Speaker 1: Welcome to How the Money. I'm Joel Matt and today
Speaker 1: we're discussing using credit cards as nature intended. Yeah, not
Speaker 1: to immediately polarize everybody, but we think that there is
Speaker 1: a right way of going about using credit cards and
Speaker 1: a wrong way. There's a way that nature intended for
Speaker 1: us to use credit cards, and that's what we're talking about.
Speaker 1: When we crawled forth from the primordial us, there was
Speaker 1: a way to use the plastic properly. And a lot
Speaker 1: of people this is a polarizing topic. That's kind of
Speaker 1: when we started to think about this episode, we were like, man,
Speaker 1: there's there's comments from people right and left in the
Speaker 1: personal finance space, some either deify credit card usage or
Speaker 1: in some demonize it. And you and I were, of
Speaker 1: course in that shades of gray area, and we want
Speaker 1: to talk about how to use them the right way
Speaker 1: because when you do, then you're gonna gain benefits and
Speaker 1: if you use them improperly, you're screwing yourself. Yeah, and
Speaker 1: especially with a topic that does kind of fall in
Speaker 1: that middle ground, it is important for us to come
Speaker 1: back and to revisit a topic like this. Right, it's
Speaker 1: not like a like talking about investing that is really important,
Speaker 1: and we're planning to do that soon as well. But
Speaker 1: when you have a topic like this that could go
Speaker 1: either way, it's probably worth us revisiting these types of
Speaker 1: topics we're eating more often than not. In an attempt
Speaker 1: to be fair, we're even in a steel man the
Speaker 1: arguments from the other side. So we're gonna kind of
Speaker 1: try to take a balanced approach and say, hey, here's
Speaker 1: where caredit cards fall short as a strategy, here's where
Speaker 1: they might make sense, and then you get to decide
Speaker 1: well you think is best based on all the information
Speaker 1: we're gonna try to present here. But before we get
Speaker 1: to that, man, I wanted to mention that when you're
Speaker 1: trying to get someone to make a behavior change, I've
Speaker 1: always thought this, but I've never been great at implementing it,
Speaker 1: But carrots are better than sticks, right, So, and what
Speaker 1: I mean by that depends on how your talking to. Well,
Speaker 1: we think there's literally a conversation Kit and I had
Speaker 1: last night about one of our kids, because trying to
Speaker 1: figure out what is actually gonna work best for this
Speaker 1: particular child given this particular situation, we've tried both neither work, Okay,
Speaker 1: So in this case, sometimes you just have to, um,
Speaker 1: you know, give them up for an option. That's one.
Speaker 1: That's one choice, let's try. But depending on the situation,
Speaker 1: I would say a lot of times a carrot makes
Speaker 1: more sense. And our illustrious power company here where we live, Matt,
Speaker 1: they actually kind of took this to heart and they
Speaker 1: offer a discount for paying early instead of a penalty
Speaker 1: for paying late. And I think that's great, and it
Speaker 1: makes me want to pay my bill early because I
Speaker 1: want to pay the least amount possible. But you don't know,
Speaker 1: I think it is going to incentivize a lot of
Speaker 1: people to approach their power bill the right way, get
Speaker 1: energized about paying it instead of feeling like an idiot
Speaker 1: if they don't pay it on time. Energized and pay
Speaker 1: your power. Yeah. Well, and it makes me think too,
Speaker 1: as a mom and pop landlord, this is the kind
Speaker 1: of thing I'm trying to implement in in my leases
Speaker 1: moving forward with with tenants is to say, hey, instead
Speaker 1: of a late fee for being five days ten late
Speaker 1: days late on your on your rent, how about a
Speaker 1: positive incentive to pay your rent on time. And maybe
Speaker 1: that reframed it for somebody and makes them more likely
Speaker 1: to do that. Yeah, that's true. It just depends on
Speaker 1: the individual, right, because I see a paying quote unquote
Speaker 1: early as just paying on time, like like the way
Speaker 1: I press things. I'm like, oh, yeah, well that's the
Speaker 1: price that you're going to charge me because I pay
Speaker 1: my bill what I'm supposed to as as opposed to
Speaker 1: being penalized when I'm late, you know. And so you've
Speaker 1: got an iron trap up there. A lot of people
Speaker 1: though they're they're easily minis set up to auto pay,
Speaker 1: and so I guess what they're Maybe what the power
Speaker 1: company is trying to do is just incentivized folks to
Speaker 1: get enrolled so that it's not something that you have
Speaker 1: to worry about. Therefore we have to spend less time
Speaker 1: on collections and hounding folks. But yeah, I've not thought
Speaker 1: about doing that with properties, but that could be a
Speaker 1: very very cool way. Maybe if you have a like
Speaker 1: what if you pay before the first like something like that,
Speaker 1: Like if you can pay and have three different prices
Speaker 1: because it's already third first or it's getting complicated, February
Speaker 1: will pay the day before it's do if you pay
Speaker 1: the day before it's do you get a fifty dollar Yeah?
Speaker 1: Like I mean, my guess is that if you implemented
Speaker 1: that tomorrow, more of your tenants would pay before it's due,
Speaker 1: as opposed to like taking that great speriod up until
Speaker 1: you know, the last day possible, even if you went
Speaker 1: ahead and charged, if you went ahead and raise the
Speaker 1: standard rent by fifty bucks, the psychology, what you're saying
Speaker 1: is the psychological component would kick in and cause people
Speaker 1: to pay early. I think so. Yeah, I think so.
Speaker 1: I was glad to see this. I think that's one
Speaker 1: of those things where we we don't give as much
Speaker 1: credence as we could to Psychology is and there's ways
Speaker 1: to motivate people, I think, to do the right thing
Speaker 1: without like making them feel like idiots for you know,
Speaker 1: for being a little late. Instead, let's let's incentivize them,
Speaker 1: let's give a positive encouragement to do the right thing earlier.
Speaker 1: All right. The beer that you and I are going
Speaker 1: to enjoy during this episode is called the Judge and
Speaker 1: this is a chocolate vanilla porter from Memphis made Bruined Company.
Speaker 1: Looking forward to enjoying us one and we will share
Speaker 1: our thoughts at the end of the episode, for sure.
Speaker 1: All right, But let's get onto the subject at Handmatt,
Speaker 1: we're talking about using credit cards as nature intended. And
Speaker 1: if you've been listening for any length of time, Matt,
Speaker 1: you just mentioned that the craft beer we're drinking on
Speaker 1: this episode, of course, any how do money listener knows
Speaker 1: Matt and Joel like beer, right, and not just crap beer,
Speaker 1: but good beer. Right, And we're drinking this one here,
Speaker 1: looking forward to talking about at the end of the episode.
Speaker 1: But crap beer. I don't know. Maybe you said not
Speaker 1: crap beer, you said good beer. Yeah, okay, not crap beer,
Speaker 1: craft beer. Crap beer sounds a lot like craft beer. Yeah,
Speaker 1: there's a several different thing. But I think interestingly enough,
Speaker 1: we're talking about how credit cards can be polarizing, well,
Speaker 1: booze can also be a polarizing subject. We've had emails
Speaker 1: from folks who say they'd like to listen to the show,
Speaker 1: but they just can't do it because of our stance
Speaker 1: on alcohol. We've heard from other folks who attend their
Speaker 1: local religious congregation and they tell us, hey, we'd happily
Speaker 1: tell everyone we know about you guys, but you got
Speaker 1: to kick the beer thing to the curb, and at
Speaker 1: least in some circles, kind of like the one I
Speaker 1: grow up in. Beer can be a polarizing thing. But
Speaker 1: I want to say two things. One we I don't
Speaker 1: fault those folks. If our affinity for beer isn't your
Speaker 1: cup of tea, that's okay. We were not going to
Speaker 1: force you to listen. We can't force you to listen.
