Rewards Stacking: How I Build Wealth with Credit Card Rewards
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- Опубліковано 23 кві 2024
- Several years ago, I stumbled upon a quote from Dave Ramsey about credit card rewards. I’ll never forget those 11 words. :
“No one ever says they got rich off of credit card points.”
As I read his words, I knew immediately that he was wrong. One could build wealth through credit card rewards. In this sense, credit card rewards aren’t special. Saving and investing small amounts of money from any source over time will turn into piles of cash. We just need to allow compounding to work its magic.
It was then that the idea of Rewards Stacking was born. Over the past four years, we’ve saved and invested all our credit card rewards. Our balance now stands at $37,834.55.
While that doesn’t make us rich (yet), it’s an impressive sum, particularly when you consider that it required no sacrifice on our part. It wasn’t about cutting back or working harder-just saving and investing the free money credit card issuers send us every month.
In this video, I’ll share exactly how we did it and, more importantly, how you can do it, too.
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ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
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Here's the article: www.allcards.com/rewards-stacking/ And remember, you should only try rewards stacking if you pay off your credit cards in full every month. Otherwise, the interest you'll pay is more than the rewards you can earn.
Credit cards, Travel Rewards 😂 the Brand New Currencies
The Costco Anywhere Visa is one for you to check out.
“I know, he doesn’t like math.” Got me to hit the like button in 40 seconds, Rob 😂
I'm not a fan of that Dave Ramsey guy either. Can't stand his attitude as well.
What I do; Fidelity 2% on everything, directly into brokerage every month. Added$1,700 last year. Not big money but adds up over time.
I love my Fidelity credit card. I do the exact same thing. Pretty cool how much my brokerage has grown over the last handful of years.
Does it automatically invest it for you?
@@TheSorrowWithinMe yes, it will transfer the amount when it reaches $75.
@@TheSorrowWithinMe - I have the 2% Fidelity card. The reward, $250-$300/mo, is deposited to my daughter's Roth acct. But it needs to be invested. I sign in, and put it in Fidelity's S&P fund. An insanely low 0.015% expense. (i.e. over 66 years, the total expense is 1%) 2 minutes, the first week of every month is a small effort.
@@SpookyEng1 - I have the same card, deposits go to a Roth IRA. I see the cash deposited early each month, but need to make the 'buy' of the fund I want. Did I miss an option for automatic investment?
Yep, I’ve been doing this for about 8 years now, where all credit card cash back rewards are functionally put into a 3-fund portfolio. If I can’t put them there directly, I’ll just get the statement credit or purchase credit and manually match it once a month. It adds up quick!
I agree people underestimate this and don't understand it. I choose to seek points and miles and each year usually save $4k-$6k net of annual fees on flight and hotel savings. A lot of this comes from new sign ups that I'm willing to do because the spend is so easy to hit. This allows my family of three to get a lot of highly discounted vacations and extra trips with friends that we would not otherwise do if we had to pay cash. So some is a true savings and some is additional flexibility when trips come up.
Same here. I play the miles game. Not only do I get miles, I have had several free airfares that were booked at discounted miles, so I'm winning in more than one way. But we want to fly; not everyone does.
"Do you carry Android? I guess some people do"....lol shaking my head. Not everyone is Team-Apple, just sayin'...
It's about 50/50 in the US and about 80% worldwide android users.
@@tonyriddle5491 That's about what I see in my circles too, about 50/50 if I had to put a number on it. So yeah, I don't know what he's talking about putting Android down either.
Love my Android so much more than my iPhone. And, it's cheaper!
If I followed Dave Ramsey's advice, I would have A LOT LESS money.
😂
David Ramsey doesnt even buy his own bs
Particularly if you follow his retirement advice that an 8% withdrawal rate is safe.
100% onboard with you.....I have been doing this for many years.
Way to go Rob!!!! We once got enough bonus miles that covered our RT tix to London with a free for a year airline credit card. And I love your math. You can definitely come out ahead on the credit card games.
Would love to hear you talk about cash back vs. points and the idea of churning.
