The Personal Finance Podcast - How to Master Credit Cards (and Beat The Banks!)

Episode Date: September 25, 2024

In this episode of the Personal Finance Podcast, how to master your credit cards and beat the banks. How Andrew Can Help You:  Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining  Index Fund Pro! This is Andrew’s course teaching you how to invest!  Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok.  Learn how to get out of Debt by joining our Free Course  Leave Feedback or Episode Requests here.  Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at  shopify.com/pfp Monarch Money: Get an extended 30 day free trial at monarchmoney.com/pfp Thanks to Fundrise for Sponsoring the show! Invest in real estate going to fundrise.com/pfp Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. Delete Me: Use Promo Code PFP for 20% off!  The Personal Finance Podcast is sponsored by BetterHelp. Go to betterhelp.com/pfp and get 10% off your first month.  Links Mentioned in This Episode:  Best Credit Cards Relevant Episodes: How to Choose The Best Credit Card (Plus The Exact Credit Cards I Use!) 10 Rules For Using and Maximizing Credit Cards! How Many Credit Cards Should I Have? - Money Q&A Connect With Andrew on Social Media:  Instagram  TikTok Twitter  Master Money Website  Master Money Youtube Channel   Free Guides:   The Stairway to Wealth: The Order of Operations for your Money  How to Negotiate Your Salary  The 75 Day Money Challenge  Get out Of Debt Fast  Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm your host, Andrew, founder of MASSADC. Mastermoney.co. And today on the personal finance podcast, we're going to be talking about how to master your credit cards and beat the banks. If you guys have any questions, make sure you hit us up on the mastermoney newsletter by going to mastermoney.com slash newsletter. And you can respond to any of those newsletter issues that come out every single week. And we'll see those and maybe even get your question answered on the show. And if you're getting value out of this episode, consider following us on Spotify, Apple Podcasts, or whatever podcast player you love listening to this podcast on and consider leaving a five-star rating and review on Apple Podcasts, Spotify, or your favorite

podcast player. I cannot thank you guys enough for doing that. Also, you can watch this episode on YouTube. If you go to the Androgen Kola YouTube channel, you can watch this episode there as well and follow along with a lot of the show notes and things that we are talking about in the episode. Now, today, we're going to be diving into how to master. credit cards and beat the banks with credit cards because most people who get credit cards who

get themselves in trouble, just do it the wrong way. And so what I'm going to do today is I'm going give you the entire guide on how you need to be utilizing credit cards and what the intended purpose for them is. Because if you open a credit card without the intended purpose in mind, you are going to make a ton of different mistakes. And so that's what we're going to be diving into it today. So without further ado, let's get into it. All right. So first we're going to talk about what credit cards are for because you need to understand what credit cards are for and the purpose behind why we are opening these credit cards. So number one, and this is a big one, is they are a buffer between your bank account and your spending. And see, what most people don't realize

is credit cards offer tremendous financial protection for your personal finances, where they are a buffer between your bank account and making a purchase. And what this does, especially in a time where we make a lot of online purchases now, this gives you financial protection. So you can call up the credit card company if there's fraud and it is a lot easier to get that fraud removed because it's not connected to your bank account. Whereas a debit card, yes, you can get fraud removed from your debit card, but there is a higher risk between that because your debit card is connected to your bank account. So number one, it is a perfect financial protection plan to utilize credit cards. Number two, and this is a huge one for a lot of people, is they are used to automate your spending.

Anybody who listens to this podcast knows we are huge proponents of automation. And money automation is only utilized by 17% of Americans. That's it. And this is only just for their savings. And that's not even counting to the full potential. I would probably argue that less than 10% of Americans use money automation to their full potential. And so because of that, they're not maximizing their financial situation. And so I use credit cards to automate my spending.