Speaker 1: But it's also important to mention that we can't please everyone.
Speaker 1: You know, we might not say it enough, but we
Speaker 1: practice moderation. Matt and I do. We we don't drink
Speaker 1: very much. We limit our intake and that's a really
Speaker 1: important thing to us. But yeah, there are other things
Speaker 1: that can be just as polarizing. Light credit cards. Everyone's
Speaker 1: got a hot take out there. They're either the greatest
Speaker 1: thing since sliced bread or they'll ruin you overnight. But reality,
Speaker 1: it's a bit more nuanced, and that's what we want
Speaker 1: to discuss today. Nuanced or being logical, balanced approach. These
Speaker 1: are not prize attributes in our society today. They specially
Speaker 1: when it comes to mass media. A hefty TikTok following yeah,
Speaker 1: hot takes and off the cuff remarks does end up
Speaker 1: getting all the press. There is often little room for
Speaker 1: those shades agree that we talked about in the world
Speaker 1: that we live in. On that note, billionaire businessman Mark
Speaker 1: Cuban he uh, he recently said that if you use
Speaker 1: credit cards, you don't want to be rich. Obviously, great
Speaker 1: hot take for all the writers over there at CNBC.
Speaker 1: I love that kind of stuff. Start writing this article now.
Speaker 1: He makes it sound like credit cards are the devil
Speaker 1: with those remarks, kind of like Bobby Boucher uh foodsball territory.
Speaker 1: But of course they are not. Uh. In fact, there
Speaker 1: are a lot of how the money listeners out there
Speaker 1: who are on their wealth building journey while simultaneously using
Speaker 1: credit cards. We most definitely fallen into that camp as well,
Speaker 1: where we are with you on that. So today we
Speaker 1: are going to discuss the pros and the cons of
Speaker 1: credit cards, and then we're gonna talk about how to
Speaker 1: use credit cards most effectively, how does that you can
Speaker 1: optimize that use. We're gonna discuss all of that today,
Speaker 1: all right, So let's let's do it because and let's
Speaker 1: first give some credence maybe to Mark Cuban, because he
Speaker 1: is right at least in part uh. And and let's
Speaker 1: go through some of the biggest reasons to not use
Speaker 1: credit cards. Some of the main reasons at the people
Speaker 1: who say that they are the devil, why did they
Speaker 1: say that. Well, we're gonna get into that in just
Speaker 1: a second. But I think human is right when he
Speaker 1: says credit cards aren't going to make you rich, that's true.
Speaker 1: Agree with him on that and say that he said
Speaker 1: that they're going to keep you from getting rich. Well, yeah,
Speaker 1: that's a good point. But like if he's talking about
Speaker 1: like that they won't make you rich, I think that,
Speaker 1: you know, I could get behind that, Like nobody's gonna
Speaker 1: sign up for all the credit cards in the world
Speaker 1: and be like, that's how I didn't look at all
Speaker 1: the secret to my success bonus points and rewards, that's
Speaker 1: how I funded retirement. No, it's gonna take a whole
Speaker 1: lot more than that. Right, if we were to talk
Speaker 1: about wealth Matt for building wealth for like three hours,
Speaker 1: it's unlikely the credit card usage would even come up
Speaker 1: in that conversation. There are so many more levers that
Speaker 1: you need to pull. Credit cards are a peripheral way
Speaker 1: to boost your finances, right There not some magic secret
Speaker 1: sauce to building wealth. That's that's for sure. And uh,
Speaker 1: it's still that doesn't mean that they can't play a
Speaker 1: role in your personal finances. But before you know, we
Speaker 1: talk about the property what we like about credit cards,
Speaker 1: let's just pay some service and talk about the biggest
Speaker 1: cons to using them and some of the reasons that
Speaker 1: people should consider avoiding credit cards altogether. Of course, yeah,
Speaker 1: I mean you said earlier that we're gonna steal man.
Speaker 1: That being said, we are always careful and we always
Speaker 1: want to make sure that folks are using credit cards
Speaker 1: the right way, because if you do not use this
Speaker 1: financial tool properly, it really could shipwreck your finances. Right,
Speaker 1: if you can't pay the bill on time and in full,
Speaker 1: it's going to cost you big money every single month
Speaker 1: because interest rates they're going up, and so that means
Speaker 1: that your lack of disciplined use, your your lack of
Speaker 1: discipline spending is going to cost you even more money.
Speaker 1: And this is of course the biggest potential downfall of
Speaker 1: using credit cards, and even a few months of poor
Speaker 1: credit card usage can dig you a hole so deep
Speaker 1: that it will often take you years then to climb
Speaker 1: out of it. And so while this is a major
Speaker 1: con and certainly is a reason for caution, like this
Speaker 1: alone doesn't lead us to think that credit cards should
Speaker 1: be off limits. I mean we're talking about how a
Speaker 1: credit card is a tool, right, Like it makes me
Speaker 1: think about just using like a knife in the kitchen,
Speaker 1: and just because it could potentially cause you harm, does
Speaker 1: that mean that that is now a tool that you
Speaker 1: completely avoid for the rest of your life. No, absolutely not.
Speaker 1: You instead learn how to properly hold a knife. You
Speaker 1: learn how to dice vegetables or in your case, trim
Speaker 1: fat off of a brisk ul um. Yeah, eventually I
Speaker 1: was like, that does not compute. I don't need vegetables.
Speaker 1: You learnable occasionally, but you learn how to take care
Speaker 1: of a knife, how to keep it sharp, because all
Speaker 1: of these things are just the proper way of using
Speaker 1: that tool. Like to say, it's such a infantalizing view
Speaker 1: to say that, oh, this could cause you harm, therefore
Speaker 1: you shouldn't ever be allowed to use it. That is
Speaker 1: not the approach that we take when it comes to
Speaker 1: things like credit cards or other tools in our life.
Speaker 1: You're right and fantializing it. We're treating adults like children.
Speaker 1: And it's and it's not that there aren't risks here
Speaker 1: when we use credit cards. That's what we're talking about now.
Speaker 1: The first one you just mentioned improper use. If you
Speaker 1: use a credit card improperly in your racking up debt
Speaker 1: because you can't control your spending, that's one reason to
Speaker 1: consider not using them at all. Another another reason that
Speaker 1: a lot of people point to, and I think they
Speaker 1: make a good point, is that it can lead to overspending,
Speaker 1: right because even if you can and do use the
Speaker 1: tool properly, there are other potential downsize to using plastic
Speaker 1: for everything. And some folks they spend more using a
Speaker 1: credit card because it doesn't feel like real money to them.
Speaker 1: Swiping it's just so easy, and Gus, we're not really
Speaker 1: swiping anymore. We're more like inserting or tapping, which I did.
Speaker 1: I love tapping. Tapping is the great It's the greatest.
Speaker 1: It's so much, so much better. Like I hate inserting
Speaker 1: the well, the inserts. It felt like a step backwards, right,
Speaker 1: like like we've been swiping for years and then they
Speaker 1: switched to the insert and then on top of that
Speaker 1: it's got that like sound effect, which but just being
Speaker 1: able to set it on top of like the little
Speaker 1: square device for like a split second. I love it.