Don't knock Dave. He targets a very specific audience who, for the most part, should not go near a credit card for obvious reasons. For the rest of us, who have graduated from Dave, or never needed him in the first place, congratulations! Dave helps a lot of people to be able to come up for air.
DR is worth well over $200 million incl real estate holdings and growing. Im sure he can handle some feedback incl alt views or opinions. Dave does the same. Comes with being a public name.
He does but he also sometimes gives bad advice and he never admits fault, which is a profound character flaw.
The problem with Dave is that he's good in some areas (like basic personal finance), and downright awful in others (like investment), but he comes across as equally confident about both.
This is a problem with a lot of "guru"-type personalities.
More and more businesses are fighting back against fees by charging the customer up to 3% interest on credit card transactions. My wife and I have started carrying substantial cash again to avoid these fees. I’m interested in how this is going to play out - are cardholders just gonna use their cards anyway and negate the rewards or are they gonna respond by going back to cash? And if they do, how will credit card companies respond? Bigger rewards? Lower merchant fees? It’s all going down as we speak.
I bet we will see more businesses charging a fee for credit card transactions. I'll just switch back to cash.
This is true, and we will go back toward cash.
For years my wife and I used United cards to get frequent flyer miles. We've had free first-class flights all over the US, Mexico and Australia, and combined with hotel and time-share offers we've enjoyed great vacations for $200 ~ $500 per week at really nice resorts and hotels. But since Covid we've stopped flying and have built up a huge number of miles, so the time has come to switch cards to something that offers cash-back. Thanks for the overview of the different card offers, we'll probably switch to a card that offers 2% ~ 3% on everything.
Totally agree with you Rob. Have specific cards for specific areas giving me the highest return (ie food 5% card). On the 1st of month go into each CC on line and prepay all in full for the month. Now also looking at the Robin Gold card.
Great content. I must be doing something right if I did the same exercise you did. Good on ya Rob. Now find an SEC team to follow...
Amex 6% cash rewards on groceries.
Amazon card 5% cash on Amazon purchases.
Gas card 3% cash on gas.
Visa 2.5% cash on everything else.
Each card is a different color. Blue for Groceries, Red for gas, etc. Easy rules for the spouse to follow.
Which Visa do you use for 2.5% on everything else?
The Amex Blue Preferred gives you 6% on groceries and 3% on gas. You don't need 2 cards.
@@myutoob2011 I was looking at this, then saw a $95 annual fee. That would be a good portion of the rewards I would see for gas and groceries, unless you have to call them every year and "complain" about the fee and get them to waive it.
@@piggsinablankie I understand. It took me a while before I would pay for a card. They do have special offers on particular purchases that can offset the fees.
@@myutoob2011 oh ok, thanks. I'll look at that card a little more, but yeah, paying a fee for a CC always got under my skin. My philosophy always has been they should be paying me to have my purchases go through them.
I've gotten back over $1000 through many years, but applied to paying the card. This frees up money for other items including investing.
I started this year. With swppx infex fund, can buy partial shares. Very exciting. Costco pay just once a year but you can't go wrong on 5% on gas all year round.
I don't chase cards and have used the same 2 cards for many years, USAA (1.5% I think) and Citi Costco (multiple %'s). We end up earning enough to pay the household reoccurring electric, internet, subsription TV, cell phone, and garbage for 3-4 months. Haven't paid interest on a card in more than 15years.
Figured this out after college and started rolling all my credit card / bank bonuses and cash back to a dividend fund to generate more income. Built it up to the point of covering 3 months of expenses. This year my wife and I used our bank bonuses to pay for our wedding.
One thing to be mindful of is that if you get new credit cards, it can temporarily lower your credit rating until they age. So maybe wait to get 10 store cards to get everything at 5% until after getting that mortgage or car loan. 😉
Good job! Look forward to anymore info on Credit Card rewards. Hope you get your gold metal Robinhood Credit Card.