So I automate every single bill possible on my credit card. And the way that I do that is I track those transactions in Monarch money. So say, for example, you have multiple credit cards. You can track all those transactions in one location automatically and be able to see where those transactions are. Because if you're manually paying your bills every single month, then you are doing it wrong. And so for most people, I don't want you spending a ton of time on your money every single month. Instead, I want you to focus your time and energy on growing your income or doing

things that are going to make a big difference and move the needle in your personal financial situation. Because if you can grow your income instead of spending time, you know, in the weeds on budgeting or spending time manually paying bills every single month, then you can make a massive difference to your financial situation by turning the right dials. And that's the most important thing that most people need to understand. Number three is you get points, miles, and cash back. with credit cards. You're going to get rewards with credit cards. This is not the number one reason why we use these, but this is a great benefit because you can get thousands of dollars per year just by putting all of your bills on the credit card and then paying it off every single month. Put the bills on,

pay it off every single month. And because you do this, you can get things like points and miles, meaning that points and miles allow you to travel for free. I just got back a month ago from Spain on a trip that was pretty much 100% free because I utilize points and miles. I've done this a number of different times from a trip to Greece, a trip to Italy, we've gone all over the place, Mexico, Puerto Rico, all for free. Because I utilize points and miles and just access the money I was already spending, put it on a credit card instead of a debit card, got those points in miles and was able to do more of what I value, which is traveling. But you can also do things like get cash back. And we'll talk about how to choose a credit card and some of the rules I have for that next.

But you can also get things like cash back where you can get cash on hand, put cash into your bank account. You can even take those dollars and invest them. There's a lot of different things that you can do. And a friend of mine, Rob Berger, who's been on this show, Rob actually takes all of his cash back and he invests it. He has like $30,000 or $40,000 now from just taking his cash back and investing those dollars into Fidelity. So I think it's a really cool extra way that you can grow your retirement. If money's a little tighter for you and you're not really hitting your investment goals, this might be another way to give you an extra boost towards your investment goals as long as you're responsible with credit cards. And we'll talk about that in a second.

And then lastly, there's tons of other perks with credit cards. For example, when I just went to Spain, we had the United card and we flew United across the country. Well, one of the big perks of having that United Card is you also get to go into the United Lounge. And in the United Lounge, they had free drinks, they had free food, and you can spend time in a comfortable place

working and or just hanging out and spending time in a private area where there's not a ton of people inside of the airport. This was especially helpful in D.C. where that's a really, really crowded airport. People are just jammed together in that airport. I absolutely hate the D.C. airport for anybody else who's ever been there.

And so we spent time in the United Lounge the entire time. Instead of having, you know, a five-hour layover in D.C., we were able to be in the United Lounge. It's really comfortable. There's a lot of seating. And so it was absolutely awesome to be able to do that. But there's tons of other perks like purchase protection. And we'll talk about more of those as we go through this today.

Then lastly, number four is it helps you build your credit score. Having credit cards on hand helps you build your credit score. Why does this matter? This does not matter because you're building up this magic number. Why you want a good credit score is because it reduces. your costs in other areas of life. What do I mean by that? That means you get better terms on a mortgage rate, for example, which is a six-figure differential over the course of your life if you start buying a house in your 20s or 30s. This also gives you better rates on auto loans. It's going to

give you better overall lending in every single situation. Now, if you're a person who is never going to take on debt, you pay cash for everything, this is not going to matter as much for you. But for most of us who actually go out and we get loans on our mortgages or you go out and get a loan on a car. This is going to reduce that number significantly and save you hundreds of thousands of dollars over the course of your lifetime, especially when you factor in opportunity costs. Like what would happen if you save that money and you invested the savings instead? That'd be a huge difference on how much you can get. Also, it can lower your insurance premium. So a lot of insurance companies will run your credit before they give you those insurance premiums. And guess what?

You can save money on those insurance premiums as well because you are building up your credit score. So those are the four reasons why we want to utilize credit cards and the four things that I think most people need to factor in before you use credit cards. Now, you're going to hear a lot of people out there who are financial gurus who say things like using credit cards will make you good with money or using credit cards will make you bad with money. And I do not agree with either camp. Using credit cards does not make you good or bad with money. They are just a tool. They are just a tool and how you use them determines your outcome. So do not think for one second that if you don't use credit cards, you absolutely need to have a money automation system. You don't. It's a great tool to help you through

that process, but you don't have to use it that way. Or don't think like if you listen to Dave Ramsey who says, never use credit cards, that you were going to be bad with money. That is not the case either. And so from both standpoints, in my opinion, using credit cards is just a tool. And it's going to be how it fits in your personal financial situation is the best option for you. Now, for me, in most of our systems, we use credit cards and we use them as spending tools that you pay off every single month. And so that's really, really important. And so I'm going to talk through next, my rules for getting a credit card. And then third, we'll talk through the rules for using credit cards, which is probably the most important part as we get through this. And then after that,