Speaker 1: It's nice, right and it's but it just doesn't trigger
Speaker 1: the same psychological response that happens when we fork over
Speaker 1: actual greenbacks we need. That's what they say. Yeah, when
Speaker 1: you have to reach into your wallet and we have
Speaker 1: to pull out cash, it's like there's some sort of
Speaker 1: like meant whole pain that comes along with it that's
Speaker 1: actually good for us. Is what the study is, literally
Speaker 1: giving something over. But there's also there's been there's other
Speaker 1: studies that say the opposite. Yeah, that as well well,
Speaker 1: And there's also I think part of it is generational
Speaker 1: and it's changing exactly. And I think we've heard from
Speaker 1: a lot of our younger listeners who say, actually, it's
Speaker 1: more painful for me to use my credit card. Cash
Speaker 1: feels like the free money. So I think depending on
Speaker 1: how you are raised, what era you were born in,
Speaker 1: that it might not ring true in the same way.
Speaker 1: But I think it isn't important to mention some people,
Speaker 1: probably good chunk of people are more likely to overspend
Speaker 1: because maybe they get excited about earning the rewards, or
Speaker 1: they just or it doesn't make them feel the pain
Speaker 1: of spending money in the same way when they're using plastic,
Speaker 1: when they're using a credit card and so yeah, I
Speaker 1: think that is a potential problem that credit card users
Speaker 1: run up against. Yeah, they're they're they're definitely seems like
Speaker 1: I mean, if you were only using cash, I would
Speaker 1: totally agree with the fact that it's going to seem
Speaker 1: like there's more of a finite amount of resources, right,
Speaker 1: because that's the thing with credit card the envelope method.
Speaker 1: You can't overspend exactly. Yeah, when you've got a credit card,
Speaker 1: or even a debit card for that matter, I mean,
Speaker 1: you're not really thinking about how much do I have
Speaker 1: left in this particular category. When it comes to groceries
Speaker 1: or you know, eating out, it does feel a bit
Speaker 1: more limitless, which which I totally get. Yeah, And so
Speaker 1: even if you are not using it improperly in a way,
Speaker 1: like even if you are disciplined about paying that credit
Speaker 1: card built off on time and in full each month,
Speaker 1: you still might end up spending more than you'd like to.
Speaker 1: And that is a problem, right, because you're trying to
Speaker 1: accomplish all sorts of money goals, and if you're spending
Speaker 1: too much because it's easy, that's a problem. And I
Speaker 1: think one thing that could remedy this mat There was
Speaker 1: a study I saw about printing credit card balances on
Speaker 1: receipts every time we purchased something that would be helpful.
Speaker 1: I think then all of a sudden, it wouldn't feel
Speaker 1: limit less because you're like, oh, that's how much I
Speaker 1: have left, okay, yeah, Or that's how much I've spent
Speaker 1: this month, that's what the balance is at. Those kind
Speaker 1: of reminders I think would trigger something in us that
Speaker 1: would be helpful. So, yeah, limits can be helpful, when
Speaker 1: balances can be helpful. That's going to happen in time soon.
Speaker 1: But I kind of wish it would because I think
Speaker 1: that would at least help on this front. Yeah, But
Speaker 1: going back to maybe what some more younger listeners are experiencing,
Speaker 1: I'm I totally agree. I am because the majority of
Speaker 1: my finances are digital. Anytime I have cash on hand,
Speaker 1: it does not feel like real money because I don't
Speaker 1: have a way for accounting for that money. It's not
Speaker 1: incorporated into my overall finances, and so it really does
Speaker 1: just feel like I could spend it on whatever the
Speaker 1: heck I want to spend it on. It feels like
Speaker 1: blow money. Uh, And so I told her exactly, it's
Speaker 1: like I got a couple of twenties in the wallet.
Speaker 1: I forgot those were there, but yeah, definitely something to
Speaker 1: keep in mind. Another con to credit cards, um and
Speaker 1: so what's interesting is that the last one so overspending,
Speaker 1: Jesse meets him. He actually kind of touched on that
Speaker 1: a little bit. He's talking about an experiment that he's
Speaker 1: going to be conducting this year on himself. So Jesse
Speaker 1: meets him, the founder of y NAB you Need a
Speaker 1: Budget when when he came on the show. When he
Speaker 1: came on the show, yeah, we'll link to that episode
Speaker 1: in our show notes because we had an awesome conversation
Speaker 1: about budgeting during that episode. But he also touched on
Speaker 1: an aspect of credit cards that we haven't really explored,
Speaker 1: which is again why I'm glad we're having this conversation now,
Speaker 1: which is he brought up, I guess the moral nature
Speaker 1: of credit cards. You know, he like, he brought the
Speaker 1: question as to whether or not it's ethical, and I
Speaker 1: think that's worth that's worth considering the fact that some
Speaker 1: folks benefit at the expense of others. That's that's definitely
Speaker 1: one of the downsides of credit cards. Estimates show that
Speaker 1: fifteen billion dollars is redistributed annually from uneducated consumers who
Speaker 1: are using their credit cards improperly to educated ones the
Speaker 1: credit cards and you know, it's not the same as
Speaker 1: the lottery. But the truth is that lottery tickets, right,
Speaker 1: they often act like an additional tax on the poorest
Speaker 1: in our society. Uh. And the tax dollars from a
Speaker 1: lot of purchases, they often fund things that then benefit
Speaker 1: those who have more, like funding higher education for middle
Speaker 1: and upper class kids. Well, credit card rewards are only
Speaker 1: a reality because a certain subset of the population ends
Speaker 1: up paying the bank uh pretty big money and interest
Speaker 1: on a consistent basis. That's where all those dollars come from. Uh.
Speaker 1: And so with that mind, should we avoid using them
Speaker 1: because of this dynamic? Right? Like should you not take
Speaker 1: the scholarship money out there because of how these tax
Speaker 1: dollars were regarded? Well, we don't think so. That that
Speaker 1: being said, you know, these are personal questions that you'll
Speaker 1: have to wrestle with. And for me, I think another
Speaker 1: way to maybe think about this is like supply and demand, right,
Speaker 1: And so, as an individual, if you want to no
Speaker 1: longer participate in using credit cards because you feel the
Speaker 1: rewards that you're getting are maybe unjust what you're doing,
Speaker 1: you're you're basically removing one small little bit of demand
Speaker 1: of those rewards from the banks. But the thing is
Speaker 1: is that demand doesn't then immediately translate into reduced need
Speaker 1: for supply because the bank's essentially act as like a MetalMan.
Speaker 1: And even though you're demanding less from the bank, does
Speaker 1: that mean that they're going to demand less from the
Speaker 1: people who are using credit cards and properly no. In fact,
Speaker 1: banks are better off because they're saying, Okay, there's a
Speaker 1: fewer rewards we need to we need to this smart
Speaker 1: you need to pay that guy who's feeling conflicted about
Speaker 1: about using our cards. And so if you want to
Speaker 1: do that, I think that's that's totally fine. But you know,
Speaker 1: the our approach is to instead don't address the demand
Speaker 1: side of the equation, instead look at the supply part
Speaker 1: of the equation. First of all, I think it's better because,
Speaker 1: like you are directly helping and hopefully educating and informing
Speaker 1: an individual as to how it is that they should
Speaker 1: be using a credit card, and so literally there's changed
Speaker 1: that's happening there for that person who who you're able
Speaker 1: to impact. But secondly, you are directly impacting the amount
Speaker 1: of money that these banks are making, and it forces change,
Speaker 1: right like they no longer have a choice. At some point,
Speaker 1: if enough people get educated and know enough people start
Speaker 1: changing habits and they're not paying interest to Visa and
Speaker 1: Master cards, they will have to then change the reward program.
Speaker 1: They're not gonna be able to offer the robust rewards.
