I know I woke up and chose violence by posting this, but hear me out!‎
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The love of credit card points and perks is strong. And, I get it. It feels like you’re getting something for nothing. If you’re spending the money anyway, might as well get the points, right?! But here’s the thing. With every transaction, the idea of those points is hanging out in your subconscious influencing your decision making.‎
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Imagine you go out to a fancy dinner and all you have with you is $100 in cash. How are you going to order and how much will your meal cost? Now imagine doing the same and planning to pay with a credit card. Do you think your bill will be exactly the same?‎
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Forbes has a great article called “Do People Really Spend More With Credit Cards?” that references two studies that show people will spend as much as DOUBLE when using a credit card vs cash. And credit card points play into that psychology. You drop $150 on that dinner but think “well, at least I’ll get the points”. But if the points are worth 2%, that’s only $3. If you just spent $85 in the first place you would be SIXTY-TWO dollars better off!‎
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And you may think I’m talking to everyone else, right? YOU’RE the one that’s beating the system. As of today Visa is worth $481 billion. MasterCard $347 billion. Amex, $136 billion. I promise, in none of their conference rooms are they discussing how to limit people taking advantage of their points games. The games are designed so they always win. ‎
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For the record, I do use a credit card. I like the security it provides by preventing direct access to my debit card/bank account. But I try to be hyper aware of how I’m spending my money and I refuse to “chase” points. Instead of spending $1,000 to get $20 back, I’d rather just spend $100 less. That’s like 10% cashback! What a deal!‎
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You will definitely get rich by living below your means and investing. You will never get rich from credit card points.‎
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As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.‎
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-Jeremy‎

‎via Instagram