we're going to go through some of the options for credit cards, how to choose one, all that kind of stuff as well. All right. So these are my rules for getting a credit card. And I want to say this up front. if you have ever been in credit card debt in the past or you have had issues with credit cards, meaning you go into debt cycles with credit cards or you get two, three months behind, or you've had tens of thousands of dollars in credit card debt, no matter what end of the spectrum you've been on, if you've had trouble with credit cards in the past, I really don't want you using them because for most people, it might be a temptation for you to go back into debt. That will absolutely kill your wealth building ability.

We do not want you in credit card debt. That is the number one thing we want you to avoid if you have. any anything else in life is avoiding credit card debt. Why the interest rates are so incredibly high that it is almost impossible to build wealth and cycle into credit card debt at the same time. This is why a lot of people like Dave Ramsey are trying to teach people, hey, don't use credit cards because there's so many people that go into credit card debt. It is a dangerous, slippery slope if you've been in credit card debt before and you know yourself. Let's get real here. You know yourself and you may be saying to yourself, I've been in a credit card debt two or three times, but this time is going to be

different. It's likely not going to be different. And so I, I want you to just sit this one out, use a debit card, and move forward that way or use a cash system, depending on which system you like the most. Now, here are my rules for getting a credit card. We have four different rules here for when you get a credit card. Number one is focus on simplicity first. In everything in your personal finances, you want to make sure simplicity is there. Simplicity is the key to making your life easier when it comes to your money. You need to simplify first and you can get a little more complex and add more later on. What do I mean by this? You're going to see people out there who are huge into the points in Miles game or travel hacking.

That, my friends, is a full-time hobby if you really, really want to get into it. And I'm not kidding about that because you've got to know, hey, which card do I open at what time? What are the perks and benefits to this? How do I use these perks and benefits? You could go through an entire college series and not know everything about the points in Miles game. It is a complicated thing that you really need to spend a lot of time on. There are entire podcasts. There are entire YouTube channels all on points and miles and the intricacies and the cards that you should open now and the big sign-up bonuses right now. All that stuff is great. And I actually love talking about that stuff. And I think we talk about that on this show at times. But if you're just getting started, simplify first. And you may be asking yourself, well, how many cards should I open, especially if I want to be a travel hacker or if I want to do all these different things? Let's start with one to two cards, okay? One to two cards is where I want you to start. And first, start with one. After you utilize that one, you get the sign up bonus or whatever else is going on. Then you can move on to two. But you got to figure out exactly how much you need. And then maximum, if you're thinking through, hey, I want to start travel hacking. I want to get all these different cards. You know,

don't carry around more than four at one given time. That's to simplify. And then once you become a master travel hacker, you're mastering the points in mile system, then you can decide if you want to expand out on that. But if you want points and miles and you're trying to get those sign-up bonuses, you know, four cards, that's fine. But you've got to be able to manage those, manage what the yearly fee is, and understand exactly where you land on that. Okay.

So one to two is the best for most people if you're not looking to maximize and squeeze every single cent of points and miles out of it. Number two is I want you to get the best card that your credit score will allow. Now, this is something that if you're brand new to credit cards, you have no credit score. you may need to go out and get a secured card first. What's a secured card? That's a credit card that acts like a debit card, but you can build credit. So Chime has a great one, for example, where you can open up a secured credit card through Chime. You put money into that card as a deposit, and then you can spend whatever money you have on there. But it works like a debit card, but builds credit like a credit card.

So that's where if you are just starting out, you are brand new to credit. That's a great way to look at this. And if you're just looking to build up your credit score and you've gotten to credit card debt in the past, that's another great option is to have a secured credit card be your main form of paying your bills as well. But if you're someone who has an established credit score, you've been building credit for some period of time, then I want you to get the best card that your credit score will allow, something like the Capital One Venture or the Chase Sapphire. If you want to see all my favorite cards, by the way, if you go to the Personal Finance Podcast.com, up top there on the menu, you'll see credit cards there. It'll say best credit cards and you can go check those out.