Speaker 1: The massive sign up onuses is the great travel points
Speaker 1: and the great secondary works like all that kind of stuff.
Speaker 1: Like they just have to say we gotta tamp down
Speaker 1: on all this, and credit cards are going to be
Speaker 1: as lucrative anymore. But I don't know of another way
Speaker 1: to up end the system. And so just focusing on
Speaker 1: the demand side, in my opinion, just feels flawed. It's
Speaker 1: because thanks will continue to make bookoos of cash and
Speaker 1: then use that money to build nice buildings and all
Speaker 1: the cities of other quarters well, and it makes me
Speaker 1: think of credit scores. Just because the credits scoring system
Speaker 1: is flawed and the big credit heures suck majorly, that
Speaker 1: doesn't mean we opt out completely and we say credit
Speaker 1: scores don't matter. There's like a game we have to play.
Speaker 1: We have to be savvy about the game. We're playing,
Speaker 1: and it doesn't mean we have to buy into a
Speaker 1: hook line and sinker, but it does. But I think
Speaker 1: removing ourselves from the equation isn't necessarily helping broader society,
Speaker 1: and it's not the best move for us personally. But
Speaker 1: by the way, we are all on that notebat, we're
Speaker 1: all paying a price for the reality of credit cards
Speaker 1: no matter what we do, because Visa and master Card
Speaker 1: they make money from those swipe fees or the tap
Speaker 1: fees now you might call them, And very few retailers
Speaker 1: charge credit card users more than cash payers, So if
Speaker 1: you're paying in cash, you're actually subsidizing the benefits of
Speaker 1: credit card users receive because that swipe fee is built
Speaker 1: into the sticker price. So you kind of might think
Speaker 1: about it like that too, you're kind of overcoming some
Speaker 1: of that swipe fee by using credit cards. Well, but um, yeah,
Speaker 1: So these are a few things. They're very much worth
Speaker 1: considering if you can't use them properly, if they lead
Speaker 1: you to overspend, if you're not sure about the ethical
Speaker 1: ramifications of credit cards, and if if you are worried
Speaker 1: about kind of the way the system works. Those are
Speaker 1: decent reasons I think to opt out, they're worth mentioning
Speaker 1: at least. But now that we've talked about the downsides
Speaker 1: of credit card usage, Matt, let's talk about the pros
Speaker 1: and then we're actually going to give a credit card
Speaker 1: optimization strategy that Matt and I've kind of thought through. Well,
Speaker 1: we'll get to that right after this. Are we are
Speaker 1: talking about the proper way to use credit cards as
Speaker 1: nature intended. And now that we just covered all the
Speaker 1: cons and hopefully I feel like we did make a
Speaker 1: pretty good case against using credit cards, even though we
Speaker 1: started making an argument for I guess for last we
Speaker 1: did not opting out there. I think there's just a
Speaker 1: more effective way of going about that with your actions
Speaker 1: on both. In both cases it's a very small impact
Speaker 1: that you're gonna have, but one of those still feels
Speaker 1: more impactful than the other. Well, and some individuals like that.
Speaker 1: That's kind of uh. That's not a reason I don't
Speaker 1: think to ban credit cards or for everybody out there
Speaker 1: not to use them, but I think those some of
Speaker 1: those things will apply to some people. And if you
Speaker 1: can't use credit cards wisely, we have always said this
Speaker 1: that you shouldn't be using them, and that totally and
Speaker 1: let's be honest. When we look at the numbers, it
Speaker 1: is something close to half of Americans don't use credit cards. Wisely,
Speaker 1: they're not paying off their balance on time and in
Speaker 1: full of your month. And if you are one of
Speaker 1: those people, you shouldn't be using credit cards at least
Speaker 1: for now. That doesn't mean that at some point, once
Speaker 1: you get your act together, that you can't start to
Speaker 1: re implement credit cards into how you use it. I'd
Speaker 1: go slow and steady and trying to make sure you
Speaker 1: don't keep yourself in this in the same position that
Speaker 1: you are in. But it's really important that to mention
Speaker 1: that for a lot of people, credit cards do not
Speaker 1: make the most sense. Sure that being said, I think
Speaker 1: for our listeners, hopefully it's it's a higher percentage of
Speaker 1: folks who are their bills off. I would it's more
Speaker 1: like a D at least a D, I would hope. Yeah,
Speaker 1: what do you think? And I think so basically, there's
Speaker 1: a lot of people who really know what they're doing.
Speaker 1: They're optimizing, and so this is a thing where yeah,
Speaker 1: they're like, well, yeah, I get that that's half Americans,
Speaker 1: but yeah, it's probably I think more of our listeners
Speaker 1: might be percent of how the money listeners right might
Speaker 1: be wrestling with, like the ethical side of things, and
Speaker 1: hopefully we gave some I don't know, at least a
Speaker 1: framework to help you to think about that for yourself.
Speaker 1: But let's now talk about some of the prose, some
Speaker 1: of the arguments for using credit cards today, which, first
Speaker 1: of all, I mean it kind of feels like a
Speaker 1: necessity in our modern society, which I mean, I guess
Speaker 1: they aren't. Like you could use cash in some places
Speaker 1: and use a debit card everywhere else, but just given
Speaker 1: the reality of online commerce, it's really tough to get
Speaker 1: by without plastic in general. Can be like Amazon, I'm
Speaker 1: gonna mail you dollar bills? How's that gonna work out? Like?
Speaker 1: Can I send you a check? Like is that even possible?
Speaker 1: I don't know. I don't think it is, don't think uh.
Speaker 1: And like similarly, Amazon actually does have some sort of
Speaker 1: weird system where you can go to a particular place
Speaker 1: and deposit cash and have it credited to your account.
Speaker 1: And forget exactly how that works, but I'm pretty sure
Speaker 1: they have something like that. But I'm going to look
Speaker 1: that up because a lot of actually fascinated by that.
Speaker 1: They're one of the only online retailers that offer something
Speaker 1: like that. Okay, so it kind of makes me think
Speaker 1: about how necessary it is to have a car today,
Speaker 1: right because there, you know, someone could argue that they
Speaker 1: aren't totally necessary. That's that's definitely true. But your life
Speaker 1: would look a lot different if you only got around
Speaker 1: with your two legs, or if you only got around
Speaker 1: on a bike. Having a car it comes in handy
Speaker 1: when it's raining, when you're trying to get get out
Speaker 1: of town. Our recent trip to Louisville would have looked
Speaker 1: a lot different if we didn't take a car. It
Speaker 1: would have uh. And similarly, it's really handy to have
Speaker 1: a credit card you use every now than I mean,
Speaker 1: we'll get some rewards in a little bit, but like,
Speaker 1: how else are you gonna pay for those plane tickets
Speaker 1: to Tahiti? You know, I'm not gonna pay for those
Speaker 1: like using cash, use the points for that. I'm not
Speaker 1: going to Tahiti, by the way, I'm still working on
Speaker 1: that the Southwest Companion pass there. But we'll talk about
Speaker 1: you know, debit cards in a little bit and why
Speaker 1: we think they are actually inferior. But since we gave
Speaker 1: some of the best arguments against using credit cards. You
Speaker 1: know the fact that you might spend more that is
Speaker 1: questionable from an ethical standpoint. Let's definitely make sure that
Speaker 1: we are giving some of the best reasons for using
Speaker 1: them as well. Let's do it, okay. One thing, they
Speaker 1: help you establish a credit score. And I mentioned before
Speaker 1: the break the credit scoring model not our favorite, but
Speaker 1: bottom line, it's how the financial industry works, and it's
Speaker 1: you know, when we're talking about an easily identifiable way
Speaker 1: of determining your credit worthiness, this is how it's done, right,
Speaker 1: this is how it's done now. And so you need
Speaker 1: to play the game to boost your score, and uh,
Speaker 1: credit cards help you do that. Responsible credit card usage
Speaker 1: is one of those things that will contribute to a
Speaker 1: robust credit score. I mean yeah, like like is the
Speaker 1: I guess the new the new inquiries for credit Like
Speaker 1: that is the only thing that wouldn't necessarily be impacted
Speaker 1: by you having a credit card. Literally everything else that
Speaker 1: makes up your score is impacted by having a credit
Speaker 1: card and paying it and using it properly. Yeah, and
Speaker 1: it's going to impact so many different things, right, having
Speaker 1: that great credit score, like what you pay for car
Speaker 1: insurance and that we just talked about it on a
Speaker 1: Friday flight. How much more you pay for car insurance
Speaker 1: if your credit score sucks a lot more, it's like
Speaker 1: double like no joke. And so if you want to
Speaker 1: pay three thousand dollars a year because your credit score
Speaker 1: stinks because you said, I'm you know, I don't want
Speaker 1: to play by I'm not playing by your rules, Well
Speaker 1: you can do that, but it's gonna cost you money
Speaker 1: in the long run. And so smart credit card usage
Speaker 1: over time will propel your score upward, which is a
Speaker 1: good thing when it comes to borrowing to get that
Speaker 1: home loan or know what you pay for car insurance,
Speaker 1: it's just going to have major ramifications on that front.
