1 00:00:00,640 --> 00:00:00,960 Speaker 1: Hello. 2 00:00:01,520 --> 00:00:05,000 Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud your the 3 00:00:05,120 --> 00:00:08,720 Speaker 2: Order KERNI Whoalbury and a waddery woman. And before we 4 00:00:08,800 --> 00:00:11,440 Speaker 2: get started on She's on the Money podcast, I would 5 00:00:11,480 --> 00:00:14,480 Speaker 2: like to acknowledge the traditional custodians of the land of 6 00:00:14,520 --> 00:00:18,640 Speaker 2: which this podcast is recorded on a wondery country, acknowledging 7 00:00:18,680 --> 00:00:22,560 Speaker 2: the elders, the ancestors and the next generation coming through 8 00:00:23,040 --> 00:00:27,120 Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and 9 00:00:27,200 --> 00:00:30,560 Speaker 2: the storytelling of you to make a difference for today 10 00:00:31,040 --> 00:00:32,599 Speaker 2: and lasting impact for tomorrow. 11 00:00:33,280 --> 00:00:34,080 Speaker 1: Let's get into it. 12 00:00:34,760 --> 00:00:54,040 Speaker 3: She's on the Money, She's on the Money. 13 00:00:57,760 --> 00:01:00,800 Speaker 4: Hello, and welcome to She's on the Money the podcast 14 00:01:00,880 --> 00:01:04,559 Speaker 4: Millennials who Want Financial Freedom. My name is Jessica Ricky 15 00:01:04,640 --> 00:01:07,920 Speaker 4: and today, of course I'm here with Queen Victoria Divine. 16 00:01:08,319 --> 00:01:10,720 Speaker 1: Queen Victoria Divine, I can get used to that. 17 00:01:10,959 --> 00:01:13,520 Speaker 4: Oh, I know everybody bout down. But today VD we 18 00:01:13,560 --> 00:01:17,039 Speaker 4: are talking about credit cards, ill spicy topics. 19 00:01:17,240 --> 00:01:17,960 Speaker 1: Idea was this? 20 00:01:18,520 --> 00:01:18,720 Speaker 2: You know? 21 00:01:19,000 --> 00:01:19,680 Speaker 1: Communities? 22 00:01:19,760 --> 00:01:23,080 Speaker 4: Absolutely? Did you know that As of June twenty twenty two, 23 00:01:23,120 --> 00:01:26,240 Speaker 4: there are thirteen million, one hundred and sixty one thousand, 24 00:01:26,319 --> 00:01:29,959 Speaker 4: four hundred and forty credit cards in Australia, netting a 25 00:01:30,080 --> 00:01:35,160 Speaker 4: national debt occurring interest of eighteen point two billion. That's 26 00:01:35,360 --> 00:01:38,720 Speaker 4: billion with a B dollars. And since the COVID nineteen 27 00:01:38,760 --> 00:01:42,399 Speaker 4: pandemic began in twenty twenty, Australians collectively paid off four 28 00:01:42,440 --> 00:01:44,960 Speaker 4: point two billion dollars of credit card debt ill. 29 00:01:45,080 --> 00:01:47,320 Speaker 1: And you know fun fact that I didn't write down 30 00:01:47,360 --> 00:01:49,680 Speaker 1: for you in this script is that our current population 31 00:01:49,840 --> 00:01:52,400 Speaker 1: as of Monday, the twelfth of September twenty twenty two 32 00:01:52,440 --> 00:01:55,160 Speaker 1: is twenty six million people. So that's a lot of 33 00:01:55,160 --> 00:01:58,280 Speaker 1: credit cards. Population. Half the preduclation has a credit card. 34 00:01:58,320 --> 00:01:59,720 Speaker 4: I think about how many of the people in that 35 00:01:59,720 --> 00:02:02,560 Speaker 4: poplation are too young? So you are giving me the 36 00:02:02,680 --> 00:02:03,560 Speaker 4: ick Oh my. 37 00:02:03,520 --> 00:02:07,280 Speaker 1: Gosh, all right, Jesse GOURRICHI speaking of young I feel 38 00:02:07,320 --> 00:02:09,120 Speaker 1: like this is going to be a really relatable piece 39 00:02:09,120 --> 00:02:11,240 Speaker 1: of content because I know it didn't happen to just me. 40 00:02:11,760 --> 00:02:14,120 Speaker 1: When I turned eighteen, I got a credit card offer 41 00:02:14,160 --> 00:02:16,480 Speaker 1: as a birthday present in the mail from my at 42 00:02:16,480 --> 00:02:19,360 Speaker 1: that time bank, and to me at the time, it 43 00:02:19,400 --> 00:02:21,040 Speaker 1: was like a green flag. I think I had some 44 00:02:21,160 --> 00:02:23,360 Speaker 1: like color blindness glasses on and I must have not 45 00:02:23,400 --> 00:02:25,720 Speaker 1: seen the red but it definitely was real green to 46 00:02:25,760 --> 00:02:27,639 Speaker 1: me because I took them up on that. I was like, yeah, 47 00:02:27,680 --> 00:02:29,920 Speaker 1: of course I want a credit card. I am an adult. 48 00:02:30,240 --> 00:02:32,280 Speaker 1: Let me add that. I think I had a five 49 00:02:32,360 --> 00:02:35,200 Speaker 1: hundred dollar limit at the very start, because obviously that's 50 00:02:35,240 --> 00:02:37,480 Speaker 1: quite responsible of the bank to not give me too 51 00:02:37,520 --> 00:02:40,200 Speaker 1: higher of a limit. But after six months of having that, 52 00:02:40,280 --> 00:02:43,760 Speaker 1: I remember getting a second letter I could increase my minimum, 53 00:02:44,080 --> 00:02:45,919 Speaker 1: so I did that. I think it went up to 54 00:02:46,000 --> 00:02:48,480 Speaker 1: fifteen hundred, then two thousand dollars, and then I know, 55 00:02:49,080 --> 00:02:50,920 Speaker 1: I can't remember how old I was. I know I 56 00:02:51,040 --> 00:02:53,120 Speaker 1: ended up with a credit card balance of more than 57 00:02:53,160 --> 00:02:56,400 Speaker 1: five thousand dollars at some point because hot girl stuff. 58 00:02:56,440 --> 00:02:58,600 Speaker 1: You know, obviously I was really good at money. Did 59 00:02:58,600 --> 00:02:59,320 Speaker 1: you ever get that? 60 00:02:59,560 --> 00:03:02,480 Speaker 4: I don't think I did. But honestly, I can't remember 61 00:03:02,520 --> 00:03:03,880 Speaker 4: I got a credit card when I was in my 62 00:03:04,000 --> 00:03:07,400 Speaker 4: late teens. It was after I had turned eighteen. I 63 00:03:07,440 --> 00:03:10,280 Speaker 4: don't think it was supplied for it yourself. Yeah, you 64 00:03:10,440 --> 00:03:12,200 Speaker 4: give anything a come, I must just beend it because 65 00:03:12,240 --> 00:03:13,640 Speaker 4: I wasn't great with opening my mail. 66 00:03:13,800 --> 00:03:17,000 Speaker 1: Yeah, look neither. I don't know why I opened that one, 67 00:03:17,040 --> 00:03:19,400 Speaker 1: And to be honest, I can't even remember why I 68 00:03:19,480 --> 00:03:22,240 Speaker 1: remember this? It seemed like such a mundane piece of 69 00:03:22,280 --> 00:03:24,080 Speaker 1: mail at the time that now I'm like, why do 70 00:03:24,120 --> 00:03:26,239 Speaker 1: I remember that? And now I'm like, oh, it's because 71 00:03:26,280 --> 00:03:28,840 Speaker 1: subconsciously I should have known that was a red flag 72 00:03:29,040 --> 00:03:32,040 Speaker 1: and I ignored it. But just for many Australians, managing 73 00:03:32,080 --> 00:03:34,680 Speaker 1: credit and debt through credit cards is actually a really 74 00:03:34,720 --> 00:03:37,000 Speaker 1: common element of their day to day money habits, while 75 00:03:37,080 --> 00:03:39,440 Speaker 1: others a few bad mistakes have actually resulted in a 76 00:03:39,480 --> 00:03:43,560 Speaker 1: downward debt spiral. But just like everything, there are people 77 00:03:43,600 --> 00:03:45,560 Speaker 1: at all ends of the spectrum of how they use 78 00:03:45,640 --> 00:03:47,760 Speaker 1: credit cards, and we know this from our community. We 79 00:03:47,840 --> 00:03:50,640 Speaker 1: know that there are people who are actually wizards at it, 80 00:03:50,680 --> 00:03:52,560 Speaker 1: like how many people have slid into our dms, And 81 00:03:52,720 --> 00:03:55,520 Speaker 1: like Victoria, you shouldn't be crucifying credit cards as much 82 00:03:55,560 --> 00:03:58,360 Speaker 1: as you do. They are absolutely not the devil's plastic. 83 00:03:58,800 --> 00:04:01,160 Speaker 1: They are a very good tool. Look at how many 84 00:04:01,160 --> 00:04:02,960 Speaker 1: points I have I never pay for flights? 85 00:04:03,040 --> 00:04:05,080 Speaker 4: Cool And that's why on today show we are going 86 00:04:05,120 --> 00:04:07,640 Speaker 4: to be looking at the stats on who exactly uses them, 87 00:04:07,680 --> 00:04:10,320 Speaker 4: what for and how much they cost. Some good users 88 00:04:10,360 --> 00:04:12,640 Speaker 4: for credit cards if that is something that might work 89 00:04:12,680 --> 00:04:14,800 Speaker 4: for you, and what to do if you're in debt 90 00:04:14,920 --> 00:04:17,800 Speaker 4: with them. But before we get straight into the thick 91 00:04:17,839 --> 00:04:19,800 Speaker 4: of all the juicy deets, VD, I've got some fun 92 00:04:19,839 --> 00:04:20,520 Speaker 4: stats for you. 93 00:04:20,720 --> 00:04:24,039 Speaker 1: Come on stat scal Usually Georgia King is the stat scale, 94 00:04:24,040 --> 00:04:25,520 Speaker 1: but you're having a turn this week. 95 00:04:25,320 --> 00:04:27,120 Speaker 4: I'm going to give it a crack. So the average 96 00:04:27,160 --> 00:04:30,640 Speaker 4: balance per credit card is two nine hundred and thirty 97 00:04:30,680 --> 00:04:33,520 Speaker 4: eight dollars, just below three grand. Weariness is a lot 98 00:04:33,560 --> 00:04:37,200 Speaker 4: of money. The average balance costing interest per credit card 99 00:04:37,360 --> 00:04:40,120 Speaker 4: is one three hundred and eighty dollars. So I assume 100 00:04:40,160 --> 00:04:43,200 Speaker 4: that's taking into account interest free cards and things of 101 00:04:43,200 --> 00:04:46,360 Speaker 4: that nature, so that maybe not every dollar that's accounted 102 00:04:46,400 --> 00:04:48,919 Speaker 4: for on credit is a caring interest. It might be 103 00:04:48,960 --> 00:04:51,960 Speaker 4: a caring fees or something else in the background. The 104 00:04:52,000 --> 00:04:55,240 Speaker 4: average number of purchases per credit card per month is 105 00:04:55,400 --> 00:04:57,719 Speaker 4: twenty two, which seems like a lot if you. 106 00:04:57,839 --> 00:04:58,960 Speaker 1: That's a lot of purchase. 107 00:04:59,200 --> 00:05:02,000 Speaker 4: Wait, thirty thirty one days in an average month and 108 00:05:02,120 --> 00:05:04,279 Speaker 4: twenty two purchases, so you're putting something on your card 109 00:05:04,680 --> 00:05:07,520 Speaker 4: twenty two tar often there, that's a lot. Absolutely, The 110 00:05:07,560 --> 00:05:10,679 Speaker 4: average credit card purchase is one hundred and nine dollars 111 00:05:10,839 --> 00:05:13,960 Speaker 4: and seventy two percent of people reported that they could 112 00:05:14,000 --> 00:05:16,960 Speaker 4: manage their finances without a credit card, they were just 113 00:05:17,080 --> 00:05:20,040 Speaker 4: electing to use one, while the remaining twenty eight percent 114 00:05:20,240 --> 00:05:20,640 Speaker 4: could not. 115 00:05:22,080 --> 00:05:24,320 Speaker 1: Why am I so negative about this? I feel like 116 00:05:24,400 --> 00:05:26,880 Speaker 1: I'm so negative about this because I just see the 117 00:05:26,920 --> 00:05:30,559 Speaker 1: financial implications for our community too often to not feel 118 00:05:30,560 --> 00:05:32,600 Speaker 1: it about it. Like you're right, Jess, there are so 119 00:05:32,640 --> 00:05:35,200 Speaker 1: many people in our community who do do good things 120 00:05:35,200 --> 00:05:37,760 Speaker 1: with credit cards. However, I feel like when something is 121 00:05:37,760 --> 00:05:39,599 Speaker 1: a really big red flag for a lot of people, 122 00:05:39,800 --> 00:05:42,520 Speaker 1: it's better to just avoid it entirely. Is that a 123 00:05:42,520 --> 00:05:43,080 Speaker 1: bad thing? 