Welcome to Had of Money.
I'm Joel, I'm Matt, and today we're talking about credit score supremacy, avoiding alts and points in purgatory.
Look at hu Jewel alliteration on point. Today with our Friday Flight to the Max, our weekly roundup of the news stories that we came across this week and specifically the ones we think you should pay attention to and how it's going to impact your wallet. We hope everyone is staying warm out there. It's like nationwide sub zero or sub freezing temperature.
Most of the kid is in California, which geez hearts go out to all our friends and one impacted out there listeners out there.
Yeah, well, I was going to say, so, we've we talked recently about my sort of close phone versus open cell spray poam, you know, with a with a house and all that insulation. Yeah, yeah, all of that. I don't want to talk about that. I've got another sort of insulation breakthrough a lot of research trying to figure this thing out, especially now when it's so cold in the house and you can feel the cold through the floors. Man.
And so I've been considering getting our cross space in the existing part of the home spray phoned because that's something folks do they anyway.
Especially just for comfort. Like I know it will reduce your energy bills, but it will also just make your feet.
Yeah, absolutely, it makes it. It just insulates that cross space even more. But I got to thinking about it, and I'm not going to do it. And here's why. Because I came across honestly a bunch of different articles. But cinderblock has a fairly high R value value or whatever, like, it's fairly insulated. And on top of that, you consider the fact that there's like a foam board on the outside of that, then an air gap and then brick. Well, all that equals to a fairly insulated cross space. You
don't need ad more. So you don't need to do that leak. You could, but you don't. It's not necessary, I guess, is what I'm saying. And that got me. Might be overkill. It might be overkilled. But then I've got to ask myself, well, why is the cross space so cold? So here's my insulation breakthrough or my insulation realization, jol, which is that the very cross space. Did you like that the cross space door that I was going through
is not insulated, and so I looked it up. Guess what the R value is of a half inch piece of plywood of OSB gotta be minimal? It is less is less than one? Okay, So basically I've got a You know, most folks, if you've got a brick house, like you have a fairly well insulated cross space that's for all the cold air is coming in. But it's like there's not even a door on there, like the
cold air is just pouring in. And it makes so much sense because in the on our main level of the house, like that is the coldest section and that's one of the things where it's like, man, why is it It's just so cold down here? It's not actually that cold in other parts of the main floor, but that portion of the house near the laundry room, oh, which happens to be where the cross space access is. My question for you, then, is I going to insulate that door? Yeah? Better believe it.
Is it similar though to when you have like attic access and people will put those I've got one of those zipper like et space hats.
Yeah, basically is that what they put on the cross space door. I've only minimally looked into it, but I know that I am at least going to put some
foam back or board, which adds a little bit. But I'm also considering They sell these different canister kits even at home depot, where it's much more affordable and you can it's a spray foam application, and I'm thinking about buying one of those consumer grade spray foam application kits, going in the cross space, putting a mask on, shutting the door and spraying over it, springing the back of the door, yeah, letting it cure, and then cutting my
way out essentially just with like a razor blade. So it's still really half home improvement half escape room. Yeah, it's really tight because you don't That's that's one of the other issues with actual air leaks that can come sometimes. It's not just insulation, is the fact that like, hey, if you can see a gap, if you can see sky out from your cross space, there's cold air obviously getting in there. But anyway, all that to say, this is a way to avoid spending thousands of dollars on
an encapsulation which you may not need. Instead, I'm going to take this low cost budget approach to finding the most low hanging fruit, and man, that cross based door is one hundred percent the lowest hanging fruit when it comes to keeping that space warm.
Well, let us know how it goes and how it changes kind of your environment near where that door is in your main.
To man, it has to yeah, but that Yeah, you're right. I'm really hopeful a.
Small amount of DIY I think could save you a lot of money and get you where you want to go without overdoing it.