Speaker 1: It's also a good reason to have a credit card
Speaker 1: if you're planning to do some travels civically, if you're
Speaker 1: looking to travel overseas. Again, you could use a debit
Speaker 1: card here, but credit cards they offer a superior exchange rate,
Speaker 1: and they ensure that that that you don't have to
Speaker 1: carry around a bunch of cash on your person and
Speaker 1: of in a foreign place. You know, like you don't
Speaker 1: have to keep that cash fanny pack around your waist
Speaker 1: tucked into your pants, and I don't wanna have to
Speaker 1: mess with that, right, Some of our favorite cards come
Speaker 1: with a zero percent foreign transaction fee, so there's no
Speaker 1: charge to you there, But the exchange rate is also
Speaker 1: going to be better for you than pulling cash out
Speaker 1: of an A t M. With your debit card as well.
Speaker 1: I like taking my no foreign fee debit card as well.
Speaker 1: And in case I am looking to pull a little
Speaker 1: bit of cash if you're gonna visit like a like
Speaker 1: an open air market, that kind of thing where they're
Speaker 1: only taking cash. But there's no way I would travel
Speaker 1: without an actual credit card in order to make most
Speaker 1: purchases that that you would incur while you're abroad, for sure. Yeah,
Speaker 1: you definitely want a little bit of loose cash for
Speaker 1: some things, you know, depending on where you're going and
Speaker 1: what you're gonna do tip having some on hand for that. Yeah,
Speaker 1: And like let's say you're getting food at a little
Speaker 1: stall on the street or something like that, Like you're
Speaker 1: probably gonna want to pay in cash there, so you're
Speaker 1: gonna want to have some cash on your person. But
Speaker 1: credit cards for all of the purchases overseas just makes
Speaker 1: sense to me. That's a really important reason to have them. Also,
Speaker 1: credit cards come with superior protections. And there was actually
Speaker 1: an article in the Washington Post last week, Matt where
Speaker 1: the author mentioned that she had charge from Apple on
Speaker 1: her card. No, she had not just bought a new MacBook.
Speaker 1: It was a fraudulent purchase. And and if that had
Speaker 1: happened with her debit card, she'd have an even bigger
Speaker 1: problem on her hands. She'd be trying to claw back
Speaker 1: stolen funds, which would have impacted her ability to pay
Speaker 1: her other bills. Instead of just trying to get a
Speaker 1: fraudulent charge removed, which is a little pain in the butt,
Speaker 1: it would have been a much, much bigger headache. And
Speaker 1: and plus, if it takes you a while to notice,
Speaker 1: you could be out that money. For good debit cards,
Speaker 1: they just don't have the same protections, uh federally speaking,
Speaker 1: from a legal standpoint as credit cards. And this is
Speaker 1: something that doesn't get mentioned enough, but it is something
Speaker 1: we see as a vitally important reason to prioritize credit
Speaker 1: cards as a method of payment. Those superior protections and
Speaker 1: the fact that you'll be hassled far less if fraud
Speaker 1: does occur. Man, those are two big check marks right
Speaker 1: there in the credit card box from yeah. Yeah. Debit cards,
Speaker 1: they do have some protection, but you have to notice
Speaker 1: fraudulent transactions or you have to notice that your cards missing.
Speaker 1: If you don't notice that within two days, you can
Speaker 1: be on the on the hook for up to bucks. Uh.
Speaker 1: Here's the other thing, here's the real kicker, dude, if
Speaker 1: you don't notice within two months, and I'm sure most
Speaker 1: of our listeners again are thinking, how would you not
Speaker 1: notice a charge leaving your checking account? Of it? Who
Speaker 1: do not budget, who do not track their expenses? And
Speaker 1: if that's you and there's been a fraudulent charge and
Speaker 1: it's been over two months, specifically sixty days, uh, there
Speaker 1: is no limit to the amount of money that you
Speaker 1: are liable for. Uh. And so with with credit cards
Speaker 1: oftentimes there well there is a maximum of fifty dollars,
Speaker 1: but most cards say that you are liable for zero
Speaker 1: dollars for any fraud and the charges another pro Another
Speaker 1: argument for using credit cards is either it's it's easier
Speaker 1: to track spending and so maybe you're thinking, well, I
Speaker 1: do better, you know, putting cash in an actual envelope.
Speaker 1: But if you're tracking your finances using digital means, like
Speaker 1: why nap you need to budget or using mint, it
Speaker 1: is so much easier to categorize and actually keep up
Speaker 1: with your spending into At the end of every year,
Speaker 1: Kate and I we always do a year, an annual review,
Speaker 1: and we look at where it is that we have
Speaker 1: spent our money that year. We compare it to previous years.
Speaker 1: Like I've got a special sheet and I copy and
Speaker 1: paste all of those expenses over and we get to
Speaker 1: see different trends and we can see that, oh, wow,
Speaker 1: we are spending a lot more uh this this year.
Speaker 1: One of the things was was our grocery bill uh.
Speaker 1: And partly we've talked about this, but once we started
Speaker 1: shopping at Costco, we we saw that skyrocket. But it
Speaker 1: allows us to make some of these overarching, large changes
Speaker 1: to our budget. It allows us to kind of tighten
Speaker 1: the belt in certain areas. It allows us to say, hey,
Speaker 1: we didn't spend in this one area even that we
Speaker 1: had set aside a certain amount of money. Let's make
Speaker 1: sure that we are working harder to spend our money
Speaker 1: in ways that we say is actually important to us.
Speaker 1: But you know, knowing where your money is going it
Speaker 1: is a personal finance necessity, and spending our credit cards
Speaker 1: and having those transactions accumulating just in one place like that,
Speaker 1: it makes it so much easier from a money management perspective. Essentially,
Speaker 1: your statement that you receive, that you receive every month.
