Using Credit Cards like a Pro #014

up with that and we couldn't have done without him. Yeah, sweet deal. Dollars towards a new phone and a lot of phones are free because with that and three months of free service. And as you guys know from from listening to the last episode two, we're fans of Republic Wireless no matter what their plan. Pricing is just you know, among the cheapest out there, and uh they've all they've got great phones you can bring your own. Just a

great company to consider doing business with. Yeah, so you wanna announce too, Yeah, Matt, So the winner is drumroll please, Brian Sebezma. Brian, thanks for following us on Instagram. Thanks for entering our giveaway. It was a lot of fun. We'll get the republic wireless stuff over too soon. And that six pack of awesome beer. Yeah, that was a sweet giveaway. Man. I'm hoping we can do more of these,

you know, in the future. Just giving away free stuff, giving away things that aren't ours to give is a lot of fun. You know, that's pretty awesome. Maybe maybe at some point we'll give away an autograph pair of your George. Oh yeah, I think those would would go for a lot of money. You know how the show Arrested Development, Like, you'll watch something in season one and then in season three it comes back the George thing.

I'm gonna I'm telling you, it's gonna make it at least like every third episode it's gonna make an appearance. I thought you're gonna talk about what's his name? Being a never nude. So it's crazy, is I never even watched uh Arrested Development. I watched like the first season then just got sick of it because your sense of

humor is lacking. I don't maybe so, man, Like I think you and I we have a little bit different since the humor and we just we didn't dig it, man, Matt, real quick before we get into the topic of credit cards. I wanted to talk about last year and what that meant in the craft beer world, because you know, we like beer. Uh found this stat interesting that it was a really fantastic year for craft beer in a lot of ways. We had almost a thousand breweries new breweries

open up in the United States total. Uh, But on the flip side, we had a hundred and sixty five breweries closed down. UM, So I kind of wanted to know your thoughts on this. It seems like craft beer feels like it's like flying high, but then there's this contracting in part of the industry too. So what do

you think about all those breweries? Man, I think those breweries that well, I mean, it's competition, right, and so a lot of it, Like, yes, there's still a ton of people out there that are wanting like a good local craft beer nearer they're living. But there's a lot of breweries that have been opened for a while that

you know, may not be that good. It's when you've kind of had these middle of the road breweries that aren't really crashing it locally, and they're also not big enough to really you know, work the system and make it happen from a distribution standpoint, and I think those guys are the ones who are dropping out, because there are a lot of these smaller guys that are starting out and putting out new, amazing stuff, and you know,

given those guys a run for their money. Yeah, it's gonna be interesting to see what happens over the next couple of years, because, um, there's just not room to continue to grow at I think it's such a torrid pace that we've been at, and I think some of those bigger breweries that some of the national and some of the regional breweries just got used to growing at growth rates and that's just not sustainable, especially with all the competition and how craft beer is getting more localized.

So you know, we've got so many more small, small craft breweries that we can bike to or a quick drive, and so we're just buying a lot more locally. You know, you picked up a beer that we're gonna have on the show hopefully next week that is just from a brew pub down the street that started canning, and so that's just that's just kind of the trend right now.

And and I think we're gonna see more of that, and I think we're gonna see probably some more open that are all that are neighborhood focused, that are incredibly small, yep, but that make their presence known in the community. And then we're gonna see some of the bigger players, whether they're regional or national, either just losing steam and losing market share or also maybe getting to the point over over a few years time where they had shuttered their

doors completely. Yeah. I was talking to a buddy over at Monday night Monday Night brewing, and that's one of the things he was excited about seeing in the future is all of these I mean there's small towns across the country, you know, like across every state, there's these all these smaller towns. And even in these smaller towns, there's breweries that are kind of popping up and they are becoming sort of like the local brewery that's making

awesome beer. It's like the equivalent of like a farmer's market, except for its beer, you know, instead of like go into your local farmers market and getting fresh samantas and veggies in the summer or eggs, that's where you're getting your beer. Now. It's it's sort of following that model. And that's exciting. Yeah. And I think the key to the whole thing, and I think it makes complete sense, is good beer. And I think it doesn't matter whether you're a big national brewer or you are my next

far group pub. There are a couple of local breweries that you and I rarely visit just because we don't really enjoy their beer. We don't think they're making great stuff. We try to support them and go every once in a while, but it's just, you know, it's not our favorite beers. Then there are other places really close to us that have amazing beers. For instance, the beer we're about to drink is one of our favorite beers, and

it's this big national brewery. And I think the key comes down to if you're making great beers and you're making what the public wants, it doesn't matter if you're distributed in all fifty states or you literally have to go to the place where it's made to pick it up. As long as you're making good beer, it's gonna sell. People are gonna find you. Yeah. And the word of mouth in the craft beer scene is is like worth

its weight in gold. And so speaking of beer, we told you last week Bull of our brewing company UM out of Kansas City was kind enough to send us to awesome bottles of beer, and we had the Grand Crew last week, which we were amazing, super fond of good and uh, this week we're cracking Love Child number eight. So this is a sour beer that they make annually

or or twice a year. Yeah, I think they do it once a year and it's a sour So it's a I mean literally in the complete opposite direction, the other end of the spectrum when it comes to beer light, sour, tart, acidic, you know, all the different sort of qualities that you typically don't find. And a stout blended with a quad which is what what we had by them last week. I think I've I started drinking this particular beer back

when it was Love Shot number five. I think the Love Shot number five was the first one I've had, and then six, and I don't know if I had seven. So well, this I love to read the labels and and see what kind of quirkiness comes out there. This one's awesome because what's to say specifically, because it's a sour beer and it's got multiple different strains in it.