Good info. I like having two cards, Citi double cash and Costco visa gets me 2-4% on everything.
i try to put everything on a CC, including ,in the past, continuing education expenses which would later get reimbursed, as much as i was allowed for a new car purchase( they limited it to 2K) and currently health insurance. i used to harvest my rewards and put them in VOO regularly. for the past year, i have been slacking off and just put them in my moneymarket fund at 5.28% apr and from there it gets used for my monthly draw. egad! last reward i used to pay for a purchase. tsk tsk...
I've been wanted to start investing my cash back rewards into the VGT ETF.
Compounding Rewards.
Gotta like an attorney who likes math.
Hope your back is on the mend…
Hi Dave. Looks like the back is better, he's sitting down in recent videos.
@@noreenn6976 Hello Noreen -- I hope all's well with you in Florida. And I hope Rob will be up for sitting on Monday May 6. Looking forward to your moderation of the chat...da
@@davearey4922 All is well, hope all is well with you. Yes, hopefully Rob will be sitting for the May 6th livestream.
DR sells to people bad at math by telling them they are bad at math while ignoring those good at math by stating being good at math doesn’t matter to people that are bad at math. A complex but profitable formula…for those good at math 🤣😎.
I am curious if the Discover debit card offering 1% cash back would be safe for those who are not "credit card people."
I guess (realistically) what matters most is if a person has the discipline to adhere to a budget.
I use 3 primary no fee CCs, usage is based on cash back points, 5X gas, 3X eating out and grocery, 3X utilities, and 2X on everything else. Last year, more than 2,500 cash back. But, I didn’t invest it, I spent it! Overall, I still have over 20nCCs in 50 years. Never close them because it would ding my perfect credit score. Just need to remember to charge at least 1 small item per card per year so they don’t cancel you.
Hey Rob - When I was 16 (I'm now 67) my father, a banker, cosigned for a credit card for me with a stipulation. That being, if I didn't pay it off every single month and even had to pay one cent in interest he was going to cancel it. So with the fear of Dad in me I followed his direction. But he also told me never to have more than one credit card, however, make sure I have a "good one". Well back then credit cards did not give cash back because if that was in place I'm sure he would follow your advice. That being said I still only have one credit card (Bank of America Cash Rewards - chosen category with 3% back are online purchases). After watching this I need to rethink what I want to do based on your recommendations. So my question to you is at any given time, how many credit cards do you have?
Love it!
Is it true that if you take your cc rewards out as cash then you have to declare the money as regular income but if you use it to pay down your monthly cc statement you don't?
Last time I researched this, credit card cash back is treated as a rebate by the IRS. Basically a delayed coupon. Zero tax consequences.
I'm definitely a 1 card person - just don't want to spend the mindshare on spending categories. But even that one card with 2% back adds up!
Any cash back cards for travel that you choose who to buy the travel from? Chase is good, but requires you purchase travel through them. Not willing to do that.
If you have Saphire card you get 25%-33% discount on flights using accumulated points. $300 a year travel reimbursement pays for over 50% of cost of card anually.
@@martinneumann9345 not cash back though. The major carriers all have cards that get you points to pay for flights. I am a chase customer and they keep offering me the cards but I can’t see a benefit to switch since the cash back for travel wouldn’t apply to me.
Amazon Prime card only pays 5% on Amazon purchases if you maintain your prime membership, so that’s what, a $120 annual fee? Otherwise it is 3%.
Sams card pays 5% reward on gas, Costco, 4%.
Some very good information here, thanks.. I do it slightly different and just use rewards to pay off basic necessities and sometimes larger purchases, which is nice when you make a big purchase for "free".
I wasn't aware of the options like 6% CC's for groceries, etc, but when I did the math (math nerd here too), it was only coming to around $100 or so more a year from my current rewards card (when you add in the $95 annual fee for AmEx, you essentially get nothing). For those of us that greatly watch spending, getting 2% or 5% doesn't make too much of a difference on specific categories for the year. So yeah, for extreme penny pinchers, it's good, but for me carrying that extra card or cards just might seem like a hassle bulking up my wallet.
