Speaker 1: Welcome to How the Money. I'm Joel and I and Matt.
Speaker 1: Today we're discussing cash, debit or credit Joel Man, this
Speaker 1: is sort of one of those age old questions. It's
Speaker 1: like paper or plastics. You know, you're like at the
Speaker 1: grocery store, they're going to ask you what kind of
Speaker 1: bag you want to use? This is the question that
Speaker 1: we ask ourselves, whether we realize it or not. This
Speaker 1: is the choice that we make pretty much every day
Speaker 1: of our lives when we make purchases. So yeah, we're
Speaker 1: not always actively thinking about it. Oh I think I'm
Speaker 1: gonna use this form of purchasing today, but it is
Speaker 1: something that we have to think about. And there are
Speaker 1: different benefits, different pitfalls to each one, and so we
Speaker 1: have to discuss those and I think hopefully people at
Speaker 1: the end of this will have a better idea of
Speaker 1: how they should be making their purchases, whether it's with cash,
Speaker 1: debit or credit cards exactly. But before we get into that, Matt,
Speaker 1: I think we should talk quickly. You and I we
Speaker 1: had little dudes recently and they are a few months
Speaker 1: old now. It's been a fun time also a time
Speaker 1: of very little sleep. But one thing that we need
Speaker 1: to do. As you know, we have expanded our families,
Speaker 1: and that other people should think about as they go
Speaker 1: through big life changes. Is like kind of questioning how
Speaker 1: much life insurance you have and whether it's enough. We
Speaker 1: cover this topic quite a while back, but it's important
Speaker 1: to consider potentially laddering your life insurance. Let's say you
Speaker 1: already have a policy, but you feel like you need more. Well,
Speaker 1: when you have in addition to your family, that usually
Speaker 1: means increased costs, and that might mean a need for
Speaker 1: increased insurance coverage. And so I don't know about you,
Speaker 1: I'm revisiting the topic. I feel like actually probably already
Speaker 1: had too little to begin with, and so I'm planning
Speaker 1: on kind of shopping for another policy to kind of
Speaker 1: ladder so that my family has enough coverage in case
Speaker 1: the terrible, unfortunate event happens of me passing away early.
Speaker 1: Nice man, Yeah, this is an excellent time to revisit
Speaker 1: the kind of insurance that we have. And specifically, like
Speaker 1: you and I, we both have term life insurance. For me. Specifically,
Speaker 1: my policy is good until I'm fifty two years old,
Speaker 1: and so I'm hoping, you know, fingers crossed that by then,
Speaker 1: I might be financially independent. That actually might be an
Speaker 1: instance when a life insurance policy may not be as crucial, right,
Speaker 1: because if you're financially independent, you don't need your own
Speaker 1: source of income to provide income for your family where
Speaker 1: you did not be there. Yeah, and I wrote an
Speaker 1: article about this, it's on the website. Will link to
Speaker 1: it in the show notes. Specifically, the reason to buy
Speaker 1: term life insurance is for replacement of income, and so
Speaker 1: people oftentimes use it for other reasons that aren't necessary.
Speaker 1: And yes, in particular, if you're financially independent, you don't
Speaker 1: really need life insurance because you don't have income that
Speaker 1: needs replacing. But yeah, I think especially I just want
Speaker 1: people to think about this. As you know, we just
Speaker 1: had these life event changes. And I think any time
Speaker 1: you get married, you change jobs in your income is different,
Speaker 1: or you move even to a new house and the
Speaker 1: mortgage payments are higher, or you have another child, like
Speaker 1: these are the kind of events that you at least
Speaker 1: need to reassess. It doesn't necessarily mean you need more
Speaker 1: or you need to buy a new policy. And one
Speaker 1: other quick thing to mention too, is that if you
Speaker 1: have a policy through your employer, well in all likelihood,
Speaker 1: it's not enough. If you just went through open enrollment
Speaker 1: and you think that you're solid because your employer offers
Speaker 1: a certain amount of life insurance just straight up to
Speaker 1: you for free or for for a certain amount of money,
Speaker 1: well it's probably not enough coverage. Think about it, do
Speaker 1: the research, read that article, and make sure that you
Speaker 1: are properly insured, because that's really important. It's it's really
Speaker 1: cheap to write. Term life insurance is so dirt cheap
Speaker 1: now there's just not much of an excuse to avoid
Speaker 1: getting it. Well, that's the thing. It may not necessarily
Speaker 1: be cheap for us now because I mean, I'm ten
Speaker 1: years older than when I got my first policy, but
Speaker 1: when you're younger, it is it's very affordable. Term life
Speaker 1: is it's very affordable. It's something along the lines of
Speaker 1: thirty bucks a month. It does increase every year you
Speaker 1: get older. So I am very curious to see what
Speaker 1: the rates are going to be if I were to
Speaker 1: kind of attack on some additional coverage sort of in
Speaker 1: in our case, I think we'd be looking at layering
Speaker 1: instead of laddering more for the short term now when
Speaker 1: we would definitely need it. Um and you know, Another
Speaker 1: instance to consider beefing up your coverage is if your
Speaker 1: borderline cheap and not frugal, and if maybe skimmed out
Speaker 1: a little bit too much on the front end. You know,
Speaker 1: you kind of mentioned that. I think that's where we
Speaker 1: are with it now as well. And it's not that
Speaker 1: we were necessarily being cheap at the time. I didn't
Speaker 1: think I was being cheap when I as when you
Speaker 1: got it, you didn't have any kids exactly, We didn't, well,
Speaker 1: we didn't have any kids. We also, you know, we
Speaker 1: had one property at that point, we were pretty young.