Let go Bacsilus and Bretton to miacies. It says these may change over time because these beers do develop in the bottle, So this is uh, these may change over time. But don't we all it's so true Bolivart. I mean, I agree, I'm not the same man that I was yesterday. Yeah, I mean it brings a level of humanity to their beers. That's like, hey, just be patient, all right. But let's I love that sound, man, I know, there's not not much better than that. This one is pouring and beautiful

golden color. I'm just gonna put it all on my glass. What color is that? It's just almost like a nice olden amber, you know. It's like a murky, murky golden color. It's got a great nose to it. So this is why I'm super excited about this. I remember the love Shots always being pretty aggressive with their acidity levels, which is one of the things I love. Yep, just had

a taste still is that's great. It's really at like, um, it's like a clean version of a goose, almost like a much cleaner It's still got a little funk to it, but a little bit of funk, little bit of sweetness just the right amount of sweetness for me. Man. That is, I really like delicious, some a nice funk factor to the beer. And on the back too. I mentioned the label they describe that it's got some funk, a fair amount of sour, and a little bit of fruit notes.

So yeah, I kind of like those like scales like that kind of help you understand what you're getting into when you pop the top. Super tasty alright, Matt, So the first rule of using credit cards like a pro, pay them off every month. We're gonna touch on some things that can help people that don't carry credit card debt, how to use their credit cards better, how to make wise decisions when it comes to you know, what credit

cards they get and how to utilize them. But the first rule, the very first thing you have to talk about. If you are listening to this and you don't pay off your credit card balance every month, that is your first and really most glaring goal that you need to accomplish. You want to sure that your credit card is getting paid off and that you're not accruing crazy amounts of interest. Yeah, man, that's step one. Like, that's the very first thing you need to need to do, Like before we get into

the little nuance and the tips or whatever. I mean, if you're carrying a balance and you're you're paying interest, you are not using a credit card like a pro, and you need to like go back and do that first. Yeah, that's essentially one on one maybe even just like a remedial class you need to take. Uh. And I know that you know, there are a lot of people that have struggled with taking out too much credit card debt and and they're you know, working on paying it back

and it can be tough. So I just want to encourage you if you are one of those people struggling under a weight of credit card debt, like you can do it, and there are a lot of tools out there to help you. But also know that it needs to be almost a singular focus for you to pay that off before you really start taking many of these

other financial lessons, financial ideas and under consideration. Because if you're paying you know, nineteen interest every month on this credit card and you're only paying the minimum them or you're paying more than the minimum, but you find it hard to really make much of a dent in that balance, you just need to be putting all of your efforts into that one area. I mean, unless you've got like some sort of crazy title loan or something like that,

that's even worse. I mean, this is probably the worst debt in your life percentage wise, and so all of your focus needs to be going at that. And I just encourage you that if you do have a lot of credit card debt, go at it. You can do it. Uh. And there's a lot of success stories out there of people not even making tons of money, but that are able to pay it on their debt in a quick amount of time just by focusing on it intently. Yeah, Joel,

that's a good word of advice. And and really we want to encourage folks just to think about sort of your behaviors and your patterns, like you, like, we want you to know yourself. And if you know that by applying for another credit card, that's gonna maybe encourage you to go into more debt or maybe even spend more than you typically would. We'll kind of get into that later on. But this is this may not be the

episode for you. This may not be sort of the sort of week or the maybe you know, the sort of financial life hack that would be great for you to do, and so it's just important to kind of know yourself, know what your tendencies are, and take that into account before you hop onto nerd wallet and start looking up all the best credit cards right that offer

sweet bonuses. And so one thing you should consider if you have credit card debt, whether it's you know, a large balance or a small balance, and you have good credit, the only reason we would encourage you to open up another credit card is if you could do this one thing, open up a credit card that has a promotional zero percent interest rate. So if you've got a credit score and go back and listen to our episode on credit

scores and now to improve that. But if you have a good credit score that's typically seven seven forty year above, if you're in that range, you're likely getting offers in the mail with zero percent promotional interest rates of twelve, fifteen,

eighteen months. And if you've got a credit card balance, it would be wise to open up a zero percent credit card, transfer the balance over and pay that likely three percent fee to do that, and then essentially give yourself fifteen eighteen months to tablet as quickly as possible where you're not paying any interest on the debt itself. And so if you have a good credit it's worth kind of going down that path. And that's the only real reason that we would consider telling you to open

up another credit card. But again, if it's going to cause you to to snowball into more and more debt, it's not worth it. You just need to cut it off all together, toss them in the freezer, and just start paying it down with that laser like focus. Yes, that's definitely more of a route for someone that's like turning over new leaf, right if it's if they're like, you know what, I'm We're done with this, We're done carrying a balance. We're not gonna have credit card payments anymore.