What about cards like discover that will let you convert that money into a gift card and save 2,5, 10% on store cards? I go to home Depot and Lowe's a lot. I can just buy gift cards with my rewards money and save another 5% right there.
When I saw the title, I initially thought, "Oh no, I hope Dave doesn't hear about this", lol. I don't think I've gotten rich from credit card rewards, but I have certainly benefited regardless of what Dave says.
I'm sticking with our Costco Visa card at no annual cost and great cash back rewards. We also have Marriott and Delta cards, but they may not be worth it unless you travel a lot.
Great Information!!😅
Please talk about airline miles and credit cards.
Rob, can you clarify why you’re saying Fidelity costs a whole lot to manage your investments? I’ve always understood them as a low cost provider
There is a difference between just having a brokerage account with them or hiring them to manage it for you.
@@matthiaslipinski2826 ahh. Didn’t realize he was referring to active management specifically vs brokerage acct. Thanks for clarifying!
I cover charges with the rewards and then take what I would have paid them and put them in my brokerage account.
Started doing this when I was 24 years old and will have 41 years of compounding, going with AMEX, Wells Fargo and Visa cash back. Going to be saving and investing.
As an engineer the "he doesn't like math" insult cut deep
I started doing it too about 3 years ago. I make about $100/mo in cc rewards and that gets put in my high yield dividend portfolio every month.
Combined with my food delivery side hustle, survey taking, and 9-5 raises/bonus - I’m making $1700/mo in dividends after 3 years of doing this! And it started with CC rewards.
Is survey taking really a money maker?
why not a medium or low dividend portfolio?
@@louiswelrod not really. I made maybe $150 off of it. I dont do it any more. back when i started this journey in 2020 it was all about doing everything I could to scrape money together since we all had so much free time because of the lockdowns and stuff. "What can I do from home to make money".... I also forgot, i started an online print on demand store to that generates passive income. lol
@@michaelsaenz380 it started out that way, all in safe big name dividend ETFs... then when yieldmax came out, I moved about 20% over to that, and then some others like NEOS and Rex Fang etc for more income.
My goal with this particular portfolio is to generate income for vacations and bills.
Kinda wondered why not also mentioning churning credit card sign-up bonuses in addition to getting rewards. Yes spending $1k/month at 2% will get you $240/yr in free money but many credit cards have sign-up bonuses in that same range for minimal requirements. Many of these sign-up bonuses can be done every other years in addition to getting rewards for using them. These additional strategies can get you relatively easily $3-5k rewards each year for reasonable spending levels (say $20-30k/yr).
Discover gives 1% on all purchases, and then roastes every quarter on the spending categories it gives 5%.
We stay 12 nights annually free all by using a credit card for all our purchases. We love traveling and we rarely ever pay for a hotel stay.
What are your favorite hotel cards?
@@jkopvo We have found the Marriott Bonvoy card to be the best. They have 586 unique locations and the points earning rate is high on purchased. It’s a JP Morgan Chase backed bank card.
Solid gold video. Just a shame us Europeans don't have that much choice in cashback cc's. We're lucky with 1% cashback with a low limit. Let's see what the future holds.
I'd trade the credit card rewards for EU style universal healthcare in a heartbeat.
@@super8mateagree, I bet more businesses in the USA, will start charging a fee to use a CC
I’ve also violated Dave’s credit card rule. I have paid off the full balance BEFORE the due date every month for four years. I get little rewards payments and immediately stuff them into a mortgage overpayment. I figure getting paid by the bank to be responsible with money with money taken from debt morons is fair enough considering how much those debt morons take from me in taxes every year.
George Kamel should watch this
George knows. That said George would say how much brain power went into optimizing the points game, and are you spending more than you would otherwise because you are using a credit card, and just so you know the rewards are not coming from interchange fees they are coming from the late fees and interest paid by the folks that can least afford it. The Ramsey folks are dogmatic but at least they are not hypocrits. A huge part of their wide audience is folks who are already in trouble with money. Much of their content is more like an AA meeting than a financial planning meeting. They don't tell people who are bad with credit that using a little credit wisely can be a good thing. Rob's audience is people who are good with money wanting to optimize.
