Some investors have asked, regarding the credit card industry, the interest rate charged by credit cards has been getting higher and higher for so many years, but the current government interest rate is so low. From this perspective, will credit card companies reduce their interest rates in the future?
Buffett said that all these will affect the bank stocks purchased by Berkshire Hathaway, including American Express. Of course, this is also a competition for credit card companies, because the possibility of losses in this area will be reduced.
"We in Berkshire are not very interested in these credit cards, but we know that credit cards can be used as another source." For example, Buffett said, "A lady came to my side. She had a certain amount of money, not a lot of money. What did she say I should do with the money? I said to return your credit card. She owes a certain amount. I don't know how much interest she owes. The bank charges 18%. I don't even know how to get 18% interest. I don't have such a high income. If I have any money, I will keep any credit card debt, and I will pay it off immediately because the interest rate is so high. After that, she talked about her daughter. She has one thousand or two thousand dollars. What should I do with this one or two thousand dollars? I told her that I told her to lend you the money. If you are willing to pay 8% more interest on the bank credit card debt, why don't you pay this interest to your daughter? ？”
"I encourage everyone, if you have money, to reduce the credit card debt, even if it is 12%, you should not pay it to the credit card company and pay off the credit card debt completely. Some people want to establish their own credit and are willing to pay interest on credit cards continuously. " Buffett said.
Greg Abel said, "I have three children, and they are very careful with their credit cards. Many people use a lot of credit cards, especially when they enter the electronic world and do business online. They all use credit cards to pay, because you have to use credit cards to do transactions now. The risk has increased, but for many people, this is a very convenient thing. "
However, Buffett added: "I will have difficulties. If I borrow money and pay 12% interest, I don't think this is a good thing, even Berkshire will not pay so much."