It's gonna take someone that is just all about knocking it out. Yes, So now the rest of this podcast is dedicated to the people that use credit cards and pay them off every month. If you're one of the people doing that, all the rest of these tips are for you. Yeah, man, So for those folks, a credit

card is essentially a tool. You know, it's just like a great sort of product that we can sort of hack and and use in a way that you know, we essentially are able to work the system kind of play the game and get some pretty sweet bonuses along the way. Yeah, and our in our country, we have a lot of people in credit card debt, and that actually allows people that use their credit cards wisely to

get some great perks and great cash back rewards. And that's essentially because people that are you know, have the credit card debt and are paying high interest rates or subsidizing the people that get points, and and they're they're subsidizing the rewards that that we get as credit card users that use it wisely. And man, I kind of like in this system to In our state, the lottery ticket sales benefit middle class and upper class families by

providing free pre k and free college. And I personally benefited from both of those things in this state. Yeah, same here, And uh, I don't like it. I don't like the fact that essentially it's a huge, huge transfer of wealth from the poorts people. It's a crap system. Yeah, who can't afford it. I don't think that's a good thing. But that is the way the system is currently constructed, and the credit card system is much the same way,

and so I don't like it. I don't like that, you know, the poorest people who can't pay their bills are paying exorbitant interest rates. But it does provide an ability for us to get returns that we otherwise wouldn't ye ji also for better or worse. That's kind of one of the biggest benefits of of the credit cards are the points, like the points in the cash back or the miles depending on you know, all the different cards out there have the different reward that they focus on.

And that's the biggest reason why I use the credit card is is I mean we use it to pay for everything. I mean, everything that we can possibly pay for with credit card, we we throw it on the credit card and we yeah, we get the cash back. So yeah, man, if you want to use a credit card like a pro, you're gonna use credit cards that benefit you the most. And there's a lot of advertising in the credit card industry. You know, commercials all the time, NonStop.

When you're web surfing, you know, you'll see ads on almost every website. You know, get this credit card, this one will make it life better. Go travel to Tahiti if you get this credit card. And I think unless you're really, really really into the credit card game, the easiest and best thing for you to do when getting a credit card is to maximize cash back because there's all sorts of loopholes when it comes to booking travel

composed the blackout dates. Yeah, and maybe you think you want to travel, maybe you didn't realize all the things that it took to actually redeem those rewards. And so I think the easiest thing for people to do is to get the highest percentage cash back that they can. And so my favorite two cards are the City Double Cash Card because you get one percent when you make the purchase and another one percent when you pay. That's

two percent back. And the card that I use most of the time is the Fidelity Investments Visa Reward Card, and that's two percent cash back that I can transfer into a retirement account. I can open up an investment account with Fidelity with the rewards, and the great thing about it is you're getting two percent on your money. If you transfer that money to U qualified Fidelity account, you could transfer it into a five account for your kids.

There's all sorts of options with that card, but I think the easiest and best thing to do if you don't really know exactly what you're spending is like the two percent is just an easy thing to follow. There's all sorts of rotating rewards cards where every three months it's five percent in this category or that category. I think for most people were too busy, like we don't,

it's hard to track of right. So one of my cards has that too, where they're like, would you like to enroll and getting you know, an extra three percent or whatever on home improvement stores, and it's just like, well, I mean yeah, because I'm logged in, I'll click yes because it doesn't require anything, you know, really extra of me. But uh yeah, man, I'm totally with you. Like for us,

we've never used credit card for miles. We like to use it more as additional income as opposed to sort of like this bonus where we sort of get this thing and we kind of have this little prize and

we get to do something with it. And by using that additional money to kind of plug back into our system where we've already sort of predecided what our priorities are, and then we'll use that to fund travel, or we might use that to fund you know, at line United tickets or something else that's fun that we might want to do. We keep it super simple. And we're totally with you, like we don't worry about the loopholes and just everything, all the hoops you need to jump through

in order to make it work. From a mile standpoint, yeah, I think if you want the set it and forget it approach, then that's the easiest one to do. If you don't want to be thinking about fulfilling all these obligations in order to book to travel, the easiest thing is to pull out the two percent cash back card because likely the one you're using is offering you inferior rewards than two and so switch to that card and

get better rewards. I will say at different times I've I've gotten travel reward cards, and I usually when I do that, I go for a specific airline. For instance, I recently got a Southwest credit card when they had a special with extra points, so I got sixty instead of the normal forty, and you know what, that's enough points for me to book a round trip ticket for my whole family of four if I wait for a sale on Southwest across the country. Right. So that's a

sweet deal. But just be careful when you're getting a credit card that offers you travel rewards points. Know what you're getting into, know that you'll you want to make sure you you'll know how to redeem them. Uh, that's really important when you're considering what cards you're gonna get, and if you know you're not gonna go through those steps, just go with simple two percent cash back cards. Yeah.