I actually like watching his content. I just get tired of Ramsey dogma. Recently, the Ramsay folks have been subtly suggesting credit cards are immoral- earning interest in the lending system is encouraged. Earning cash back in the lending system is considered abusive towards single moms. It's just weird and counterproductive.
@@yhckelly I really like their stuff in small doses hahaha. The truth is if most people followed their advice they would be better off. Most people (56%) don't have $1,000 for an unforseen expense. 2% cash back on credit card purchases is not what those folks need, because if they have one unforseen thing happen, they are going to late pay or min pay and the credit card companies know it. The real interesting part is the kind of folks watching this video who have never paid a dollar of credit card interest or late fees and are happy to take the 2% are their worst customers. The interchange and transaction fees don't cover what they are paying out. They are not dumb, so you have to assume this gravy train will come to an end at some point with lower caps on annual payouts or higher fees to access the cards with premium rewards. Miles cards make more sense long term because the redemption rates are so low and the depreciation rate is so high on the points. 2% cash back is just a money loser. So you slap a big reward on the advertisment to attract the folks that don't read fine print and pay late fees and carry balances and the fine print caps they payout at some more reasonable annual payout.
Nice, Rob, but I gotta stick with Dave because he'll let me withdraw 8% yearly from my retirement funds and I can't ever go broke 😂😂😂
Wait. wait. There is compound interest in the rewards?
You can put your Medicare premium on a charge card, and to the extent you have any IRMAA charges, the charge is not insignificant. This is basically an unavoidable cost, and getting the rewards/points is certainly a nice benefit. I also agree that many of Dave's listeners should stay away from credit cards because they accumulate debt. But others are more disciplined and will pay their credit card balances each month, so why not benefit from costs you have to pay anyway. Although I thought stacking was somehow getting rewards on more than one card for the same purchase.... no such luck.
this is only for those past 65 and NOT taking Social Security yet, otherwise the med premium comes out of SS benefit directly.
Be careful about those category-specific cards. The second it causes you to buy something you otherwise wouldn't, the benefit is wiped out. Find cards that give you enhanced rewards for things you are already buying. Groceries and gas are your friend. Dining and travel, not so much. The Amex Blue Cash preferred is a no-brainer at 6% on groceries.
With Amex Blue Pref.. buy gift cards at the grocery store for gas, hardware, restaurants, airlines, cruises, etc .. and get 6% back.
@@pauld9653 We hit against the $6000 limit each year at the grocery store alone, but that's a great strategy for a smaller family.
I think it would be easier to just swag how much rewards I get every year and put that amount once a year into a separate investment account so I can feel good about it. :) I don't think I am spend more because I am getting rewards.
Thank you for this.
Dave Ramsey’s problem with credit card rewards is not because he has any problem with free money, but because it keeps people locked in to using credit cards for the rewards, and so often people end up with credit card balances and interest to pay that totally outweigh the rewards. There is a reason credit card companies offer the rewards. Ultimately they make money doing it. For many people it is a trap.
@johnschneider2429 that’s fine, but Ramsey talks as though credit card rewards are purely a scam, and that any person who uses them is behaving irresponsibly. He’s barely able to contain his contempt. He’s a thoroughly off putting personality, IMO.
@@tripillthreatwhen getting rewards, you are taking someone's else money they paid to the credit card company. Why do you want to take their money when they are struggling? Shame.
@@GoKU-xx2vgthat logic doesn’t work if you think it through. The credit card companies are going to take debtor money no matter what you do. They are using rewards to entice you to pay through them because it makes them even more money eventually. They won’t give the money back to poor people if you refuse.
@@GoKU-xx2vg I’m not sure I know what “[someone else’s] money they paid to the credit card company” means. Are you suggesting that if I didn’t have a rewards card these people would not have had to make their credit card payments? How are credit card rewards different from other loyalty rewards programs? I’m having a tough time seeing what is shameful about it.
