If you’re on my email list, you know I recently sent out an email promoting a new credit card offer. One of the readers didn’t like this and informed me that they were very disappointed and would be unsubscribing. Looking back on the situation, I kinda understand.
You signed up to the newsletter to keep up with my story and then BAM! I come along and hit you with a credit card offer. I didn’t think it through very thoroughly and this is my first and only blog, so I’m having to learn as I go.
I thought I was providing a win-win situation to you and myself by letting you know about a great credit card offer and possibly make a few bucks if you signed up for it. I didn’t explain that very well in the email, so I can see how it would’ve come across as me just trying to make a sale.
Where I really went wrong is promoting cards on this website without telling you my philosophy on them.
Are credit cards the devil?
Back when I was a wee Dave Ramsey follower, I followed his plan diligently and that included cutting up all of my credit cards. Dave had me convinced that if you use credit cards, you must be stupid. Credit cards are the devil and you should never own one under any circumstance.
I understand why Dave is so against credit cards to some extent. If you use them to buy things you can’t pay for with cash, you’re living above your means and aren’t saving anything. That’s a bad path to go down and you’ll stay broke if you don’t change your buying habits. I would never tell you to get a credit card if I didn’t think you could control yourself and only use them for things you’re going to buy anyways.
Dave also uses credit cards as a way to market himself. Everyone knows Dave Ramsey is the anti credit card/debt guy, much like Mr. Money Mustache is the anti pick-up truck guy. Having a strong stance on something is a great way to build a community behind you. When you make your followers feel like it’s us against them, they feel closer to you and become avid fans.
Credit cards are like the internet. They can be used for bad or good. It’s not the cards or companies that are bad, it’s all in how you use them. If you don’t have much self control then stick to a debit card or cash.
Why I changed my mind
How I handle money changed a lot when I learned about the FIRE movement. When you realize you can drastically shorten the time it takes to become financially independent with just a few changes, you start optimizing everything about your financial life. I did anyways… I realized that I’m leaving money on the table by not using credit cards.
Last year, I signed up for a Chase business card. I used my social security number as my business ID (totally legal, especially since I sell things on eBay). From that one credit card, I was able to get 80,000 rewards points by spending $5,000 in 3 months. I only used the card for purchases we were going to make anyways. I was able to redeem the points for cash and got $800! I would’ve gotten even more value if I had used them for travel but we needed the cash for Christmas.
I essentially made $800 by doing nothing! Spending about 30 minutes to set up the card on all of our bills was all I had to do. If I just wanted to earn cash from credit cards, I could easily earn a couple thousand dollars a year by getting a new card each time I get the bonus. That’s a much less time consuming way to make extra money than taking those online surveys.
Travel the world for (nearly) free
I should be able to accumulate a couple hundred thousand rewards points every year just by using credit cards for our normal expenses. I took the FREE travel rewards course offered at travelmiles101.com and although it’s a time commitment, the knowledge I gained from the course is going to allow me to travel the world for very cheap for the rest of my life.
My wife and I will be able to take our kids (when we have them) to places I never dreamed of for a fraction of the cost it would be if we paid cash. I don’t know about you, but that alone is enough reason to use credit cards.
The reason it’s called “travel hacking” is because this isn’t what credit card companies have in mind when they offer the sign up bonuses. They expect you to sign up for the card and maybe earn the bonus, then keep that same card for years. Over time, they hope you’ll keep a balance on the card and they’ll start earning interest off you.
When you’re using these cards for normal purchases, you get to laugh in the credit card company’s face as you pay your cards in full each month and collect your points. It’s amazing the things you can take advantage of when you live life a little differently than the average person.
Still not convinced?
If you still don’t want to deal with credit cards, I get it. Life is a bit simpler when you only have a debit card. Learning how to travel with rewards points does take a lot of time. Once you’ve got it down, it doesn’t take that long though. Learning how to travel hack is a lot like learning any new skill. You get better the more you do it.
If spending some time learning about this stuff gets me a trip to Hawaii every year for almost free, I’m in! If nothing else, at least you know why I’m a fan of using credit cards and why I promote them now.
What are your thoughts? Are you a travel hacker, cash back king, or do you just use a debit card?
Oh, and if you’re interested in checking out some credit cards, go here for some of the best offers out there right now. I’ll earn a little commision if you do, so it’s a win-win.
Nathan created Millionaire Dojo to document his journey to reaching a million dollar net worth and inspire others to follow the same path. Go here to read how he intends to become a millionaire and reach financial independence. If you’d like to contact Nathan, you can do so here.