George Kamel - Millionaire Reacts To: Insane Credit Card TikToks

Episode Date: April 15, 2024

💵 Sign up for EveryDollar today. Create a free budget!  Is it just me, or are more and more people taking crazy leaps in logic to make their credit card habits make sense? Check out these wild examples and decide for yourself whether credit cards are tanking our collective IQ. Next Steps  📗 Order George Kamel’s new book, Breaking Free From Broke.  📺 Watch: How People Felt About Credit Cards 30 Years Ago   Offers From Today's Sponsors  This episode is sponsored by DeleteMe. 🔒 Remove your personal information from the web at JoinDeleteMe.com/George and use code GEORGE for 20% off. 🙌    🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💼 The Ken Coleman Show  📈 The EntreLeadership Podcast     Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

Y'all have sent me some videos recently that have convinced me that debt is making people, well, dumber. And as we say in the South, some people's cornbread ain't done in the middle. They eat soup with a fork, and there are a few sandwiches short of a picnic. Where I'm from, they're two types of folk. Those who ain't, and those who are knee-high on a grasshopper. All of these sassy southern say that people aren't just more broke or stressed when it comes to money, but even otherwise intelligent people are taking absurd mental leaps and suspending logic in order to make their money. habits make sense. So in today's episode, I'll share some of the bizarre exhibitions so you can

decide for yourself whether debt has lowered these people's IQ or if they're still working with all their marbles. But first, a little cognitive test for you. If you can locate the like and subscribe buttons and click them within the next five seconds, you're smarter than 88% of the average population. So please prove to me that there is hope yet for humanity by smashing those buttons and extra credit if you also figure out how to share it with a friend. Hint, there's a share button for that. I'm ready for this my whole life. All right, let's get to it.

All right, first up, we've got a landscaper slash entrepreneur in San Jose. A while back ago, I posted a screenshot of my American Express credit card bill. It was $300,000. A lot of you were capping on me. You said, T, you're in debt. Don't be in debt. Life is so difficult when you're in debt. Here's the honest truth.

This is not debt, dummy. This card helps me do business. This card keeps me from being stressed. If I didn't have this card, I would be using it. cash all the time. If I'm using cash all the time, you always will have a cash flow problem, because if your customer didn't pay you right when you needed it, you'd be sweating bullets. So this card buys me time. This thing has a half a million dollar limit. I can go and swipe $500,000 house and buy it with this card. American Express makes life easy.

Okay, this guy's risk meter is clearly broken, and this frightens me. I'm just looking at a screenshot. He's got a total balance of $306,000, remaining statement balance of $3,000. of $171,000, and his minimum payment due is $137,000. This is insane. And what he's saying is, well, I can protect my cash and I can just keep borrowing other people's money and then my clients will pay me back and this will all work out.

And that might work for a week until it doesn't. And let me tell you, running your business with debt or running your personal life with debt causes a lot of risk and life is too short to live with this level of risk. And I'll tell you this, Dave Ramsey built this place, The studio we're in, the building that we're in, at the speed of cash. We don't have an ounce of debt, and I'm telling you, it has changed the way we've built this place. Have we moved a little slower?

Yes. Have we moved with more peace? And will we sustain the test of time? Unlike this guy who people apparently call T. No one says that. And there's some noteworthy comments on this post. Here's one from Michael Bubbly. He said, stress-free, but 22% interest on 300K?

That's the definition of stressed, my guy. Love that one. Herman Wooster said, if your customer didn't pay you right when you needed it, you'd be sweating bullets. That's what savings is for. Thank you, Herman. I don't know why you're living life on the edge of your seat thinking that you're crushing it. Rally Ghost said this.

If Dave Ramsey saw this video, dot, dot, dot, dot. I can tell you exactly what Dave's reaction would be. I don't give a crap. You're wrong. Yeah, that's spot on. Moving on. Next on the docket, we've got a collab from comedians Andrew Packer and Andrew Oporto. This one looks fun.

Let's check it out. I gotta pay for baggage for my flight tomorrow. Paying for baggage, bro? It's 2024. There's no reason to pay for baggage. I have the Magenta Maverick card. Now I get a free turkey sandwich and baggage on all domestic flights. Free sandwich? It does have a $900 annual fee, but what people don't get to is the amount of bonus points you get just for signing up. It pays back twofold.

I went to Mexico this year based only on points. And all I had to do was put $95,000 worth of transactions through. Why isn't everyone doing this? Can't imagine why. And the feeling you get redeeming points for something you had your eye on. It's unbeatable, man. Are you okay, dude? You have to trust me, okay?

I already have your form all filled out with my referral link, so we both get extra points. All you need to do is sign here. Thanks, man. You're just save so much money, man. I love this video so much. And while it's obviously satirical and humorous in nature, there's so much truth in this,

as there is with all good comedy. And these are the guys that I run into on the internet who want to fight about credit card points. They are truly, as you can tell, this man is treating this like a meth addiction. He's just jonesing for the next hit for his rewards, and he's trying to get everyone else in on it, like it's an MLM or something.