124 00:05:43,360 --> 00:05:45,000 Speaker 4: I know what you mean, but I think and this 125 00:05:45,120 --> 00:05:47,000 Speaker 4: is where we see those conversations happening a lot is 126 00:05:47,040 --> 00:05:49,000 Speaker 4: people saying, well, what if you do use it responsibly? 127 00:05:49,040 --> 00:05:52,000 Speaker 4: And absolutely you can. I found it really interesting that 128 00:05:52,040 --> 00:05:54,200 Speaker 4: seventy two percent of people said that they could manage 129 00:05:54,240 --> 00:05:56,960 Speaker 4: without a credit card, but they elected to have one. 130 00:05:57,160 --> 00:05:58,880 Speaker 4: Do you have any idea of why they might be 131 00:05:58,920 --> 00:06:00,440 Speaker 4: looking to use them or Jess? 132 00:06:00,520 --> 00:06:03,200 Speaker 1: I was looking at an article from Finder about why 133 00:06:03,240 --> 00:06:05,719 Speaker 1: Australians actually take out credit cards and they had some 134 00:06:05,800 --> 00:06:08,600 Speaker 1: interesting stats. So the biggest one, which I don't think 135 00:06:08,640 --> 00:06:11,320 Speaker 1: will be a surprise to anybody, is forty one percent 136 00:06:11,360 --> 00:06:14,040 Speaker 1: of people said they took out a credit card for emergencies. 137 00:06:14,279 --> 00:06:16,840 Speaker 1: I feel like that's relatable content. I know I've lent 138 00:06:16,920 --> 00:06:20,159 Speaker 1: on one like that in the past. Thirty eight percent 139 00:06:20,240 --> 00:06:22,840 Speaker 1: though didn't see this coming, or you might have because 140 00:06:22,880 --> 00:06:25,240 Speaker 1: you're a flying queen, but thirty eight percent of people 141 00:06:25,320 --> 00:06:28,120 Speaker 1: got it for frequent fly points or the rewards associated 142 00:06:28,160 --> 00:06:30,280 Speaker 1: with it. I did not think that that would be it. 143 00:06:30,320 --> 00:06:32,919 Speaker 1: I genuinely thought that the second one would actually be 144 00:06:33,120 --> 00:06:36,560 Speaker 1: you know, budget and cash flow, which unsurprisingly doesn't actually 145 00:06:36,560 --> 00:06:40,279 Speaker 1: feature in this list of topics. The next is twenty 146 00:06:40,279 --> 00:06:42,400 Speaker 1: one percent of people got a credit card to make 147 00:06:42,440 --> 00:06:46,520 Speaker 1: a big purchase eighteen percent, which I really don't like 148 00:06:46,600 --> 00:06:49,880 Speaker 1: this one at all, Jess, because as we know, in Australia, 149 00:06:50,120 --> 00:06:53,480 Speaker 1: you don't need a credit card to create a credit score. 150 00:06:53,880 --> 00:06:56,560 Speaker 1: But eighteen percent of people getting credit cards in Australia 151 00:06:56,600 --> 00:06:58,760 Speaker 1: said that they were getting them to establish their credit. 152 00:06:58,839 --> 00:07:01,480 Speaker 4: Oh my goodness, they clearly haven't listened to our episode 153 00:07:01,560 --> 00:07:02,440 Speaker 4: or about credit scores. 154 00:07:02,440 --> 00:07:05,160 Speaker 1: And if you will, literally go back to our episode 155 00:07:05,200 --> 00:07:07,400 Speaker 1: on credit scores, because if you've gotten a credit card 156 00:07:07,480 --> 00:07:12,280 Speaker 1: to establish your credit, it's mistake nor I mean, we're 157 00:07:12,280 --> 00:07:14,000 Speaker 1: not allowed to tell people they did the wrong thing. 158 00:07:14,080 --> 00:07:16,120 Speaker 1: But I mean, I definitely don't think you did the 159 00:07:16,200 --> 00:07:19,160 Speaker 1: right thing in that circumstance, because in Australia, the best 160 00:07:19,160 --> 00:07:21,600 Speaker 1: way to establish a credit score is actually just pay 161 00:07:21,600 --> 00:07:24,200 Speaker 1: your bills on time and make sure you don't default 162 00:07:24,240 --> 00:07:26,600 Speaker 1: on any loans or any bills that are due. It's 163 00:07:26,640 --> 00:07:29,320 Speaker 1: actually not about having a credit card. That's a very 164 00:07:29,400 --> 00:07:32,640 Speaker 1: American way of thinking of things, because the American money 165 00:07:32,640 --> 00:07:36,600 Speaker 1: system works completely differently to ours. The next reason people 166 00:07:36,600 --> 00:07:39,000 Speaker 1: would have got a credit card in Australia is eleven 167 00:07:39,000 --> 00:07:41,320 Speaker 1: percent of people get them Jessica Ricci to do a 168 00:07:41,320 --> 00:07:44,560 Speaker 1: balance transfer or pay off debt, which is interesting because 169 00:07:44,560 --> 00:07:46,640 Speaker 1: they think this is a really valid reason to get 170 00:07:46,680 --> 00:07:49,160 Speaker 1: a new credit card because often a lot of times 171 00:07:49,200 --> 00:07:51,679 Speaker 1: they'll offer like, oh, for six months, it's zero percent 172 00:07:51,760 --> 00:07:55,000 Speaker 1: interest rate, and you go, that's really good. However, that 173 00:07:55,040 --> 00:07:56,960 Speaker 1: can actually get people in a little bit of a 174 00:07:57,000 --> 00:07:59,840 Speaker 1: sticky position because just say you have a credit card 175 00:08:00,080 --> 00:08:02,280 Speaker 1: nineteen percent, you're like, oh my gosh, this is getting, 176 00:08:02,480 --> 00:08:04,720 Speaker 1: you know, way too overwhelming. You know what, I'm going 177 00:08:04,800 --> 00:08:07,160 Speaker 1: to do a balance transferred to another credit card because 178 00:08:07,160 --> 00:08:10,120 Speaker 1: I'll get six months of interest repayments that sounds like 179 00:08:10,120 --> 00:08:13,040 Speaker 1: a money win, except if you haven't done your budget 180 00:08:13,080 --> 00:08:15,920 Speaker 1: or your cash flow after that six month period, you 181 00:08:15,960 --> 00:08:18,240 Speaker 1: might end up with an interest rate of twenty two percent, 182 00:08:18,280 --> 00:08:20,880 Speaker 1: and you actually end up further behind than you would 183 00:08:20,920 --> 00:08:23,880 Speaker 1: go forward if you haven't actually worked out how to 184 00:08:23,920 --> 00:08:26,640 Speaker 1: pay that debt off within that period of time. So 185 00:08:26,760 --> 00:08:29,200 Speaker 1: definitely have a look at that before making that decision. 186 00:08:29,680 --> 00:08:32,200 Speaker 1: And then eight percent of people said that they got 187 00:08:32,200 --> 00:08:34,840 Speaker 1: a credit card to help them manage a drop in income, 188 00:08:35,160 --> 00:08:38,520 Speaker 1: So that makes sense. But at the same time, why 189 00:08:38,559 --> 00:08:42,160 Speaker 1: are we leaning on credit if your income overall has decreased. 190 00:08:42,320 --> 00:08:46,600 Speaker 1: That's actually probably really establishing some negative money behaviors from 191 00:08:46,600 --> 00:08:49,960 Speaker 1: my perspective. All right, Jess, I know historically you've had 192 00:08:50,000 --> 00:08:52,160 Speaker 1: a credit card. Am I right in saying that you've 193 00:08:52,160 --> 00:08:53,360 Speaker 1: gotten rid of it completely? 194 00:08:53,520 --> 00:08:53,720 Speaker 2: Yeah? 195 00:08:53,760 --> 00:08:55,880 Speaker 4: I did it was actually I did it when I 196 00:08:55,920 --> 00:08:57,080 Speaker 4: was listening to the show. 197 00:08:57,240 --> 00:08:59,880 Speaker 1: Paid Off the Money Ogfan. 198 00:09:00,440 --> 00:09:03,440 Speaker 4: I know, throwback to Poor Jess like three years ago, 199 00:09:03,600 --> 00:09:05,920 Speaker 4: but I originally got it. And it's really interesting looking 200 00:09:05,920 --> 00:09:08,400 Speaker 4: at this list because I see a lot of my 201 00:09:08,840 --> 00:09:11,400 Speaker 4: thought patterns in it, and I would imagine that these 202 00:09:11,520 --> 00:09:15,360 Speaker 4: responses are what the initial catalyst for someone was to 203 00:09:15,360 --> 00:09:17,319 Speaker 4: get the card, because in my experience, the reason you 204 00:09:17,360 --> 00:09:18,680 Speaker 4: do get a card and the reason you keep a 205 00:09:18,720 --> 00:09:21,400 Speaker 4: card very different. Yeah, it can often be very different things. 206 00:09:21,440 --> 00:09:23,240 Speaker 4: And so my first card that I ever got was 207 00:09:23,280 --> 00:09:25,440 Speaker 4: an interest free card. It was when I moved out 208 00:09:25,440 --> 00:09:26,760 Speaker 4: of home for the first time, and it was a 209 00:09:26,760 --> 00:09:29,480 Speaker 4: little bit unexpected and I just didn't have the finances 210 00:09:29,520 --> 00:09:31,000 Speaker 4: to get everything. 211 00:09:30,640 --> 00:09:33,240 Speaker 1: In order that I needed to do. That makes sense, Yeah. 212 00:09:33,120 --> 00:09:34,640 Speaker 4: So it felt like a little bit of an emergency. 213 00:09:34,679 --> 00:09:36,120 Speaker 4: I was having a bit changed and I needed to 214 00:09:36,120 --> 00:09:38,040 Speaker 4: buy some furniture, and so I got like my bed 215 00:09:38,120 --> 00:09:39,720 Speaker 4: and my mattress and stuff, and I put it on 216 00:09:39,720 --> 00:09:42,320 Speaker 4: an interest free card, which worked really well for me. 217 00:09:42,480 --> 00:09:45,240 Speaker 4: But I wasn't educated enough because in hindsight, I was 218 00:09:45,280 --> 00:09:48,439 Speaker 4: paying a monthly fee which I think was about twelve bucks, 219 00:09:48,480 --> 00:09:48,959 Speaker 4: which is. 220 00:09:48,920 --> 00:09:51,719 Speaker 1: Not not much, but also it is a lot. It's 221 00:09:51,720 --> 00:09:52,600 Speaker 1: not gona your end all. 222 00:09:52,760 --> 00:09:55,520 Speaker 4: I had I think maybe two or so thousand dollars 223 00:09:55,559 --> 00:09:57,400 Speaker 4: on there with like the mattress and the few bits 224 00:09:57,400 --> 00:09:58,240 Speaker 4: of furniture that I had. 225 00:09:58,280 --> 00:10:00,920 Speaker 1: So like, did that change what ma interest? Some furniture 226 00:10:00,960 --> 00:10:02,880 Speaker 1: you picked because you felt like, oh, I've got more 227 00:10:02,920 --> 00:10:03,360 Speaker 1: to spend. 228 00:10:03,559 --> 00:10:05,280 Speaker 4: No, it didn't I knew what I wanted and it 229 00:10:05,320 --> 00:10:07,640 Speaker 4: was just a matter of I didn't have the cash there. 230 00:10:07,679 --> 00:10:09,600 Speaker 4: I was like, that's the best option, and in my head, 231 00:10:09,640 --> 00:10:11,760 Speaker 4: I was like, oh, interest free, amazing, That's way better 232 00:10:11,760 --> 00:10:14,600 Speaker 4: than paying interest. Didn't even think about the monthly or 233 00:10:14,600 --> 00:10:18,200 Speaker 4: annual fees as SID and I paid it off really slowly. 