But yeah, man, the points the cash back and then for me, Man, recently the past few years, I've been really into the sign up bonuses. That's another sort of pro that I feel like we've been able to work. And honestly, just about every three months or so, I'll apply for a new card that's offering anywhere between three hundreds of eight hundred dollars for a sign up bonus if you spend a certain amount of money within you know,

like typically three months or something something like that. Yeah, So when you're considering what credit card you're gonna get, consider what the rewards are and whether you're actually gonna know how to use them, and if you're not going to take the time to figure out how to redeem the miles, don't be suede a commercial and sign up for a credit card just because oh I want to go to Tahiti. Instead, get a cash back credit card

and consider the sign up bonus too. So some of these credit cards are going to offer you know, richer sign up bonuses and it might be worth it to make three bucks off the bat if you're gonna fulfill those obligations of spending within the first ninety days. That can be a really great perk of getting a new credit card too. Yeah, and a good place to look those up would be nerd wallet dot com. They basically

have all the credit cards, they've reviewed them all. They kind of have all the information laid outside by side, so you can it's really easy to kind of compare look at the different costs associated with it and the different percentage of cash back that you get, plus any sort of sign up bonuses on there as well. So that's a great tool. Yeah, another way to use a credit card like a pro It's easier to track than cash.

So if you have been kind of working on a cash system that has its pros as well, usually tend to spend less. But I love how easy it is to track my credit card spending in Mint. I just tie it straight in there. It's easy to kind of run through how I've spent my money over the past month. Or yesterday even just based on how I use my credit cards, and I can see kind of, you know, how our families doing overall pretty quickly, and where our money goes. It's just so much easier to track, yes man.

And if you listen back to our episode on budgets, I think it was episode number two. That's basically the easiest way to get started on creating a budget is looking at your actual expenses, and the easiest way to do that is looking at your credit card statement from the from the month before. So a lot of times people are get overwhelmed, you know, they don't know even know where to start when it comes to making a budget, And the best place to start is by looking at

what you typically spend. And it's easy to do that by again, just looking at your credit card statement. Man. Another pro of using a credit card is that fraudulent charges and unauthorized transactions cannot be held against you like they can with a debit card. Yeah, have you ever just disputed a fraudulent charge in your card before? I don't know if I've disputed a fraudulent charge, but I've definitely filed a charge back against a merchant for not

delivering goods like they should have. And so that's definitely a perk of using a credit card. And I will say debit cards, many of them provide some of these same features of the credit card on their own, but they're not legally held to the same standard as credit cards. And so using a credit card for your purchases does put you in a better situation when it comes to

your rights, and typically too with a credit card. I mean, if there's an unauthorized transaction, that's not money out of your pocket yet, like it's charged on the card and you can dispute it. But that's one of the disadvantages of say, like a debit card, right, Like folks say that like, oh, you have the same kind of protection.

It's a visa card. It still got that protection, what except with a debit card, like that money is already out of your wallet, like and you've gotta get it back, yeah, and you've got to get it back, versus saying that like, oh no, this isn't something I charged on, you know, with your credit card. And in that case, by the time the statement actually rolls around and by the time you have to actually pay, it'll it's gonna roll off

they'll you know, they'll address it. Same thing with you know, booking a rental car or a hotel or something like that. They'll put a hold on your account usually, and when you have a credit card you don't to worry about that. But if you have a debit card and you overdraw your account because they put a hold on it, you're liable for over draft fees. Yeah. Man, it's been a long time actually since I've had an actual, you know, fake fraudulent charge whatever my credit card. It would mean

it was years ago. The credit card company caught it before I did, and they gave me a call and we're just like, hey, are you making plane ticket purchases in like Israel? And I was like, nope, it's not me. Yeah, And in that case, it was super easy, I was. I just said, these are not my charges, and they just shut down the account. They sent me a new card,

you know, and it's super easy. So one tip if you want to use your credit card, you're worried about getting into debt and you want the parks of using a credit card, but you kind of want that ease of mind of paying with a debit card and knowing that that's taken care of. There's a really cool new app called debt Eze, and essentially Debatize uses your credit card but treats it like a debit card. How does

it work, man, because that sounds awesome. So you make purchases on your credit card like you normally would, they deduct the amount from your checking account every day, and at the end of the month, they pay your credit card bill. So yeah, so it's really cool, Like it feels like it's this day by day thing and you're not racking up this like huge four thousand dollar bill or two thousand dollar bill at the end of the month. You're paying it off every day, so you're actually seeing

the balance in your account shrink. But you're using it a credit card, and you have interesting those perks of a credit card without accruing a huge debt that you might or might not be able to pay at the end of the month. If you want to check that out, go to debitize dot com and you can see the details. And then the one of the last advantages of using our credit card is like the builts in sort of rental car insurance, like the purchase protection or like the

extended warranties and anything like that. I personally have never used that. It's been there in case something like that word to happen. But but yeah, man, I've never actually had to sort of like tap into that feature of of of a credit card, so I don't have personal experience as far as that goes. I have actually used the rental car insurance really in my credit card one time. I got a minor accident in South Africa and uh and so it came in really helpful save me a

lot of money. Was it easy? Yeah, it was super easy to use too. Yeah. So I would say, look at those services that your credit card offers, like trip cancelation, insurance, rental card coverage, the extended warranty. So specifically, let's say you're buying a television, you want to make sure you use the credit card in your wallet that offers a doubling of the warranty offered by the manufacturing fu facturer's warranty. Yeah, so it's really some of those perks are really neat.