@@GoKU-xx2vgIf I won't take the money then Brandon will take it and send it to Ukraine and Israel
Rob, the problems are not mathematical, they are behavioral and ethical. Behavioral: People that use credit cards with the knowledge that they will use the rewards tend to spend more even when they try not to. And even one extra purchase will defeat your net worth increasing from the rewards. Ethical: Credit cards do create a trap for those trapped in debt to them. Your rewards are being paid by those struggling in debt. Some choose not to play the game as they may feel responsible.
Hmmm....Either the CC company keeps the money or I can have a small percentage for using the service.
People have choices and I'm not going to feel responsible for anyone making bad financial decisions.
Can you cite a source saying that people using credit cards tend to spend more? Or maybe people with no financial discipline is going to spend no matter if they are using a credit card or not.
I don't get the ethical part. No one forces you to use a credit card and not pay it back timely.
That just sounds like "people with more income spend more"
Ok and? Would you also complain about a small raise in the same way you'd complain about a card rewards program?
@@Chris-N916 i think the fact that credit card companies are highly profitable should suffice as evidence in support of the idea that credit cards influence people into overspending.
Rewards aren't free money. You're paying for it because the card companies raise their fees to cover the rewards, and the stores raise their prices to cover the fees.
But you can't opt out of paying this fee (in most cases) so it's already built into the price whether you pay cash or not. The grocery store is not giving me a 4% discount to pay in cash. If it was, then paying cash would be the definitive answer.
@jceddy1 totally agree. Since the system isn't going to change, I use my credit card for everything I can and pay it off every month.
I looked into this. One way to think about it is that we pay more for the convenience and security of credit card transactions. The victims are people who have credit card debit.
It's one of countless mechanisms that penalize poor financial decision-making.
@@ajrobbins368 So true....
I travel with my points and get huge value. I invest 30% of my income.
Seems like a fun side hobby for shits and giggles, gonna start doing this.
Dave Ramsey would be so proud! 😉
All said and done. The reason they offer the points is a trick that often works. They trap you into spending more than you should and eventually paying 29% per year.
I have accepted Dave Ramsey as my personal savior!
I used to worship the FICO gods, but now I've converted to Ramseyianism. 🙏
Playing the rewards game is like active management in investing.
Sure, you might be one of the few individuals who beats the system (doesn't carry a balance OR doesn't overspend), but it's likely you're not. In aggregate, we lose, banks win.
In active management, sure you can try to outperform the market, some people will, but in aggregate, we lose, wall street wins.
The safest best in both cases? Don't play the game.
In my experience: Budget + Auto pay + 2% cash back on everything = Savings
Sorry, I'm not trying to convince you. Let's agree to disagree.
That does leave me curious: Have you considered the Discover debit card that offers 1% cash back?
Also, do you like coupons? Or do they also make you overspend?
@@ajrobbins368 This is basically my plan too. Haven't paid interest on any credit card since 2002. All cards currently set to auto pay, and I watch my spending.
If you have a card with 6% on groceries, buy gift cards (for other purchases, gifts, entertainment, dining out, etc), at a grocery store.
Rob is still sour about Dave Ramsey haha
Liberal males became very aggressive and "brave" since internet invention
Yes I use an android phone.
the BEST cc cash rewards in your pocket is.......buy/charge LESS crap you don't need😜
Dave's advice isn't based on math, it's based on psychology and mentality around money for the other 90% of people. People who don't over analyze everything to maximize earnings.
0:33 _"...we'll use math..."_
_"Oh, no! Here come these goobers with calculators in their mommas' basements again!!"_ ( oДo) -Dave Ramsey
Not LOL level, but very close. Thanks for sharing. I thought I spent too much time on finance stuff! Wow! I’m sharing this video with my wife!
The maths is fine, but unrealistic for most people. It assumes that you have a zero balance each billing cycle (else you are paying like 20% interest) and have a card that allows more than a few hundred dollars per YEAR maximum in cash back. Good for you if you can do that
Most people charge their credit card with no idea how much they're spending until they get their statement.