234 00:10:18,240 --> 00:10:20,520 Speaker 4: I was only paying the minimum because I was like, oh, 235 00:10:20,600 --> 00:10:23,240 Speaker 4: I'm not paying interest on it again, not thinking about 236 00:10:23,280 --> 00:10:25,440 Speaker 4: the monthly or annual fee. And then I got a 237 00:10:25,440 --> 00:10:29,200 Speaker 4: second credit card because I something went wrong with my 238 00:10:29,280 --> 00:10:31,480 Speaker 4: car and it was going to be like four thousand 239 00:10:31,559 --> 00:10:34,040 Speaker 4: dollars to fix, and again I didn't have the cash, 240 00:10:34,080 --> 00:10:36,000 Speaker 4: and I was just about to go overseas for a 241 00:10:36,040 --> 00:10:38,200 Speaker 4: trip that I'd already paid for. It was like three 242 00:10:38,280 --> 00:10:40,520 Speaker 4: days before I went away or something ridiculous. So I 243 00:10:40,559 --> 00:10:42,880 Speaker 4: was like, I can't pull the money out because of 244 00:10:42,920 --> 00:10:45,280 Speaker 4: course I'm respundable. And I was just like, well, I 245 00:10:45,280 --> 00:10:46,920 Speaker 4: don't know what to do. So I got a card 246 00:10:46,920 --> 00:10:49,320 Speaker 4: and I put that on there. But then I like 247 00:10:49,400 --> 00:10:51,600 Speaker 4: would pay it off or pay off a substantial amount, 248 00:10:52,000 --> 00:10:53,840 Speaker 4: and then I would just tap it because I'd be like, 249 00:10:54,120 --> 00:10:55,920 Speaker 4: I'm saving money and I don't want to see money 250 00:10:55,960 --> 00:10:56,720 Speaker 4: come out of my account. 251 00:10:56,920 --> 00:10:57,840 Speaker 1: Yeah, toxic. 252 00:10:58,440 --> 00:11:02,160 Speaker 4: I don't keep money in the account associated with my 253 00:11:02,200 --> 00:11:04,199 Speaker 4: bank card. We've spoken about this before because you've had 254 00:11:04,240 --> 00:11:06,160 Speaker 4: to pay all me out a few times, but I. 255 00:11:06,120 --> 00:11:08,439 Speaker 1: Don't keep feel like you need to find a better system. 256 00:11:09,400 --> 00:11:11,199 Speaker 4: But I don't keep money in there because I lose 257 00:11:11,240 --> 00:11:14,480 Speaker 4: things and I have historically lost my bank card, and 258 00:11:14,960 --> 00:11:17,080 Speaker 4: I'm afraid that if I keep money there, of course 259 00:11:17,120 --> 00:11:19,680 Speaker 4: you start tapping, have a great time. So I don't 260 00:11:19,720 --> 00:11:21,520 Speaker 4: keep money there. And so they've been times in the 261 00:11:21,559 --> 00:11:23,559 Speaker 4: past where I've been like, oh, I need to transfer 262 00:11:23,600 --> 00:11:25,400 Speaker 4: money over, but I have no internet reception. 263 00:11:25,559 --> 00:11:29,960 Speaker 1: Literally just got back from America, have it, so. 264 00:11:29,880 --> 00:11:31,120 Speaker 4: Like that would happen, I'd be like, oh, I'll just 265 00:11:31,120 --> 00:11:32,800 Speaker 4: pop it on the credit card, because the credit card's 266 00:11:32,800 --> 00:11:35,280 Speaker 4: always there. So like, yeah, the reason I got it 267 00:11:35,320 --> 00:11:37,280 Speaker 4: and the reason that I used it or maintained it 268 00:11:37,360 --> 00:11:39,480 Speaker 4: were two very different things. So I can see in 269 00:11:39,559 --> 00:11:42,840 Speaker 4: this list where people perhaps are taking things out for 270 00:11:42,840 --> 00:11:45,320 Speaker 4: the right reason. They want the rewards points, or they're 271 00:11:45,360 --> 00:11:48,000 Speaker 4: just making one off, big purchase. But even if that's 272 00:11:48,040 --> 00:11:50,079 Speaker 4: the reason you've got it, that's not necessarily the reason 273 00:11:50,080 --> 00:11:52,040 Speaker 4: that you kept it. And I think that's where the 274 00:11:52,080 --> 00:11:54,040 Speaker 4: element of danger kind of comes into it. 275 00:11:54,559 --> 00:11:56,960 Speaker 1: Can completely agree with that. We've spoken about it a 276 00:11:57,000 --> 00:12:00,720 Speaker 1: million times on the podcast before. Nobody gets credit card 277 00:12:00,720 --> 00:12:03,400 Speaker 1: to go into debt, right, like all of these reasons, 278 00:12:03,440 --> 00:12:05,600 Speaker 1: like for an emergency to make a big purchase, like 279 00:12:05,640 --> 00:12:07,760 Speaker 1: we do them with the best of intentions. Like you 280 00:12:07,800 --> 00:12:10,479 Speaker 1: sign up for a credit card, Jess, because in your circumstance, 281 00:12:10,480 --> 00:12:12,880 Speaker 1: you're like, I'm moving out of home really unexpected, didn't 282 00:12:12,920 --> 00:12:15,240 Speaker 1: have time to save. I need to go buy these things. 283 00:12:15,360 --> 00:12:17,480 Speaker 1: I'll just pay it off really quickly. Yeah, you wouldn't 284 00:12:17,520 --> 00:12:18,920 Speaker 1: have ever thought, you know what I'm going to do. 285 00:12:18,960 --> 00:12:20,960 Speaker 1: I'm going to drag these payments out and put myself 286 00:12:20,960 --> 00:12:24,480 Speaker 1: in debt and you know, sacrifice future use financial security 287 00:12:24,800 --> 00:12:28,120 Speaker 1: Like no one does that. However, if we aren't going 288 00:12:28,160 --> 00:12:31,160 Speaker 1: into it fully educated, those are the circumstances we can 289 00:12:31,200 --> 00:12:34,839 Speaker 1: find ourselves in way too easily, Jess. You said before 290 00:12:34,880 --> 00:12:38,000 Speaker 1: that thirteen point one million Australians have credit cards, which 291 00:12:38,040 --> 00:12:40,880 Speaker 1: is that's a big number from my perspective, especially because 292 00:12:40,920 --> 00:12:43,360 Speaker 1: of the reasons people are getting them right like that 293 00:12:43,480 --> 00:12:45,600 Speaker 1: means it's pretty common for people to want to lean 294 00:12:45,679 --> 00:12:48,640 Speaker 1: on a credit card for an emergency circumstance, which means 295 00:12:48,679 --> 00:12:51,280 Speaker 1: we need to, from my perspective, be doing a shitload 296 00:12:51,400 --> 00:12:55,520 Speaker 1: more around financial literacy education. That aside, a lot of 297 00:12:55,520 --> 00:12:58,160 Speaker 1: people have actually run into issues when applying for them 298 00:12:58,200 --> 00:13:01,160 Speaker 1: and maybe been declined. So let's talk through a couple 299 00:13:01,200 --> 00:13:03,960 Speaker 1: of those reasons as to why people might not get them. 300 00:13:04,320 --> 00:13:06,880 Speaker 1: And this is, honest to god, one of the most 301 00:13:06,880 --> 00:13:09,880 Speaker 1: frustrating things ever, because a lot of people in our 302 00:13:09,880 --> 00:13:13,880 Speaker 1: community are freelancers or artists, or work in areas where 303 00:13:13,880 --> 00:13:16,840 Speaker 1: they don't have a consistent income. Therefore, they might be 304 00:13:16,880 --> 00:13:18,800 Speaker 1: way more likely to try and rely on a credit 305 00:13:18,800 --> 00:13:22,000 Speaker 1: card to get from paycheck to paycheck. But the biggest 306 00:13:22,040 --> 00:13:25,480 Speaker 1: reason people are declined when applying for credit cards is 307 00:13:25,600 --> 00:13:29,160 Speaker 1: unsteady income at thirty six percent according to Finder. And 308 00:13:29,200 --> 00:13:32,320 Speaker 1: then it's followed by having too much debt, which from 309 00:13:32,320 --> 00:13:35,320 Speaker 1: my perspective it doesn't sound good, but I'm actually glad 310 00:13:35,360 --> 00:13:37,600 Speaker 1: that people who are applying for credit cards who already 311 00:13:37,640 --> 00:13:40,920 Speaker 1: have too much debt aren't getting further into debt. And 312 00:13:40,960 --> 00:13:43,679 Speaker 1: then the third reason why people are being declined when 313 00:13:43,720 --> 00:13:46,120 Speaker 1: they apply for credit cards at twenty one percent, Miss 314 00:13:46,200 --> 00:13:48,960 Speaker 1: jessic Ricci, is having a bad credit score. 315 00:13:49,400 --> 00:13:51,679 Speaker 4: Yeah, I think, like you said, ultimately, that's not the 316 00:13:51,720 --> 00:13:54,800 Speaker 4: worst thing in the world, because I guess you want 317 00:13:54,920 --> 00:13:57,480 Speaker 4: lenders to be lending responsibly. 318 00:13:57,640 --> 00:14:00,520 Speaker 1: That's why we went through an entire royal commit like 319 00:14:00,640 --> 00:14:04,480 Speaker 1: responsibility is so important. However, do you think that this 320 00:14:04,559 --> 00:14:05,880 Speaker 1: makes people mad? I think so. 321 00:14:06,040 --> 00:14:08,080 Speaker 4: But then I guess the thing to casitic heat would 322 00:14:08,080 --> 00:14:10,480 Speaker 4: also be I guess additional factors. For example, if I'm 323 00:14:10,480 --> 00:14:12,560 Speaker 4: a freelancer and I'm applying for a credit card with 324 00:14:12,559 --> 00:14:15,160 Speaker 4: a thirty thousand dollar limit help me run my business, 325 00:14:15,600 --> 00:14:17,600 Speaker 4: potentially the banks looking at me and going, oh, well, 326 00:14:17,640 --> 00:14:20,320 Speaker 4: you don't necessarily have the cety income to service that, 327 00:14:20,560 --> 00:14:22,600 Speaker 4: but we will give you one for ten thousand dollars. 328 00:14:22,960 --> 00:14:26,040 Speaker 4: So it makes me kind of happy personally to know 329 00:14:26,080 --> 00:14:29,080 Speaker 4: that on some level people are being rejected. I mean, 330 00:14:29,080 --> 00:14:31,840 Speaker 4: we don't know, you know, how many people who apply 331 00:14:31,920 --> 00:14:33,520 Speaker 4: are getting that, or how many people are being sent 332 00:14:33,560 --> 00:14:36,840 Speaker 4: those birthday letters like what you got, But it makes 333 00:14:36,840 --> 00:14:39,560 Speaker 4: me kind of glad to know that it's being looked at, 334 00:14:39,600 --> 00:14:42,440 Speaker 4: because you know, some other kinds of debt like buy now, 335 00:14:42,480 --> 00:14:44,520 Speaker 4: pay later, aren't regulated that heavily, and I think it's 336 00:14:44,520 --> 00:14:45,360 Speaker 4: important that they are. 337 00:14:45,720 --> 00:14:47,560 Speaker 1: Yeah, and do you know what. That makes me so 338 00:14:47,840 --> 00:14:51,160 Speaker 1: mad because people are seeing it so differently. They're looking 339 00:14:51,240 --> 00:14:53,640 Speaker 1: at buy now, pay later in credit cards as completely 340 00:14:53,680 --> 00:14:54,640 Speaker 1: separate products. 