Yeah. And that's why I was thinking the phone backer board because I was thinking, you know what, I could even cut it to be slightly larger than the actual door. Yeah, and that's that's really affordable, right, just a piece of whatever. Maybe I'll even double it up, I don't know. Yeah, but sticking that on, they're making it slightly larger that way, when it closes, it's like it overlaps the crack in the door. To sure, Oh you know what I'm saying.
I think that because there's always a game plywood there. It's not there's always a little gap there. It seems like exactly, that's a good way to fix that.
Anyway. I wanted to share that with all the folks out there. Who might be thinking something similar where they're like, man, my feet are so cold, how do we how do we fix this? Yeah, this might be a solution. I like it. I like it. And that's enough house talk. Yeah, enough enough house which that truly is like our favorite channel. Now.
I have that set up a really on the same because the same sung It's got all these free channels included H and whatever you turn the TV on, it always goes to some default channel, and so I always have it set there because I love seeing all these home improvement projects. It's like classic Americana. I love it. I think most people here talk like this or they think about having to do something like this themselves on their own home, and they just get bummed out. I
get stoked. Yeah, you love home promos.
I'm like most of the people listening who are like, let's screw that. They're not terribly interested. But let's move on with a Friday flight mass that to talk about let's do them home. Let's talk about cars. Turns out January is the best time to buy a used car. This is according to our friends over at car Edge. You know, we have had Ray and Zach on the show last year and they provided a lot of great advice when it comes to shopping for cars and getting
the best price. Well, the reasons that January is the best time to buy a used car is because there are more trade ins on the lot, because you know, people upgrading their car, buying the new car, trading in their old car in December, that's a popular time to do. That makes sense for used cars now in abundance.
That was one of the things they said was that you get a good deal at the end of the month, you get a better deal at the end of the quarter. You get the best deals at the end of the year. Yeap.
So if you want to buy a new car, e might want to wait eleven and a half months. Within Spring actually is typically when people start to look to upgrade their used car ride too often because of a tax refund cash infusion. So we're in this sweet spot where there's an abundance of used cars and not all that many people looking. Car prices Obviously they fluctuate according to supply and demand, and so supplies high demand isn't so basically for.
Everyone out there.
If you're like I'm looking for a used car, I don't know when I'm going to start, well, now it might be the best time actually, and it might even be a good time to consider an electric vehicle, specifically from rental car company Hurts. They bought Oh yeah, we've talked about this before, Maat, but this continues to be a problem for them. They bought a ton of Teslas, they weren't able to rent them out in the numbers that they hoped, and they're even I saw it. I
think it was in Jelopnik. They're even soliciting people who just rent an EV. Now they're telling them at the end of the rental period, hey, do you actually want to buy this car. Here's what we'll sell it to you for. You don't even need to take your things out, just to just keep on driving. Really really incredible, Like Hurts really wants to get rid of some of these Teslas and other evs that they bought. Wow, their loss could be your gain. It's at least worth taking a
look to see. But I mean some of those cars are priced at sub twenty thousand dollars. That's not bad for like an EV if it's in good condition.
Absolutely, And it makes sense that they're wanting to unload these because like if you think about it. If you let's say you're a business traveler and you're just flying into a city for the day, You're not thinking about like, you don't want to have to learn how to drive an EV you don't want to have to learn the ins and outs of a tesla if that's not what you typically drive. You want something that you're used to. You're going to get to work or the office wherever
you're visiting. I don't know how this works, make your sales calls or something like that. You don't don't have to find a place to charge. No, Yeah, And when it comes to if it is an overnight trip, where are you typically staying. Most folks are staying at a hotel, but how many of those give you the ability to charge? I mean, is not that easy. And this is something Kate and I learned firsthand when we went out to Colorado.
I wanted to try out the tesla and I was like, man, it's kind of a pain in the butt actually to stay at a condo where I can't charge the thing. And we were forced to find the superchargers, which was fairly easy, but still budgeting the time to because you still have to sit there while it's charging, even on a supercharger, and the cost it was just as expensive as gasoline. Yeah, and that's why it's better to own.