You just have to remember that they're there and you have to meet all the requirements. So, for instance, when you're booking a rental car, you have to make your initial booking reservation with that credit card and then actually pay with that credit card as well. If you don't do both, you're not going to be covered. So make sure you read the fine print. But there are some really cool perks that credit cards offer. Besides just the rewards that they tout, there are awesome protections for you

on top of that. You know, one of my credit cards offers like con concierge service, so I could get tickets to I know, use it because it sounds fancy. It sounds too fancy for me, please, Yeah, But like if I really wanted tickets to, like, I don't know, Taylor Swift Last a Minute tomorrow night, I don't know, I could call them. They don't know. They might have the hook up. I have no idea. So that's kind

of cool. Make sure, you know, look in those fine prints and and see kind of what your credit card offers, and make sure you're making the right purchases with each credit card, because there's some cool stuff. I know. Some fancy travel credit cards offer you free admission to airport lounges, and that can be really cool perk if you travel

a lot. Yeah, that would be something good to look at I guess if you know you're about to make a bigger purchase, uh, somewhere where it would be you know, say extra handy, did like Joel said, kind of have that extended warranty or you know, like if you know you're gonna be traveling, it definitely might be worth looking at that card. Obviously, make sure you don't have a foreign transaction fee um associated with that card when you're

when you're traveling. But yeah, man, I couldn't imagine being in another country and then get it getting an erect like having that extra insurance essentially see valuable. Yeah. And I want to say too that at some point I

hope to get into like the travel hacking thing. And I know there's a lot of people that are super into travel hacking and using credit cards, essentially opening a credit card, taking the perks and the sign up bonuses, and booking a whole trip for their family for fifty dollars or less, and and that's really cool and I love that idea. For me, I'm just not brushed up enough on that and not interested in brushing up enough yet.

But hopefully, you know, at some point when I have more free time, I look look forward to using credit cards for stuff like that. Yeah, And I love that idea, but I'm just not there yet. Yeah. Yeah, same here, man. I look forward to the day when I have to do all the mile researching because that means I'll be traveling a lot more and have a lot more time. Don't quite have that at the moment. Yeah, with you've

got three young kids. I've got two young kids. Were just traveling once a year, and you know, if we're lucky right now, not doing much jet setting with our with our kids in tow. Yeah. So let's talk about some of the cons of using a credit card real quick, Matt. Yeah, those were all the pros that we just covered, you know, every all the advantages and benefits of using a credit card. And there's definitely some some cons, some things that we need to be wary of, make sure we're not getting

hammered or paying more than we need to be paying. Yeah. Man. One of the first I put this in parentheses cons is annual fee credit cards. And so there are a lot of credit cards that charge you an annual fee. And I will say for most people it is a con because they're not getting their money's worth. They might be paying annual fee and they're not making their money

back because they're not using their rewards properly. Yeah. A lot of times those those annual fees are associated with cards that have slightly higher cash back, and you think, oh man, that'll totally be worth it. But in a lot of those cases, sometimes those will be business cards or just sort of these fancy personal cards, and you need to be spending a lot of money on that card. The fact is you don't need to be encouraged to spend more money just to make sure you're getting your

money is worth out of your annual fee card. There's something kind of messed up and twisted about that thinking that like, oh man, I gotta make sure it's worth it for me to keep this card with an annual fee. Therefore I need to spend extra money so I get the extra rewards and slippery slope, Yeah that you just don't do that. Yeah. So I mentioned my Southwest card that I got that will, when we book on a sale, give us probably four round trip tickets pretty easily across

the country for our family, which is awesome. That's like the reason I got it, because I had it in mind I'm going to book tickets to go see my family in the Northwest, and it carries an annual fee, but it's worth it because I know what I got from signing up, and after I book those tickets, I might cancel it. Yeah. Oh, man, absolutely, that's kind of

my m O. Like it's the same thing. Like if there's a card that I'm going to sign up for that has a really sweet sign up bonus, like one specifically that I recently redeemed and got eight fifty bucks cash cash back. Man, that's huge. Granted that card had a nine dollar annual fee, and so I just gotta take that into accountans in reality is not eight fifty it's more like seven fifty. But even still, that's the biggest cash back sign u bonus that there is out

there right now. And if you can just keep that in mind and take that into account when you're weighing the benefits out there, sometimes annual fee isn't a huge deal as long as you're aware of it. Yeah. Another con of using credit cards is your tendency to overspend, and that's been well documented throughout the years. Using plastic just doesn't register with our brain in the same way

as handing over physical bills and change. And so if you're not able to control your spending when you're using plastic, like we talked about earlier, I think you really need to consider going to a cash system. I mean, I think credit cards are great for a lot of reasons, but if you know yourself in particular, you know you can't handle it, then moving not even just to a debit card, but moving to cash could be the way

for you to pay for most things. Yeah man. And so then another con I guess that I want to touch onto is sort of the trap of paying for your purchases from yesterday, like yesterday's purchases tomorrow. And what I mean by that is thinking that, like cool man, there's something I want to get like today, like right now,

but I don't quite have the money. Like people know that it takes close to a month before that charge shows up on the statement, you know, like once your monthly statement comes in, I'm gonna buy that coach purse, yeah yeah, or the Atlanta United Jersey. Yeah that's more like uh, and I want them for for a month and a half. It's gonna be awesome. I'll have the money back by then. They're about the same price too. Yeah, yeah, exactly, and then it's another month almost before that statement is

even due. And so basically you're making charges today assuming that you'll have the money you know, in the future. But like for us, are income fluctuates. Someone might be out of work or something like that, you know where where they don't have the or even other expenses that come up. There's just other things that that kind of