Those are affiliate links. That's actually a way to help support the show if you're interested. But those are all my favorite cards up there on that page. And so you can look into those. But I love, you know, travel hacking. I love things like the Chase Sapphire, the Capital One Venture, Amex has some great cards. City has a few great cards. There's some good stuff out there that I think you definitely need to be checking you out. And looking at the sign-up bonuses at the timing of when you're opening these cards. Like at the time recording this, Capital One has an awesome deal at that point in time. But there are other deals out there as well. In addition, if you have a business, you can open up business cards and business cards

have some fantastic bonuses too if you spend enough in your business. Rule number three for getting a credit card is if you have other cards, you need to manage those fees by downgrading when necessary. So let's say, for example, you have three credit cards open and you're about to open your fourth credit card. You're trying to go through the points in Miles game and play this game where you were going to get some of these sign up bonuses and use those sign up bonuses in order to travel, or whatever else you're doing. Look at your other three cards and say to yourself, before I open this card, do I need to downgrade one of these cards because it is not going to get used as much as some of these other ones will? What do I mean by that? What I mean by that is say,

for example, you have a Chase Sapphire. And when you have a Chase Sapphire, there are two versions. There's the free version of the Chase Sapphire, which they call the Chase Sapphire. Then there's the Chase Sapphire Preferred, which is a $95 annual fee. And then there's the Chase Sapphire Reserve that has a $550 annual fee. Okay? So let's say you have the Chase Sapphire Reserve. You think you'll use it a little less, but still want some of those perks. And so you can downgrade to the preferred or you can just downgrade to the Chase Sapphire.

And so because of this, if you don't want to pay those annual fees, I want you downgrading your cards more frequently. You can call them up. You won't lose your credit history, which is why this is a beautiful strategy. You can call up Chase and say, hey, I'm not looking to pay this annual fee. They may waive the fee, not every time, but sometimes they will give you stuff or they will waive the fee. And so you can ask that first and say, hey, can you waive this annual fee? If not, then just say, okay, I'm going to go ahead and downgrade this because the fee is not worth it to me.

And so ask them what the downgrade options are, and they will give you a couple of different options, and then you can go ahead and downgrade that card. But I want you downgrading cards. You're not paying annual fees on all these different cards. If you have three or four cards, that could be hundreds of dollars per year that you're paying annual fees that you're not using any of the benefits for. So I want you to make sure that you are utilizing those benefits. Now, sometimes it's worth it to keep a card open for the annual fee. Like if you're going to go get TSA precheck, then the Capital One Venture card, for example, will pay for that for you, and that might just wipe out the annual fee right there.

And so there's some cases where you can look at all the additional perks, and most of these have tons of perks. For example, we have a YouTube video on all the perks of the Chase Sapphire that we walk through exactly, you know, I think it's like 21 different benefits that we walk through that are the key benefits. And those perks keep adding up over time. So make sure you are looking through some of those if you ever want to. check that out. Number four is use them as a tool for money automation. This is the most important part,

and I want you to already have a plan in place before you are opening that credit card of how you're going to use this as a tool for money automation. What do I mean by that? What things are you going to spend on this card automatically every single month in order to either hit the sign-up bonuses or in order to use this as part of your money automation system? Because it's really, really important to already have a plan in place. You don't want to just open a card and then try to just spend the money. What this is going to cause you to do is as you get closer to the signup bonus time, you may start to recklessly spend because you want to hit a signup bonus. I don't want you to do that whatsoever.

You need to have a plan in place ahead of time and have a plan in place on where you're going to automate this so that you don't have to worry about it and you know you're going to hit that sign up bonus. So A, automate paying your bills with the card. B, automate paying off the card every week or every month, depending on what works for you. And we're going to talk about rules for using credit cards next. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post

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So it's really important to do that. Number one is you must have cash on hand before you spend with the credit card. Now, this is the most important thing that I want people to understand. A credit card is not a tool where you swipe your credit card and you figure out how you're going to pay for that thing later. That is absolutely not the right way to do this. If you use credit cards that way, the banks are going to beat you. meaning that the banks are going to make a ton of money off you. Instead, I want you to reverse that

psychology. I want you to say, hey, I'm only going to swipe this credit card if I have the cash sitting in my checking account and or savings account. Typically, we want it to be in your checking account because your checking account is just a money flow account. So money's just going to flow out of your checking account and it's going to go towards paying off your cards. If you don't have that cash in your bank account, you do not swipe that card. That is the number one rule. This is a is something that if you do not spend intentionally, and if you do not think through this properly, you can get yourself in a world of trouble. And this is how people get into credit card. They spend the money first on the credit card and then they figure out where the cash is going to come from later.

