This is money, you use it to buy things
Ok I want to use it to buy this TV
ah…
What?
Well that’s okay, it’s just that most people use a plastic card for that.
How does that work?
Well the plastic card represents the digital money in your bank account
So when I swipe the card, it gives the money digitally from my account to their account?
Well actually it takes the money from your bank company and then you promise to pay them back in a month.
Ok but I have the money now, can I pay them back now?
No lol, I mean yes but why would you? Consider the time-discounted value of cash…
Ok well can I pay them back in 6 months?
NO lol you have a 20% interest rate
Ok so in 1 month exactly I’ll have to remember to pay them back?
No lol set up autopay, you can’t leave these things to memory
Ok but why am I doing all this instead of just spending cash?
You need to build your credit score
What’s that?
It’s a measure of how well you remember to pay someone back
But I don’t need to remember, I just use autopay
Right so you’re gonna get a good score
Huh ok
But don’t use that plastic card
What?
Use a different plastic card to get more points
What are points?
They’re money you get from the bank for using the plastic card
Why is the bank paying me to use the plastic card?
They’re hoping you forget to pay them and then they can hit you with the 20% interest
Oh ok… so they’d probably look for clients with a low “credit score”, right? I think I’m starting to get it.
No, actually your score is too low to get this plastic card, my bad
What??
They’re afraid you won’t pay them back
But I thought that’s how they earn interest!
They want you to forget to pay them back, but then eventually pay them back.
They want my forgetfulness to be a medium amount?
Precisely.
Ok well can I get this other card?
To find out we’ll have to pull your credit score.
Right, ok
Are you sure?
What? Yes, why not?
If we look at the credit score too much, it can lower the score
Looking at the score changes the score??
It might, yeah. Have you heard of the Copenhagen interpretation of quantum mechanics?
Wait so what do I do??
Just pull the credit it’s nbd
[6 months later]
Hey, I’ve been using the plastic card to buy things, and I’ve been earning “points”, this is pretty cool. How do I spend the points? Convert to cash?
No lol that’s the worst value you can get for your points
Oh. Then how do I spend them?
You’re gonna want to convert them to hotel or airline points for the best value.
Oh, hotels and airlines have points too?
Yes, every single one has a unique currency of points with its own earning options, redemption options, and expiration policies
Oh wow
But you can transfer them between different companies. But only if they’re partners. There are three major alliances of airline partners-
This seems like a lot to think about
This is the hardest optimization problem you will ever face in your life. Welcome to adulthood