It makes a ton of rent. All the advantage is being able to drive it home, pulled into your garage and do that slow basic charge. That's where the real savings come in. Absolutely, No, the real savings is buying not a new car but a used car. Because the average price of a new car these asual is it's still close to fifty thousand dollars, which is it's difficult for me to wrap my mind around.
I want to say, if I'm recalling correctly, is like and seventy three dollars average price for a new car so expensive.
Twenty percent of buyers now have a monthly payment of one thousand dollars or more. And certainly some of this we can blame on inflation, but that's only a part of it. Felix Salmon over at Axios. He highlights that our tastes they account for most of the price increased. We like nice things or less content with compacts in sedans than we used to be, and upgrading to the suv or upgrading to that truck. It costs dramatically more. And so when you're thinking about your next car, just
keep that in mind. For some folks, a three to row shuv maybe it is necessary. But if not, man, a smaller car is going to save you a lot more money in almost every way as well.
Yeah, I think that's really important to highlight, Matt. I think a lot of it's like that Spider Man meme where all the Spider Man are at each other. I think it's really easy to point in inflation, but then there's a finger pointing back at you, and it's like, well, did you have to buy the biggest possible car on the planet. And when you're talking about those big SUVs, we're typically talking about seventy plus thousand dollars rides. And so maybe you need it, maybe you don't, and if
you don't, you can save a lot of money. And this coincides perfectly with something else I saw about the amount of space that the average American has in their home these days. The number of homes with extra bedrooms just hitting all time high. So like we are gluttons for space and we're expanding maybe even when we don't need.
To, or just such a facy rich nation yea, our tastes have exceeded our pocket book. That's true, that's right, Yeah, and so yes, similar to buying the larger car, that extra space is going to cost you big time. Zillow estimates that the average three bedroom home costs three hundred and thirty six thousand dollars, but the average four bedroom home costs four hundred and ninety six thousand dollars. That's a more than one hundred and fifty thousand dollars difference,
which is substantial. And there's nothing wrong with having a home office or having a guest room, right, having maybe a little bit more room than you need.
But and especially you know post COVID more people working from home, Like I get that you want a separate space like that. But given that homes are one of our most expensive purchases, it's important to go in eyes wide open and know that buying a beastly home, one that's maybe larger than you actually need, with space that you're not going to put to use very well, it
comes with financial consequences. And Matt, I think sometimes people think about, well, what about when the rare occurrences where people are staying at your home yep, or maybe Hey, the holidays just finished and you had someone staying at your home for four or five days, and you're like, gosh, don't want to live through those tight quarters again next Christmas when it comes around, Well, maybe think about renting that special person in your life, your parents or whoever
they might be, renting them something around the corner. And that is way cheaper you pay for it yourself, even how much cheaper is that than renovating, adding on or buying a new, bigger house.
Tens of thousands of dollars. And the same thing is true when it comes to to vehicles. Like a common thread between silk houses and autos is the fact that, like we're planning for these edge case scenarios that rarely happen, and we catastrophize what would happen if we were in need? Right, and so like I'm thinking of like going back to cars and trucks. Folks are like, well, I want to have a truck because I want to be able to pick up the new refrigerator because we're going to upgrade
our appliances or whatever. A couple of things here. First off, Costco and Home Depot they all deliver. Yeah, so you don't even need the truck. Secondly, if you actually do need a pickup, well, for you could borrow it. But let's say you don't have any friends with trucks. Okay, you can still go to home depot and rent the stupid truck for twenty bucks for a flatbed. And there's a big difference between paying twenty twenty five bucks to rent a pickup truck versus financing a seventy five thousand
dollars decked out whatever fancy pickup truck. That people are spending so much money on this.
And it's I think it's just so easy to feel that, especially in the aftermath of a visit like that, and say, we got to do something about this house.
It's getting too tight. But is it really getting too tight? Let's just sign up for some payments. Yeah.
