turkish → English transcript

Now let's get to why credit cards are oh so good for banks.

Before credit cards, people borrowed from banks, of course, but either to start a business or to buy a home or a plot of land.

So people didn't use to borrow to buy consumer goods.

They borrowed to generate value or to buy assets they thought would appreciate.

As I said at the start of the video, no one goes to their bank and applies for a loan to go on vacation.

Nor does anyone take out a personal loan to buy a game console.

And credit--that is, debt--cards broke that perception.

They enabled people to get luxury consumer goods with money they didn't have.

There's saving for one year and buying the car you want.

There’s also buying the car you want right now and then making larger payments on its loan for one and a half years.

The human brain is always wired to seek pleasure as fast as possible.

For five days people live a shopping spree like kings and don’t think about how they’ll pay.

And this theme was pushed in every credit card ad in the world.

With this plastic card, I can get things I normally couldn’t.

The credit card had meshed perfectly with the consumer culture that capitalism needs.

In the past, the salespeople who set their sights on people’s idle savings in their bank accounts didn’t just take those anymore.

They also made people spend their future savings.

Also, credit cards were changing people’s brains.

In a study conducted at MIT, it was found that when people paid with cash

While the pain and reward centers in their brains were active at the same time

for payments made with credit cards, only the reward center was active.

Another study shows that when people pay with credit cards

they tend to spend up to 100% more.

Another academic study shows that

McDonald's customers spend 55% more when they use credit cards.

Casinos use chips instead of real money.

Because when people lose chips, they don't feel the same pain as when they lose real money.

Credit cards and the brain work the same way.

While credit cards on their own have already sent consumption soaring

the advent of the internet took it to a whole different level as well.

Now buying things is so easy that

without getting out of bed, with three clicks what you want is at your home tomorrow.

On top of that, social media and Instagram culture got added to the mix.

Everyone shares their best moments and vacations in the nicest places.

Not having the money isn't a problem.

You put it on your credit card in installments; you'll pay it at some point, sweetie.

Of course, when taking on debt, we always think of ideal scenarios.

I'll work for a year and pay it off.

What if you get fired, what if you get sick, what if an extra expense pops up?

The type of person being created today has no answer to these.

At the slightest stumble, due dates get missed and interest starts piling onto the debts.

That's when they encounter the credit card's dark side.

All the sweat of their brow goes to paying the interest on their debts.

Taking the model of a person who puts money aside

and replacing it with a model of a person who spends today half the money they will earn next year.