341 00:14:54,880 --> 00:14:56,600 Speaker 4: But Vie, do you know how long it takes people 342 00:14:56,680 --> 00:14:59,360 Speaker 4: to actually pay off that debt once they have it? 343 00:14:59,520 --> 00:15:03,520 Speaker 1: Okay, So I did some research and it really ticked 344 00:15:03,560 --> 00:15:06,200 Speaker 1: me off. Just creach, you tell me what because if 345 00:15:06,240 --> 00:15:09,960 Speaker 1: you look at the statistics from Finders credit Card Statistics, 346 00:15:09,960 --> 00:15:12,400 Speaker 1: they have an entire web page on this right, which 347 00:15:12,400 --> 00:15:14,320 Speaker 1: I find really interesting because I think it gives us 348 00:15:14,360 --> 00:15:17,280 Speaker 1: some really good insight, but it doesn't give the context 349 00:15:17,320 --> 00:15:19,920 Speaker 1: I would like it to give. So on that website, 350 00:15:19,920 --> 00:15:22,120 Speaker 1: it says that it'll take female six point nine months 351 00:15:22,160 --> 00:15:24,080 Speaker 1: to pay off a credit card debt and it takes 352 00:15:24,080 --> 00:15:28,320 Speaker 1: male six point two months, which I think is totally fine, 353 00:15:28,400 --> 00:15:30,840 Speaker 1: makes sense. There's not actually that much difference between the 354 00:15:30,920 --> 00:15:33,640 Speaker 1: average for a male and a female. It obviously skews 355 00:15:33,680 --> 00:15:36,040 Speaker 1: to male's being able to pay off a credit card 356 00:15:36,080 --> 00:15:38,640 Speaker 1: debt quicker, which we're not surprised about when there is 357 00:15:38,680 --> 00:15:40,800 Speaker 1: the gender pay gap in every other pay gap under 358 00:15:40,840 --> 00:15:44,520 Speaker 1: the sun. However, Jess, I feel like that makes it 359 00:15:44,560 --> 00:15:46,960 Speaker 1: seem a lot softer, like six. 360 00:15:46,960 --> 00:15:49,800 Speaker 4: Months a long time. That's not what my experience was either. 361 00:15:50,040 --> 00:15:52,600 Speaker 1: Yeah, yeah, no, it wasn't my experience either. I was 362 00:15:52,680 --> 00:15:55,600 Speaker 1: literally in credit card debt for years. So to take 363 00:15:55,640 --> 00:15:58,120 Speaker 1: it another step further and really contextualize it and go, 364 00:15:58,120 --> 00:15:59,800 Speaker 1: all right, well, how long does it take to pay 365 00:15:59,840 --> 00:16:02,640 Speaker 1: off credit card debt? I think that's six month average 366 00:16:02,680 --> 00:16:04,320 Speaker 1: is just when someone might have put a couple of 367 00:16:04,320 --> 00:16:05,920 Speaker 1: debts on there and they're like, at a couple of 368 00:16:05,960 --> 00:16:09,080 Speaker 1: one hundred dollars and it actually didn't massively impact their 369 00:16:09,160 --> 00:16:11,400 Speaker 1: cash flow, right, Like, let's say you had a really 370 00:16:11,400 --> 00:16:13,880 Speaker 1: well paying job and you got that credit card in 371 00:16:13,920 --> 00:16:16,120 Speaker 1: the same way you did historically Jess, just for like 372 00:16:16,160 --> 00:16:18,240 Speaker 1: the bed and a few pieces of furniture, and you 373 00:16:18,280 --> 00:16:20,080 Speaker 1: had a really well paid job. You just smash it 374 00:16:20,120 --> 00:16:22,840 Speaker 1: off six months, easy done, wam bam, Thank you, ma'am. 375 00:16:22,960 --> 00:16:24,640 Speaker 1: And there are going to be people in our community 376 00:16:24,640 --> 00:16:26,880 Speaker 1: who are like, well, that's how I use my credit card. 377 00:16:26,880 --> 00:16:29,840 Speaker 1: It's fine, But I've got an example for you. So 378 00:16:30,440 --> 00:16:32,960 Speaker 1: we know that the average credit card debt in Australia 379 00:16:33,040 --> 00:16:36,600 Speaker 1: is just over two thousand dollars. However, the amount that 380 00:16:36,720 --> 00:16:38,880 Speaker 1: I always struggled with because I had a limit of 381 00:16:38,920 --> 00:16:41,000 Speaker 1: six thousand dollars on my credit card when I was 382 00:16:41,080 --> 00:16:44,080 Speaker 1: younger and I earned like maybe fifty grand. That is 383 00:16:44,120 --> 00:16:46,600 Speaker 1: a lot of your income that's able to be you know, 384 00:16:46,760 --> 00:16:49,440 Speaker 1: lean out in credit. So let's go with an average 385 00:16:49,480 --> 00:16:52,280 Speaker 1: balance of about you know, five two hundred dollars. Let's 386 00:16:52,280 --> 00:16:55,320 Speaker 1: pretend that's how much debt you have on a credit card, Jess. 387 00:16:55,360 --> 00:16:58,280 Speaker 1: That then means that your monthly repayment is about fifty 388 00:16:58,320 --> 00:17:00,760 Speaker 1: two dollars per month, and you go, all right, new problems. 389 00:17:00,960 --> 00:17:03,120 Speaker 1: So each and every single month, you're going to get 390 00:17:03,160 --> 00:17:06,520 Speaker 1: an email or a letter. If you do still get letters, 391 00:17:06,560 --> 00:17:08,400 Speaker 1: please turn them off. It's tell it bad for the environment. 392 00:17:08,440 --> 00:17:10,440 Speaker 1: But you're going to get an email from your bank 393 00:17:10,520 --> 00:17:13,200 Speaker 1: or your credit facility to say, hey, Jess, your minimumory 394 00:17:13,200 --> 00:17:15,920 Speaker 1: payment is due. You're going to go log in, pay 395 00:17:15,920 --> 00:17:17,480 Speaker 1: your fifty two dollars and be like, oh my gosh, 396 00:17:17,560 --> 00:17:20,000 Speaker 1: thank god, that's over. Like I've paid my credit card 397 00:17:20,080 --> 00:17:23,040 Speaker 1: this month, I'm sitting pretty right. However, if you only 398 00:17:23,080 --> 00:17:25,560 Speaker 1: make that minimum of payment of fifty two dollars each 399 00:17:25,600 --> 00:17:28,600 Speaker 1: and every single month, yes, that's going to take you 400 00:17:28,680 --> 00:17:31,760 Speaker 1: twenty three years to pay off, and it will end 401 00:17:31,840 --> 00:17:35,280 Speaker 1: up costing you eleven, four hundred and thirty three dollars. 402 00:17:35,400 --> 00:17:37,639 Speaker 4: Oh my gosh, that's crazy. What interest rate is that? 403 00:17:37,840 --> 00:17:41,639 Speaker 1: So that's a nineteen percent interest rate, which is pretty standard. 404 00:17:41,640 --> 00:17:44,720 Speaker 1: Most credit cards sit anywhere between fourteen to about twenty 405 00:17:44,760 --> 00:17:48,399 Speaker 1: five percent, which is wild. However, if you upped that 406 00:17:48,480 --> 00:17:50,400 Speaker 1: and you said, all right, I've got five two hundred 407 00:17:50,520 --> 00:17:52,800 Speaker 1: is dollars on my credit card, I'm going to pay 408 00:17:52,800 --> 00:17:54,720 Speaker 1: one hundred and eighty two dollars each and every single 409 00:17:54,720 --> 00:17:57,960 Speaker 1: month instead of that fifty two bucks, which jess at 410 00:17:57,960 --> 00:18:00,560 Speaker 1: the time, I hated doing that. If you got like 411 00:18:00,680 --> 00:18:03,200 Speaker 1: such a waste of money when I put additional cash 412 00:18:03,240 --> 00:18:05,120 Speaker 1: onto my credit card, I'd be like, but I only 413 00:18:05,200 --> 00:18:07,080 Speaker 1: had to pay fifty two dollars, Like, I'm not that 414 00:18:07,240 --> 00:18:09,199 Speaker 1: much further out of debt. I could have used that 415 00:18:09,240 --> 00:18:10,960 Speaker 1: one hundred bucks or that you know, one hundred and 416 00:18:11,040 --> 00:18:14,080 Speaker 1: thirty bucks to go out for drinks or live my life. 417 00:18:14,440 --> 00:18:17,240 Speaker 1: But one hundred and eighty two dollars on a five thousand, 418 00:18:17,320 --> 00:18:19,520 Speaker 1: two hundred dollars debt will mean that you're out of 419 00:18:19,520 --> 00:18:22,439 Speaker 1: debt in three years as opposed to twenty three years, 420 00:18:22,720 --> 00:18:25,320 Speaker 1: and the total will only cost you six thousand, five 421 00:18:25,400 --> 00:18:28,080 Speaker 1: hundred and sixty four dollars as opposed to more than 422 00:18:28,119 --> 00:18:29,320 Speaker 1: eleven thousand dollars. 423 00:18:29,440 --> 00:18:30,720 Speaker 4: That is insane, that's. 424 00:18:30,680 --> 00:18:33,440 Speaker 1: Crazy, right, So if you pay that off within that 425 00:18:33,480 --> 00:18:35,680 Speaker 1: three years, you're saving more than four and a half 426 00:18:35,720 --> 00:18:39,000 Speaker 1: thousand dollars, Like, that's so much money that you could 427 00:18:39,000 --> 00:18:42,040 Speaker 1: have invested or saved or put towards an entire holiday. 428 00:18:42,080 --> 00:18:45,000 Speaker 1: Like four and a half grand goes a really long way. 429 00:18:45,320 --> 00:18:47,240 Speaker 1: So I think when we go back to that question 430 00:18:47,320 --> 00:18:49,040 Speaker 1: that you asked before, and I'm sorry, I have gone 431 00:18:49,080 --> 00:18:50,720 Speaker 1: on a little bit of a rant or a tangent 432 00:18:50,840 --> 00:18:53,200 Speaker 1: of how long it takes to pay off a credit card. 433 00:18:53,480 --> 00:18:55,720 Speaker 1: If we just look at the stats, they're not that scary. 434 00:18:56,160 --> 00:18:59,440 Speaker 1: But if we look at the reality of our community 435 00:18:59,560 --> 00:19:01,919 Speaker 1: and how I used to be and arguably how you 436 00:19:02,040 --> 00:19:04,520 Speaker 1: used to be. You just look at the minimum repayment, 437 00:19:04,560 --> 00:19:06,200 Speaker 1: do you, and you go, all right, well, i'll pay 438 00:19:06,200 --> 00:19:08,320 Speaker 1: that and I've got a life to live, or I'll 439 00:19:08,320 --> 00:19:10,399 Speaker 1: do this, and it makes the most sense for me. 440 00:19:10,880 --> 00:19:13,760 Speaker 1: So to say it only takes us sixi ish months, 441 00:19:13,920 --> 00:19:16,359 Speaker 1: I think is just a little bit too flippant for me, 442 00:19:16,840 --> 00:19:18,840 Speaker 1: because I go, well, that means that it doesn't sound 443 00:19:18,880 --> 00:19:21,840 Speaker 1: so scary. However, if that's your experience money we in, 444 00:19:22,280 --> 00:19:24,760 Speaker 1: six months of credit card debt is not that long. 445 00:19:25,040 --> 00:19:26,840 Speaker 1: And usually if you're in a little bit of a 446 00:19:26,880 --> 00:19:29,600 Speaker 1: financial pickle and you have relied on credit card debt, 447 00:19:29,720 --> 00:19:31,560 Speaker 1: getting out of it in six months is a great 448 00:19:31,600 --> 00:19:34,960 Speaker 1: position to be in. I think my main takeaway, or 449 00:19:35,000 --> 00:19:37,399 Speaker 1: the takeaway I want you guys to have here, is 450 00:19:37,440 --> 00:19:39,639 Speaker 1: that if you do use a credit card, we have 451 00:19:39,720 --> 00:19:42,080 Speaker 1: to be always aware. We have to be on top 452 00:19:42,119 --> 00:19:43,800 Speaker 1: of our payments, we have to be on top of 453 00:19:43,840 --> 00:19:46,360 Speaker 1: what we're putting on there, and not do the Victoria 454 00:19:46,400 --> 00:19:48,600 Speaker 1: Devine special of like, oh, I'll just tap it because 455 00:19:48,600 --> 00:19:50,840 Speaker 1: I don't want to think about that, or I'll just 456 00:19:50,880 --> 00:19:52,520 Speaker 1: pop it on my credit card because I know I've 457 00:19:52,560 --> 00:19:54,800 Speaker 1: got room on the card. I'll just do that. Does 458 00:19:54,800 --> 00:19:55,359 Speaker 1: that make sense? 