Well, when you figure out where the cash is going to come from later, guess what happens? The cash all of a sudden just doesn't show up because you didn't have a plan in place. And so you have to make sure the cash is on hand first, then you swipe the credit card. That's rule number one. Rule number two, you must pay the card. off every single month. And preferably, what I do is I pay the card off every single week. See, what I learned early on is for me personally, this is just my personal situation and exactly what I do, is I pay my cards off every single week. Why? It helps me just stay on top of everything. The last thing I like is for a credit card balance to get larger and larger. And as I've had kids,

now we're having our third kid on the way, I'm married. And so our family is growing to a family of five, we spend more money now. And because we spend more money now, those card balances can grow over the course of a month. And I don't like for them to get too larger balances. So I like to pay the card off every single month. The only reason for that is because I want to stay on top of it. There's no other magical reason on why I do that. It's just a personal preference. If you notice your credit card balances are getting out of hand and maybe you're even starting to fall behind because you're not checking to see if you have the cash on hand before you swipe that card, then start considering paying it off every single week.

but I want you 100% of the time to pay it off every single month. How do you do that? You automate it. So you go into your bank and you set up automations and saying, hey, I'm going to pay off the full balance every single month on this specific date. And you can connect your checking account to your credit card and be able to pay off that full balance every single month no matter what. Because that way you will never have a situation where your card does not get paid off.

So that needs to be automated. Otherwise you're relying on your wheel. You're relying on your memory to remember to go pay off that card. That's not what I want you to do. I want you to automate this instead. So you must pay it off every single month or every week automatically. That's number two. Number three, I want you to say this out loud, say it to your friends,

high five when you're talking about this. You will never pay a cent of interest to the banks. If you're using a credit card, I don't ever want anybody listening to this show paying a cent of interest to the bank. It is really, really important. to make sure that you commit to this. What the banks want you to do is open a credit card, get 60 days or so behind where they still get their money,

and they want you to stay in this cycle of 60 days behind. Why? Because you are paying interest to them. In every single month that you pay interest to them, they are making more and more money. And guess what? If you leave that balance on there, when balances get out of hand,

compound interest starts working against you instead of for you. And so I want you to make sure I am never going to pay a cent of interest to the bank. How do we do that? We follow rules number one and number two in order to make sure we are successful with rule number three. So again, rule number one is you must have the cash on hand before you spend on the card, okay? Rule number two is you must pay off the card every single month or every week automatically

using automation. And then number three, you must never pay a cent in interest to the banks. This is what they want. They want to make that money off you. That is how you beat the banks and use credit cards to your. advantage and then everything else is a byproduct. The points and miles are a byproduct. The credit score is going to be a byproduct of that. The automation pros of using it to spend money. All of those are going to be a huge byproduct of you following those three rules. That's all you have to do.

So those are going to be the major rules on how to master credit cards and beat the banks. What we're going to talk about next is how to choose between different types of credit cards for your situation and what you're motivated by. All right. So quickly, what I'm going to do is I'm going to run through different types of cards and what you can look at. Again, if you want to see my favorite cards, if you go to the personal finance.com and you look at the top menu there, there's going to be best credit cards. You can check it out there. Again, those are my favorite cards that you can kind of look through it and look at. Number one is travel rewards cards. This is how I really got interested in credit cards was because one of my big values is I want to travel more. And the way for

me to travel more, especially when I was in my early 20s, was doing it for free because your boy did not make much money. And so because of that, I was still able to do all these really cool trips. We had our honeymoon when we were completely broke. We had a fully paid honeymoon to Rome. And we had like a seven-day trip to Rome. It was absolutely amazing where we went to a couple different places in Italy, but Rome was the main place that we stayed. And so even if you're broke, but you are good with money, meaning you manage your money well, you can utilize travel cards and be able to get travel-related expenses paid for your hotels, your flights, which are always the big one. In addition to rental cars, all of those.