come up. And so when you put yourself on that cycle of of being anywhere between thirty and sixty days sort of removed from that purchase, I just feel like that's sort of another slippery slope where you can essentially just end up overspending. Yeah, no doubt. And that's a common reason that people get into a lot of credit cards because they think, I can make this purchase now and pay for it. It'll be fine a couple of

months from now, and I will have the money. But if you think that way about too many purchases, you're not gonna have the money in two months, and so that's that's a huge issue. And then it becomes just this sick cycle that repeats itself. And in the same way that you know, putting your money into an investment account or that compounding interest makes such a huge difference to your bottom line over time. The same thing happens in the opposite direction with credit cards. Can I get

stuck in that opposite cycle? Well, let's say you're just paying the minimum payment every month. If you look at your statements, it tells you if you pay the minimum payment, it might take you thirty seven years to pay off this debt. And that's like legitimately, it could say thirty seven years forty s I it could be forever if you're only paying the minimum payment. Essentially, if you're paying the minimum payment allowed by your credit card issue every month,

you're accruing interest. Your balance is not being cut down significantly, and you're going to be in debt for such a long period of time. It's not even funny. Yeah, indefinitely. Yeah.

And so that sort of mentality when it comes to using a credit card actually means you're you're not fit for using a credit card and you need to really consider moving to cash or UH and and doing that taking that focused approach towards your debt, like we talked about earlier on Yeah man, and like the way we use credit cards is we literally pay them off, you know, at the end of every month. Essentially what you're that new app that you're talking about does, which I'm totally

gonna look into you because that's like right up my alley. Um, but yeah, I mean, we track our expenses every month and then literally on the you know, after the last day of the month, um, I schedule a payment for all the charges for that month. And that's before you know, the statement even rolls in. Because for us, I just want to make sure that we're on top of our expenses, um, that we're sort of don't have this backlog of of charges that we owe, and it just helps us to

stay on top of things and stay organized. Yeah, and that's a great tactic for people to ensure they're using their credit card wisely is to pay before the statement even comes in. And it's really easy to do that online. Essentially choose the date at the end of the month, like you said, or or figure out a system that works for you. But whatever you have to do to minimize your chances of getting into recurring credit card debt, you want to do. And that's a great tactic for

ensuring that you never fall down that path. Alright, So let's talk about how many credit cards should people have, Matt, and what should those credit cards consist of. We already kind of talked about how we like cash back cards, but how many credit cards do you think the typical person should have? I have like currently open, like five. Yeah, five is a good number. I think it's good. I don't know. I think average person anywhere between three and five.

And that's because of the credit utilization rate that we talked about in our how to Approve Your Credit Score podcast episode, which you can check out. But I think there's a few reasons that you want multiple Let's say your credit line gets reduced or credit card gets canceled because you're not using it enough. You want to make sure you have other lines of credit available to you, uh, and you you don't want to be essentially s O l when it comes to having a credit card that

you can use. The other thing is I think you want to be able to maximize rewards. So I think for the person that is really really lazy about it, and I would I would put myself like just a little bit above that on the scale of using credit cards. So most of my usages I go to the two percent card, but I have a couple of others that I know that I can use for certain things. So I use the Costco card. That's one of my other main cards that I use, and I'll tell you why.

It's because I can get four percent cash back on gas, so I always use it when I get gass, three percent cash back on restaurants and travel, so I always use it when I go out to eat or when I'm doing travel stuff, and two percent back when I go to Costco. So obviously I always use it at Costco, and then for everything else, I use my two percent card. That's just kind of my one leg up to on some purchases I make a little bit more than two percent.

But I think for most people, you know, if you've got twelve cards and you're trying to figure out which card do I use it the supermarket, which card do I use for booking travel stuff? That that gets a little like, at least for it's too much mentally, and so I try to keep it simple with literally three credit cards that I cycle back and forth between. But I think anywhere between three and five is probably a good number for you for a bunch of different reasons.

And just make sure you can have a simple enough method of knowing when to use them so that you can do it the right way with every purchase consistently. Yeah, I mean the biggest thing there is just to not overcomplicated. It's not like we're making bank Like you're not making a ton of money with these different bonuses in the cash back. This isn't a way to create an income. This is a way, do you know, just have like a nice little bonus the end of the month or

at the end of every every few months. So for the longest time for us, we've had essentially two main cards that we use. We kind of have like our main go to card that we use for like in person purchases, so if you go to the store and you know when we're handing the card over in person, but then for all like essentially like utilities and online purchases and things like that, we kind of have this

other like a separate card. From my standpoint, like keeping up with finances, it helps me to sort of mentally organize what purchases are aware that being said, and I have recently signed up for like a new sort of sign up bonus card though that's when I hit that one card hard across the board. You got two man, you got to meet those requires. Yeah, yeah, because sometimes

they're pretty step. You know, they can be like four to five tho dollars in three months, and it can be like kind of tough because we can try to live pretty frugally and so I have to try to make sure I get a bunch of business expenses on there, and uh yeah, I gotta gotta hit that quota. But in those instances, though, I really like having that single card because it's super easy, incredibly simple, laser focused. We're using this one card for everything, and we get the