459 00:19:55,480 --> 00:19:55,640 Speaker 2: Yeah? 460 00:19:55,640 --> 00:19:57,440 Speaker 4: Absolutely. And we know from those stats that we share 461 00:19:57,480 --> 00:19:59,199 Speaker 4: before that forty one percent of people who do get 462 00:19:59,240 --> 00:20:02,560 Speaker 4: a credit card do so for emergencies. Some recent statistics 463 00:20:02,640 --> 00:20:05,160 Speaker 4: from find art share that only half of OSSI's who 464 00:20:05,200 --> 00:20:07,600 Speaker 4: find themselves in out of control credit card debt would 465 00:20:07,640 --> 00:20:10,080 Speaker 4: be able to dig themselves out if they got into it. 466 00:20:10,080 --> 00:20:13,600 Speaker 1: It's actually so scary. I remember sitting down with someone 467 00:20:13,640 --> 00:20:15,479 Speaker 1: from our community, and I'm not going to get too 468 00:20:15,560 --> 00:20:17,840 Speaker 1: much into the semantics because it's their story and their 469 00:20:17,840 --> 00:20:21,000 Speaker 1: story alone to be shared. However, I sat down with 470 00:20:21,040 --> 00:20:23,199 Speaker 1: them and they were in more than one hundred and 471 00:20:23,240 --> 00:20:25,560 Speaker 1: thirty thousand dollars worth of credit card debt. I think 472 00:20:25,600 --> 00:20:28,200 Speaker 1: I've shared this story on the pod before. One hundred 473 00:20:28,200 --> 00:20:30,280 Speaker 1: and thirty thousand dollars worth of credit card debt duwel 474 00:20:30,320 --> 00:20:34,040 Speaker 1: income family, but they were living way beyond their means. 475 00:20:34,080 --> 00:20:35,560 Speaker 1: And when I sat her down and said, look, this 476 00:20:35,600 --> 00:20:37,560 Speaker 1: is your get out of debt plan, because obviously that's 477 00:20:37,560 --> 00:20:40,600 Speaker 1: something that I've always specialized in, they just didn't want 478 00:20:40,640 --> 00:20:43,159 Speaker 1: to reset their lifestyle. They were like no, Like that 479 00:20:43,200 --> 00:20:45,320 Speaker 1: means that I wouldn't be able to do abc DN, 480 00:20:45,640 --> 00:20:48,360 Speaker 1: And it just was so shocking to me that they 481 00:20:48,359 --> 00:20:51,679 Speaker 1: were choosing literally choosing to bury their heads in the 482 00:20:51,760 --> 00:20:54,800 Speaker 1: sand and continue to go further into debt because they 483 00:20:54,800 --> 00:20:58,159 Speaker 1: didn't want to compromise their lifestyle. Like, to me, that 484 00:20:58,400 --> 00:21:01,840 Speaker 1: was wild, and I always it's so strange. If I'm 485 00:21:01,920 --> 00:21:04,119 Speaker 1: up at four am, that's what I'm thinking about. I'm like, 486 00:21:04,160 --> 00:21:07,080 Speaker 1: I wonder what they're up to now, because there's no way. 487 00:21:07,600 --> 00:21:11,679 Speaker 1: They haven't not gone bankrupt because that was the next step. Like, 488 00:21:11,840 --> 00:21:14,160 Speaker 1: at the point in time that I saw them, they 489 00:21:14,160 --> 00:21:16,800 Speaker 1: had the ability to create a strategic plan to get 490 00:21:16,840 --> 00:21:19,720 Speaker 1: out of it. It would never have been easy, however, 491 00:21:19,920 --> 00:21:21,960 Speaker 1: because they've buried their heads in the sand, I just 492 00:21:22,119 --> 00:21:25,480 Speaker 1: know that the situation they're in now is arguably even worse, 493 00:21:25,520 --> 00:21:27,240 Speaker 1: and it honestly breaks my heart. 494 00:21:27,440 --> 00:21:29,400 Speaker 4: Yeah, And it seems like people really fall into two 495 00:21:29,440 --> 00:21:31,320 Speaker 4: camps when it comes to credit cards. There's people who 496 00:21:31,320 --> 00:21:33,560 Speaker 4: are using it efficiently and in a way to make sense, 497 00:21:33,560 --> 00:21:35,040 Speaker 4: and there are people who are using it in a 498 00:21:35,040 --> 00:21:37,440 Speaker 4: way that is a little bit more detrimental and maybe 499 00:21:37,480 --> 00:21:39,800 Speaker 4: not putting themselves in the best possible position. 500 00:21:39,600 --> 00:21:41,800 Speaker 1: Which is what I used to do and having you know, 501 00:21:41,920 --> 00:21:44,120 Speaker 1: you and I just recently went to America and we're 502 00:21:44,119 --> 00:21:47,119 Speaker 1: talking to our friends who are also money podcasters and 503 00:21:47,200 --> 00:21:49,080 Speaker 1: in that space, and they're like, oh, yeah, I used 504 00:21:49,080 --> 00:21:52,280 Speaker 1: my credit card points to like get an upgrade to business. 505 00:21:52,280 --> 00:21:53,600 Speaker 1: And you and I are sitting in the back of 506 00:21:53,600 --> 00:21:55,959 Speaker 1: the plane at economy and I'm like, maybe we should 507 00:21:56,080 --> 00:21:59,480 Speaker 1: revisit this, But I'm also so scared to get another 508 00:21:59,520 --> 00:22:01,480 Speaker 1: credit card because I'm like, I don't know if I 509 00:22:01,520 --> 00:22:04,520 Speaker 1: can be trusted even though I have a better education now. 510 00:22:04,840 --> 00:22:07,800 Speaker 1: So it's just such an interesting position to be in. 511 00:22:07,960 --> 00:22:09,919 Speaker 4: So when people find themselves in that hole where they 512 00:22:09,920 --> 00:22:11,440 Speaker 4: are in a truckload of debt, they need to dig 513 00:22:11,440 --> 00:22:13,600 Speaker 4: themselves out, I've got a little list here for you 514 00:22:13,720 --> 00:22:16,000 Speaker 4: of the different ways that they might approach that. So 515 00:22:16,119 --> 00:22:18,480 Speaker 4: fifty two percent of people said that they would utilize 516 00:22:18,520 --> 00:22:22,040 Speaker 4: their emergency savings, which arguably, emergency savings are there to 517 00:22:22,040 --> 00:22:23,800 Speaker 4: get you out of an emergency, so glad to see 518 00:22:23,800 --> 00:22:26,560 Speaker 4: that's up the top. Eighteen percent of people would ask 519 00:22:26,680 --> 00:22:29,560 Speaker 4: friends or family to help them out. Eighteen percent of 520 00:22:29,600 --> 00:22:33,000 Speaker 4: people would also call their bank provider or issuer for help, 521 00:22:33,000 --> 00:22:34,680 Speaker 4: which I think is a really great thing. That's something 522 00:22:34,720 --> 00:22:36,960 Speaker 4: we say on the podcast all the time is if 523 00:22:36,960 --> 00:22:39,080 Speaker 4: you do find yourself in a tough spot, definitely reach 524 00:22:39,119 --> 00:22:41,240 Speaker 4: out to somebody to see if they can help you. 525 00:22:41,480 --> 00:22:43,399 Speaker 4: It's a little bit of leeway on your repayments, or 526 00:22:43,440 --> 00:22:46,080 Speaker 4: a little bit of extra wiggle room on your due 527 00:22:46,119 --> 00:22:48,720 Speaker 4: dates and things like that. Five percent of people said 528 00:22:48,720 --> 00:22:50,960 Speaker 4: they would just miss the payment, which is really that 529 00:22:51,080 --> 00:22:53,040 Speaker 4: burying the head in the sands that you were talking 530 00:22:53,040 --> 00:22:55,440 Speaker 4: about before. And three percent of people said they would 531 00:22:55,440 --> 00:22:58,480 Speaker 4: take out a small personal loan to cover it. And 532 00:22:58,520 --> 00:23:00,760 Speaker 4: I feel like some of the things on that list 533 00:23:00,840 --> 00:23:03,600 Speaker 4: are really perhaps not the most ideal situation. 534 00:23:03,640 --> 00:23:06,040 Speaker 1: So it's just what other people are doing though, right, 535 00:23:06,119 --> 00:23:09,240 Speaker 1: It's not actually advice of like, oh hey, here are 536 00:23:09,240 --> 00:23:11,280 Speaker 1: some hot tips on how to get out of credit 537 00:23:11,320 --> 00:23:13,840 Speaker 1: card debt. It's just I guess some insight on what 538 00:23:13,920 --> 00:23:17,720 Speaker 1: people are doing in their own circumstances, because sometimes you 539 00:23:17,720 --> 00:23:19,480 Speaker 1: are backed into a corner and you're like, well, I 540 00:23:19,480 --> 00:23:21,159 Speaker 1: can't get out of this credit card debt. I'm going 541 00:23:21,240 --> 00:23:23,199 Speaker 1: to have to go down the route of finding a 542 00:23:23,240 --> 00:23:25,639 Speaker 1: personal loan to cover me for that period of time. 543 00:23:25,760 --> 00:23:28,280 Speaker 1: Like this definitely is an advice because I think that 544 00:23:28,320 --> 00:23:30,399 Speaker 1: some of those things can be really bad. But I 545 00:23:30,400 --> 00:23:32,760 Speaker 1: think the number one thing I would do is literally 546 00:23:32,800 --> 00:23:36,040 Speaker 1: call my band called Product Issue Are for some advice 547 00:23:36,080 --> 00:23:38,200 Speaker 1: and some help, or even reach out to a team 548 00:23:38,280 --> 00:23:41,080 Speaker 1: like our friends at Wiser Jess who can actually point 549 00:23:41,080 --> 00:23:43,640 Speaker 1: you in the right direction, or as we've always talked 550 00:23:43,640 --> 00:23:46,520 Speaker 1: about on the show, call the National Debt Helpline. Honestly, 551 00:23:46,640 --> 00:23:49,399 Speaker 1: they are there for any debt, big or small. You 552 00:23:49,440 --> 00:23:51,679 Speaker 1: don't have to be in the biggest financial pickle in 553 00:23:51,720 --> 00:23:54,920 Speaker 1: the entire world to lean on their services. They exist 554 00:23:55,000 --> 00:23:55,440 Speaker 1: to help. 555 00:23:55,560 --> 00:23:57,200 Speaker 4: So what are some good sets that people can take 556 00:23:57,240 --> 00:23:58,840 Speaker 4: if they do find themselves getting into debt. 557 00:23:59,000 --> 00:24:00,639 Speaker 1: So I think the first thing that you need to 558 00:24:00,640 --> 00:24:03,120 Speaker 1: be doing is really looking at your money story and 559 00:24:03,160 --> 00:24:06,760 Speaker 1: what your take on credit card debt actually is. I 560 00:24:06,760 --> 00:24:10,400 Speaker 1: think looking for the solution immediately doesn't address the underlying 561 00:24:10,480 --> 00:24:13,000 Speaker 1: problem of why we are leaning on credit card debt 562 00:24:13,040 --> 00:24:15,640 Speaker 1: in the first place. It could be a shopping addiction. 