Speaker 1: We didn't we had fewer expenses. Your circumstances have changed
Speaker 1: and changed another look, yeah, they have changed significantly. And
Speaker 1: so if that's the case for you, that you know,
Speaker 1: that's what you want to keep in mind, and you're
Speaker 1: looking at the different types of coverage out there. Yeah,
Speaker 1: I might have been a touch cheap, like it touched
Speaker 1: not not thinking about it as long term as I
Speaker 1: should have. And at the same time, also my circumstances
Speaker 1: have changed a good bit and so for both reasons,
Speaker 1: it's time to revisit. But okay, Matt, enough about life insurance.
Speaker 1: Love talking term life insurance. So cheap, so beautiful. But
Speaker 1: you know what else is beautiful with the label on
Speaker 1: this beer, we're checking Bourbon Barrel Orro Negro from Jackie
Speaker 1: O's our final beer that they sent us. And man,
Speaker 1: this one I'm really excited about having on the show today.
Speaker 1: And we'll give our thoughts on this one at the
Speaker 1: end of the episode and before we forget. If you
Speaker 1: happen to be anywhere near Athens, Ohio and you're into beer,
Speaker 1: you can't miss Jackie Os. Make sure you swing by there. Dude,
Speaker 1: I know that if we go anywhere near Ohio and
Speaker 1: the near future, we are totally going to spend like
Speaker 1: a few days. They're just hanging out with us. Guys.
Speaker 1: You I already know that this brewery is worth a
Speaker 1: long distance drive because the beers are so good and
Speaker 1: that people are so good there. All right, Matt, let's
Speaker 1: get onto the topic at hand. We're talking about cash, debit,
Speaker 1: or credit. It's important to consider how we pay. How
Speaker 1: we pay for things has a lot of implications for us.
Speaker 1: Some payment methods are more secure than others, Some provide
Speaker 1: better rewards peace of mind, or or might even cause
Speaker 1: us to spend less of our money. Are hard earned money.
Speaker 1: So how can we know whether we should be pulling
Speaker 1: out debit card or a credit card, or should we
Speaker 1: even stick to using cash. It's kind of old school,
Speaker 1: but that's how a lot of people roll right. Cash
Speaker 1: seems to help them stick to their spending plans. Well,
Speaker 1: we're going to discuss the pros and the cons and
Speaker 1: why how you pay is so important in this episode. Yeah,
Speaker 1: before we launch into you know that the cash, debit
Speaker 1: or credit debates. How about you know the different apps
Speaker 1: out there, right, the mobile payment platforms like zel or,
Speaker 1: Venmo and cash app. Those folks are blowing up, man.
Speaker 1: It is so easy to pay for goods and services
Speaker 1: and to just settle up with friends via those apps.
Speaker 1: I personally use Venomo, cash App and PayPal all the time.
Speaker 1: Like seriously on the rag and Joel, you know you
Speaker 1: mentioned the differing amounts of security, Like all these different apps.
Speaker 1: They use the highest level of encryption to ensure you
Speaker 1: know that their apps are secure, so your money doesn't
Speaker 1: just straight up and vanish, right. That is no fun
Speaker 1: vanishing money like that sucks, but at least you have
Speaker 1: a good story. Right. However, though, there are almost no
Speaker 1: protections for you if you make a user error if
Speaker 1: you send money to the wrong person. Right, So if
Speaker 1: you just send it to the wrong gym on the app, man,
Speaker 1: you are out of luck. I recently mentioned my Venomo
Speaker 1: mistake and that's exactly what happened to me. But luckily
Speaker 1: the person on the other end was kind enough to
Speaker 1: refund me. But here's the thing, if you are a
Speaker 1: recipient of some errant funds, don't immediately refund that money
Speaker 1: because there's a chance you might be, you know, the
Speaker 1: potential victim of some frauds. So you know, we would
Speaker 1: recommend for you to reach out to customer support of
Speaker 1: that specific app. You just want to make sure things
Speaker 1: around the up and up before you send money back
Speaker 1: their way. Yeah. I mean, the thing is with with
Speaker 1: those apps, it takes a couple of days for the
Speaker 1: money to actually go through. It looks like you just
Speaker 1: got the money, but it actually hasn't hit your account
Speaker 1: for a couple of days typically, and so because of that,
Speaker 1: the person that paid you the money could stop the
Speaker 1: payment with their bank, and that means you never actually
Speaker 1: got the money even though it looks like you did.
Speaker 1: So those apps are fantastic for a lot of reasons.
Speaker 1: They made things so much easier, especially settling up bills
Speaker 1: between friends, paying a landlord for your rent, or all
Speaker 1: these ways that these apps have just kind of really
Speaker 1: helped to make it easier for us to send money
Speaker 1: to each other. But be careful of paying the wrong person,
Speaker 1: or be careful if you mistakenly received funds to Matt,
Speaker 1: that's a good point, all right. Let's get into cash, debit,
Speaker 1: and credit in particular. Let's start with cash. Matt, it's
Speaker 1: so old school, man. People still use cash though, right.
Speaker 1: Do you carry cash in your wallet typically on like
Speaker 1: a daily basis. I always try to keep a twenty
Speaker 1: in there. I'm kind of an old school in that sense,
Speaker 1: you know, don't like Dad's always care around like it's
Speaker 1: twenty in your wallet just just in case for emergencies. Yeah,
Speaker 1: for sure, that's me. Yeah. I like to carry like
Speaker 1: a five and a few ones if you need a
Speaker 1: tip for something random or I don't know, just it's
Speaker 1: nice to have a few bucks on hand. But for
Speaker 1: the most part, man, I don't really use cash for
Speaker 1: It's kind of like that backup for me in my wallet,
Speaker 1: but it's not something I typically make purchases with. Ye
Speaker 1: back up only for sure. Yeah, because ultimately there aren't
Speaker 1: any rewards to be earned when we pay with cash
Speaker 1: unless a store offers a cash discount, which is also rare.