If you have a plan in place, it's perfectly viable. I get paid weekly, so I pay off my balance in full when I get my check, all while sticking to a budget
I do regularly listen to Ramsey, so I am biased, but I think your Ramsey quote is without context. Usually when he makes that statement (he says this alot actually), he says nobody in the Ramsey study of millionaires ever stated that they actually became millionaires as a direct result from credit card rewards or airline miles.
The information you have shared in this video seems to back up Ramsey’s statement.
"Do you carry android? I guess some people do"
You're just as mean as Dave Ramsey, sir.
Am I missing something? I was hoping to see an automated mechanism to invest the rewards dollars in your designated investment target. You’re doing it manually, right?
Fidelity is the only way
Most cards you'll probably have to do it manually.
I have a fidelity rewards visa..so 2% cash back automatically goes into my HSA. You can set it to go into any investment account automatically
This long is we're not talking about practice😂
If you belive that every person getting cash back is also spending more than they would without the credit card, then by the same logic all coupons are trickery, not discounts.
Look, sometimes we are convinced by the coupon, sometimes we get a discount on something we would have paid full price for. Same with cash back. It's not black and white.
Too many merchants are now charging “convenience fees” to pass on the swipe fees they are being charged by the card processing network. The “convenience fees” negate the benefit of the rewards earned by the transaction, making it a bad economic decision to pay by credit card in many cases. Taxes, utilities, tree service, pool service, insurance all charging convenience fees higher than the card rewards multiplier.
I've heard in the past said that the CC companies would forbid merchants to charge more for accepting payment with the card.
Dave Ramsey says this is impossible
To be fair to DR *if one wants to!) I still don't think it makes you rich, unless you do something lucky but unwise, like invest in a single stock that turns out to be the next Amazon/Google etc. If you spend a lot on credit cards, obviously your 2-5% investable amounts are bigger, but then presumably so is your original wealth. Which is not to say it's not worth doing, but it isn't a path to significant new riches.
This is not what I thought "reward stacking" even was! I watch friends switch cards often to take advantage of massive cash-back offers or airline point (or companion fares) where if you spend X $ in the first few months, you get big rewards... then they get the reward and SWITCH CARDS and do it again. Maybe they're doing "REWARD SWITCHING". All of this is WAY too complicated for me - not to mention having to track all those bills!!! Yikes!
Maybe your definition of Wealth is different than mine.
You do not mention the merchants charge when using a credit card - 2-3 % per transaction. I pay cash for the majority of my purchases. I generally use one card, if there are no surcharges for cruise rewards only.
You must live in an area where merchants give you the option of paying less for an item if you pay cash. Where I live, the price is the same regardless of how you pay for the item.
@@larryTX415 New Jersey - 2-5% of most purchases
One way to think about it is that we all pay slightly more for the convenience and security of credit card transactions. The benefits are not shared equally.
Also, in my area everyone pays the same price regardless of payment method.
All cool but I prefer to travel when I am young
If you're a business owner, you can probably get thousands a month cashback.
Android catching a stray toward the end
Android instead of Apple? Of course Rob, much more cost effective, much greater options. Should be part of your core.
I don’t recall Dave Ramsey ever saying he doesn’t like math, in fact, he’s said that he considers himself a math nerd - your statements seem to be an unnecessary and uncharitable ad hominem against him. I don’t agree with everything Dave says, but I recognize he is speaking to a different audience than me - I’m a very prudent individual when it comes to money, but many people struggle with finances and live far beyond their means with no savings or discipline to speak of. Those are the individuals whom he is speaking to, and those are the individuals that benefit from his work. I also think it’s worth noting that Dave is ethically opposed to credit cards because the way they pay you 2%-5% cash back is by charging others usurious rates of interest - a point that is unrelated to math, sure, but it certainly not fundamentally opposed to it.
I respect both you and Dave (as well as plenty of others who give financial advice that I don’t always 100% agree with), and I think that, even if you have fundamental disagreements, you should avoid making unfair attacks against someone, especially when said attacks aren’t based on what the individual believes or teaches.