563 00:24:15,760 --> 00:24:17,960 Speaker 1: It could literally be a situation like yours, Jess, where 564 00:24:18,000 --> 00:24:21,360 Speaker 1: it's actually got nothing to do with your money abilities 565 00:24:21,560 --> 00:24:23,400 Speaker 1: and everything to do with, oh my gosh, I need 566 00:24:23,440 --> 00:24:25,639 Speaker 1: to move out and I don't actually have access to 567 00:24:25,720 --> 00:24:27,560 Speaker 1: instant cash to be able to put a bed in 568 00:24:27,600 --> 00:24:29,080 Speaker 1: the house, which at the end of the day is 569 00:24:29,119 --> 00:24:32,280 Speaker 1: a hygiene factor. We need to address this. So I 570 00:24:32,280 --> 00:24:35,560 Speaker 1: think having a talk to yourself about how you got 571 00:24:35,600 --> 00:24:39,560 Speaker 1: in this particular circumstance is, from my perspective, the most 572 00:24:39,560 --> 00:24:42,159 Speaker 1: important thing that you do, because if we address that, 573 00:24:42,480 --> 00:24:44,720 Speaker 1: we can make sure one we don't slip back into it, 574 00:24:45,000 --> 00:24:47,160 Speaker 1: but two we can create a plan to get out 575 00:24:47,200 --> 00:24:50,119 Speaker 1: of it that addresses that at the same time. So 576 00:24:50,280 --> 00:24:52,520 Speaker 1: from there, I would then look up a credit card 577 00:24:52,640 --> 00:24:55,520 Speaker 1: repayment calculator to work out a payment plan that actually 578 00:24:55,520 --> 00:24:58,920 Speaker 1: becomes affordable to you. We discuss the difference of making 579 00:24:58,920 --> 00:25:01,639 Speaker 1: a fifty two dollars minute repayment versus one hundred and 580 00:25:01,640 --> 00:25:04,159 Speaker 1: eighty two dollar minum room repayment, but you might go VI, 581 00:25:04,400 --> 00:25:06,960 Speaker 1: I just can't afford that, Like, what are the options 582 00:25:07,000 --> 00:25:09,720 Speaker 1: in between? I think it would be about really looking 583 00:25:09,760 --> 00:25:11,960 Speaker 1: at your budget and cash flow and what's a little 584 00:25:11,960 --> 00:25:14,720 Speaker 1: bit shiftable. We've spoken about it before. You can get 585 00:25:14,760 --> 00:25:16,960 Speaker 1: rid of some of your streaming services in the interim, 586 00:25:17,040 --> 00:25:19,200 Speaker 1: you can get rid of some things that are allowed 587 00:25:19,200 --> 00:25:21,760 Speaker 1: to come back once you're completely out of debt. But 588 00:25:21,800 --> 00:25:23,879 Speaker 1: what can we do in the short term that puts 589 00:25:23,880 --> 00:25:27,399 Speaker 1: you in a position to turbocharge your debt reduction. I 590 00:25:27,440 --> 00:25:31,520 Speaker 1: would then obviously really recommend spending within your means. Credit 591 00:25:31,560 --> 00:25:34,639 Speaker 1: cards aren't free money, so be really careful with your 592 00:25:34,640 --> 00:25:38,480 Speaker 1: spending habits and avoid purchasing things that we don't really need. Jess, 593 00:25:38,520 --> 00:25:40,640 Speaker 1: we say it all the time on the podcast and 594 00:25:40,680 --> 00:25:42,880 Speaker 1: in real life, and you posted about it on Instagram 595 00:25:42,920 --> 00:25:45,000 Speaker 1: the other day. What's the other thing that she's on 596 00:25:45,040 --> 00:25:46,680 Speaker 1: the money usually says. 597 00:25:46,560 --> 00:25:49,320 Speaker 4: Put twenty four hours between you and your purchases. 598 00:25:48,920 --> 00:25:51,360 Speaker 1: At a minimum, but Bingo, I think that that can 599 00:25:51,359 --> 00:25:53,800 Speaker 1: really put you in control. But I think it also 600 00:25:53,880 --> 00:25:55,440 Speaker 1: puts you in a position where you go, oh, do 601 00:25:55,520 --> 00:25:57,879 Speaker 1: I really need this or not? In the heat of 602 00:25:57,880 --> 00:26:00,520 Speaker 1: the moment, Guys, I'm really impulsive want to buy it. 603 00:26:00,560 --> 00:26:02,480 Speaker 1: But if I put twenty four hours between me and 604 00:26:02,520 --> 00:26:06,600 Speaker 1: my spending, especially if it's online spending, Jess, I look 605 00:26:06,640 --> 00:26:09,240 Speaker 1: at it and I go, oh, my gosh, I completely forgot. 606 00:26:09,280 --> 00:26:11,840 Speaker 1: I wasn't even intending on purchasing that. So that's kind 607 00:26:11,840 --> 00:26:13,480 Speaker 1: of helpful. But I think at the end of the day, 608 00:26:13,520 --> 00:26:15,840 Speaker 1: we need to create a really solid budget and cash 609 00:26:15,840 --> 00:26:18,680 Speaker 1: flow plan that makes sense for us and strip back 610 00:26:18,720 --> 00:26:21,480 Speaker 1: all of those things that are not hygiene factors in 611 00:26:21,520 --> 00:26:23,800 Speaker 1: your budget. So obviously we don't have a lot of 612 00:26:23,840 --> 00:26:25,680 Speaker 1: say on our rent and our bills and what we're 613 00:26:25,720 --> 00:26:28,879 Speaker 1: spending on food, But what are those discretionary costs that 614 00:26:28,920 --> 00:26:31,639 Speaker 1: we could potentially cut back on in the short term 615 00:26:31,800 --> 00:26:34,640 Speaker 1: to put ourselves long term in a better financial position. 616 00:26:34,720 --> 00:26:37,560 Speaker 4: Okay, I know it seems like we're bashing on credit cards, 617 00:26:37,600 --> 00:26:39,159 Speaker 4: but I promise you that's not what we're doing. He 618 00:26:39,200 --> 00:26:42,200 Speaker 4: today's episodes only a little bit, So come back after 619 00:26:42,240 --> 00:26:43,879 Speaker 4: the break because we're going to talk through what some 620 00:26:43,920 --> 00:26:51,040 Speaker 4: of the benefits might be. Don't go anywhere, Welcome back today. 621 00:26:51,080 --> 00:26:52,760 Speaker 4: We are talking all about the ins and outs of 622 00:26:52,800 --> 00:26:56,359 Speaker 4: credit cards FD. Let's talk through some benefits because I 623 00:26:56,359 --> 00:26:58,400 Speaker 4: know people think that we really do just think they're 624 00:26:58,520 --> 00:27:01,280 Speaker 4: the devil incarnate, which they're not. It can be used responsibly, 625 00:27:01,520 --> 00:27:02,000 Speaker 4: so can you. 626 00:27:01,960 --> 00:27:05,920 Speaker 1: Tell peoples plastic devul's plastic? No, there are a number 627 00:27:05,960 --> 00:27:08,960 Speaker 1: of benefits associated with credit cards that it would be 628 00:27:09,080 --> 00:27:11,919 Speaker 1: silly of us to completely dismiss because at the end 629 00:27:11,960 --> 00:27:15,040 Speaker 1: of the day, we've spoken about how detrimental they can be, 630 00:27:15,160 --> 00:27:17,080 Speaker 1: and I do think we need to really weigh up 631 00:27:17,119 --> 00:27:20,000 Speaker 1: the pros and cons. However, there is literally a long 632 00:27:20,040 --> 00:27:21,760 Speaker 1: list which I have written down, and Jess, you and 633 00:27:21,840 --> 00:27:23,639 Speaker 1: I are going to go through them with you now. 634 00:27:23,960 --> 00:27:26,520 Speaker 1: But there is a long list of benefits associated with 635 00:27:26,680 --> 00:27:30,560 Speaker 1: having a credit card, and when used constructively, sometimes people 636 00:27:30,600 --> 00:27:33,320 Speaker 1: actually make money. So it would be silly of us 637 00:27:33,359 --> 00:27:35,879 Speaker 1: to not address it. However, from my perspective, if you 638 00:27:35,960 --> 00:27:37,480 Speaker 1: are a little bit like me, and you are a 639 00:27:37,560 --> 00:27:42,200 Speaker 1: little bit impulsive, even though these benefits can look really sexy, Jess. 640 00:27:42,200 --> 00:27:44,800 Speaker 1: If you're anything like me and you are really impulsive, 641 00:27:45,000 --> 00:27:47,120 Speaker 1: it does not mean that a credit card is right 642 00:27:47,160 --> 00:27:49,879 Speaker 1: for you, no matter how good the benefit looks. Because 643 00:27:49,880 --> 00:27:51,679 Speaker 1: I know that even if we go all right, well, 644 00:27:51,680 --> 00:27:53,960 Speaker 1: there's cash back, or there's rewards points, or there's all 645 00:27:54,000 --> 00:27:56,920 Speaker 1: these other frequent flyer miles that we could add to 646 00:27:56,960 --> 00:28:00,800 Speaker 1: your account, I just know that as somebody who has 647 00:28:01,280 --> 00:28:04,000 Speaker 1: as we've spoken about before, I have ADHD. I love 648 00:28:04,000 --> 00:28:07,080 Speaker 1: a good gamification, love a good dopamine. Here I'll be 649 00:28:07,119 --> 00:28:10,680 Speaker 1: like rewards points, frequent flyer miles, how many can I get? 650 00:28:10,800 --> 00:28:12,760 Speaker 1: And Jess, you have seen me do it with my 651 00:28:12,880 --> 00:28:15,760 Speaker 1: frequent flyer miles without a credit card, so I don't 652 00:28:15,760 --> 00:28:17,520 Speaker 1: know how it would go with a credit card. Let's 653 00:28:17,520 --> 00:28:18,639 Speaker 1: be brutally honest. 654 00:28:18,840 --> 00:28:21,679 Speaker 4: Yeah, absolutely so big that caveat on the front that 655 00:28:21,840 --> 00:28:23,840 Speaker 4: just because there is something shiny attached to the credit 656 00:28:23,840 --> 00:28:26,080 Speaker 4: card doesn't necessarily mean it's a good choice. But with 657 00:28:26,160 --> 00:28:28,600 Speaker 4: that being said, V run me through your. 658 00:28:28,480 --> 00:28:30,200 Speaker 1: Lists, all right. The first thing on the list, Miss 659 00:28:30,320 --> 00:28:34,000 Speaker 1: Jesscarci is one time bonuses. So often credit cards offer 660 00:28:34,040 --> 00:28:36,840 Speaker 1: cash bonuses in exchange for spending a certain amount in 661 00:28:36,880 --> 00:28:39,840 Speaker 1: the first several months of the account being open, So 662 00:28:40,040 --> 00:28:43,760 Speaker 1: other cards often enticed applicants with bonus reward points or 663 00:28:43,800 --> 00:28:46,280 Speaker 1: miles that could be redeemed for travel or gift cards, 664 00:28:46,360 --> 00:28:48,840 Speaker 1: or merchandise or a whole heap of other things. Jess 665 00:28:49,000 --> 00:28:51,000 Speaker 1: we've all seen it. I feel like that's a pretty 666 00:28:51,000 --> 00:28:54,560 Speaker 1: good no brainer one. The next is cash back, So 667 00:28:55,160 --> 00:28:56,920 Speaker 1: you guys know, we love shot back. You don't even 668 00:28:56,960 --> 00:28:58,800 Speaker 1: need a credit card to use shot backs, so maybe 669 00:28:58,800 --> 00:29:02,480 Speaker 1: that's a very good alternative if cash back is of 670 00:29:02,600 --> 00:29:05,360 Speaker 1: interest to you. But the cash back credit card is 671 00:29:05,400 --> 00:29:08,880 Speaker 1: another really popular incentive. Some cards now offer two or 672 00:29:08,920 --> 00:29:11,560 Speaker 1: three percent, or even as much as six percent back 673 00:29:11,600 --> 00:29:15,320 Speaker 1: on selected purchases. Then number three on my least, Jessica, 674 00:29:15,560 --> 00:29:19,160 Speaker 1: is rewards points. So many rewards credit cards provide bonus 675 00:29:19,200 --> 00:29:22,280 Speaker 1: points for certain categories of spending, like restaurants or groceries, 676 00:29:22,360 --> 00:29:25,680 Speaker 1: or spending on fuel. When certain earning thresholds are reached, 677 00:29:25,760 --> 00:29:28,080 Speaker 1: points can be redeemed for travel or gift cards from 678 00:29:28,120 --> 00:29:31,280 Speaker 1: retailers or restaurants, or for merchandise items through a credit 679 00:29:31,320 --> 00:29:35,040 Speaker 1: card company's online rewards portal. So think back, jess you 680 00:29:35,120 --> 00:29:37,960 Speaker 1: love a good Flybys point. Oh my God, yes, no 681 00:29:38,080 --> 00:29:41,280 Speaker 1: credit card necessary with that one, but you literally banked 682 00:29:41,320 --> 00:29:43,400 Speaker 1: up all of your fly buys points and what you get. 683 00:29:43,560 --> 00:29:44,480 Speaker 4: I got a kitchen age. 684 00:29:44,520 --> 00:29:47,560 Speaker 1: You've got a whole damn kitchen egg for free. Literally 685 00:29:47,760 --> 00:29:50,520 Speaker 1: it is wild. And I think the trick to rewards 686 00:29:50,520 --> 00:29:53,200 Speaker 1: points is to actually work out what best suits your 687 00:29:53,240 --> 00:29:57,360 Speaker 1: spending patterns, as opposed to just looking at the shiniest option. 