Speaker 1: So the biggest benefit though, of paying in cash is
Speaker 1: that you'll likely spend less. Study show that we have
Speaker 1: a harder time parting with physical currency than we do
Speaker 1: paying with plastic. It just kind of hurts a little
Speaker 1: more to actually open up your wality, your purse, pull
Speaker 1: the cash out and hand it over. There's just a
Speaker 1: feeling that we get that psychologically it means more to
Speaker 1: us than the swipe of the card. It almost feels
Speaker 1: like we're not actually spending money when we do that.
Speaker 1: So basically, the major upside of us actually using more
Speaker 1: cash in our lives to pay for things is a
Speaker 1: behavioral one. It's a behavior modification system of payment that
Speaker 1: forces us to think a little bit more before we
Speaker 1: actually go through with the purchase. So yeah, I think
Speaker 1: that is probably the biggest reason to actually pay with
Speaker 1: cash a little more often. Is that sort of double
Speaker 1: take that we have to do before we actually buy something. Yeah,
Speaker 1: and Joe, And another awesome benefit of only using cash
Speaker 1: is that it can help us to stick to a
Speaker 1: budget if you know, if you have a set amount
Speaker 1: of money that you've decided to spend on let's just
Speaker 1: say craft beer in our example, my favorite example, then
Speaker 1: once you run out of cash, guess what you are
Speaker 1: done spending money. This is especially helpful for discretionary purchases
Speaker 1: like going out for drinks, eating out, and even groceries.
Speaker 1: Right sometimes it can be tempting if we see some
Speaker 1: delicious looking fruit or veggies, maybe it's time to load up.
Speaker 1: Or ice cream bacon bacons on sale. Man, you buy
Speaker 1: that and freeze it. But paying in cash means that
Speaker 1: you only buy stuff that you can actually afford, and
Speaker 1: it also ensures that you won't pay interest on the
Speaker 1: items that you buy where you to buy those items
Speaker 1: on credit. But cash also has kind of an ugly downside.
Speaker 1: You could lose your wallet because you're carrying too much
Speaker 1: cash around, and that can be a bit nerve wracking.
Speaker 1: A lot of folks love the envelope system, kind of
Speaker 1: putting your money into envelopes for the specific line items
Speaker 1: in your budget, and then when you run out of cash,
Speaker 1: you run out of cash and you don't have any
Speaker 1: money left for the rest of the month. But I
Speaker 1: can't really imagine carrying around hundreds of dollars in cash myself,
Speaker 1: Matt to the grocery store wherever I'm going, and it
Speaker 1: just seems a little cumbersome, and also just having that
Speaker 1: much cash on your person. I just don't like that idea. So, really,
Speaker 1: if we're going to get practical with it, we purchased
Speaker 1: so many things online today that it makes it kind
Speaker 1: of impossible to use cash for a lot of those purchases.
Speaker 1: It's just not convenient, and so I think because of
Speaker 1: those reasons, using cash is helpful for a small segment
Speaker 1: of people, but isn't necessarily a great solution for most folks. Yeah,
Speaker 1: shopping online, man, I would love to know the actual
Speaker 1: percentage of Americans who do some form of shopping online.
Speaker 1: It's got to be huge, right, Oh, yeah, at least
Speaker 1: some form a huge percentage of us. A majority of
Speaker 1: our money is still overwhelmingly spent in retail stores, but
Speaker 1: it's shifting quickly. And so those folks who are typically
Speaker 1: using cash but do want to make online purchases, a
Speaker 1: lot of those folks are using debit cards because of
Speaker 1: that convenience, because they can actually make those purchases online.
Speaker 1: So we're gonna talk about debit cards and what we
Speaker 1: really think about them right after the break. All right, Matt,
Speaker 1: let's get into it. What do we really think of
Speaker 1: debit cards? Most people seem to kind of have a
Speaker 1: high view of debit cards. They're basically like credit cards.
Speaker 1: There's no real difference. So I feel more comfortable using
Speaker 1: my debit card. Why not? I think a lot of
Speaker 1: folks think that by using these debit cards they're gonna
Speaker 1: gain that convenience of paying in plastic and the ability
Speaker 1: to shop online, which is true. But folks think that
Speaker 1: with debit cards they have the same level of security
Speaker 1: that they have with credit cards, and this is not true,
Speaker 1: and that, in my mind, is the biggest reason why
Speaker 1: debit cards are not a great option for folks. Specifically,
Speaker 1: those protections that are offered to you when you pay
Speaker 1: with a credit card. There's so much better than the
Speaker 1: protections that you have when you pay with a debit card. Yeah. Man,
Speaker 1: if you don't report a fraudulent purchase with your debit
Speaker 1: card within two days of it occurring, you could be
Speaker 1: on the hook for up to fifty dollars right if
Speaker 1: you do happen to notice it within sixty days, you
Speaker 1: could be liable for up to five in charges. But
Speaker 1: if you don't noticed that fraud within sixty days or longer,
Speaker 1: you could lose all of your money. I can guarantee
Speaker 1: you that the protections that credit cards offer are much
Speaker 1: better than that. Yeah, Matt our friend Kenzie, she recently
Speaker 1: had her purse stolen and her debit card taken out
Speaker 1: and someone started using it as a way. I didn't
Speaker 1: know this, yeah, as if they were her she she
Speaker 1: posted in our Facebook group about it, and you know what,
Speaker 1: a debit card just doesn't have the same protections. Fortunately,
Speaker 1: she notified the bank immediately within that two day period.
