Greetings! I trust that this will find you well in every way.
Do you remember the old saying hurry up and wait? That’s what this challenge with the coronavirus makes me feel like just now, hurry up and wait. There’s just so much I want to get done, so much of my old way of life I long for and want back. But that’s not in the cards for now and so it looks like, I’ll just hurry up and wait.
While we hurry up and wait I have a suggestion for you. Make sure you are managing your bank cards as efficiently and opportunistically as you can. I’m talking credit cards here friend. I have no idea why anyone would use a debit card other than to get cash from a debit machine, in the very rare case you need cash nowadays like paying the baby sitter. Credit cards offer more benefits like cashback and airline miles, whereas debit cards offer a lesser benefit if any benefit at all. Can somebody tell me what they’re good for?
Allow me to start over here, I meant to start this week’s market update with credit cards can be either friend or foe. Credit cards are an interesting financial tool because we have total control of a powerful resource and institution that we use and master, or it uses and masters us. (Makes me wonder all of a sudden why they call them MasterCard??) If I master it and control it, I get to use someone else’s money while my money is in the bank earning interest. And it gets even better because the card company pays me to use their card! It’s as simple and valuable as that. The only role you absolutely must play is to make sure you pay the credit card off each month and never carry a balance. That’s absolutely the way that you beat them at the game.
Different cards provide different benefits I personally favor cashback. Best rate I’ve found CITI has a cashback card that pays 2% on all purchases you put on it. The math works like this. They pay me 2% to use their money and I’m earning 1.5% on my money in the bank. That’s 3.5% on all of the money I flow annually through the card and you’d be surprised what you can put on a card. My fiancée Kelli told me recently she uses her card for every purchase and was actually paying her rent on her CITI card. Yes!!
All it takes is a little discipline and you take advantage of the system that so wants to take advantage of you. I almost forgot to mention another thing a credit card provides is various forms of consumer protection built-in like product warranty and debit cards often do not. And if someone steals from you through your debit card it’s possible that that turns out to be your problem, not the banks. With a credit card, it’s the company’s problem. And on top of all of this seeing how and where I spend all in one place, helps me manage best.
And so during this time while we hurry up and wait, why not analyze how you use cards or they use you and ask yourself, what’s in your wallet? (I can’t believe I said that.)
If you have questions or we can help you in any please call!
Jeff Christian CFP, CRPC