And it's just interesting to see that Americans have gotten accustomed to having more space than they actually need. Part of that is increasing home sizes, part of that is declining family sizes. It's kind of both of those things happening simultaneously. But we used to get by with a heck of a lot less space in this country, and to think, I don't know the twenty five hundred square foot house is getting pretty tight from my family of
three like that. I think that's the phenomenon that you and I would love to combat a little here.
Absolutely, Joel's talk about debt, specifically medical debt, because it's no longer going to show up on credit reports, or actually will it, Joel, We will see. That's what That's what all the headlines are saying. At least, it's another political tug of war the outgoing Biden administration. They have finalized a rule that is going to end the inclusion
of all medical debt on credit reports moving forward. We've already seen the removal of sub five hundred dollars medical bills from being reported to credit bureaus, which has helped a lot of folks not have their scores crushed thanks to just, you know, a minor bill that they couldn't afford to pay, or even maybe that they forgot to pay. But this much bigger rule change would mean that medical debt of any size can no longer plague people on the credit front, and it would impact close to fifteen
million people according to the CFPB. But I think it is unlikely to stick because again of the way that we arrived to this rule being implemented. It's not that we don't feel for folks who have medical debt, certainly, but.
And it's not that the system doesn't have meaningful problems with sure how medical debt.
Is, but the way you arrive at solving these problems and matters a ton and to say, carte blanche, oh, we're going to change the rules. We're going to change the standards. As to the idea is that, well, everyone's credit score is going to be boosted. But like, think about the last time you had, like just think about great inflation with teachers. What if a teacher says, hey, I'm only going to give a's this semester, Well, guess what that A no longer means anything because everybody got
an A. And so what do colleges then do. They're like, Okay, well, we're actually looking for people that have high than A four point zero. We're looking for the students out there, they have the four point two to four point three who are tacking on the ap classes. That's what I see happening here is that there's not going to be this sort of long term benefit to folks because lenders
are still going to cover their butts. They're still going to find ways to filter through applicants that are out there, and they want the best applicants who are looking to take loans from banks and credit unilll.
The other thing is that this might be this might not live for very long because it.
Is assuming the best that it is able to stick around for.
Literally, you know, weeks away from transition to the next presidency, the next administration, and this could be overturned and with
stroke of a pen. So when we don't arrive at legislation in the proper way, which is typically through congressional action, which they have been loath to work, it seems the sort of back and forth politics and legislation that we've seen, specifically from executive branches and administrations going back and forth, we see more of that, and that means that these changes aren't necessarily standing the test of time to stay.
Yeah.
Oh, and by the way, we have an episode go back and listen in to episode seven sixteen if you want to know how to fight back against medical debt again. Oh, the system sucks, doctor Virgie. Doctor Virgie, she was wonderful and the system is again not consumer friendly. The healthcare system the health insurance system and then the reporting of health debt to your credit report. But if you want to know how to battle that in your life, you got to stick up for yourself. Episode seven to sixteen
is for you. Will link to that in the show notes And Matt this brings up too, you're kind of getting at maybe how credit scores are becoming less relevant if we're not taking into account certain factors for credit reports. And I guess the importance of credit scores has been widely debated in the personal finance community. Some people think that they matter, other people would say that they don't. Dave Ramsey in particular, is one of those guys who would say, oh, he loves.
The I love debt score. That's what he calls it.
Heytes that thing, right, And you and I have said, well, no, it's it's not the best thing in the world, but it's smart to jump through the hoops to make sure that your credit score stays solid. And so this Yahoo Finance article detailed why you shouldn't listen to Dave Ramsey's advice on living without a credit score, and we wholeheartedly agree with it. The credit scoring system is flawed. The credit bureaus are error prone and not great at responding
to your concerns. There was actually another lawsuit just filed against TransUnion this week because guess what, they don't deal with consumer complaints well at all. And that's phrasing it nicely. But at the same time, you know, the game isn't all that hard to play once you kind of dig into the rules, and not playing the game of trying to have a solid credit score makes your life harder.
