Credit cards have always been a bit baffling to me, if I'm being honest, and I think that's because credit cards have kind of been vilified in films and TV as this slippery slope of spending that makes us believe we can buy anything we want until we can't and we're in even deeper financial trouble than before we had the credit card. Take the movie Confessions of a Shopaholic as a prime example. The opening scene talks about these beautiful women who have beautiful things and they don't even
need money because they use quote magic cards credit cards. Eventually, in the film, this obsession with credit cards leads our heroin into sixteen thousand dollars worth of debt. When a story wants to show us that someone is in for difficult times ahead, there's this classic scene where their credit card is declined, and that's our first signal that a character is about to hit financial rock bottom. We're constantly present with these storylines that portray credit cards as these
proverbial financial poison apples. But according to a report from the Federal Reserve System on the Economic well Being of the US household in twenty twenty one, eighty four percent of US adults have and use credit cards, so it begs the question are credit cards all bad if so many people have them? I know we have to be careful about accruing debt, but can credit cards also help us achieve good financial standing? Also, if someone could tell me how to get the most out of the rewards
i'm the card, that would be great. Let's figure it all out together and start taking notes because this is.
Stuff.
Welcome to another episode of grown up stuff How to adult Now, Matt. When we first brought up covering credit cards and credit you were very enthusiastic about this, and it was surprising as it's not usually something that gets my blood pumping, and I want to know where does this zeal come from?
So credit cards have best been described to me as a tool, and in knowledgeable hands, a tool can be an amazing thing. Let's think about like a chainsaw. Right, you can cut down trees, you can trim your hedges, but in less knowledgeable hands you could lose a few toes. You know, like credit cards have the power a really wreck havoc on someone's financial life. If you've got a twenty percent interest rate on your credit card, which you know,
they can be that high. And you spend one hundred dollars in a month and you don't necessarily pay it off, you now not only owe one hundred dollars, but you owe one hundred and twenty dollars. And if you keep not paying it off, that compounds and it can just spiral out of control really really quickly. I was very lucky when I was a kid. My dad was like, if you get a credit card, you pay it off every month. There were years where I didn't have one because I was like, I don't feel like I can,
you know, do that right now. But to get away from all the scary things, they can also would be something really positive, Like they are the easiest way to establish a credit history, and we'll get into that in the episode, but essentially having a positive credit history makes it a heck of a lot easier and more affordable
to buy a car or a home. Also, if you spend a lot of money on dining out or at the grocery store or traveling, there are certain credit cards that you can use that will give you cash back, like actual cash back, like they'll just credit it to your credit card or travel points, so you can put towards future travel purchases, and more than anything, I think credit cards can be a bit mysterious, and I'm excited about equipping our listeners with the knowledge they need before
diving into their own credit card journey. Yeah.
Absolutely, I was really nervous to see where you were going with that chainsaw analogy, but you made it work.
I figured I followed you.
I totally follow But when it comes to credit cards, there are few sites more apt to help us understand than nerd Wallets. So we have invited Sarah Rather from the nerd Wallet team to help us figure out the basics of credit.
That's right. Sarah has appeared on The Today Show, CNBC's Nightly Business Report, and quote it in The New York Times, The Washington Post, The Wall Street Journal, Business Insider, and Reuter's just to name a few of the places that seek out her advice in insights on personal finance. Hey, Sarah, welcome to the show. Before we get too far into credit cards, I'd actually like to take a step back and talk about credit. You know, like, what is it?
It's essentially the ability to borrow money, That's really it. Whenever you talk about a line of credit or a credit card, or anything with credit. You know, buying something on credit, it's just borrowing money, and then you have to pay it back. And if you don't pay it back, that's where things get a little expensive or a lot expensive, honestly. So at its core, you're just talking about borrowing.
So then for people who don't necessarily need to borrow money, you know, they have a debit card that is associated with their checking account, why might they want to consider getting a credit card?