Speaker 1: But if you didn't notice right away, and you didn't
Speaker 1: notify your bank, like you said, that timeline just kind
Speaker 1: of grows, and every day that you wait, basically, the
Speaker 1: more you can be on the hook for. And it's
Speaker 1: also money that's been taken out of your account that
Speaker 1: you're waiting to get refunded back to you. The money
Speaker 1: is gone for the time being. So when you use
Speaker 1: a credit card, you would be disputing in the case
Speaker 1: of fraud, for money that you would owe to the
Speaker 1: credit card company. But when someone racks up those charges
Speaker 1: on your debit card, that cash is gone and you
Speaker 1: have to fight to get it back, and so that
Speaker 1: can cause other issues while you're waiting for your bank
Speaker 1: to look into the situation and issue you a refund.
Speaker 1: Some banks will provide a provisional credit, but not all
Speaker 1: of them. They don't have to. They're not legally required to.
Speaker 1: You can always report your bank to the CFPB if
Speaker 1: they aren't treating you fairly, but it's just a crummy
Speaker 1: process to go through. And so, yeah, I think for
Speaker 1: these reasons, these protection reasons that are in place for
Speaker 1: debit card or credit card users, they're just stronger for
Speaker 1: credit card users, and because of that, it just makes
Speaker 1: debit cards just not nearly as good as an option
Speaker 1: for us to use. Yeah, man, they are certainly not
Speaker 1: great options. But here's the thing. By the same token,
Speaker 1: the same aspect of debit cards can actually help you
Speaker 1: to control your spending right. The fact that it is
Speaker 1: your actual money can help you. What is good about
Speaker 1: debit cards is that you are only accessing money that
Speaker 1: you actually have in your accounts, and that can be
Speaker 1: helpful if you tend to overspend and find yourself at
Speaker 1: the end of the building cycle owing more to your
Speaker 1: credit card than you actually have. While you can increase
Speaker 1: the limit on your credit card, you can't do that
Speaker 1: with your checking account that would be frowned upon by
Speaker 1: the bank you can do that, So in this way,
Speaker 1: debit cards are similar to cash. Once you've spent that money,
Speaker 1: you can't keep spending. You're done. Basically, what it comes
Speaker 1: down to with the debit card is that we should
Speaker 1: probably avoid them all together. Ultimately, the only debit card
Speaker 1: upside is the one you just mentioned, is that we
Speaker 1: can't spend more than we have, except for we kind
Speaker 1: of actually can at times if we allow our bank
Speaker 1: to give us the option of overdrafting our account, And
Speaker 1: if we do that, we're racking up exorbitant fees for
Speaker 1: the privilege of spending more money than we actually have,
Speaker 1: which is also a terrible idea, right exactly, So, even
Speaker 1: that one positive reason doesn't make it worth it to
Speaker 1: use debit cards. In our opinion, pretty much, the only
Speaker 1: time I'm pulling out my debit card these days is
Speaker 1: when I actually need to get cash for some random reason,
Speaker 1: which is very very rare. Yeah, you gotta replenish your
Speaker 1: stock of your one five dollar bill and your your
Speaker 1: three ones that you like to keep in your wallet
Speaker 1: eight dollars specifically at all times. I like to have
Speaker 1: it on And it's just a nice round number. It's
Speaker 1: kind of a random amount, right, When do you need
Speaker 1: more than that? Really? Though? Well there's four, you've got
Speaker 1: four bills. That's the thing for me. I just like
Speaker 1: having a singular bill, like just having a twenty in there.
Speaker 1: What if you gotta tip somebody though I don't tip, Okay,
Speaker 1: all right, all right, no, I'm kidding. This actually recently
Speaker 1: happened to us because here a quick story. Kate and
Speaker 1: I we were eating out and they took forever getting
Speaker 1: our food to us, and we didn't complain or anything,
Speaker 1: but our waiter just realized how long we were waiting,
Speaker 1: came over, explained to us the situation, said that dinner
Speaker 1: was gonna be taken care of, which was a huge tree.
Speaker 1: I mean, we were sitting there was a date night,
Speaker 1: and so we were having a great conversation, but we
Speaker 1: still wanted to make sure that we were tipping on
Speaker 1: what our bill would have been. And so because she
Speaker 1: didn't actually bring us a check, I got up and
Speaker 1: went to the bar broke my twenty that way, we
Speaker 1: can still leave, you know, a generous tip. So to
Speaker 1: answer your question, what do I do if I need
Speaker 1: to leave a tip? You just take a little visit
Speaker 1: to the bar. Makes everything better there you go, all right,
Speaker 1: I'll acknowledge that that worked out for you in that
Speaker 1: circumstance without one time I worked out. Yeah. Ultimately, with
Speaker 1: debit cards, there's no in greased friction, so it's pretty
Speaker 1: easy just to kind of swipe that card. The benefit
Speaker 1: that you have with cash is that it's psychologically harder
Speaker 1: to actually spend it. And if you were using an
Speaker 1: actual credit card, you would receive benefits and protections that
Speaker 1: come with using a credit card. You don't have those
Speaker 1: with a debit card. So that's why we would say
Speaker 1: probably avoid debit cards altogether. Yeah, well, here's a quick
Speaker 1: question for you. Debit cards are tied to checking accounts.
Speaker 1: How do you feel about old school paper checks? Oh?