You know, not tending to your credit score. It can lead to higher mortgage rates, higher insurance costs in most states around the country, to not getting a rental that you're interested in getting if you know you are. Let's say you're trying to go down the street and you say, oh, hey, I want to apply to live at this property. Well, the landlord might say, I don't know. Your credit score
is pretty rough. Sorry, you can't live here. So you're only harming your self if you're not paying attention to your credit score. And we've got resources on how to money dot com about how to tend to your credit But I think despite what Dave Ramsey says on this, we advise caring about your credit score, even though he doesn't.
Yeah, but it's also possible to pay too much attention to your credit score. The Journal documented someone someone who is attempting to attain a perfect credit score. He was already at eight forty, but guess what, Joel wasn't good enough. He wanted the coveted eight fifty, and he achieved it. One of those type A folks. I guess, yeah, through some trial and air. But dude, this what a hollow victory.
Talk about like majoring in the minors. Maybe at the end of the soul section, I'll ask you what your credit score is, but I don't. Honestly, I don't know right now. I know you don't know because it doesn't Honestly, it doesn't even matter. I was anytime we talk about credit score, I know it's good enough, so I'm always curious. I'm like, all right, well, actually, where am I sitting right now? Probably like maybe I'm guessing I'm like seven eighty.
I bet you're higher than that. Actually, But there are a certain segment of Americans out there who seem to be obsessing over the credit score to an unhell healthy degree. But the truth is, anything above a seven sixty is fantastic. And that's going to get you qualified for the best
loan terms out there. And so what we would say is to it's kind of fun, right if you're just like like the way I'm talking about it, be like, oh, you just kind of keep an eye on it, and it's kind of fun to be like, oh, yeah, actually
I'm ten points higher than you. But also, don't make this slight if that's what you want to compare your friendships, like like just some healthy competition, right, Like it makes me think of that one time when we're like, all right, where do we think Netflix is going to be at the end of the year. We never followed up on that. Actually, yeah,
you remember that. This is like years ago when Netflix tanked or whatever, and you and I we had a small friendly wager, yeah on Netflix the price of their stock. But don't take it too seriously. Don't waste your time and energy trying to push your score way up above anything that is actually going to move the needle when it comes to the kind of loan terms that you might be able to qualify for. Yeah, in the case
of your credit score, good enough is great, agreed. And I think if you are kind of wondering where your credit score stands. It's a good idea to get the picture that you can typically get that from a credit card company that you do business with, or you can check out credit karma dot com. That's a good place to kind.
Of not just get an idea of what your score is, but then you can also they've got like the score card that'll help you help highlight the places where you can improve your credit. But again, if you're in that seven to seventy plus range, don't sweat trying to raise it significantly. And it was really interesting to see the journey of this guy, Matt, trying to improve his score to eight fifty and how much time and effort it took.
I feel bad for the guy. Yeah, Like, honestly, guess what, like as a waste of.
Time, we only hear so many hours on this earth does don't waste it thinking about a perfect credit score.
As I'm reading through that profile, and just like, dude, there's so many better things you could be doing with your life, but instead this is the thing that you've chosen to obsess over. Yeah, but Joe, we got more to get to more Friday Fly, We're gonna get to points Purgatory and more. Right after the break our Matt, we're back. Now it's time for.
The ludicrous headline of the week. This one comes from the Wall Street Journal and the headline reads, You're invited to Wall Street's private party. Say you're busy and more and more is being written about alternative assets right now. And Jason's Wyke, he's the investment columnist over there at
the Journal. He had a great piece on why we should kind of give him the heisman, right, we don't want alternative assets in our lives, in our portfolios, even though financial advisors are pushing these alternative investments on us as individual investors more than ever before. And there are all sorts of ways now we've documented this on the show in the past, for people, the average person to invest that were essentially unavailable to previous generations.
We talked about.
