00:00 Speaker B
Next question, talk to me.
00:03 Speaker A
What is what is truly the benefit of having a credit card? Cuz right now, I’m really happy with my debit card, but everybody tells me having a credit card is like you need to have it.
00:15 Speaker A
And I’m looking into getting it, but I want to know like what are the actual benefits of having the credit card.
00:24 Speaker B
I love it, right? Uh, I think what happens in certain communities, you have other people that inherit a different bias when it comes to, you know, if you’ve ever had a bad experience, right? any past financial trauma. So you might have a parent, a relative, and or a friend and they might have a 4 or 500, you know, a 5, 600 credit score and as a result, they’re like, don’t use credit cards. And quite often, you know, a lot of people come up with that concept. Oh, you don’t need credit, just use cash.
01:00 Speaker B
Here’s the reality. With your credit, it gives you some inherent leverage, aka through the through the idea of having points, having rewards. And so you can look, you can have a credit card that has, you know, I get almost a million points with American Express. I got a million points with my uh, you know, Chase Sapphire, you know, so you’re looking and those points are, you give you ability to redeem them for different rewards, right? You know, miles and trips, uh different dining benefits, etc. But here’s the idea.
01:46 Speaker B
You have to use a credit card responsibly. I do I never recommend using your debit card unless you need to get cash from the ATM. I’m buying gas, groceries, uh any other thing in my life on a credit card, but here’s the reality. It all boils down to are you using it responsibly?
02:18 Speaker B
I never recommend using a credit card if you can’t pay that balance in full within that next 30 days when the when the actual bill is due. And so, the way you look at a credit card is not saying I am borrowing money to then buy something that I can’t afford. That is when a credit card does not make sense. A credit card makes sense if you’re doing your day-to-day purchases, your monthly expenses, anything from, um, you know, your utility bills, groceries, etc, gas, etc. But the idea is you have to use it responsibly in order to truly benefit from it. And so I recommend only using a credit card if you can pay everything in full.
03:09 Speaker B
So in short, in a very long-winded way of saying it is, you can use a credit card, but only if you can afford it. And the benefits of it is the points that you can eventually redeem and and get discounts and you know, free trips and hotel stays, etc. uh as you continue to pile up points.
03:33 Speaker B
All right, so let’s actually go through the benefits of a credit card, right? As you can see on this chase Sapphire, um, I have 815,000 points that can all get redeemed, right? I can literally get cash back, go travel, redeem as gift cards. And so every dollar that I spend has the ability to uh go back and do something even better, right? And here on my Amex, I got 970,000 points. Once again, I can redeem these guys, I can get a statement credit, I can redeem as gift cards.
04:09 Speaker B
Uh and to give you even an example, my wife and I, we went on a trip to Morocco, um kind of late last year and it cost me 100,000 of my points and I put, you know, a couple hundred bucks with the flight and that was like a finesse. Uh and mind you, I was going to spend this money anyway. That’s the thing, right? When you look at a credit card versus a debit card, this is money that I had to spend. And so with that debit card, you’re not getting any points for your dollars, but with um with the credit card, this is money that I was going to spend anyway.