Speaker 1: It's almost as if you have your own personal like
Speaker 1: c f A and they're just like sending you financial
Speaker 1: reports of like here you go, sir uh. And that's
Speaker 1: not necessarily something you have if you if you are
Speaker 1: doing the cash envelope system for sure. Yeah all right,
Speaker 1: So another pro of credit cards, and this one is
Speaker 1: the calling card really that most people associate as the
Speaker 1: biggest benefit of credit cards, which might not be the
Speaker 1: biggest benefit, but it's it's at least the one that
Speaker 1: gets the biggest headlines, and that is the rewards that
Speaker 1: you get from using credit cards. It's good, good that
Speaker 1: we say the best for last. Yes, yeah, well there's
Speaker 1: more too, but we'll save that for later. But yeah,
Speaker 1: every everyone knows about this part of credit cards, and
Speaker 1: that's what most people are hankering for. Right. They can
Speaker 1: mentioned on every single commercial and and you know, we
Speaker 1: talk about the massively lucrative sign up bonuses and and
Speaker 1: then even more recurring rewards that smart people can maximize
Speaker 1: to the tune of thousands of dollars a year, or
Speaker 1: if you know you're not into dollars as much or
Speaker 1: into more valuable travel perks, you can do that as well.
Speaker 1: And here's the other thing that makes these credit card
Speaker 1: rewards so valuable is that you don't get taxed on them, right,
Speaker 1: which just makes them even better. Because if you sign
Speaker 1: up for a new bank account to score a bonus,
Speaker 1: which I have done I did this past year, that
Speaker 1: money gets taxed. I just got in the mail my
Speaker 1: t N I N T from a bank saying hey,
Speaker 1: I'm glad you got the sign up bonus. Now Paynicle
Speaker 1: Sam a portion of it. And so while that was
Speaker 1: still a good move for me to make, credit card
Speaker 1: bonuses don't come with any sort of taxes associated with them,
Speaker 1: and the rewards can be significant. But again, and I
Speaker 1: feel like we're gonna have to keep saying this, don't
Speaker 1: let the rewards tail wag the dog. Credit card rewards
Speaker 1: can be great, but spending more to juice your rewards
Speaker 1: is fool And that's again part of what the naysayers
Speaker 1: will say about credit cards. Well, people get so excited
Speaker 1: about these rewards that they end up spending more than
Speaker 1: they should. And it's true for some people that they
Speaker 1: end up doing that, and you have to be careful.
Speaker 1: You have to be cautious because rewards can be great,
Speaker 1: but if you're spending more to get more rewards, it's
Speaker 1: just like spending money when you weren't intending to because
Speaker 1: something was fifty off. I got this great discount, you know,
Speaker 1: and it's like, well, yeah, but you weren't planning on
Speaker 1: buying that, and so actually you you like to think
Speaker 1: that you saved, but you spent. Yeah, I totally agree.
Speaker 1: I think it's the same folks that might find fall
Speaker 1: prey to a really sweet deal, a really big sale,
Speaker 1: would be like, look how much money I saved. It's like, well,
Speaker 1: what if that sale didn't exist and you didn't spend
Speaker 1: any of that money at all to begin with? Where
Speaker 1: you plan on my not that thing? Anyway, if you
Speaker 1: weren't yeah, again, you spent. You didn't say exactly, yeah,
Speaker 1: so it's yeah, like you said, important to keep in
Speaker 1: mind that those rewards, certainly they're not gonna make you rich,
Speaker 1: but they can be a nice perk. But in order
Speaker 1: to make sure that your desire for rewards isn't working
Speaker 1: against you. It's crucial to use your cards properly. Um,
Speaker 1: those rewards can feel exciting, right like, it can feel
Speaker 1: a lot of fun as you're getting thousands, you know.
Speaker 1: It's it's also smart that they're not tying it to
Speaker 1: the actual dollar reward that you get, but it's to
Speaker 1: the scent, you know. You know, it's just like, oh,
Speaker 1: eighty thousand points. It's like yeah, yeah, like eighty thousand pennies,
Speaker 1: you know, yeah, I know it sounds nicer than it is,
Speaker 1: so exactly, it's slightly inflated there. But if you spend
Speaker 1: more because the bank says you can, right, or if
Speaker 1: you can't pay the bill on time every single month,
Speaker 1: using credit cards does not make sense. Minimum payments they
Speaker 1: are not enough. The full balance needs to be paid.
Speaker 1: You've got to be disciplined in order for the rewards
Speaker 1: to make sense, if not just completely avoid them all together. Okay,
Speaker 1: let's address debit cards here for a second to Matt,
Speaker 1: because we mentioned that they don't come with the same
Speaker 1: protections as credit cards, but a lot of people, a
Speaker 1: lot of people think, well, they're basically the same thing,
Speaker 1: and so I'm going to use debit cards because what's
Speaker 1: the difference, and it's preventing me from racking up debt
Speaker 1: and spending money that I don't have. And while I
Speaker 1: get that, like desire, I get the impetus. They might
Speaker 1: look the same, but they they're not the same, and
Speaker 1: they don't have the same protections, and they don't offer
Speaker 1: the same rewards either. There's no sign up bonuses for
Speaker 1: debit cards. There are no free travel perks. There are
Speaker 1: also rarely any cash back rewards attached to debit cards either.
Speaker 1: In fact, you know, one of the only ones we
Speaker 1: know of is the Discover debit card, which gives you
Speaker 1: one percent cash back. So that's at least our favorite
Speaker 1: from a debit card perspective. But even that's still not
Speaker 1: as rewarding as spending the spending you do with the
Speaker 1: credit card. But I think the biggest downer is those
Speaker 1: protections that debit cards lack that credit cards have. If
Speaker 1: changers were made to federal law to make debit cards
Speaker 1: have the have those exact same protections, I think I
Speaker 1: would feel more comfortable pushing people in that direction. But yeah,
Speaker 1: I don't want my cash ripped out of my account
Speaker 1: and then have to go like begging the bank to
Speaker 1: keep it back. That sounds like a pain in the butt.
Speaker 1: But after the break, we're gonna talk about credit card optimization.
Speaker 1: How can you make the credit cards that you have
Speaker 1: worked better for you or get the one that maybe
Speaker 1: makes the most sense for how you spend. Well, we'll
Speaker 1: talk about that right after this. And it's now time
Speaker 1: for the credit card optimization segment of our episode today, Joel. So,
Speaker 1: let's say someone's listening, they're on board with using their
Speaker 1: credit cards properly, right like they've got that souber view
Speaker 1: of how credit cards work, and maybe now you want
Speaker 1: to use them as a way to nab some rewards.
Speaker 1: And if that's you, so much of this, so much
Speaker 1: of your strategy is going to depend on how it
Speaker 1: is that you use credit cards and specifically what categories
Speaker 1: you spend the most money on. So let's go ahead
Speaker 1: now and mention what we're gonna call the how the
Speaker 1: Money super Chill credit card optimization strategy. Brandy so sweet
Speaker 1: on that, Matt's a mouthful, but we think this is
Speaker 1: this really is an effective approach for most folks out there.
Speaker 1: So let's now discuss what this three card approach entails.
Speaker 1: And first of all, we think definitely includes the American
Speaker 1: Express Blue Cash Preferred card. That's one that most folks
Speaker 1: will benefit from. It is important to point out that
Speaker 1: this card comes with a annual fee, which sounds like
Speaker 1: bad news bears, but you are looking at a six
Speaker 1: percent cash back reward at grocery stores as well as
Speaker 1: on streaming subscriptions as well. Joe and I we both
Speaker 1: love this card because we've got bigger families and be
Speaker 1: we purchase a ton of groceries. That being said, it
Speaker 1: may not be worth it if let's say you're single,
Speaker 1: maybe you live by yourself, or you're always eating takeout,
Speaker 1: like because really, the grocery store is the main feature
Speaker 1: of this card exactly. And if that's the case, uh,
Speaker 1: you would be wasting every single year were you to
Speaker 1: get this card. Uh. And so an important number to
Speaker 1: keep in mind. There's a break even point between this
Speaker 1: card and the version of this card that does not
Speaker 1: come with a fee. But the break even point is
Speaker 1: that you need to be spending at least eighty dollars
Speaker 1: a month on groceries in order to make the annual
Speaker 1: fee for this card worth it. Yeah, and I know
Speaker 1: a lot of people, especially if if they have a
Speaker 1: significant other, a partner, or even just a kid or two.