A credit card is a pretty quick way to establish your credit history. There are these companies that are called credit bureaus. You might have heard of Equifax, Experience, TransUnion. These are companies that gather data on your payment activity or some of your payment activity, and that information is used to calculate a credit score, which is a three
digit number. It's between three hundred and eight point fifty and lenders, banks, credit unions use your credit history from these bureaus and your credit score and other financial information like your income, debts, things like that to determine whether or not they want to lend money to you in the form of a credit card or a mortgage or
a car loan or anything else. Because they use that number and that information to determine how risky it would be for them to that you borrow money based on how likely they think you are to be able to pay back. So the higher your credit score and the more established your credit history, the less risky you seem. Because you've already shown a history of paying your bills on time, of paying off your debts, things like that.
You've already shown that you're responsible, and so they're like, Okay, we're going to use your past behavior as an indication that going forward, you're going to continue this behavior, and so we will lend this money to you. We'll give you a lower interest rate. You're less risky to us versus somebody who maybe is newer to building credit, not as much of a history, lower credit score, a little
bit more of a risk to the lender. They might still lend you money, but they'll charge you more for it. And if you are, let's say you're pretty new to the whole adulting thing, you are less likely to own
a home owned car. You don't own much yet when you're like twenty three years old, So that's a good time in your life to establish this credit history because later on, when you do want to do those things when you need to buy your new car, when you want to buy your first home, when you want to borrow money to start a business, you've already established that foundation. It takes down a lot of barriers because you know
you can at least get the money. You can get the money, so yeah, so that's why it's important to do that. And then when you use the credit card responsibly and you know you pay your bills on time every month, you don't charge too much, you don't max out the card, within a couple of months, you begin to see your credit score start to reflect your responsible behavior. So it's a pretty quick process and there's a much
lower left compared to other forms of borrowing. So for many people, credit cards and also student loans are the first ways they begin to dip their toes in establishing the credit history.
Credit cards are one of the first and easiest ways for us to start building up credit and improving our credit score. However, credit cards are super easy to get. I mean literally, you just need your name, social Security number, and income and you can get approved and get your card in the mail roughly ten days later. And because it's so easy to get a card, we have to be careful that if we don't have the funds to pay off what we spend, we could be negatively impacting
our credit score. But the important thing to know is that credit cards can also offer us and our money an extra layer of security.
Besides building credit, are there any other benefits to using a credit card?
Yes, so credit cards have stronger consumer protections than debit cards. Do what the heck does that mean? Right? So, here's a common problem having your credit card or debit card information compromised because you use your card to buy something online and the merchant got their data compromised, or you lost your wile and somebody stole it. You left your card in an ATM and forgot to go get it,
somebody took it. They are just like bots that, like, I don't know, run random credit card numbers and just try them out. So fraudulent charges happen on credit and debit cards all the time, and when it happens on a debit card, basically the law is the longer it takes for you to report fraudulent charge, the more liable you are to cover more and more of that cost out of your own pocket. And because your debit card
is directly tied to your checking account. If somebody withdraws money with your debit card, that money is gone from your bank account until the bank completes its investigation, which usually takes a couple of weeks, and then refunds the money to your account. So in the meantime, you are without that money in your account, and you still have other bills to pay, and so that can make it really hard for you to afford those other bills while
you're waiting for that refund. It's a little bit different with a credit cards, a little bit safer as far
as the consumer is concerned. And here's why. By law, with a credit card, you're not liable for more than fifty dollars worth of fraudulent charges, and most credit card companies waive that fifty dollars entirely, so you have zero liability and it's not a matter of the longer it takes for you to report it, the more you're liable, even if it takes you three or four weeks to notice the charge because you haven't looked at your statement
in a while. Once you complain, you're not liable and they will refund the money to you as a statement credit, which means, because of the way credit cards work, you essentially run up a tab for the month, and then you pay the money out of your checking account to pay the tab. You haven't actually lost any money out
of your checking account. You've only lost money on your tab, and then your tab gets a credit back to it, so you get that charge taken off essentially, so the money is still right there in your checking account, available to you to pay your other bills while you work to resolve this issue with your credit card company. So your money is a little bit more secure in this particular instance when it comes to credit cards.