cash back. But then on top of that, like I said, you know, you get get that sign up bonus anywhere between like three and in some cases even even eight hundred or eight hundred fifty bucks. Yeah. And I think one other quick point is you'll probably want to get a Visa and a MasterCard, any sort of mix of

the three major credit card companies Visa, mess Card, AMEX. Yeah, you want to get different logos on on a couple of different cards just because of where credit cards are accepted, and just make sure you have one Visa, one master Card, one Visa one American Express. You know, whatever suit, your your your needs. Just make sure it's not three visas just just in case, or three amex Is or three Discover cards. Yeah. Yeah, it's like we don't take Discover

but that's all I have. Yeah, that's not good and real quick, Matt, let's touch on closing a credit card. Yeah, we just admitted that we close credit cards, right. I think that if you are getting one for the sign up bonus only essentially, and you're done with it, You've used the bonus and you're done with it, and you don't want to pay that annual fee, that's a decent reason to close the credit card. I think for the most part, closing credit cards is a bad idea, and

you don't want to close them for no reason. The annual fee really is, in my mind, the only good reason to close the credit card. Yeah, man, I completely agree. I'm not gonna pay that annual fee. You know, I'm not gonna pay a hundred bucks a year just to have this card if I'm not gonna reap some huge reward. So when the time comes, I I really do close it. Though you know we cover this in the Credit Score episode.

The length of credit history like that only makes that fifteen per cent of your entire score, and so you know, you close a card that portion of your credit score that might drop a little bit, and you know you'll see a change on your credit score, but it'll rebound pretty quickly. That's not gonna impact you, like say, over

utilizing your credit cards. Yeah, just make sure you know what you're doing when you're playing the game, because you want to make sure your credit utilization rate is not an impacted greatly and that your age of credit history is an impacted greatly by closing a card. If you're closing one, make sure you have three others right that have low balances. Sure, you're gonna want to make sure that you know what you're doing when you close the

card and that you already have a good score. And yeah, I mean that's not something you want to do, especially when you're if you're considering taking out a new loan, say for a new home or something like that. A lot of times I've found from personal experience that it's tough to know what exactly is going to happen to your credit score, and so it kind of just takes some messing with it. It sounds kind of funny to say, but it's not really that big of a deal, like

it's constantly changing. Just make sure you're not trying to, say, apply for a new mortgage for your first home something like that, where if your credit score drops some a few points where you would be more negatively impacted. Yeah, and just make sure you're not messing with it, like Matt said, at a point where you're gonna need it,

to need it exactly at it's very best. So you know what, Hey, I'm getting a mortgage in two months, or I'm applying, but you know what I'm gonna I'm gonna do this credit card hack real quick and sign up for this awesome bonus and then cancel it next week. Yeah, I want to do five credit card hacks, sign up for all of them and drop them all. That's that's something you don't want to do, right, Yeah, And it's totally fine if you're completely settled in your house you

don't need access to any credit anytime soon. Your credit score doesn't really mean much to you. But if you're even close to thinking about getting a loan for anything, you don't want to take part in this. So just make sure that you're wise when it comes to closing your credit card because your credit score matters for a lot of reasons and you don't want to negatively impact it, even in the short term unless you really know what

you're doing. Cool man, Let's uh, let's go ahead and get to some Facebook questions now, Like right before we sat down to record, I'll it's passed up a post up in our group and uh, a bunch of folks have commented, which is totally awesome. So let's let's get to some of these questions. See what folks are saying. All right, Brian mentioned not a question but a statement, and it's an awesome one. He says, we put all of our expenses on a credit card that we can

and pay the bill monthly. We gotta be disciplined. We have a U. S A A limitless cash back card, and we earned two and a half percent back on all purchases. And Brian, I'll be honest, I hadn't heard of this card. Sweet. I looked it up. It's pretty neat. It is better than even the two percent cards we

were talking about. So if you are a U. S A A member and direct deposit your paychecks into their bank, you can get this USA A limitless cash back card and earned two and a a half percent back on everything. That's pretty sweet man. And then Zach wrote in, Matt, and to talk about something we just talked about. He said, when should you cancel the credit cards? Should it be based on time, minimal use or when a better deal comes along? I mean, yeah, we essentially just kind of

talked about that. But for a quick recap, if you don't have an annual fee, keep it open. It will help you maintain a low credit utilization rate, which is great for your credit at score. And it's always kind of there if you want to be able to take advantage of maybe a sweet promotion that they're doing. Hey, and the only reason to cancel is an annual fee where you feel like you're not getting to benefit from the card. And even in that you need to be careful,

right like we talked about all right, Matt. Also, Josh Ordening said, should I pay off all my credit card debt before saving for a down payment on a house or should I try to do both? And if my rent is lower than my mortgage would be, should I stay where I am until I'm at least credit card debt free? So those are yeah, two separate questions. The first one should if you have credit card debt before saving up for a house, And I think to that one we we would both say yes. I mean, it's

typically credit card debt. I mean, if you have anything lower than that you're paying to a credit card, you've got a great credit card. But it doesn't even matter if it's if you're paying ten percent to a credit card, you want to get rid of that. That's I mean, that's a high interest rate. You're not going to do better than that in savings. So yes, exactly, and you're definitely not going to do better than that when it