And some of that's good, right, like the advent of index funds in the seventies, Like that's a beautiful, wonderful thing that makes it easier to invest. And then there are other ways that you can easily invest, but in products that might not makes sense for you, So wine, whiskey, real estate. Those are some of the alternative assets that people can now invest in. There's invest in farmland, farmland
anchor Trader Veno vest. I mean, there's all of these websites out there that make it easy to invest in all these different things.
Hey, why don't you.
Diversify your portfolio and invest in some farmland or some art right stuff like that. And then it even got pretty wild with NFTs and meme coins over the last few years. And you can do this all like from the comfort of your home and your PJS on a slick looking website. So I think people are more tempted or even just like some of the partial real estate investing websites. Matt the crowdfunding real estate website. That's another one that attracts people, and the accessibility I think makes
it seem normal or even good. But then these alternative investment products come with often in small type, often in places that are hard to find, significantly higher fees, yeah, lots more risk, significantly less liquidity. And so I'm with Jason's wig here. We don't believe that anybody out there listening needs any alternative investments in their life in order
to be diversified, in order to build wealth wisely. In In fact, I think a lot of people you're maybe majoring on the miners, if you like, try to put too much your focus in. They're kind of like trying to get that perfect credit score. It's just not important.
Agreed. One small caveat is real estate, because that is something that you and I are invested in, but not this sort of crowdfunded approach to investing in real estate I do. I think it's not even something that we talk about all that all that often these days, Like when's the last time you bought a house, Joel, Yeah, it's been a minute. Like I haven't purchased a home
in the twenty twenties because well, my personal home. But when it comes to an investment in real estate, because the deals were back in the teams harder to come by now. And if you already have a property, that's fine, it's sure hang onto it, especially if you've got that
low interest rate mortgage rate baked into it. But for somebody who is interested in growing their wealth right now and they're just getting started, and that is not an area I would say that you should be focusing on unless it's something that you're really really passionate about it.
And I think there is a difference in my mind, between owning long term real estate that you invest in locally and you self manage or renting out a portion of your house right short term rental style. There's a big difference between that and between some of these alternative investment styles, because there are advantages you can have as a local real estate investor that you don't have when
you're investing via some of these other newfangled websites. And yeah, there are higher fees in real estate, but there are also advantages to real estate too that the index fund investor just doesn't quite have. But yeah, I think that's that's like the one exception I'll give to this. I just don't I don't wrangle regular real estate investing, owning other owning, owning more properties into the alternative investment sphere.
I think I'm talking about all these other things or all these digital ways to invest that seem super sexy, and they talk about and they tout magnified returns by investing in art or watches or whatever, and hey, look at what's happened with like watch valueations matt over the past few years. Those have gone down. And it's been said that, oh, Rolex watches, they only go up in value. That's not so that's.
Not the case necessarily, the case stock market's been going up, the value of your Rolex watch has gone down. Yeah, I will say, if investing more is one of your big goals for twenty twenty five, be careful which brokerage firm that you choose to go with, because more of the different uh, you know, as we're talking about apps here, there are a lot more investment apps that are more like traditional investing apps, but they are incentivizing risk these days more than some of the big ones that we
are actually fans of. So it started with robin Hood, of course, but they've actually gotten better since their inception, while other newer companies have leaned harder in the gamification direction, and new research shows that it is particularly effective at getting younger investors with less investing knowledge to trade more frequently,
which of course leads to worse results. There's a study that showed that the best performing portfolios were the unfortunately, were those of people who had died and they hadn't been touched. Because you're not getting in there and you're not messing, you're not buying and selling at inopportune times, I.
Feel like you should reiterate that, because every time I see that, it's it just it's kind of baffling. But it makes a lot of sense, right that, like people who aren't living can't tweak their portfolio so they do better.
