[purplelobster]

Funny thing is, as a European I never saw the point in credit cards. So when I lived in the US I didn't get one for a few years. Finally my girlfriend pushed me to get one for the free cash back, but the application was denied since I had no credit history (yet a high-paying job and $100k in the bank...). Just weird. You have to be in debt to show that you're responsible enough to handle debt.

[dasil003]

You don't have to be in debt, paying your credit card in full each month is an excellent way to build credit, and you will never pay a cent in interest as long as you pay in full without fail.

I can see how it all appears to be a silly game if you never actually need credit, however there are material benefits (cash-back, rental car insurance, etc) of playing the game. In some cases the benefits you receive are nonsensical until you realize they are subsidized by irresponsible individuals paying huge sums of interest. There's a special kind of smug pleasure reserved for those who are financially responsible in America.

[johnchristopher]

Can you cancel your credit card at any moment if you know you are going into a tight spot soon ? So you don't enter the vicious circle.

[dasil003]

Sure, although the age of credit accounts is a significant factor in your credit score, so it's not advisable if you are trying to build credit.

Personally I have enough practice that I treat my credit cards no different than I would treat my checkbook—it's not that hard to avoid trouble if you just have the mentality of only spending money you already have. In other words, I personally don't think cancelling the credit card is necessary, but YMMV.

[dalke]

I can't help but wonder if it's due to the US using the bank system vs. Europe using the post giro system.

Rather, that's one of the biggest differences I can think of between those two regions, with respect to personal finance.

But I can't figure out what the mechanism might be, so it's more an idle conjecture than something substantial.

[yason]

I've never had credit card debt (I just pay back once in a while, or every few hundred euros, to keep the balance out of red) but I've found good way to categorise my spending using credit cards. For example, I use one of my cards for personal expenses whereas we use a joint debit card account from the same bank for household expenses only. Then we have another joint credit card that we use on holidays etc. for shared expenses that aren't strictly household expenses or personal expenses... Very convenient. Also convenient is that instead of keeping lots of money on my day-to-day debit card account I'll just top up the c/c balance once in a while. The opposite would be to move money to my debit card account beforehand, and let it sit there even if I'm not sure I'll spend it in a week or three weeks.