I absolutely went off on a dave ramsey post the other day, and i need to share with you, hello, everyone and welcome back to a new video shawn's. The name and credit cards are the game today, like literally, if you don't know who dave ramsey is. First of all, lucky you but he's this dinosaur that preaches all credit cards and all debt is bad. It's the devil! If you have any bit of debt, you're gon na be dead in the eyes of dave ramsey and he might be wrong on so many aspects of finances.

But today i want to hit hard on the credit card side of things, and this is not a sean malkou, hates dave. Ramsey type of video no dave does have some good financial practices. Okay, i do disagree with a lot of his financial practices, but not all of them and that's why today, i want to show you how you can properly use a credit card to your benefit without paying a single penny in interest. Okay, so hopefully you're ready for this topic strap in all right.

So if you want to read the full post on me, taking a doodoo on dave ramsey, then i will leave the link down below for you to read. But if you want the abridged version, dave ramsey was essentially saying you don't need credit cards or any types of lines of credit to get by in today's day and age, because you can get a non-traditional credit mortgage and yes, you're right dave. You can get a non-traditional credit mortgage and you'll also get a mega high interest rate with it, and it'll also be incredibly hard for you to qualify for that. But you're right, you can get it look.

This isn't the 1970s all right dave things have changed. Just a little bit since then, just just a little bit, we now have things like standing desks. Cell phones and i don't know modern day financing dave, look bottom line. You need credit in your life.

Okay. Today, i'm going to show you not only how you can build credit, but how you can beat the credit card companies at their own game, so you can benefit and not them. I mentioned this in my post, but financial strength is not someone with a massive net worth. No financial strength is someone who knows how to properly manage their finances, whether they make twenty thousand dollars a year or two million dollars a year anyway, i'm gon na stop rambling here's how you properly use credit cards in today's day and age, okay, so step.

One is you actually get a credit card, and during that process you need to actually read the terms and conditions. Nobody reads these: they just sign on the dotted line to get their victoria's secret card to get their two dollars off on that 900 pair of underwear. When they literally could have just gotten dental floss for a dollar at walmart, come on people, you are literally opening a new trade line and agreeing to legally binding terms and conditions, take five minutes, and at least just skim through it. When you skim through it you're going to see things like annual fees being charged, your interest rate, your payment terms, your max credit limit, etc.

This is like really important stuff. I know you're just buying underwear and you're getting yourself a little credit card to do that. But imagine if you were buying a house, if you were opening up a mortgage, would you just sign on the dotted line? If you had no idea what your interest rate was, what your monthly payment was going to be, or even how much your loan is on that home? No, you want to know exactly what you're getting yourself into and same thing applies when you are opening a new credit card, but once you do understand what you're getting yourself into you're good with it all and you read through a little bit of the terms and Conditions just a little bit, i know they're long, but just read a little bit of it to know kind of what you're getting yourself into and you're good with it sign on the dotted line, get your credit card and here's how you use it. Oh and if you need a couple recommendations for what credit card you should open, if you're kind of new to the game of credit, then i will leave a link in the description to a couple videos that i've made.

I've got lots of them on my favorite cards that are kind of modern day cards, so feel free to check those out link down below, but all right right as you get your card, we move on to step two all right. So right as you get it, you need to immediately call go online, get the app whatever you want, but you need to talk to the credit company and tell them that you want automatic payments from your checking or savings account for the full balance, and i wrote This out on the whiteboard, so you can see it and understand it completely. Alright, this means that, every month, when your credit card bill is due, it'll automatically pull from your savings or checking account for the full amount that is due on your credit card, not the minimum, not some random amount that someone told you to pay. No, the full amount.

This is the most important part of properly using a credit card to your advantage and not the credit card companies, because when you do it this way, you are never paying a single penny in interest to the credit card company. I know it's crazy to understand, but they are literally gon na make zero dollars off you. Yet you're gon na earn all of the free benefits and perks that that card is gon na give you, you know we're talking couple percent cash back on gas. Your two percent cash back on groceries, your neighbors first born son, whatever is in those terms and conditions, that's the benefits.