Yeah, and I actually I learned this thankfully the easy way, because I think right after I got my credit card, I left it at the counter of a restaurant and someone had taken it spent two hundred dollars at three different department stores, oh my gosh, And then I think that they went back home and bought like an eight dollars sandwich from the deli, because that was like the last charge that they did, And I was like, I like to think that they celebrated with the little eight
dollar sandwich. But luckily none of that came out of my bank account.
And You're not always going to see big charges on your account all the time as a sign of fraud. By the way, really it's so easy. You know, people put their cards on autopay, they don't necessarily check their statements before paying it. You want to check your bank statements and your credit card statements every month, maybe more frequently than that. You can even set up alerts, so whenever there's a charge to your card, you get a text.
You can set up alerts that will text or email you when your bill is due, or when a charge over a certain amount is put on your card, or when your credit card balance exceeds a certain amount, so you know to stop spending things like that. So there are all sorts of alerts you can set up just to remind yourself, hey, my credit card exists and I
have to manage it. And it takes a lot of the guesswork out of it, because sometimes the first sign of fraud is this like two dollars charge for something random, and you don't think about it because it's two bucks. So when you look at your bill, it's not like astronomically high, but that's often a sign that they're just testing your card out to see if it's friendly, if it'll work really, and then the bigger charges come later. So many of the times that I have noticed fraudulent
charges on my card, they've been very small. So you want to check your statement.
Right And are there any other ways that we could go about like detecting fraud or protecting ourselves from like identity theft?
So another thing you can do is check your credit reports on a regular basis, So the end of this year you can actually get weekly credit reports for free. That might be a little much, but from all three credit bureaus. You can go to annual credit report dot com.
Never pay for your credit reports. You are entitled to that information for free, So annual credit report dot com you can get all three of your credit reports from the major bureaus once a week and check them to make sure every account on there sounds like something you've heard of before. Check them and make sure your name is spelled right, that your address is right, that your social Security number is right, especially if you have a
common name. If your name is John or Mary Smith, you might have another John Smith's bank account, or credit card account or other account on your credit report by accident. That just happens unfortunately, So you want to make sure that report is error free because sometimes mistakes can cost you precious points on your credit score. If there's a bill or a debt that you've paid off that should have come off of your credit report, it hasn't come
off yet, it's something you can dispute. So you just want to be sure that everything is accurate.
So when it comes to credit scores, would you mind telling us what number or range of numbers is considered good and what might be considered bad.
So credit score ranges, they range from bad. It's like bad, which sounds bad, but it's is the terminology they use, bad or poor credit, fair or average, good, and excellent, and sometimes you might see like very good thrown in there. There are different score ranges, but in general, anything above like six ninety is good or excellent, and that opens a lot of doors in terms of borrowing money, accessing credit cards, getting good interest rates on loans, things like that.
Fair credit is sort of like the high five hundreds through the high six hundreds, and then anything below that, so three hundred to like five eighty or so is bad credit. So if you're keeping tabs on your credit score, which you can do with different financial apps like the nerd wallet app. You can get a score for free
that might vvery once you apply for a loan. There are different scoring models, so what you get for free with an app might look a little bit different from if you were to apply for a loan what the lender uses. So just keep in mind there are some variances, but buying large like the score you can get for free on an app is elites help to give you an idea of where you are, so use that to
get a picture of where you are today. And if you don't like the number that you see, then that's a sign that this is something in your life that you should focus on over the next couple of months and see what you can do to improve your situation.
Yeah, it's really important. I mean, like, so my wife is European and it's not a huge thing where she's from to like have credit. It's a very like American concept in a lot of ways. And so when she came here and we got married, it was very important to be like I was like, hey, you know, we want to have a house, we want to have a car, we want to like do all the things and so I was like, it's really important for you to get
a credit card. And you know, even if you just put like our groceries on it for the week and build it up. But it's amazing how quickly if you're starting fresh that you can really get into good standing if you're responsible.
We'll be right back with more grown up stuff how to adult after a quick break and we're back with more grown up stuff to adults.
I want to get into some credit card dues and don't And like I said in the intro, the first due that was told to me by my father was do pay off your credit card every month. Can you get into why that is so important?