688 00:29:57,800 --> 00:30:00,560 Speaker 1: Because for you, Jess, you just tap your fly every 689 00:30:00,560 --> 00:30:02,440 Speaker 1: time you're at the grocery store and you're getting these 690 00:30:02,480 --> 00:30:05,160 Speaker 1: bonuses and it doesn't even include a credit card. But 691 00:30:05,360 --> 00:30:07,680 Speaker 1: if there's something that is going to really work for you, 692 00:30:07,720 --> 00:30:09,200 Speaker 1: maybe that's when you lean into it. 693 00:30:09,400 --> 00:30:10,880 Speaker 4: Before we get into the rest of the list. I 694 00:30:10,880 --> 00:30:14,800 Speaker 4: would personally group those first three into like a little 695 00:30:14,840 --> 00:30:18,440 Speaker 4: subset because I think interestingly, when you look at it critically, 696 00:30:18,840 --> 00:30:22,719 Speaker 4: they're all aimed at establishing spending habits, Like, yeah, all 697 00:30:22,760 --> 00:30:26,080 Speaker 4: of these things aim at encouraging you to use your 698 00:30:26,080 --> 00:30:28,520 Speaker 4: credit card regularly so you get, you know, your one 699 00:30:28,560 --> 00:30:31,320 Speaker 4: time bonus if you spend five thousand dollars in the 700 00:30:31,320 --> 00:30:33,800 Speaker 4: first three months, or you get rewards points if you 701 00:30:33,840 --> 00:30:35,720 Speaker 4: spend on your fuel or your groceries. All the things 702 00:30:35,720 --> 00:30:38,240 Speaker 4: that you buy all the time. And I think that's 703 00:30:38,360 --> 00:30:41,800 Speaker 4: really a little bit sneaky by the credit card companies because. 704 00:30:41,600 --> 00:30:44,360 Speaker 1: They've been trying because it keeps you at clients, yeah, and. 705 00:30:44,360 --> 00:30:46,040 Speaker 4: They're trying to put you in a position where you 706 00:30:46,120 --> 00:30:49,040 Speaker 4: are relying on these purchases regularly and they're using those 707 00:30:49,080 --> 00:30:51,560 Speaker 4: points to entice you to do so. So like they're absolutely, 708 00:30:51,600 --> 00:30:53,920 Speaker 4: as you said, great if it works for you in 709 00:30:53,920 --> 00:30:56,360 Speaker 4: your lifestyle. But I would also encourage people to be 710 00:30:56,480 --> 00:30:59,760 Speaker 4: conscious of what new habits you're forming, because that's when 711 00:30:59,800 --> 00:31:02,160 Speaker 4: you maybe are going to slip into something that's a 712 00:31:02,200 --> 00:31:03,920 Speaker 4: little bit less sustainable for you. 713 00:31:04,200 --> 00:31:06,160 Speaker 1: Yeah, And I think that it's a really good point 714 00:31:06,200 --> 00:31:09,040 Speaker 1: to bring up. It's kind of like if something is free, 715 00:31:09,520 --> 00:31:11,880 Speaker 1: there's a reason for it. Like there's no such thing 716 00:31:11,960 --> 00:31:14,520 Speaker 1: as a free lunch. It's not just an American thing. 717 00:31:14,720 --> 00:31:16,840 Speaker 1: Like I was talking to Glenn James a couple of 718 00:31:16,920 --> 00:31:20,239 Speaker 1: days ago actually about this, and it's if something is 719 00:31:20,320 --> 00:31:23,480 Speaker 1: free and you can't work out why you're the products. 720 00:31:23,880 --> 00:31:26,320 Speaker 1: And I think that that's really interesting to bring up 721 00:31:26,400 --> 00:31:28,440 Speaker 1: because so many times people are like, oh my god, 722 00:31:28,480 --> 00:31:31,080 Speaker 1: it's free, I just added my email, Like cool, they're 723 00:31:31,120 --> 00:31:33,840 Speaker 1: probably selling your email address and all of your information. 724 00:31:34,240 --> 00:31:37,640 Speaker 1: So just be really careful about what that means. Because 725 00:31:37,840 --> 00:31:40,840 Speaker 1: when something is free, you're the product. But if it's 726 00:31:40,960 --> 00:31:44,040 Speaker 1: free and it's a service, it's usually to keep you 727 00:31:44,160 --> 00:31:46,800 Speaker 1: engaged and keep you spending beyond the means that you 728 00:31:46,920 --> 00:31:49,120 Speaker 1: usually would have set up for yourself. Right, Like, this 729 00:31:49,320 --> 00:31:51,680 Speaker 1: is so important that as much as they're going, oh, 730 00:31:51,720 --> 00:31:54,280 Speaker 1: cash back, that's so sexy, Oh my gosh, one time 731 00:31:54,320 --> 00:31:57,880 Speaker 1: bonus is fantastic, rewards points, it's actually so that you 732 00:31:57,960 --> 00:32:01,719 Speaker 1: stay in their ecosystem and spend more. Because Jesse, if 733 00:32:01,760 --> 00:32:04,560 Speaker 1: I sat you down earlier, you gave me a statistic 734 00:32:04,600 --> 00:32:06,800 Speaker 1: that said that the average credit card purchase was one 735 00:32:06,840 --> 00:32:10,360 Speaker 1: hundred and nine dollars. I would argue that my average 736 00:32:10,400 --> 00:32:12,800 Speaker 1: purchase is not one hundred and nine dollars, Like, most 737 00:32:12,840 --> 00:32:16,200 Speaker 1: of my purchases are far below that. I'd be interested 738 00:32:16,200 --> 00:32:20,960 Speaker 1: to look into. I guess the psychology around what type 739 00:32:21,000 --> 00:32:23,960 Speaker 1: of spending patterns we are establishing on credit cards, because 740 00:32:23,960 --> 00:32:28,360 Speaker 1: that's significantly higher than I'd say, yours or my average spend. 741 00:32:28,560 --> 00:32:30,560 Speaker 4: Yeah, one hundred percent. Tell me what else have you 742 00:32:30,560 --> 00:32:31,520 Speaker 4: got on your list? All right? 743 00:32:31,720 --> 00:32:35,320 Speaker 1: So, Glenn James, special it is the frequent flyer miles, 744 00:32:35,480 --> 00:32:38,760 Speaker 1: So many frequent flyer cards are made way more valuable 745 00:32:38,800 --> 00:32:42,360 Speaker 1: by their mileage based introductory bonuses. So these are often 746 00:32:42,440 --> 00:32:44,720 Speaker 1: enough to put you fifty or even one hundred percent 747 00:32:44,760 --> 00:32:47,280 Speaker 1: of the way towards a bonus flight after meeting a 748 00:32:47,360 --> 00:32:50,800 Speaker 1: card's initial spending requirements. So if you're going on a 749 00:32:50,800 --> 00:32:53,160 Speaker 1: holiday or you're traveling a lot, that could be something 750 00:32:53,200 --> 00:32:57,160 Speaker 1: that really plays into it. Something that our community really 751 00:32:57,320 --> 00:33:00,360 Speaker 1: likes is the safety. So number five I've written down 752 00:33:00,520 --> 00:33:03,320 Speaker 1: is safety, and that is because when you pay with 753 00:33:03,400 --> 00:33:06,440 Speaker 1: a credit card, it is often easier to avoid losses 754 00:33:06,440 --> 00:33:09,080 Speaker 1: from fraud. So when your debit card is used by 755 00:33:09,120 --> 00:33:11,680 Speaker 1: a thief, the money is often just missing from your 756 00:33:11,680 --> 00:33:15,160 Speaker 1: account immediately. However, when you use a credit card, it 757 00:33:15,280 --> 00:33:18,520 Speaker 1: works a little bit differently. The money is not missing immediately, 758 00:33:18,640 --> 00:33:22,080 Speaker 1: and sometimes a transaction can be completely canceled or it 759 00:33:22,120 --> 00:33:24,320 Speaker 1: can be skipped, and it's far more likely to be 760 00:33:24,480 --> 00:33:27,520 Speaker 1: acknowledged by a credit card system because they are looking 761 00:33:27,560 --> 00:33:29,840 Speaker 1: for it on a more regular basis than your bank 762 00:33:29,960 --> 00:33:32,160 Speaker 1: is with your debit card. Right, so if you know 763 00:33:32,280 --> 00:33:34,320 Speaker 1: another one hundred bucks goes out on your debit card, 764 00:33:34,320 --> 00:33:36,480 Speaker 1: they're going to be like, oh, Jess is probably just spending, 765 00:33:36,760 --> 00:33:39,680 Speaker 1: whereas there's a lot more data with a credit card 766 00:33:39,720 --> 00:33:42,280 Speaker 1: transaction that they're able to trace and go, oh, I 767 00:33:42,280 --> 00:33:44,640 Speaker 1: don't know if this was Jess, because this is a 768 00:33:44,720 --> 00:33:47,560 Speaker 1: very different system. I've also heard that they're more flexible 769 00:33:47,560 --> 00:33:50,280 Speaker 1: with chargebacks as well. It's chargeback the right works. I 770 00:33:50,320 --> 00:33:51,960 Speaker 1: think it's like cash back or charge back. 771 00:33:52,280 --> 00:33:54,360 Speaker 4: It's like if someone steals your card and they, you know, 772 00:33:54,560 --> 00:33:57,080 Speaker 4: spend five hundred dollars on the Iconic and you go 773 00:33:57,160 --> 00:33:59,600 Speaker 4: to them, oh, like, my card's been stolen. I've heard 774 00:33:59,640 --> 00:34:02,240 Speaker 4: and this is my personal experience, but credit cards are 775 00:34:02,320 --> 00:34:04,560 Speaker 4: much more quick to go, oh my gosh, we're so 776 00:34:04,600 --> 00:34:07,400 Speaker 4: sorry and charge it back. Somebody comes back to your card, 777 00:34:07,400 --> 00:34:09,080 Speaker 4: whereas banks it can be a little bit more of 778 00:34:09,080 --> 00:34:10,240 Speaker 4: a strenuous process. 779 00:34:10,360 --> 00:34:12,239 Speaker 1: Yeah, and I'm sure that you guys have heard our 780 00:34:12,320 --> 00:34:15,600 Speaker 1: money diarists before. We've had people who this has happened too, 781 00:34:15,719 --> 00:34:18,600 Speaker 1: and I think it's really valid. But I also think 782 00:34:18,600 --> 00:34:22,480 Speaker 1: it plays into your larger financial plan, right, and how 783 00:34:22,520 --> 00:34:25,960 Speaker 1: your banking system works, because going back to Jess, Jess, 784 00:34:26,000 --> 00:34:28,600 Speaker 1: your banking system is such that you don't actually have 785 00:34:28,640 --> 00:34:31,400 Speaker 1: a debit card that gives you immediate access to your 786 00:34:31,480 --> 00:34:34,359 Speaker 1: lump sum of cash. So if some scammer got hold 787 00:34:34,360 --> 00:34:37,239 Speaker 1: of Jess's card, good luck, you can probably buy a Starbucks. 