Speaker 1: I think checks are pretty much kind of a bad
Speaker 1: way to go now to especially with identity theft and
Speaker 1: if someone sole your purse or stole your checkbook, they
Speaker 1: have access to your routing number, your account number. That's
Speaker 1: just not a good place to be. And honestly, checks
Speaker 1: are kind of for the most part, in most circumstances
Speaker 1: for us as individual consumers, that kind of gone the
Speaker 1: way of the Dodo bird. I mean, I know that
Speaker 1: they're useful in some circumstances for businesses, but really, when
Speaker 1: we're talking about how we spend as individuals, checks are
Speaker 1: just kind of a thing of the past, I think
Speaker 1: in a lot of ways. Yeah, but again, and plus,
Speaker 1: I mean the security aspect of it, right, I mean,
Speaker 1: I'm not a professional thief or anything, but the fact
Speaker 1: that the routing number and your account number are right
Speaker 1: there on a check, I'm pretty sure that is all
Speaker 1: that a criminal would would need to impersonate you to
Speaker 1: find a way to try to steal some of your money.
Speaker 1: So forge checks, I mean, that's a real thing too.
Speaker 1: So I have a check book, I keep it at home.
Speaker 1: If I ever need to write a check, I have
Speaker 1: access to that. I probably write like two a year maybe,
Speaker 1: I mean, I just it's very, very very rare that
Speaker 1: I actually need to write a check, especially, like we
Speaker 1: mentioned at the beginning of the show, with apps like
Speaker 1: Venmo and cash App and more people accepting credit cards
Speaker 1: and those alternative forms of payment, I mean, checks are
Speaker 1: just kind of not something that I even think about anymore. Yeah,
Speaker 1: bottom line checks do not offer any sort of security.
Speaker 1: Neither do debit cards. But you know what does are
Speaker 1: credit cards. And there are lots of benefits to using
Speaker 1: a credit card properly, and we're gonna get to all
Speaker 1: of those right after the break. All right, Matt, we're
Speaker 1: back from the breaking. It's time to talk about kind
Speaker 1: of that last part of our triumvirate cash, debit or credit.
Speaker 1: Let's talk credit cards now. And I don't want to
Speaker 1: overseell how great credit cards are. I don't want to
Speaker 1: make this an episode about how cash is terrible and
Speaker 1: debit cards are terrible and you should only use credit
Speaker 1: cards for every purchase ever that you make in your life.
Speaker 1: But honestly, that's ultimately kind of where I come down.
Speaker 1: I wonder what you're gonna say, because it's we're gonna say,
Speaker 1: but you might want to consider it, Yeah, but you
Speaker 1: really might want to think about it if you can
Speaker 1: handle credit cards. Well, really, it's just our favorite option
Speaker 1: for people who are able to do that. If you
Speaker 1: pay your bill infol at the end of every month,
Speaker 1: and it's not going to cause a bunch of unnecessary
Speaker 1: spending in your life, then credit cards just are the
Speaker 1: best bet. And I'm sure you can kind of already
Speaker 1: figure out a couple of the reasons why, but we're
Speaker 1: gonna go into a few details on why credit cards
Speaker 1: just are the best choice for people when they're spending money.
Speaker 1: The obvious downside is that it's just so easy to
Speaker 1: swipe or insert that chip and not even give it
Speaker 1: a second thought to the purchase that you made. So
Speaker 1: it's again it's a behavioral thing that credit cards actually
Speaker 1: can make it easier for you to to spend more
Speaker 1: money because the swipe or the insert just doesn't have
Speaker 1: that same effect as pulling out a twenty dollar bill
Speaker 1: out of your wallet. You could go super old school.
Speaker 1: You can keep a ledger, you could write down every
Speaker 1: purchase that you make with your card, and that can
Speaker 1: help a lot. But but lots of folks just they're
Speaker 1: not going to do that. Right the dollar Bird app, Matt,
Speaker 1: We've mentioned that before. That can be a great way
Speaker 1: to while you're on the go, kind of record your
Speaker 1: purchases that you make with the credit card. And I
Speaker 1: think I can help people use their credit card more
Speaker 1: effectively so that they are keeping track. Tracking is like
Speaker 1: a huge way to actually like lessen the potential downsides
Speaker 1: of of using your credit card. I think, yeah, well,
Speaker 1: I mean what's at the core of this is just
Speaker 1: being aware that you're spending money, right. I think that's
Speaker 1: one of the reasons cash is so effective at that
Speaker 1: is because you mean you literally see it leave your
Speaker 1: purse and versus when you use your card, you either
Speaker 1: just swipe it or you just insert the chip. Your
Speaker 1: card looks the exact same before and after that transaction.
Speaker 1: It's not like a little piece of your card broke
Speaker 1: off and and you're never going to get it back.