Yeah, So here's how credit card works. Think of it like a bar tab. You made purchases throughout the month, they get added to your tab. Then at the end of the month you got to pay your tab. The bartender is ready to collect and you get sent a bill with all a list of all the charges that you made and assuming everything is accurate, then that's what you owe and you have a payment. You have a deadline to pay this bill.
You have a due date.
If you pay your entire bill by the due date, then you don't owe any interests because you have no debt, you've paid your bill, you're done, so then the next month you start from scratch. Essentially, here's where it gets a little bit more complicated, because there is a cost
to borrowing. Basically, if a financial institution like a bank or credit union lends you money, they charge you for that, and they charge you while you're in the payoff period, and then once you're done paying off what you've borrowed, you're done owing money for the privilege of borrowing. And so when they talk about APR or interest, when you see numbers with percentage signs after them, that is the
cost of borrowing. And obviously the higher that number, the more expensive it's going to be when you don't pay the bill in full. And there are lots of reasons why people don't. It's not this, oh, well, I'm irresponsible and I'm flighty, and I think credit cards are free money. Like no, a lot of people are in a pretty tough financial situation right now. They're using credit cards for essential purchases. They're using them get by salaries or not
keeping up the cost of living. They're not keeping up with groceries and medical bills and childcare and all these things, and a lot of people are using their credit cards to float these costs. So here's what happens when you do that. You run up a bunch of charges. You make purchases throughout the month, and you get this bill and you have to at least pay a minimum a small percentage of the bill, and you'll be told on your bill this is what the minimum charges, something around
two percent of what you actually owe. You can pay that minimum amount and your account is considered in good standing. The bartender is happy. You've paid enough of your tab to keep them quiet for now, But you still have a remaining balance that's getting carried into the next month, and that's what you owe interest on. And the thing with credit cards, and here's how easy it is to
get into massive amounts of debt with credit cards. When you apply for a card and you get accepted, you are assigned not just an interest rate, but also a credit limit. So let's say five thousand dollars. You can spend up to five thousand dollars in a month on your card before your card begins to get declined. And then once you pay at least the minimum, at least
that little two percent of your total bill. You carry the debt into the next month, but you can charge up to the five thousand dollars limit.
Again.
It's not like, well, you've only paid you know, five hundred dollars off your bill, so next month you can only spend forty five hundred dollars because you've you know, you still have this set. No, you can charge up to the full amount again.
Wow.
And then you can only make the minimum payment again, and then you charge up to the full amount again. And you do that for a couple of months, and you're paying like twenty five percent interest on this card. Yeah, and suddenly, I mean, you're reaching a point where you're just not going to be able to afford to pay that back.
Ever, and every month that you keep this balance, you're getting charged very high interest rates. So we're talking like between fourteen and twenty five percent interest on what could be thousands and thousands of dollars. That adds up so fast and it does not stop right.
According to the Federal Reserve, the average credit card interest rate as of February, that's the most recent data we have is t point ninety two percent.
Wow.
That is the highest it's been since they started keeping tabs on this in nineteen ninety four. So it's a lot of money.
That's a lot. Okay, so we do want to pay off our credit card bill each month to avoid paying that interest. But what about some don't, Like I've heard, it's not a great idea to try to withdraw cash using your credit card.
Yeah, so what you just described is what's called a cash advance that is a way to basically borrow against your credit limit. You use your credit card much like you would a debit or ATM card, You go to an ATM and you withdraw money. You can also go to a bank teller and do this. Don't do this if you're not in like a deep, deep emergency situation
because it is very expensive. Basically, when you use your credit card an ATM to get cash, you are subject to ATM fees, cash advance fees, and oftentimes a higher interest rate than your card already charges. So you might a card that charges like twenty one percent normally, but then the APR for cash advances is like twenty six percent. And remember how I describe it sort of like a bar tab, and if you pay it off at the
end of the month, then you don't owe interest. So this is like a bar tab where the interest begins to accrue the minute you buy the drink, so instead of having that you know you're spending money. You're spending money, it's getting added to your tab, and then you have the due date and as long as you pay by the due date, there's no interest. No, the interest begins to get charged well before the due date, so you're already paying that really high interest rate on what you
take out. That's why, if you are in a bind, if there are other ways you can get cash, first try it like I don't know, tap it to you, just use your debit card at your the ATM, borrow money from a friend if you have to. Really, a cash advance is very very expensive, and credit cards and debit cards look identical in your wallet. Let's just make sure you're using the right thing when you go to the atm.