788 00:34:37,280 --> 00:34:40,840 Speaker 1: And that's basically it. If you're lucky, you're lucky. So 789 00:34:41,160 --> 00:34:44,239 Speaker 1: number six on my list Jess is insurance. And this 790 00:34:44,280 --> 00:34:46,520 Speaker 1: is another one that our community goes wild for and 791 00:34:46,520 --> 00:34:48,959 Speaker 1: they're like, oh my gosh. Insurance is such a big 792 00:34:48,960 --> 00:34:51,879 Speaker 1: thing with credit cards. It's a money when I would 793 00:34:52,040 --> 00:34:54,160 Speaker 1: argue that you need to read the terms and conditions 794 00:34:54,160 --> 00:34:57,520 Speaker 1: of the policy because most of the time, me being cynical, 795 00:34:57,600 --> 00:35:00,720 Speaker 1: me the insurance on a credit card does not stack 796 00:35:00,840 --> 00:35:04,279 Speaker 1: up when compared to a different type of insurance policy. So, 797 00:35:04,360 --> 00:35:06,320 Speaker 1: for example, Jess, you and I had to buy travel 798 00:35:06,320 --> 00:35:11,000 Speaker 1: insurance recently, and we bought standalone policies. They are great policies, 799 00:35:11,120 --> 00:35:13,439 Speaker 1: but I know that a policy with a credit card 800 00:35:13,440 --> 00:35:16,799 Speaker 1: that came for free would not have been as comprehensive 801 00:35:16,920 --> 00:35:19,839 Speaker 1: or had as high a level of cover. But most 802 00:35:19,840 --> 00:35:22,640 Speaker 1: credit cards automatically come with a number of different consumer 803 00:35:22,680 --> 00:35:25,640 Speaker 1: protections that people just don't even realize they have. So 804 00:35:25,680 --> 00:35:28,040 Speaker 1: it could be rental car insurance, or it could be 805 00:35:28,080 --> 00:35:32,040 Speaker 1: travel insurance or product warranties. That might exceed the manufacturer's warranty. 806 00:35:32,200 --> 00:35:35,040 Speaker 1: And the important thing to do here is actually one 807 00:35:35,160 --> 00:35:38,160 Speaker 1: understand what they are, but to make sure that you're 808 00:35:38,200 --> 00:35:40,640 Speaker 1: not just relying on it because you heard, oh my gosh, 809 00:35:40,640 --> 00:35:43,520 Speaker 1: well I have you know rental car insurance, like, understand 810 00:35:43,520 --> 00:35:46,840 Speaker 1: what that actually means, because sometimes putting yourself in the 811 00:35:46,880 --> 00:35:50,320 Speaker 1: best position actually looks like going and getting a standalone policy. 812 00:35:50,640 --> 00:35:53,600 Speaker 1: The other caveat there, Jess, is it's not just hey, 813 00:35:53,680 --> 00:35:56,799 Speaker 1: I got rental car insurance. You actually have to use 814 00:35:56,880 --> 00:36:00,000 Speaker 1: that card to book that rental card. Otherwise you're not cut, 815 00:36:00,440 --> 00:36:03,399 Speaker 1: which makes sense. Another selling point of a credit card. 816 00:36:03,520 --> 00:36:07,000 Speaker 1: Number seven I've written down is universal acceptance. So when 817 00:36:07,040 --> 00:36:08,480 Speaker 1: you want to rent a car or stay in a 818 00:36:08,520 --> 00:36:11,960 Speaker 1: hotel room, you'll almost certainly have an easier time if 819 00:36:12,000 --> 00:36:14,279 Speaker 1: you have a credit card. In saying that, not to 820 00:36:14,280 --> 00:36:16,479 Speaker 1: bring up the fact that we've been overseas so many 821 00:36:16,480 --> 00:36:20,120 Speaker 1: times this year. Again, every hotel that I have stayed in, 822 00:36:20,200 --> 00:36:22,240 Speaker 1: I have put down a debit card, not a credit 823 00:36:22,239 --> 00:36:26,000 Speaker 1: card on our room and had absolutely no issue. So 824 00:36:26,080 --> 00:36:28,680 Speaker 1: I think that this is more of a historical issue. 825 00:36:28,920 --> 00:36:31,000 Speaker 1: In saying that a lot of people feel a lot 826 00:36:31,000 --> 00:36:34,600 Speaker 1: more comfortable having it there, and often rental car companies 827 00:36:34,600 --> 00:36:37,759 Speaker 1: and hotels actually want customers to pay with credit cards 828 00:36:37,840 --> 00:36:40,040 Speaker 1: because it makes it easier to charge customers for any 829 00:36:40,080 --> 00:36:42,080 Speaker 1: damage that they cause to like a room or a car, 830 00:36:42,160 --> 00:36:44,680 Speaker 1: and it just actually makes the job easier for the 831 00:36:44,680 --> 00:36:47,240 Speaker 1: hotel because it's easier to put cash onto a credit 832 00:36:47,239 --> 00:36:50,319 Speaker 1: card than it is to authorize the transaction to a 833 00:36:50,320 --> 00:36:53,320 Speaker 1: debit card. It just makes sense. So, Jess, that wraps 834 00:36:53,400 --> 00:36:56,400 Speaker 1: up my hot list of reasons you could and should. 835 00:36:56,600 --> 00:36:59,280 Speaker 1: I can't believe I'm saying this, should get a credit card? 836 00:37:00,080 --> 00:37:03,000 Speaker 4: Yeah, probably not should, but for sure I feel like 837 00:37:03,040 --> 00:37:05,320 Speaker 4: the TLDR of that is, if you are getting a 838 00:37:05,320 --> 00:37:07,319 Speaker 4: credit card for the first time, you know, there's kind 839 00:37:07,320 --> 00:37:09,520 Speaker 4: of the two camps. There's credit cards on the market 840 00:37:09,600 --> 00:37:12,479 Speaker 4: with you know, low interest rates or no interest rates 841 00:37:12,480 --> 00:37:14,719 Speaker 4: potentially as well, but make sure if you are looking 842 00:37:14,760 --> 00:37:16,960 Speaker 4: at those, you look into the monthly and annual fees 843 00:37:17,000 --> 00:37:19,640 Speaker 4: that might be associated and then obviously credit cards that 844 00:37:19,680 --> 00:37:23,320 Speaker 4: come with rewards. Both potentially might be a good option 845 00:37:23,400 --> 00:37:27,000 Speaker 4: for you, but they're definitely aimed at servicing very different people, 846 00:37:27,239 --> 00:37:30,520 Speaker 4: and I guess it's probably worth people considering if they 847 00:37:30,600 --> 00:37:33,359 Speaker 4: are wanting to get a credit card, maybe starting with 848 00:37:33,400 --> 00:37:35,800 Speaker 4: something a little bit more basic with a really low 849 00:37:35,840 --> 00:37:39,759 Speaker 4: interest rate, and seeing if you use it successfully, because 850 00:37:39,800 --> 00:37:41,960 Speaker 4: if you've never had one before, you don't know what 851 00:37:42,000 --> 00:37:44,319 Speaker 4: your interactions or habits are going to be like once 852 00:37:44,360 --> 00:37:45,279 Speaker 4: you've got that card. 853 00:37:45,440 --> 00:37:47,960 Speaker 1: I totally agree. I'm still so negative on it, and 854 00:37:48,000 --> 00:37:50,120 Speaker 1: would argue that if you don't need one, it wouldn't 855 00:37:50,160 --> 00:37:53,120 Speaker 1: be getting one. I can see the safety aspect of it, like, 856 00:37:53,480 --> 00:37:55,520 Speaker 1: you know, having traveled and been able to put things 857 00:37:55,560 --> 00:37:58,640 Speaker 1: on debit card. Every time I approach that reception desk, 858 00:37:58,719 --> 00:38:01,080 Speaker 1: I'm not entirely sure if they going to accept that, 859 00:38:01,280 --> 00:38:03,520 Speaker 1: So I can understand wanting to have it because you 860 00:38:03,600 --> 00:38:07,000 Speaker 1: feel more safe traveling with it. Right However, I would 861 00:38:07,200 --> 00:38:10,440 Speaker 1: still would, if possible, steer clear of things like that, because, 862 00:38:10,480 --> 00:38:12,560 Speaker 1: as we mentioned through that entire list, there are so 863 00:38:12,640 --> 00:38:16,440 Speaker 1: many different cash rewards programs or fly bys points that 864 00:38:16,480 --> 00:38:19,040 Speaker 1: you can get without even needing to have a credit card. 865 00:38:19,320 --> 00:38:22,280 Speaker 1: So if you're rewards driven, why not look for options 866 00:38:22,320 --> 00:38:24,880 Speaker 1: that don't include having to have a credit card? Is 867 00:38:24,920 --> 00:38:28,160 Speaker 1: probably where I would sway when it comes to advice. 868 00:38:27,880 --> 00:38:29,759 Speaker 4: Jessica, Yeah, and one little tip from me from my 869 00:38:29,760 --> 00:38:32,680 Speaker 4: personal experience is you can lower your maximum spend on 870 00:38:32,719 --> 00:38:34,520 Speaker 4: your cards, so all ot of the time they'll come 871 00:38:34,520 --> 00:38:37,200 Speaker 4: in like one thousand, five thousand, ten thousand dollar limits, 872 00:38:37,200 --> 00:38:39,520 Speaker 4: and it's just very standard and very basic. But you 873 00:38:39,560 --> 00:38:42,399 Speaker 4: can actually generally get in contact with your credit card 874 00:38:42,440 --> 00:38:44,440 Speaker 4: provider if you are wanting to get a card for 875 00:38:44,480 --> 00:38:45,719 Speaker 4: the first time, or if you do know that you're 876 00:38:45,719 --> 00:38:48,200 Speaker 4: a little bit spendy and say hi, like I'd actually 877 00:38:48,280 --> 00:38:51,040 Speaker 4: like to drop my limit to five hundred dollars or 878 00:38:51,080 --> 00:38:54,200 Speaker 4: one thousand dollars, and they will usually have a minimum 879 00:38:54,239 --> 00:38:55,680 Speaker 4: that they want it to sit at. But that's something 880 00:38:55,719 --> 00:38:57,680 Speaker 4: that I did when I was weaning myself off my card, 881 00:38:57,719 --> 00:38:59,480 Speaker 4: is I just kept dropping my amount and dropping my 882 00:38:59,480 --> 00:39:02,120 Speaker 4: amount and my amount to make sure that I couldn't 883 00:39:02,120 --> 00:39:03,319 Speaker 4: actually overspend on it. 884 00:39:03,400 --> 00:39:05,560 Speaker 1: All right, Jess, I think that that is probably a 885 00:39:05,600 --> 00:39:07,919 Speaker 1: really good place to leave it. Again, if you're listening 886 00:39:08,000 --> 00:39:09,680 Speaker 1: to this and you are in debt, there are a 887 00:39:09,760 --> 00:39:11,879 Speaker 1: number of different places that you can go to help. 888 00:39:11,960 --> 00:39:14,760 Speaker 1: We always, always always recommend our friends at the National 889 00:39:14,760 --> 00:39:17,840 Speaker 1: Debt Helpline who have tons of free resources and you 890 00:39:17,880 --> 00:39:20,520 Speaker 1: can call and speak to them too. We'll obviously link 891 00:39:20,560 --> 00:39:23,200 Speaker 1: them in the show. Notes. But jesse Garci, it is 892 00:39:23,239 --> 00:39:25,759 Speaker 1: now time to wrap the boring but important stuff. Take 893 00:39:25,800 --> 00:39:26,520 Speaker 1: it away, my love. 894 00:39:26,600 --> 00:39:28,640 Speaker 4: Don't forget guys. The advice shed on Ches on the 895 00:39:28,680 --> 00:39:30,719 Speaker 4: Money is general in nature and does not consider your 896 00:39:30,719 --> 00:39:34,280 Speaker 4: individual circumstances. Cheese on the Money exists purely for educational 897 00:39:34,320 --> 00:39:36,400 Speaker 4: purposes and should not be relied upon to make an 898 00:39:36,400 --> 00:39:39,880 Speaker 4: investment or a financial decision. And we promise Victoria Divine 899 00:39:39,920 --> 00:39:42,640 Speaker 4: and Cheese on the Money are authorized representatives of Infocused 900 00:39:42,640 --> 00:39:46,719 Speaker 4: Securities Australia Proprietary Limited ABN four seven oh nine seven 901 00:39:46,800 --> 00:39:49,920 Speaker 4: seven nine seven four nine AFSL two three six five 902 00:39:50,040 --> 00:39:50,520 Speaker 4: two three. 903 00:39:50,560 --> 00:39:51,800 Speaker 1: See you on Friday, guys. 904 00:39:51,880 --> 00:40:03,680 Speaker 4: Bye,