And here's the truth about this. Credit card companies are smarter than you. They run thousands of experiments on consumers every year to get them to chase that high and chase that carrot of rewards through more spending, maybe $95,000. In fact, research shows, that rewards and cashback are the top reason people keep their credit cards around.

But think about the math here for a second. For every dollar you spend, you're hoping to get a 2% reward with the very real risk of paying 22% APR. Let's think about it in terms of points, like in this video. For most cards out there, every dollar you spend earns you one mile or one point. But when you try to redeem those points, each one is worth only about one and a half cents, depending on the kind of card you have. So you'd have to spend $50,000 to get 50,000 points, which then gets you a free flight that would have cost $750 out of pocket. So you spent $50 grand to get $750. That math ain't mathen.

That don't make no sense. And I love this comment from Maria that really sums it up. Ha ha, looks like me trying to justify having an MX when the truth is that I only wanted a pretty card. Terrible. Terrible, Maria. Come on, do better. All right, some caution for this next video. The team warned me that it may cause us all to question the future of America as we know it.

Deep breath. What did you just say? Why does it say pay it? No, why did you, what did you say? Why did they pay it? Because that means you have to pay for that. She's looking at our American Express bill and under charges it says like pay it.

Like you can pay that on your American Express. And she said, why does it say pay it under this? And I'm like, so you could pay that. Like you would hit pay it and you pay that. And she said, why is it? Does it say that on mine? That's not my responsibility. But like I already bought it.

So why would I have to pay for it again? No. No, you're not paying for it twice. Your help. I don't get it. Okay. Well, let me just say the apple doesn't fall far from the tree because I'm not even sure the mom fully understood what's happening here.

And this is sad. This is the sad state of America. When people use a credit card, it feels like free money. She's like, well, I bought it with the card, so I already paid for it. Not how credit or debt works. You see, you borrowed the money, and now you have to pay that money back.

Wait, what? And the data shows almost half of cardholders don't know what the interest rate is on their cards, let alone how it works, apparently. And I'm guessing if you're watching this, you know better than she does, but you probably promised yourself, I'll never carry a balance.

And the truth is, 49% of people are unable to pay off their credit card balance every month. And plus, research also, shows you spend more when using credit. From an MIT research study, here's a quote. Shoppers with credit cards are willing to spend more on items, check out with bigger baskets,

focus on and remember more product benefits rather than costs, and make more indulgent and unplanned purchase choices. So to sum it up, when it hurts less, it costs more. So spending your own money right now with cash or a debit card causes more pain than borrowing someone else's money and paying it back later. And that pain is a good thing. It reminds me of an old Benjamin Franklin quote,

where he said this, he that lies down with dogs shall rise up with fleas. And Taylor Swift would say, play stupid games, win stupid prizes. Dave Ramsey would say, you play with snakes, you get bit. And that's why I don't lay down with dogs, I don't play with snakes, and I don't try to win prizes or play games anymore. Those are the words I live by. And in honor of Ben, I'm going to do my best Ben Franklin impression to shout out the sponsor for today's episode, delete me.

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With the special code of our friend George, camel that is, thou may as partake in this wondrous service for prey, less than $9 a month. So regain thy peace of mind and visit join deleteme.com slash George today, and let us henceforth safeguard our digital sanctity together. P.S. What is online? Question mark. All right, we've looked at some examples of not so smart thinking about credit. But what does, you know, a legit smart person say about credit cards who, by the way, might have a $6.2 billion net worth to back it up. Let's see. If you use your credit cards,

you do not want to be rich. Well, anytime you say something about that, people send it to me. Look at what Cuban say it. Look at what Cuban say. So cut up your credit cards. If you use a credit card, you don't want to be rich. Yep. I like that. That's my line. That's a good line. That's my favorite line. I tell people all the time. People then, they ask me, well, where's the best place to invest? I said, your best place to invest is to pay off all your credit cards and burn them. Because your credit card you know what your return is right if you get off you know you're paying 15 20% interest if you pay that down you just earn 15 or 20% folks I've told you 100 times and uh Forbes 400 400

wealthiest people in North America when surveyed ask what's the way to build wealth what's the number one way to build wealth 75% of wealthy people not your broke brother-in-law with an opinion but wealthy people say get out of debt yep oh finally a breath of fresh air thank you Dave and Mark. Despite what you've been told, you can not only survive without a credit card, but you can thrive without one. And I found that bucking this credit card system has given me more perks and benefits than any company ever could. And the best part is, I was no longer subconsciously tempted to spend more due to some rotating cashback reward or miles. My budget told me how much I could spend, and using my own money caused me to make decisions very differently. So you've got

to think bigger than points and rewards and perks. You've got to stop stepping over dollars to pick up That's what you're doing when you're playing this credit card game. And listen, people didn't think this way about their money 20 or 30 years ago. Over the last few decades, we've been brainwashed to think that we can't survive without credit cards when that's not true at all. And if you don't believe me, check out this video I made that shows you exactly how people felt about credit cards just 30 years ago. It's nostalgic, shocking, and bonus will leave you Jones in for a whopper.

Link in description as well. As always, thanks for watching. We'll see you next time.