comes to seeing equity growing a home. Uh So, first things first, pay off that credit card, and I think you'll be shocked and surprised at how quickly you are then able to save up for a down payment on a house. And I think his second question actually reinforces what we just said, because his rent is lower than his mortgage. If your rent is lower than what a mortgage would be where you're buying, you should strongly consider continuing to rent because of the costs that are associated

with buying a house and then maintaining a house. If you're happy renting and you're happy where you are, and you're in a good situation, and the rent is reasonably low, which it sounds like it is where you are. I think renting is the best option there, and Matt really soon on the podcast, we definitely need to cover the age old debate of renting versus buying. Yeah, man, there's nothing wrong with renting. You know, live that rent life. That's pretty nice, not have to worry about doing all

those household things that. Yeah, we could, we could talk a whole episode about that that alone. Yeah, we'll do that real soon. So yeah, Josh, I would say, pay off your credit card at first, and stay in that rental that's reasonably cheap, and eventually, you know, you'll find the time to get into that house of your very own. But now it sounds like it's not quite the right time. All right, Joel, let's get back to this beer. I feel like we like all the beers that we have

on here. I haven't really had bad words to say about almost any of the beers we've had, but I think it's because we carefully select and we picked good beers. I mean, thanks to Boulevard for sending this one. This is uh really tasty. I'm a huge fan. I mean it really is in that if you've had some of the older love Child's, it's right in that vein. It's like a freaking sibling of the ones that came before it, and it's it's it's beautiful of the previous Love Child

Love Child before that. It's delicious. Man. I really love how sour it is. It's it's heart. Yeah, it really has a great tartness to it. It's still fruity, though. This is nice and well balanced and rounded and that's great. Yeah, and enough of that funk that kicks in that it's not just sour. It kind of gives it like a well roundedness. It's got some interest to it other than just sourness. Yeah. So Love Child number eight you can probably get it in your local bottle shop and maybe

your maybe your local grocery store. Fancy your grocery store. Yeah, you're not gonna be able to pick this up at Aldi No, well, no, definitely not. And actually, uh, you know, one of our listeners wrote us a note the other day said that Aldie actually has a good beer. So Matt, we're gonna test that out. Do you remember what it was?

I don't remember, but I'll look it up. Maybe we'll give it a shot on a future show, because I do kind of like the idea of drinking beers that a lot of other people out there can get, and so we'll try to do that more and more, um so that if you hear about the beer that we're drinking and you you want to partake that, you can, you know, run out to your local shop and grab it. All right, MAT's a quick recap. Using your credit cards

like a pro. Yeah, man, The first thing you need to make sure you're doing is paying off your card every single month. You do not need to be carrying a balance. You do not need to only be making the minimum payments. The credit card companies are are working you like a pro. When that's the case. If you're not doing that, do not pass go, do not collect two hundred dollars. Go back to square one. Pay off your balance every month, and until you can get there,

the rest of the things don't matter. But assuming you've already done that, there's some sweet advantages and then pros to to using credit cards, the first of which is cash back. Man, you can get some sweet little bonuses at the end of the end of the month or end of every couple of months, and maybe even a

sweet bonus for signing up. Another pro the credit cards are easier to track than cash spending, and so cash my curb your spending, but using a credit card can be really helpful for seeing where your money goes, tracking it either on your balance sheet that comes in the mail or online every month, or tracking it through an app like Mint. Using a credit card just makes it really easy to see exactly where your money is going. Yeah, especially helpful if you're trying to create a budget for

the first time. There are constant credit cards too, and even someone who's using a credit card like they should be used. A con could be an annual fee. And so if you're spending seventy or more dollars a year on an annual fee, but you're not getting the bang for your buck when it comes to rewards, you might want to consider closing that credit card, I mean, and another downside to using credit cards is the tendency to overspend.

Instead of feeling you know the bills your cash leave your wallet when you use plastics, sometimes you don't feel it as much. So if you're not tracking and keeping up with your expenses. Uh, it's really easy to to overspend and even blow through your budget. Yeah, it's tough for to see a clean, crisp greenback fly out of your fingers than it is to just slide or insert your credit card. Really, yeah, man, consider paying off your credit card not at the end of every billing statement,

but literally at the end of every month. We found that that's incredibly helpful for us to stay on top of our expenses. We don't fall behind that way. And if it's kind of tricky for you to keep up with them, check out that app that Joel mentioned. It's debitized, which is d E B I T I Z, which sounds awesome And I literally I'm totally gonna check that out because that that sounds like something right up my alley might be a way to for us to simplify

our life. And another tip, how many credit cards should you have? Well, probably between three and five. Yeah, that's for your credit utilization rate and just in case one of your credit cards gets canceled, you want to make sure you have enough lines of credit available to you.

And on top of that, you can maximize your rewards by having you know, between three and five you have specific credit cards for specific usages like I mentioned having a two percent cash back card for everyday purchases, and then having other credit cards that give you higher amounts that specialize in certain things. But don't overdo it, because you want to make sure that your system is easy enough that it's not going to annoy you, and so you're gonna actually be able to use your credit cards

properly for maximum benefit. All right, thanks to everyone for listening. Our home on the web is how to money dot com. Check it out. We'll have some show notes up there for you. Yeah, we'll link to things like debtize and some of the credit cards that we think are best. And until next time, Joel, best friends Out, Best Friends Out,