Speaker 1: They're definitely spending more than that, especially given what's happened
Speaker 1: with inflation and groceries this past year. Your family spend
Speaker 1: two hundred bucks a month just on eggs. It feels
Speaker 1: like it right now. It certainly does, right And so yeah,
Speaker 1: if you're spending in the plus range on groceries, this
Speaker 1: is probably the first credit card you should have in
Speaker 1: your wallet, right, I mean six percent, Like literally, you're
Speaker 1: not going to find any card out there that is
Speaker 1: paying or cash back percentage this high, not that, not
Speaker 1: anywhere close. Using get this card, pay for your streaming,
Speaker 1: and pay for your groceries with it, and it's going
Speaker 1: to pay for itself for sure. And the next card
Speaker 1: in this super show credit card optimization strategy is the
Speaker 1: City Custom Cash Card, which clocks in at five in
Speaker 1: any single category of spending. So this is where your
Speaker 1: personal spending patterns come into play, because if you spend
Speaker 1: a big chunk of change every month eating out, then
Speaker 1: this is the card you're gonna want to use it
Speaker 1: restaurants and if you spend a ton at different gas stations,
Speaker 1: or let's say you spend a bunch at home depot
Speaker 1: and lows right, well, then this is your gas or
Speaker 1: home improvement card. And then literally right on the card
Speaker 1: with the sharp piece that you get those max rewards
Speaker 1: in that specific category, and always use that credit card
Speaker 1: in that one place. Don't spend it anywhere else because
Speaker 1: you're only getting one percent on other categories. But the
Speaker 1: City Custom Cash Card is a great card for people
Speaker 1: to have to use and basically their top spending category. Yeah,
Speaker 1: beyond feel like everybody, most folks are going to be
Speaker 1: going to the grocery store. It depends on how much
Speaker 1: you actually spend at the grocery store as to whether
Speaker 1: or not the Amix Blue Cash prefer It is gonna
Speaker 1: be worth it. But the next you're looking at that
Speaker 1: City Custom Cash Card. And then lastly, we think that
Speaker 1: everyone should have a basic two cash back card. There
Speaker 1: are two of these out there that have been around
Speaker 1: for a number of years now that we consistently recommend.
Speaker 1: First of all, the Fidelity Visa is great. Uh, And
Speaker 1: what's cool about this card You can saw those rewards
Speaker 1: straight into an IRA, which is super cool. You know, like,
Speaker 1: we're totally fine with you earning points for free travel.
Speaker 1: I like free flights, but at least with the monetary
Speaker 1: perks that you get from these straight up cash back cards.
Speaker 1: I love the idea of you using them as a
Speaker 1: way to invest for your future, right, Like, this is
Speaker 1: an income that you're banking on, uh and so instead
Speaker 1: of splurging maybe a little bit extra, just toss those
Speaker 1: those few extra dollars every month into your roth IRA
Speaker 1: or into even a taxable brokerage account if you're already
Speaker 1: maxing out your IRA. But it would be really cool
Speaker 1: to see just how much those reward dollars could grow
Speaker 1: for your future when invested, uh in, particularly if you
Speaker 1: are finding it difficult to get investing or or maybe
Speaker 1: you're finding that you haven't been able to max out
Speaker 1: some of you know, your IRA A and I think
Speaker 1: this is an awesome way to kind of give you
Speaker 1: that boost that future you will most definitely appreciate. Yeah,
Speaker 1: So this credit card optimization strategy really entails getting three cards.
Speaker 1: The m X Blue Cash Preferred is one, the City
Speaker 1: Custom Cash is two, and then a two percent cash
Speaker 1: back card is third, either the Fidelity Visa the match
Speaker 1: just mentioned, or the City Double Cash, which is another
Speaker 1: one of our favorites that consistently pays two percent cash
Speaker 1: back on everything, which is also well worth considering. So
Speaker 1: get those three cards, and that's really for most people
Speaker 1: going to optimize your rewards without overthinking it. Right, It's
Speaker 1: a it's a simple strategy to maximizing rewards. And we
Speaker 1: actually have an article kind of outlining how this works
Speaker 1: that will link to in the show notes for this
Speaker 1: episode that you can check out and you can kind
Speaker 1: of read and see like, Okay, now this makes sense
Speaker 1: because hopefully I was talking about it makes sense, but
Speaker 1: sometimes reading it makes will help it make more sense.
Speaker 1: But some of you might be saying, well, I can
Speaker 1: optimize more than that, though, right of course you can,
Speaker 1: Like I think we just wanted to offer a an
Speaker 1: easy like way to start for people to say, like,
Speaker 1: you don't have to overthink it, and there's ways for
Speaker 1: you to get six percent back on a lot of things,
Speaker 1: five percent back on a lot of things, and two
Speaker 1: percent back on everything else, and you don't have to
Speaker 1: deal with rewards and redemption ends and stuff like that
Speaker 1: for travolving categories things changing like that's personally, I'm not
Speaker 1: a huge fan of that. I don't like jumping through
Speaker 1: some of those additional hoops. The ability to kind of
Speaker 1: set it and forget it is what this optimization strategy
Speaker 1: is all about. It's like a simple method really for
Speaker 1: people to do the basics to score the low hanging
Speaker 1: fruit by using credit cards. But then yeah, if you're
Speaker 1: a superorganized person, you might might make sense for you
Speaker 1: to open additional cards over time to score extra rewards.
Speaker 1: We're not against that at all, and Matt and I
Speaker 1: we do that ourselves, but yeah, I just wanted to
Speaker 1: at least give you that simple strategy. But like, because
Speaker 1: let's say you're a renter. The Built credit card is
Speaker 1: literally the only credit card on the market that offers
Speaker 1: you rewards just for paying rent, and it is possible.
Speaker 1: This is a real card, and and there's not any
Speaker 1: other card that offers the same feature, Like, you can't
Speaker 1: get get paid, get rewards for paying rent except for
Speaker 1: with this credit card. You can check out our review
Speaker 1: of that card at how the Money dot com slash
Speaker 1: Built b I lt But you know, this would be
Speaker 1: a very solid fourth card renters, even if you only
Speaker 1: use it to pay rent each month. There's no annual
Speaker 1: fee either, which makes this one really worthwhile and attractive. Uh,
Speaker 1: and you can also go to our how to Money
Speaker 1: credit card tool how the Money dot Com slash credit
Speaker 1: cards as credit card tool out there, man, and you
Speaker 1: can click a few buttons and you can easily filter
Speaker 1: based on kind of the rewards that that you're looking for. Specifically, yes,
Speaker 1: specifically by whether or not you're looking at getting cash back,
Speaker 1: or if you're looking for points from an airline, and
Speaker 1: then specifically what airline that you are looking to get
Speaker 1: those points with. And if you're a business owner, some
Speaker 1: of those business cards are even more lucrative, and you
Speaker 1: can click the business button right there and you can
Speaker 1: filter by that. Yeah, that's an awesome tool. But aside
Speaker 1: from the specific credit cards out there, there are a
Speaker 1: couple of ways that we want to discuss here to
Speaker 1: make credit cards work even better for you, and we
Speaker 1: would recommend you trying to negotiate with your credit card
Speaker 1: issue where specifically to ask for a reduction on that
Speaker 1: annual fee. Some of those travel cards out there, the
Speaker 1: annual fee it's pretty stinking high. And case some point here,
Speaker 1: our friend Scott Rickens, he literally had chat GPT. So
Speaker 1: that's the you know, the AI that has been all
Speaker 1: up in the headlines Uh, you're living under a rock
Speaker 1: if you missed GPTU. He had it right a script
Speaker 1: for him to ask for an annual fee reduction. He
Speaker 1: said it was it was super easy to do, saved
Speaker 1: him five hundred bucks. He's talking. I think it was
Speaker 1: like the is amex Platinum card that he was referring to.