Speaker 1: And so either way, whether it you do go old
Speaker 1: school and kind of write transactions down or whether you
Speaker 1: use an app like dollar Bird, you're basically just trying
Speaker 1: to confront the purchases that you're making. You're trying to
Speaker 1: create a step in there that forces you to look
Speaker 1: at what you're spending your money on. Steady Pay that's
Speaker 1: another app that's launched recently that attempts to marry the
Speaker 1: benefits that you do get from using credit cards, but
Speaker 1: with the accountability that comes with money actually leaving your
Speaker 1: checking account and quickly you know. The kind of the
Speaker 1: way it works is After linking your credit card and
Speaker 1: your checking accounts to the app, you just use your
Speaker 1: credit card like you normally would, and steady Pay automatically
Speaker 1: draft your checking account to cover your balance for the
Speaker 1: expenses that you've had that day, and so you know,
Speaker 1: while you are not seeing every single expense register, you
Speaker 1: know in your checking account, you do get to keep
Speaker 1: up with your money a little more immediately than waiting,
Speaker 1: you know, till the end of the month, or even
Speaker 1: agree if you're waiting until the end of the building
Speaker 1: cycle before you truly realize how much money you've actually spent. Yeah,
Speaker 1: I think seeing that updated daily balance of what you
Speaker 1: actually have in your checking accounts is so huge because
Speaker 1: it's that mental hurdle. Sometimes people are like, if I
Speaker 1: have a credit card and I can't see the money
Speaker 1: actually leaving my account, well, then I'm not gonna be
Speaker 1: able to handle it well. And so steady Pay can
Speaker 1: be kind of that happy medium where you're using a
Speaker 1: credit card. You're getting the protections that a credit card
Speaker 1: has to offer, but at the same time, you're seeing
Speaker 1: the money leave your account because it reflects that it
Speaker 1: actually is actually pulling that money out and it's gonna
Speaker 1: help you have that money set aside to pay your
Speaker 1: bill at the end of the month. It's a neat idea.
Speaker 1: And if that is kind of your hurdle to being
Speaker 1: able to use a credit card, well then it might
Speaker 1: make sense for you to check out Steady Pay. Yeah.
Speaker 1: So let's get to the reasons why we are such
Speaker 1: proponents of credit cards, and that's basically just due to
Speaker 1: the benefits that you receive from the different cards that
Speaker 1: are out there, the different rewards and protections that they offer.
Speaker 1: You know, there's price matching guarantees, there's sign up bonuses,
Speaker 1: travel miles, rental insurance. We've talked about that recently. These
Speaker 1: are all things that you most often hear about. But
Speaker 1: here's the thing. You still need to make sure that
Speaker 1: you're handling your credit cards carefully and that you're not
Speaker 1: getting carried away with it just for the rewards. Yeah.
Speaker 1: There's an article I read recently, Matt. It specifically was
Speaker 1: kind of calling out millennials, because man, isn't every article
Speaker 1: calling out millennials. It feels like millennials do this, they're idiots.
Speaker 1: It just it kind of is overkill at times. But
Speaker 1: this article had some really interesting stuff to share that
Speaker 1: a lot of millennials in particular love using credit cards
Speaker 1: to get rewards. That's us right at me, Yeah, yeah,
Speaker 1: I love credit card rewards, but a lot of them
Speaker 1: didn't realize that that by not paying off their balances
Speaker 1: in full every month, they were paying a far too
Speaker 1: hefty price in order to earn those rewards. When you're
Speaker 1: paying seventeen to and interest charges, the benefits aren't worth
Speaker 1: the cost. And so a lot of folks out there
Speaker 1: that think they're using credit card rewards, well, but they're
Speaker 1: not paying off their balances, well, no you're not. That's
Speaker 1: just that's not worth it. Basically, that's just something to
Speaker 1: to watch out for, and I don't think we can
Speaker 1: stress it enough. More than anything, if you can't pay
Speaker 1: your balance off and full at the end of the month,
Speaker 1: credit cards are probably not a good idea for you. You
Speaker 1: You shouldn't be spending more on them, because no interest
Speaker 1: charge is worth any sort of reward that you're getting
Speaker 1: from a credit card. If that's the case, you need
Speaker 1: to consider switching to using cash more frequently, because that
Speaker 1: can kind of be the incentive to maybe break a
Speaker 1: spending habit that you have. And as you find yourself
Speaker 1: working out of debt once your credit card debt hits zero,
Speaker 1: and if you change the way you handle those credit
Speaker 1: cards in the future, then and only then does it
Speaker 1: make sense to go back to actually using credit cards
Speaker 1: in your life. Yeah, it's so important to know your
Speaker 1: personal spending habits and how you actually handle credit. But
Speaker 1: if you are handling it well, then there are numerous
Speaker 1: benefits that you will receive from using that credit card.
Speaker 1: Let's talk about unauthorized chrges. The protections that purchasing with
Speaker 1: a credit card offers you are one of the most
Speaker 1: compelling reasons to use a credit card. Thank to the
Speaker 1: Fair Credit Building Act, your liability is capped at fifty
Speaker 1: dollars from fraudulent transactions if your card is stolen or
Speaker 1: if your card information is stolen. And unlike using a
Speaker 1: debit card, you aren't using your money. When you pay
Speaker 1: for something, no cash has actually left your hands. Yet
Speaker 1: by using a credit card, you are not only protecting
Speaker 1: the overall amount that you can be held liable for,
Speaker 1: but you're also protecting your current cash from vulnerability. Yeah.
Speaker 1: Another thing that credit cards do as you use those
Speaker 1: as opposed to the other methods of payment, is that
Speaker 1: they're building your of course, wait for it, credit score.
Speaker 1: Aside from those monthly payments or any loans that you
Speaker 1: might have, will paying your credit card bill on time
Speaker 1: and or early will contribute to having a really high
Speaker 1: credit score. There are many reasons that having a high
Speaker 1: credit score is good for you. We've talked about that
Speaker 1: multiple times on the show. Some cards, secured cards in particular,
Speaker 1: can help you build credit when you're starting from scratch.
Speaker 1: So let's say you have a poor credit score, you
Speaker 1: haven't used credit well in the past, Well, going with
Speaker 1: a secured card, which basically means that you put the
Speaker 1: money down up front. A secured card has similarities to
Speaker 1: a debit card, but it's so much better. That's helping
Speaker 1: you build your credit back up when you're starting from scratch.