The less active of an investor you are, the better your results are going to be. And so instead of realizing your potential behavioral biases and you know, and helping out, some of these newer apps out there and some of these newer platforms are exploiting your behavioral issues, your biases because it's better for their bottom line to get you to trade more often. And this is why the more boring companies that we have always recommended, like Vanguard and
Fidelity are still great. And it's almost like a ride of passage for younger investors to get sort of distracted by the shiny, the novel, the sexy, the new, which I almost want to be okay with because when you're younger, you've got less money at risk, like the stakes are lower, And part of me says, well, better to learn these lessons now while you're younger with fewer zeros than you
know twenty thirty years from now. But of course The reason we have the show is for people to learn from our mistakes, to learn from other people, Like why make the same mistakes that your parents have made when you can learn your lessons like in a secondhand way. But I think there are still going to be some folks out there who might have to experience it.
Well, that's exactly what you marry. In our conversation with Josh Brown, that's that was one of the things he said was like, no, people should be like given the chance to to screw up. And I think people should certainly be given the chance to screw up, but I wouldn't it be better to avoid it completely and to yeah, learn from other people's beats, right, Yeah, So I agree, that's why we have the show.
I guess that's what we're trying to advocate for. People are still gonna meme, bros. Are still gonna meme, you know, Like folks are still going to go out there and do the dumb things and.
If they want to do And we talked about like maybe sandboxing too some of your investing as well, Like if you have this die hard desire to trade or to speculate on individual.
Stocks, do you want to have a little bit of fun.
Yeah, that's okay, but just do it with a small portion of your portfolio and make sure you can lose sleep or you won't lose sleep at night if you lose the money that you're training inside of that account. But I would siphon that off and do it somewhere else and do the boring thing with the vast majority because it's the tried and true way to build wealth and it's far less mentally taxing. So yeah, let's talk
about credit cards for a second. For the extreme credit card nerds, getting the right reward credit card can be massively beneficial. And Matt I think about hearing from listeners the exotic trips that they've taken, the cool places they've gone, and how much money they've saved because they've just played the game. They know the system, and they've just changed essentially the method of their payment and it's led to
some pretty cool perks. And we've talked about that on the show a reasonable amount, most recently in episode eight ninety nine with our friend Chris Hutchins from the podcast All the Hacks. Well, there was this new survey from bankrate and it made me think twice about rewards credit cards, or at least want to add some nuance into the conversation. What Bankrate found was that the average person, they're not paying much attention to the credit cards they are using
and to the points that they're racking up. Almost a quarter of folks ended up not redeeming any of their rewards in the past year, so they hey, maybe they accumulated their rewards, but they didn't spend any of them. I forgot about them, Yeah, exactly. I think that's a big part of it. It's almost like the gift card that you were given a couple of years ago. It's lost somewhere or it's been forgotten about, and I think
it could be fun to play the game. It can be really cool to accrue those travel points, but the truth is using them for the cost of the trip. That's the real joy. I mean, if you miss out on that connection, what are you actually doing. Plus the longer those points linger, the less valuable they become. And travel rewards, Man, they might sound great in theory, but what do they look like in practice in your life.
I think it's a good question to ask, because it turns out, based on this Bankrate survey, cash back cards were the crowd favorites, and although yeah, they might not provide the best theoretical return for your spending, they might be the best real life choice for a lot of people. Because the credit card rewards the best ones that you can get are the ones that you're actually going to use.
Absolutely, yeah, where are you going to actually follow through and do the dang thing. But having said, be careful how you're using your credit cards, especially if you are a newer listener, or if you've had a history of overspending or getting into consumer debt. But either way, check out the Golden Rules of Plastic. This is an article we've got up on the site. We don't want poor usage of credit cards to increase your debt load or
to harm your credit score. We talked about earlier The Financial Times they just published an article about how US credit card defaults. They're actually at a fifteen year high, which isn't great macro data or on an individual micro level. Basically, the lender doesn't think that the debt will be repaid, so they write it off. That is what it means
when credit card debt is in default. We've discussed how paying off debt, how it's basically like this apex goal for Americans and we love that, especially as interest rates have climbed. But never having a balance, well, that is crucial to smart credit card use to be able to completely avoid it all together or to get out of that debt. If you have acquired some we will link to that Golden Rules of Plastic article in the show
notes as well. But if you need some additional help, we would well, we would love to hear from you. Send us a voice memo. We'd love to hear the particulars of your personal situation. But if you are someone who is like no, no, no, guys, I can't wait for you to maybe get back to me on a show off in the future. I need help now. If so, we would recommend to reach out to an organization like
Money Management International that provides credit card debt counseling. We want consumer debts to be something that is in the rear view mirror for you.