Dave Ramsey made a video criticizing the 4% rule, calling the proponents of the rule nerds who live in their parents' basement. So not only is he not hearing out arguments that revolve around math, he also constantly personally attacks people instead of their arguments
Dave is a math nerd until it gets to statistics or exponents. The statistics of index funds outperforming active funds, and the safe withdrawal rates of 10% he talks about come to mind.
@@mikel5929 I never defended when Dave is uncharitable or used as hominem. Just because someone else does something doesn’t mean it’s right. I’m merely saying that I don’t think anyone, whether I agree or disagree with what they are saying, should throw around ad hominem comments of be uncharitable. As stated, I disagree with plenty of things that individuals who give financial advice say.
And the 4% rule thing has nothing to do with being opposed to math… it comes down to whether you’re okay with your portfolio shrinking during retirement (4%+) or if you want to pass on an inheritance (4% or less). Whether you or I agree with Dave when it comes to our personal finance goals and the “4% rule” is irrelevant, neither strategy is “opposed to math”.
@@harrychufan you can disagree with someone without being uncharitable or using ad hominem- that’s my point. All the same things can be said without bearing false witness against someone’s beliefs, character, or intelligence.
Furthermore, Dave has displayed an acute knowledge of derivatives, it’s rather unfair to suggest he doesn’t understand statistics or exponents considering that fact.
@Mr_Mcgee_ If Dave Ramsey can’t take an extremely mild dig, like saying he “doesn’t like math,” I don’t know what to do for him (or you). Frankly Rob’s take DOES seem charitable, considering Dave’s penchant for his over-the-top, ad-hominem insults regarding PEOPLE WHO ARE CORRECT about safe withdrawal rates.
Dave’s ostensible reasons for objecting to rewards credit cards feels frankly disingenuous. To my knowledge, he’s never shown a direct correlation between rewards rates and interest rates (not that that would stop him from stating his opinions as facts), and his crude characterizations of people who use rewards cards seems much more likely due to his monomaniacal obsession with avoiding any and all forms of debt, which is just bad advice. His rude delivery doesn’t help.
Dave Ramsey’s advice likely has value for people who are pathologically incapable of responsible spending, and who need a gruff daddy to tell them what to do in simple, absolute terms with no room for nuance of any sort. But I don’t feel anyone other than this type of person stands to gain much from Ramsey’s content. Just my opinion, obviously.
You are an amazing person to be able to do this, however I feel for most people this is a dangerous video. This is going to cause more damage than harm.
Dave Ramsey is breaking out in hives.
Disappointed at the mispronunciation of “Krogers” as “Kroger”
Dave Ramsey doesn't like math because it lets people call him out on his mistakes. In math, the concepts of "right" and "wrong" actually exist.
14:19 more android users vs 🍎 in U.S. : )
Credit card rewards are not a source of money. They are a discount.
Well there's lots of study that says you over spend the body 18% when you use a credit card, so few times 18 percent by what you banged out on the credit card, you spent more than you made
Thanks for the update, keep up the good work.< Learned a lot from my market journey, especially the importance of living within one's means. With Flora Elkin’s guidance, my nest egg has grown to a 7-figure sum. My advice - get an analyst for better financial trade decisions and peace of mind
I've just looked up her full name on my browser and found her webpage without sweat, very much appreciate this
It is really refreshing to see a comment about Flora Elkin.I have worked with her also for months now, reached out after reading more about her on the internet. she simplifies matters, whether it's a market surge or drop; her approach consistently keeps you ahead of the trend, She's a guru i'll say
Investing has proven to be an incredibly beneficial decision. My cryptocurrency profits continue to play a substantial role in growing my overall wealth, reducing my reliance on my salary
You aren’t going to outsmart a multinational bank. Not a chance. Credit card debt is ridiculously stupid and expensive. Most people don’t have the discipline to pay it off every month. When you don’t, those banks are making far more off of you than you are off of them. And that’s before they sell your information to hundreds of other companies.
All the money you earn by optimizing credit cards you could make by just switching from apple products to Android products lol