Are there any other situations that you'd consider inappropriate to use a credit card.
When you have to make a purchase, you know you don't have the cash to pay back, and that can happen if, like you know, you need to repair your car, or your dog gets sick and has to have surgery or I mean, things happen. What's tough is just dealing with that in the aftermath and like really buckling down and prioritizing paying it back as quickly as you can and trying to limit how many months you're in debt after a major expense. So it's just something to be
careful for. The issue is that life happens, and sometimes you do have to get into debt.
Right. Is there such a thing as having too many credit cards? And if so and we cancel one, how might that affect our credit score?
Yeah, so there's no right or wrong number of credit cards to carry. What's right or wrong for you is when you feel like you're in over your head. You've gone too far. It's time to scale yourself back. You know, if you're carrying let's say you're routinely rotating through anywhere from three to five credit cards depending on your habits. But you've got your your alert setup, you know when your bills are due, you pay your bills on time every month. You don't get into credit card debt. You
feel like you're on top of things. Then you are on top of things, and for you, you are in a situation that is sustainable. But if you start like forgetting a bill due date and you miss a payment because you didn't set up the alerts and you forgot to you know, and suddenly you are overwhelmed, then that's a sign that you need to scale back and it's okay to only use one credit card for everything. If that's what makes you comfortable and sleep at night, then
you should sleep at night. That's really one of the better things. My advice about your finances is that if you're waking up in the middle of night with heart palpitations about your money, then something needs to change. So long as you're managing everything well, like carry on now. Closing cards is another story. It can affect your credit temporarily.
A lot of people think, well, I'm going to spring clean my wallet and I'm going to cut things up and throw them away and it's going to feel amazing. There can be some repercussions to your credit score if you do this. You just want to go about it thoughtfully. That's not to say you should never cancel a card.
I've certainly done that many times. It's just something that you want to be a little bit strategic about, especially if you're maybe a couple months away from like applying for a mortgage or a car loan or something like that, because it can lower your credit score temporarily.
Here's how.
When you have a bunch of credit cards open, you have a total credit limit, which is basically the sum total of all the credit limits on those cards. In general, we recommend not charging more than thirty percent of that total credit limit every month under ten percents. Even better, that's your credit utilization ratio. That's the amount of your total available credit you use each billing cycle. Maxing out
your card is bad for your credit. So when you have a card, especially if it has a pretty high credit limit, by closing it, you're automatically lowering that total credit limit, and if you're spending remains the same, you might run the risk of exceeding that recommended credit utilization ratio, which can affect you over time. So that's one thing to think about. Another thing to think about is when
it comes to your credit score. Age is good. It's not like the rest of society where age is not valued, but they like to see a high average age of your accounts on your credit report. So if you close a card that you've held for a really long time. Maybe it was your first credit card that you got when you were twenty one years old, and now ten years later you're closing it and all of your other
credit cards are really new. Then you're going to dramatically lower the average age of your accounts, and that can affect your credit as well.
So those are just.
Two things to think about. It's not to say you should never cancel a card. An alternative to that is let's say you've got a card open, you don't use it much, or you never use it, it charges an annual fee. You don't want to pay that anymore. You can call the credit card call the number on the back of your card and say, I don't want to pay the annual fee for this anymore, but I want to keep the account open. Do you have a no
annual fee card I can switch my account to. And if the card issuer has a family of credit cards that they offer, they might have something they can switch you down to. That's called downgrading your account. It allows you to keep the account open, but you're not paying for it anymore, and you can keep it in a drawer and then maybe like use that card a couple times a year, just to keep the account active, because
accounts can be closed due to inactivity. So maybe put like you know, one streaming service subscription on it and then put it on auto pay, so that fifteen dollars charge is charged every month, and then you know the card is active, it's open, but you're not paying for it, and so you still benefit from the long credit history, from the increased credit limit, but you're not paying to keep this account active anymore. So that's one thing you can do instead.