of this stuff can be used from points and miles. Okay. So that's number one. If you want to learn more on how to travel hack, we actually have a travel hacking mini course. It's like a five email course. We just send out five emails. And you can check that out as well when you go through this process. Number two is cashback cards. Now cashback cards are for folks who would rather have the cash back and they can use the cash for different things. Maybe you like to shop on Amazon. You can use the cash back and shop on Amazon. Maybe you like the perks of having cash so you can invest those dollars, which is what I talked about at the top of the show my friend Rob Berger does. He invests his cash back. Maybe you like cash back so you can spend money on more fun things. Maybe you save it for Christmas presents. That's what my parents do.

They use their cash back and they save that up for Christmas presents at the end of the year so that there's not a huge issue there. There's a bunch of different reasons why you would want to use cashback cards. But if you like cash and you like money, who doesn't like free money, then cashback cards are a great way to go. Balance transfer cards. So if you have a high balance on a high interest credit card, you may want to consider something like a balanced transfer card. If you're already in credit card debt and you're listening to this episode, first of all, if you're a drug addict, don't go to listen to a podcast about drugs. And so that's the same thing when it comes to a credit card podcast. But if you are in credit card debt, you can use something like a balanced transfer card

to try to get caught up. And the reason why you would use a balanced transfer card is to transfer this money over to a zero percent interest card. And your goal is to pay that off as fast as you possibly can within the timeframe. So sometimes a zero percentage of card, you don't have to pay it off for 12 months, sometimes it's six months, sometimes it's 18 months. You want to get the longest time frame you can find and the lowest interest rate, preferably a 0% interest rate so that you can pay off that card as fast as you possibly can. Number four is business cards. Now for folks who own a business, my entrepreneurs, or if you just own an LLC and do a little business in there, you dabble a little bit, you can open a business card. And with business cards, you get a lot of

additional perks, but in addition, you get big, big sign-up bonuses. So something for example, right now, this will probably be expired by the time this episode comes out. But the Chase Inc. has one of the best deals I've ever seen on it right now where you get 120,000 points if you spend $8,000 within the first three months. And so that's an example of like a big sign-up bonus for business cards. MX has great business cards. Capital One has great business cards with their spark line. And so there's a ton of different cards that you can use. Retailer cards. If you find yourself shopping at a retailer pretty frequently. Most of them I would not use, meaning that most retail cards are absolutely crap. One I really do like is the Amazon card, because if you shop at Amazon a lot, you get 5% cash back

on a lot of different things, in addition to cash back on some other items as well. So that Amazon card has a ton of different perks, the prime card, I think it's called, and so that's a good one. Another one is if you are going to use an airline, for example, I'd mention that we used United recently, and so you can get the United card and get free flights, for example, and that is also linked up to your chase account. And so you can transfer points in miles from airlines to your chase account and or vice versa. And so there's some cool stuff that you can do there. But you also get things like priority boarding. You get free check bags. You get access to airport lounges like I talked about. Another one is the Southwest card. So we've talked about in the past how if you have the

Southwest card when they have these big bonuses, you can also get something like a companion pass with it. And the companion pass allows you to travel with somebody else where all you pay is the taxes and the fees. and so basically your second person that you're traveling with is completely free. And so there's ways to do stuff like that. So there are some airline cards that I absolutely love. Number seven is hotel cards. Now I've had hotel cards in the past. I found that some of them, unless you're really loyal to a hotel, some of them don't get the best bang for your buck, especially as your first card. I'd rather you have something like a Sapphire or a venture and then use that for travel awards over some of the specific hotel cards. But there are some hotel cars if you are frequent to them that can be

very, very good. And so I would go something like a flexible card first, like I mentioned, and then trickle down to hotel and specific airlines later on. And then secured cards and student cards. So secured cards like we talked about are great for you put the cash on the card and then you spend it, but you can still build up your credit score. If you have a low credit score, that is a great one to go and look through. Now, how do you weigh out all the other perks that come with a card? This is a big thing I want you to understand is number one is sign up bonuses. Most people open new cards because they get a sign up bonus. And what a sign up bonus is, is you get X amount of points for spending $3,000, $8,000 in the first three months in that card.