Speaker 1: And other cards, through smart and regular use are contributing
Speaker 1: to a strong credit score, and that has important impacts
Speaker 1: on many areas of your life. So yeah, using those
Speaker 1: credit cards well isn't just good for the protections that
Speaker 1: you'll get, but it's gonna be a boonteer credit score man,
Speaker 1: you're talking about credit score? Is that's such like a
Speaker 1: nerdy benefit of using your credit cards well, like obviously
Speaker 1: it's a real benefit. But like I'm in I'm in
Speaker 1: it for the other rewards, right. Well we're nerdy fellas, Yeah,
Speaker 1: we like to cover the nerdy aspects of money, and
Speaker 1: sure a nerd out on that stuff. But I also
Speaker 1: and into the cash back, right, like these other benefits
Speaker 1: that the credit cards offer on top of the different
Speaker 1: protections that you can get I'm talking about, like the
Speaker 1: different travel awards, cash back rewards. The better credit cards
Speaker 1: that are out there will offer some of those pretty
Speaker 1: sweet secondary benefits. I mean, I know, for me, the
Speaker 1: main reason I signed up for my first credit card
Speaker 1: ever was for that cash bag bonus. You know, I
Speaker 1: heard that by using this card you receive your percentage
Speaker 1: back every single statement. And man, you know what, how
Speaker 1: the money Matt was really into that before I was
Speaker 1: even how the money Matt. And while a good many
Speaker 1: of them are being stripped away by credit card issuers,
Speaker 1: you can actually still nab price protection. That's a pretty
Speaker 1: cool benefit. You can still get that benefit on a
Speaker 1: few select cards. And there are many more cards that
Speaker 1: are actually offering the different extended warranties on purchases. So
Speaker 1: if you know you're about to make an expensive electronics purchase,
Speaker 1: make sure that you put that on a card that
Speaker 1: will offer to double the manufacturer's warranty. It's hard to
Speaker 1: beat that free piece of mind. Yeah, the rewards that
Speaker 1: credit cards can offer can be really really sweet, can
Speaker 1: be enticing, and we're fans of kind of taking the
Speaker 1: advantage of the sign up bonuses, of the cash back
Speaker 1: of travel rewards. I mean, there are all these ways
Speaker 1: to use credit cards effectively. So, man, I actually just
Speaker 1: mentioned my first credit card, and I think I specifically
Speaker 1: remember that being a Discover card because I had heard
Speaker 1: that they were the ones offering that cash back, even
Speaker 1: though I think a bunch were at the time. Do
Speaker 1: you remember your specific first credit card, Man, I honestly
Speaker 1: don't remember the credit card. I guy, Yeah, I'm trying
Speaker 1: to think back right now, but it doesn't ring a bell.
Speaker 1: It's not registering. I think for me, I just felt
Speaker 1: like such a grown up, right because I'm like, oh,
Speaker 1: I'm building my credit. Like I specifically remember my dad
Speaker 1: saying you need to learn how to use credit. You
Speaker 1: got a bount your credit score, and as a kid
Speaker 1: entering adulthood, I just thought, cool, I get to have
Speaker 1: a credit card, you know. I wasn't thinking about the
Speaker 1: long term effects, but it certainly helped me over the years. Yeah,
Speaker 1: I think I was a little nervous to open a
Speaker 1: credit card for a while, based on kind of my
Speaker 1: family history with credit cards, and you know, we wracked
Speaker 1: up debt when I was growing up, My my my
Speaker 1: family did and and so I was just kind of
Speaker 1: a little apprehensive about using them. And so I understand
Speaker 1: too where people are coming from why they're nervous about
Speaker 1: using credit cards. I'm pretty sure the first card I
Speaker 1: ever got was the Fidelity two percent cash back credit card.
Speaker 1: Such a nerdy, grown up card. Again, you're talking about
Speaker 1: your credit score. You got the Fidelity two percent card,
Speaker 1: that was your first one. I've had that one for
Speaker 1: a long time, so I think that's my oldest one,
Speaker 1: all right, I'm glad it came to you. If not,
Speaker 1: I think it was a capital one because they had
Speaker 1: zero percent foreign transaction fees before that's kind of became
Speaker 1: industry standard and a lot of issuers started offering that.
Speaker 1: But yeah, those are the cards I've had the the longest.
Speaker 1: But ultimately, like I said, I understand why people are apprehensive,
Speaker 1: and I think there are good reasons for people to
Speaker 1: consider not using a credit card, in particular if you've
Speaker 1: had problems with them in the past or if you're
Speaker 1: currently in credit card debt. But I think also we've
Speaker 1: pointed out just all these reasons that using a credit
Speaker 1: card is beneficial if they are unauthorized charges on your account,
Speaker 1: there's these cash back bonuses. I mean, there are all
Speaker 1: these reasons that paying with a credit card makes more
Speaker 1: sense than paying with cash or debit. I think it's
Speaker 1: important to highlight those reasons at least give people some
Speaker 1: food for thought, Like, what am I using to make
Speaker 1: my my everyday purchases and it doesn't actually make sense?
Speaker 1: Is this the right form of payment for me to
Speaker 1: be using? And in some cases using cash might be
Speaker 1: right for us, and in other cases using it might
Speaker 1: be right. Well what about debit? I noticed you didn't
Speaker 1: mention debit cards at all, So yeah, I mean, I'm
Speaker 1: just like, really, when I think about it, logically, I
Speaker 1: just don't know that there's much room for debit cards
Speaker 1: in our lives. I just side with either credit cards
Speaker 1: or cash. And I guess the only time debit cards
Speaker 1: would make sense is if you are in a lot
Speaker 1: of credit card debt. You can't handle spending on credit cards.
