is perfect timing because I’ve recently been thinking of paying off all my credit cards instead of just making the minimum payments…Do you think there’s any benefit to using a credit card, or ways to use them to your advantage? I know that Graham Stephan in America has about 11 credit cards and says it’s fine as long as you pay off the balance in full each month.
Saw your post on reddit! Nice video, keep it up! :]
Liked and subscribed!
Mate that was so informative and sleek 👍 keep up the work mate, we all appreciate what you are doing!
I'm relatively new to the credit card game as I'm just 19. This was a good insight into the other side of the coin of credit scores, points and etc. If you don't repay in full, all those benefits are just a smoke screen to you losing money.
Really clear and well presented video Sasha. Sound advice (or should that be information), thought provoking too !
What do you think of the new video format? Let me know in the comments!