Some of them, you only have to spend $1,000 and you get like $500, something like a Chase Freedom Flex does that. But if you're looking at bigger cards and you spend more money every single month, maybe you spend $2,000, $3,000 a month on cards, meaning on your bills, you put every single bill on there that you can. Then you'll be able to kind of get some of those sign-up bonuses. Also look at the rewards programs on what rewards you can get out of it. And you can look at the foreign transaction fees. If you travel a lot, looking for zero percent foreign transaction fees is going to be really, really cool.

But there are other perks that a lot of people don't know about when they open up a credit card. So one is purchase protection. This is going to replace the cost or repairing an item that you bought with that specific card. So an example is, let's say, for example, you buy a laptop and your credit card covers the cost of replacing that laptop. Well, that is a great thing to put on your credit card where I've seen people do this a number of different times with, for example, AirPods, where I had AirPods that were damaged pretty much 90 days into having them. I had them on this credit card. They paid for that purchase protection to replace him. Extended warranty. So some cards offer extended warranties beyond manufacture warranties on

items you purchased, typically by an additional year. So this can save you from buying an expensive warranty separately. So things like appliances, things like that, that is great for this kind of stuff. And you can check into your car to see if they have that. Price protection. So some credit cards, if you buy an item and then you find a lower price later on, some credit cards will actually give you the difference based on that price protection. Now, the retailer also might do that. I know Target Walmart, I think, do that. But that price protection is a really cool and important thing that you can look at. Also, return protection. If some retailers won't accept a return, you can also find cards that have return protection that will allow you to extend the return window

for an eligible purchase and they will reimburse you. Travel insurance. This is a huge one if you're begin to travel. So beyond standard travel rewards, some cards will offer you travel insurance that covers trip cancellations, interruptions, lost luggage, even emergency expenses. I've seen emergency expenses for a few thousand dollars being covered on credit cards. So that's a huge one. Rental car insurance. I don't have to get rental car insurance anymore whenever I rental a car because I put it on the right cards that already cover that rental car insurance for me, so I don't have to pay for that. Also, high-end cards will come with concierge service that can assist people from making dinner reservations to booking travel. That is some really cool stuff on some of those

high-end cards. Airport lounge access, we've already talked about. Cell phone insurance is another one that a lot of them will cover. And so you can put cell phone insurance with that card. I think that's a really, really cool way to get your cell phone insurance without having to pay for through the actual retailer. Statement credits. So some cards will offer annual statement credits for specific categories like dining, travel, streaming services, all those different things. So If there's something you use a lot and you want statement credits, that's another thing to look into. Event access. Love this one for a lot of different scenarios. So you can get specific event access only through your car. So for example, like this weekend was the U.S. Open in New York City.

Chase was a big, big advertiser there. You could do a lot of different things if you're really into tennis or something like that to get in the U.S. Open. You can get into concerts. You can get into sporting events. There's a lot of cool different perks that these event accesses will give you. In addition, they also have unique dining experiences that you can have access to. because you have that card. And then lastly, there's things like shoppers discounts. For example, Capital One has a tool that allows you to get discounts when you're shopping. It's like a honey chrome extension that you can use to get cash back.

And usually it's even a little more than maybe Rackettin or honey or whatever else you use. So those are just some of the things that I would look into when I am going to open and utilize a card. So listen, this is how we think about mastering credit cards and beating the banks, is you want to make sure you have a strategy and plan in place with your cards on how you going to use them. If you follow our three rules on how to spend with a credit card, you will never ever get in trouble when it comes to utilizing credit cards. And I think that's the most important thing that you need to note is use those three spending rules, never fall astray from those, and you will have a great credit score, you will get as many perks and points and miles as your

spending will allow, and you will have automatic spending where you don't have to lift a finger to pay your bills. And so this is how you start to build out an automatic cycle where you're not spending so much time in your finances. Instead, you're automating it so you can remove your willpower from that equation. You can build wealth automatically, which is what we want you guys to do. So thank you so much for listening to this podcast. Can not thank you guys enough for investing in yourself because that's exactly what you're doing when you watch or listen to this show. And I appreciate each and every single one of you being here with us today. Share this with a family member or friend. If you're getting value out of it. And we appreciate each and every single one of you. We will see you on

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