Speaker 1: You have to only use what's in your account, and
Speaker 1: you want to make online purchases, well cash isn't gonna
Speaker 1: work for that, so debit card really is then kind
Speaker 1: of your only option. But yeah, I think it's important
Speaker 1: to at least think through through these things, kind of
Speaker 1: know the potential pros and cons of each, and I
Speaker 1: think that'll just help us make better decisions. Yeah. But
Speaker 1: in the end, man, it's worth mentioning that credit cards
Speaker 1: can be so good for for you in your bottom
Speaker 1: line if you can be disciplined with your spending. So Joel,
Speaker 1: let's talk now, though about some beer. I'm gonna go
Speaker 1: ahead and kick it off with my thoughts on this beer,
Speaker 1: on the Orro Negro. And here's the thing, let's talk
Speaker 1: about Jackie as Man. Like all of their beers that
Speaker 1: we've had from them, they're all perfectly balanced. And this
Speaker 1: is even harder to do with all the different flavors
Speaker 1: in a beer like this, where there are so many
Speaker 1: different flavors going on. You got the cocoa nibs, you
Speaker 1: got the peppers, like there's that amount of heat, you
Speaker 1: got the sweetness from the bourbon barrel, there's when there's
Speaker 1: so many sort of flavors like that competing for your attention.
Speaker 1: It takes a level of finesse and experience to rain
Speaker 1: all those flavors in and to deliver them in a
Speaker 1: way that you know sits well in your mouth. And
Speaker 1: they have completely succeeded. This is a fantastic beer. And
Speaker 1: what's the Girl Scout Cookie? Is it the Samoa's that
Speaker 1: kind of have like the coconutt e cocona nitty sort
Speaker 1: of flavor. My mind kept going to that cookie. And
Speaker 1: there's not necessarily like coconut flavors specifically in this beer,
Speaker 1: but just the combination of all of those flavors together
Speaker 1: totally made me think of Samoa's, except of course, this
Speaker 1: beer is a much more grown up version of that
Speaker 1: beloved cookie. Yeah, man, this beer was awesome. I feel
Speaker 1: like we truly saved the best for last from Jackie
Speaker 1: O's and they were all great. Everything they put into
Speaker 1: this beer. I could taste each little element. Everything was there,
Speaker 1: But like you said, they were kind of perfectly harmonized,
Speaker 1: like they really really hit the nail on the head.
Speaker 1: You really got a little bit of everything in this
Speaker 1: stout that in my mind was kind of a stout
Speaker 1: of epic proportions. I love the touch of the habba
Speaker 1: narrow heat. I feel like that it wasn't overwhelming, but
Speaker 1: it was just a little bit in the back of
Speaker 1: your throat. And I love that in kind of a
Speaker 1: Mexican style stout like this is combined with the vanilla
Speaker 1: and the cinnamon and the cocoa like it's, man, it
Speaker 1: really is kind of this symphony of flavors going on
Speaker 1: in this big burly stout. It was really really well done.
Speaker 1: Mad props to the folks of Jackie O's for basically
Speaker 1: not just hitting a home run like this is a
Speaker 1: Grand Slam. This is like a walk off, bottom of
Speaker 1: the ninth, two outs grand Slam. This was such a
Speaker 1: good beer. Man deep with that analogy, are and ship
Speaker 1: I went hole hog on that one. Well, here's here's
Speaker 1: the thing. Like you said, this is a big burly stout,
Speaker 1: but it's burly in like all the different flavors, but
Speaker 1: it's not barely over the top. And how it drinks
Speaker 1: is that one of these beers that you have a
Speaker 1: few SIPs and you're almost tired of because it's just
Speaker 1: so overwhelming. They've delivered just the right amount of flavor
Speaker 1: and at the perfect time as well. Right, like each
Speaker 1: flavor is kind of around every single corner. As you
Speaker 1: drink this beer, it couldn't be any more enjoyable. And
Speaker 1: something else too, like the name of it Oro Negro.
Speaker 1: Do you know what that means? I looked it up
Speaker 1: actually ahead of time, black Gold. Yeah, you took Spanish,
Speaker 1: so you remember something. So I'm proud of you. All right,
Speaker 1: I got lucky there, I think, But well I am impressed, sir. Yeah, honestly,
Speaker 1: beer was so good, Jackie O's so good to us.
Speaker 1: Send it some good beers our way. Thank you the
Speaker 1: folks over there for sending these beers. It's a pleasure
Speaker 1: to get to try something that we don't even get
Speaker 1: here in Georgia. Yeah, man, let's go ahead and wrap
Speaker 1: it up. You can find our show notes on our
Speaker 1: website at how to money dot com. We'll have our
Speaker 1: show notes up there, along with some of the links
Speaker 1: to the different apps that we mentioned, as well as
Speaker 1: an article to some of our favorite credit cards that
Speaker 1: offer some of the best benefits if you think you
Speaker 1: can handle the challenge of using a credit card. Yeah,
Speaker 1: and of course, as always, we hope that you learned
Speaker 1: something and that you found it interesting. Matt and I
Speaker 1: have such a good time creating this show. It's fun
Speaker 1: for us to record this together. And then we also
Speaker 1: appreciate your feedback. And if you've got feedback that you're
Speaker 1: willing to share, well, feel free to leave a review
Speaker 1: on Apple Podcasts. Those reviews really help other people find
Speaker 1: out about the show, and that helps spread the word
Speaker 1: about good money habits. All right, Matt, that's going to
Speaker 1: do it for this episode. Yeah, So until next time,
Speaker 1: best Friends Out, Best Friends Out,