Okay, so sometimes credit card debt happens, but it doesn't always mean we're using our cards irresponsibly. If we find ourselves in this situation, at the very least, let's ensure we're making the minimum payment each month. We'll still be in debt, but this way we avoid late fees and keep our accounts in good standing. But enough about the struggles of credit card usage. Let's get to the good stuff, like rewards come on credit card points. Malie needs some airline miiles.
I think a lot of financial products, not just credit cards, but loans in general, and different kinds of accounts can be thought of like a tool in your toolbox, your financial toolbox, and you turn to different tools for different purposes, whether you're making purchases, buying a home, saving for retirement, investing for other purposes, you want to pick the right tool for the job. So let's apply it to credit cards.
Right.
If you are in a position in life where you can use your card to make your purchases and then pay off your bill in full every month and you have no debt, then that is a great circumstance to look for cards that earn rewards because this way you're basically getting a percentage of your spending back just for existing. Really like, there's no additional effort really involved other than carrying the card. And there are two main kinds of
rewards cards, cash back and travel. Those are the two big ones, and then there are some niche cards as well that offer different kinds of rewards, but for the most part cash back and travel. Cash back is like using a coupon every time you shop. You get somewhere between one and six percent back on every purchase, depending on which card do you use and where you use it. Travel cards earn rewards in the forms of points and miles. They're basically two terms that I sort of use interchangeably.
You don't get to fly one mile because you've earned one mile.
It's not like that, No, not exactly how that works.
Yeah, I once had to describe that to a friend. He's like, so fly to California, that's like three thousand miles, right, I'm like, I mean distance wise, yes, but it's also it's gonna cost you like twenty thousand miles.
On a card.
So with a travel card, you can and earn these points and miles through your spending and then apply them toward things like flights, hotels, rental cars, even travel experiences like tours and stuff like that. So if you have a trip in mind over the next year or so, you can use your day to day spending to earn back a discount on eventual travel, which is very cool, which is how I've seen the world in a lot of ways.
Same. I saved up points for a couple two years and I went to Thailand and southat Asia for a couple of weeks and it was amazing, and yeah, I didn't pay for any of the flights.
Yeah, it's great. I went to like Australia and New Zealand and then later to Japan, all in one calendar year, and the flights were free, but yeah, it's been very nice to have that stockpile. I almost think of my travel points from credit cards as my travel savings account. Yeah, and so I know what I have to spend on this airline or that airline, and it helps me book travel and it's something that brings me a lot of
joy because I really love traveling. So basically, that's how you can use credit cards for good for yourself.
Are there any other ways that you can think of to get the most value out of your credit card?
Yeah, So some credit cards earn the same amount of cash back or points no matter where you use them. You might see cards that earn one or two percent cash back everywhere, or one to two points per dollar spent everywhere. But if you're willing to carry more than one card and let things get a little bit more complicated administratively for yourself, some cards will earn more on
certain kinds of spending. So you might have a card that earns more at grocery stores or at restaurants or on gas or if you let's say you carry a card for a certain airline, you earn the most points when you buy tickets on that airline with that credit card, and so that's where you can earn even more. So,
like let's say you carry three cards. You've got the card that earns you know, five or six percent at the grocery store, another card that earns you know, three or four percent at restaurants, and a card that earns
two percent on everything else. If food is your biggest budget item besides housing, then use the grocery card at the grocery store, the restaurant card at restaurants and everything else, card on everything else, And that way you're earning at least two percent back, but at most six percent back on some of the purchases you make most often.
Are there other situations in where it might be beneficial to have multiple credit cards.
So another thing you can get with rewards cards. You might hear them called sign up bonuses, welcome bonuses, welcome offers, things like that. In the first year of carrying rewards credit cards, if you hit a certain spending minimum in the first three to six months. So a common one is spend three thousand dollars in the first three months, and you'll get anywhere from like twenty five thousand to seventy five thousand points in addition to the points that
you aren't on your spending. That gives you a lot of value on a card in the first year you carry it. And if you carry multiple cards, you're earning these multiple sign up bonuses. And this is how you build up what I call the travel savings account. Is you might have an airline card, a more general travel rewards card, and some banks issue multiple cards that all
feed into the same rewards system. You see this with American Express, with Chase, So you can carry multiple cards from the same bank and then combine all those points into one rewards account, one pool of points, and then you have this big pool of points to spend on yourself, to spend on travel, or to spend on reimbursing charges you made on your credit card.