Speaker 1: It's got like a five four annual fee, but it
Speaker 1: only took him ten minutes. Will link to the Twitter
Speaker 1: thread where he was talking about that. But you know,
Speaker 1: to to be able to have your cake and eat
Speaker 1: it too by by getting a great card with sick perks,
Speaker 1: with sick benefits, all while avoiding hefty fees. We're all
Speaker 1: for that. Yeah, Okay. One other way to kind of
Speaker 1: maximize credit cards in your life is to take advantage
Speaker 1: of the hidden benefits that credit cards offer and the
Speaker 1: rewards a sign up bonuses, those get all the press.
Speaker 1: That's what you know again is in the commercials, that's
Speaker 1: what they're publicly touting. But the best credit cards offer
Speaker 1: benefits that go beyond those headline rewards. So for instance,
Speaker 1: with some cards, you can get primary a rental car coverage.
Speaker 1: That's actually what that built card. I just mentioned that.
Speaker 1: How the money dot Com slash b I lt that
Speaker 1: card that can where you can earn for paying rental.
Speaker 1: You can also get primary rental card coverage, which is incredible.
Speaker 1: Not many cards even offer that, all with zero annual fee.
Speaker 1: I mean that that's a really sweet secondary park that
Speaker 1: most people don't talk about. Chrip cancelation insurance comes with
Speaker 1: other credit cards to airport lounge access. Cell phone insurance
Speaker 1: if you pay your cell phone bill with a particular card,
Speaker 1: like the Built card every single month. It's one of
Speaker 1: those things where you drop your phone, you lose your phone.
Speaker 1: Guess what, it's ensured. Those can be just as rewarding
Speaker 1: though as the headline cash back number and the travel
Speaker 1: words you might get with some cards. It's just worth mentioning, Like,
Speaker 1: dig into that fine print and see, okay, well, what
Speaker 1: what is this credit card offering in addition to just
Speaker 1: two percent cash back or in addition to that five
Speaker 1: percent in my favorite category? What else is it gonna
Speaker 1: give me on top of that? And then optimize your
Speaker 1: credit card use accordingly? That's right, man, dig into those benefits.
Speaker 1: And if you use credit cards properly, they can kind
Speaker 1: of act like an interest free loan. Uh, not only that,
Speaker 1: they can award you even greater benefits like cash rewards,
Speaker 1: free travel. That's what we've been discussing just now again.
Speaker 1: Do the banks get rich off of folks using credit cards? Yeah,
Speaker 1: there are too many people out there who are using
Speaker 1: credit cards poorly. The rest of us wouldn't have access
Speaker 1: to these perks if they started changing their spending habits
Speaker 1: and if they pay their their credit card debt off,
Speaker 1: if credit card rewards evaporated, because that became a reality,
Speaker 1: would we be happy about that? Absolutely? But that's not
Speaker 1: the way that the world works. That's not how our
Speaker 1: financial system are. You know, it's not structured that way,
Speaker 1: at least not yet. Uh. And so we've all got
Speaker 1: to make up our mind about how and even if
Speaker 1: we're going to partake and use credit cards in the
Speaker 1: world that's polarized by them here at how the money.
Speaker 1: We are all for smart use. But this is one
Speaker 1: that we think good folks can hopefully agree to disagree on.
Speaker 1: I agreed. And and the way if you're listening to
Speaker 1: this and you're like, I'm in credit card debt, well
Speaker 1: that's something that's like a hot high priority for us,
Speaker 1: is we want to see you get out of that.
Speaker 1: And we've got resources on how to money dot com
Speaker 1: to help you figure out make a plan to pay
Speaker 1: off your debt, and prior episodes as well that speak
Speaker 1: to debt payoff and creating a plan so you can
Speaker 1: get rid of it sooner than later. That's really important,
Speaker 1: and it's really important that you not use those credit
Speaker 1: cards for the time being while you're getting out of it.
Speaker 1: You don't want to continue to dig yourself a hole
Speaker 1: while you're also trying to crawl out of it. Like
Speaker 1: that's that's not a good strategy. So if you haven't
Speaker 1: had good habits with credit cards, we want you to
Speaker 1: develop those, but maybe wait until after you're out of
Speaker 1: the debt all the way to even consider starting again.
Speaker 1: And and also, by the way, if you want to
Speaker 1: learn more about our super chill credit card optimization strategy,
Speaker 1: you can go to how the Money dot com slash
Speaker 1: optimized to check that one out. But Matt, let's get
Speaker 1: back to the beer for this episode. This one was
Speaker 1: called The Judge and it's by Memphis Made Brewing Company.
Speaker 1: Or your thoughts on this chock Vanilla porter, I thought
Speaker 1: it was pretty tasty. Man. We don't often have porters
Speaker 1: here on the show, and so I'm always it's always
Speaker 1: fun to have a different style that we don't often
Speaker 1: frequently drink. But that being said, I felt like, uh,
Speaker 1: you know, when you have a piece of toast and
Speaker 1: it's been toasted like a little bit too long and
Speaker 1: it gets it's not like bitter, but it has been
Speaker 1: like a little bit of those like bitter chocolate notes
Speaker 1: like on the malts, like on the actual grains. That's
Speaker 1: what this one kind of reminded me of, especially the
Speaker 1: first sip I took. I don't know, that's the that's
Speaker 1: definitely what came to mind, Like before you put the
Speaker 1: butter on there. Uh you know, so I feel like
Speaker 1: the butter kind of sweetens it up a little bit.
Speaker 1: But yeah, that being said, I definitely enjoyed it. Nice
Speaker 1: would you think, Yeah, I mean, well, chocolate vanilla, I'm
Speaker 1: kind of a basic dude. I like chocolate vanilla, like
Speaker 1: give me a swirl ice cream calling I'm a happy guy.
Speaker 1: So this one, yeah, it's like because those the two
Speaker 1: basic ingredients kind of had that swirl elements that taste
Speaker 1: going on. So nice. I liked it, and porters aren't
Speaker 1: typically my favorite, but I thought this one was was
Speaker 1: pretty tasty. Yeah, well, it's just nice to have some
Speaker 1: of these darker flavors without getting really filled up. And
Speaker 1: oftentimes you will get filled up more often with a
Speaker 1: stout and with a porter. You get all that flavor,
Speaker 1: but you get it without all that body, without all
Speaker 1: without all that weight. That's a little bit lighter for sure. Exactly.
Speaker 1: All right, Well, I definitely enjoyed it. That's gonna do
Speaker 1: it for this episode. For folks who want the show notes,
Speaker 1: you can find those up on our site at how
Speaker 1: to money dot com and will link to a lot
Speaker 1: of the resources that we mentioned in today's show. But Matt,
Speaker 1: that's gonna do it for this episode. Until next time,
Speaker 1: best Friends Out, Best Friends Out.