And I think I just saw this today this morning, Matt, when I was looking at my email, and the number is ticked up. The percentage of people who use credit cards who don't pay them off on time infil every month, that is just going up. That number, so I think it's like forty eight percent of families now have some sort of recurring credit card debt, and that with a high interest rate attached. That is putting you behind in
your finances. It's like running on a treadmill, but like have you seen the treadmills for the guy who runs marathons in like two hours and they try to put people on it like the.
Size of a room, like a small regain, and it's like, can you run out the pace? And you can't. I couldn't.
I couldn't run it for eight seconds, I don't think, and people just fall flat on their face because that's how fast he runs. But he runs that fast for twenty six miles. That's what like perpetual credit card debt is doing to your finances.
The algorithm knows you, Joel, Yes it does. Twenty twenty twenty one, Joel would have been like, wait what I'm being fed treadmill videos of I give had way too much running the world record marathon runner. It's pretty ridiculous. I love it.
Well. We talked about the downsides of buying gift cards ahead of Christmas, and I have more hesitation, I think than you do. You you you're more leisse fair about gift cards and I yeah, let people make their mistakes, right, I won't be able to think twice. Although there were some good discounts out there that made gift cards cheaper, which we're down with. Let mean, I think about the
annual Target ten percent off gift cards sale. We didn't talk about it on the show, but it's usually kind of of after Black Friday before Christmas, and if you're a big time Target chopper, hey go get that discount, but just remember to not be a spillage statistic. And spillage is when gift cards linger for months or for
years without being spent. And this is great for retailers because they hey, get they got the money in their pocket already, they sold the gift card, and then if that gift card never gets presented, that's cashing their in their pockets. But it's important for you to not be that statistic and to spend the money because, as we've documented, there's no guarantee that the store you have a gift card for sticks around for forever.
It's right if you're a TGI Fridays was a Fridays Yeah, that was the last one.
But this has happened at many different times, right where a store is just going out of business and you're like, wait a second, or my gift cards worthless and they might be. So make a plan to spend your gift cards quickly, like let's say in the first quarter of twenty twenty five, or another option. If you have a gift card and you're like, I'm never using that. I don't really like this retailer. Why did ant Edna give it to me? Use a site like card cash dot com.
You can sell a gift card online. You're gonna get you know, depending on where it's two pennies on the dollar or let's say sixty cents on the dollar or something like that. But getting something is better than getting nothing. Just I think the key here is to not let your gift cards languish or get lost.
That's right. Actually, have you continue to use the costco instacrt gift card hacked? Uh?
I will say they on the online purchases they limit two Instacard gift card purchases per fourteen days.
Oh really?
Yeah, but then so I had to I ran back into the store to get a couple more. But yeah, it's working out well for me. So far, I'm still as a hoop.
That you're willing to jump through for sure, give that sweet discount. Well that's a situation where it totally makes sense to get the gift card. Dreda. I'm not anti gift cards.
I'm just anti gift cards going to waste, Yeah, going to waste, or I prefer for you to get them at a lower price.
Well, that's gonna be it for this episode. We hope everyone has a fantastic weekend that you stay warm out there. We'll see back here on Monday with a fresh ask how to Money episode. Head over to the website. Specifically, check out our credit card tool if you are looking for a credit card that aligns with how it is that you spend your money, or specifically the kind of rewards that you're looking to garner from your credit card.
You can sort it buy airline, you can sort it buy business cards, personal cards, cash back, and of course you can find that at how to money dot com. Forward slash credit card tool. Joel, it's gonna be it for this one, buddy. Until next time, Best Friends Out, Best Friends Out,