Huge. That's huge, Sarah. I wanted to thank you so much for taking the time to chat with us today and also wanted to ask you if you have any final words of wisdom and where our listeners can find you and find nerd Wallet.
I will leave you with this. If you have credit card debt and you're paying interest on it, ignore rewards cards for now. Don't do it because the amount of interest that you're paying is far offsetting the value of any rewards you'll earn. So number one thing, focus on pay down that debt and then when you're debt free at some point in the future. I hope it's soon, because being debt free feels amazing. Then you can turn your focus onto rewards points and cash back and miles
and all that fun stuff. But until you get to that point, pay off your debt. Trust me, like that will serve you so well in life. So that's my number one tip because so many people are like, well, I'm gonna like going into debt for this, but I really want to get this sign up bonus and I'm like, h sign up bonus is irrelevant. Focus on interest rate, Focus on how much you can put towards your debt every month. Focus on what's going on in your budgets.
You can apply as much money as you can, be as aggressive as you can, and get out of debt as quickly as you can. So that's my big nugget of wisdom.
Huge.
But you can find me on nerdwal dot com. You can also find me on nerd walle It's a smart money podcast which you can get wherever you get podcasts. And we hope to have you as a listener and a reader of our work. If you have not heard of us before.
You heard the Woman the Smart Money podcast is fantastic follows. Subscribe if you know it is good for you and Sarah out there. Thank you so much for spending time with us today.
Thank you for having me.
Like many things in life, credit cards come with both risks and rewards, but at the end of the day, they are an important part of building a credit history, which can help you buy your first car, home, and even set you up for starting your own business. So here are some of the more important takeaways that I learned from mass conversation with Sarah. Credit cards are not linked to checking accounts, which make them much safer to
shop with. While a fraudulent charge on your debit card is taken directly out of your bank account, a fraudulent charge on your credit card is just added to your bill, keeping your cash safe while you file acclaim. Pay attention to your spending habits, and choose a credit card that will give you the most reward bang for your buck,
be it cash back or travel points. Racking up enough cash or points can be thought of as a little rewards savings account to be used however you see fit and finally, think twice before you cancel your card and make sure it's necessary. It may have more of an impact on your credit score than you think. And remember you can always ask your card provider about downgrading your account to another card as an alternative option. That's all
for this episode. Be sure to join us again in two weeks as we continue this journey to being more responsible adults and healthier humans. Matt, what's our next stop on the World of grown Up Stuff?
Next up, we are learning about finding an apartment, how to look for one, negotiating your lease, and what you should look for when you're checking out potential places in person.
Oh, well, that's easy. It's water pressure. I can't move into an apartment with bad water pressure. It's just a it's a deal breaker.
It's one of those things you don't think about, but when you're in the shower, you gotta have that pressure for sure.
And flushlows toilets.
Make sure that work.
And remember you might not be graded in life, but it never hurts to do your homework.
We'll get to it all next time on grown Up Stuff, How to Adult.
This is a production from Ruby Studios at Iheartmatia.
Our executive producers are Malli Soshia and Matt Stillo.
This episode was engineered by Matt.
Stillo and written by Molly Sosia. Special thanks to the Ruby team, including Eden fixelm Rachel Swan, Krasnov, Amber Smith, nikiath Swinton, Sierra Kaiser, Sierra Spreen, and Andy Kelly.
The views, information, and opinions expressed during this podcast are solely those of the individuals participating in the podcast and do not represent those of iHeartMedia It's affiliates or employees. This podcast does not constitute financial, legal, or other professional advice or services. Material contained in the podcast is for general information purposes, only available at the time of publication, and no assurance is given that the information is comprehensive
or individually applicable. Listeners are encouraged to seek independent financial and legal advice from reputable professionals concerning all matters discussed here in