You're gon na get out of that card, but you're not gon na, be paying a single penny for it. Plus. This also means you never have to worry about forgetting to make your payment or making your payment late or having anything crazy hit. Your credit report, no it's literally foolproof.

Now this is when some people will say well sean uh. What, if i don't have the full amount in my checking or savings account to make that full payment every month, and this is why most people lose at the credit card game and the credit card companies make so much money. You cannot and must not spend more than what you can actually afford. Every single month set up the automatic payments, so you do not have an out.

You have to make that full amount every single month, and this is going to ensure that you don't overspend, and i don't i don't care if you have some massive event or some crazy bill that needs to be paid or or something that you know you think Is a good excuse as to why you should charge it on a credit card and why you should make the minimum monthly payment on your credit card? I don't care, that's how you lose the credit card game. That's how the credit card companies make their money. That's what they want you to do it's this simple. If you cannot afford something, if you were to pay it in cash, do not buy it and the sad truth is here's.

What most people do? Medical emergency yeah, we'll charge it daughter, sweet 16, definitely charge that adding avocado to my chipotle burrito charge. It no do not do that. People treat credit cards as if they're a personal loan, but that is the worst idea you could possibly do. Credit cards have interest rates of 15 to 30 to maybe even 40.

In some cases, that is an obscenely high interest rate. If you need a loan for a medical emergency or you need a loan for something that you just think, you cannot live without go get a personal loan go get a hard money. Loan go borrow it from a family member or a friend and tell them you're going to give them a 10 return on their money. I mean that's an insane amount of interest still, yet a credit card company is going to charge.

You twice that so do not ever treat a credit card as a personal loan. It is literally the worst way to borrow money in today's day and age. The worst and again, i'm going to relate this back to mortgages. Would you take a mortgage right now with a 30 interest rate? If i said, look i'm gon na, let you borrow a hundred thousand dollars.

Do you want a hundred thousand dollars and you're like yeah, sure i'll take that and i'll be like it's also going to be at 30 interest rate? Would you then go? Maybe i won't do that and maybe i'll try to figure out something else to do yeah. You probably would but people don't think they just think they can charge it and they'll just make the minimum monthly payment and they'll get by in life. Well, that, again is the worst thing you can do. Look i'm going to say it one more time.

Okay, if you can't afford to buy something, do not buy it on a credit card. You have other options, you can go with right and if you have the mentality of oh i'll, buy it and figure it out later or i'll charge it and i'll eventually pay it off then do not open a credit card. You are far better off not having credit, if that's your mentality, but if you can use a credit card as if it's a debit card, then you're golden and that's what i do and that's what anyone with a strong financial strength does because you'll generate really good Credit scores and you'll generate some really good credit perks and benefits and again you'll never pay a single penny in interest to the credit card companies. So i'm going to break it down on how this will work with your personal financial situation, all right.

So when you treat your credit card as if it's a debit card, very little money comes out of your checking account on a daily basis because you're using your credit cards to pay for things. But then, at the end of each month each credit card bill is gon na be due and it'll all come out at once. It might take you five minutes extra every single month to manage your finances this way, and this is exactly what a credit bureau is looking for in terms of ranking your score. Can you take five minutes out of your day once a month to manage your finances properly and i'm gon na give you a real world example right now, so i spend about 750 every single month on one card, one credit card for things like food, entertainment, gas.

You know your daily expenses that aren't necessarily your fixed expenses, like your utilities, your mortgage, slash, rent whatever, so none of these expenses leave my account when i buy things. So when i fill up my gas tank, my checking account does not have it deducted, because i buy with my credit card then at the end of the month, all those expenses hit. My bank account at once because my credit card bill is due easy enough and if my credit card is giving me two percent cash back on all my purchases and again that's kind of on the low end. But if it's giving me two percent cash back on all my purchases, then i'm saving money.

That means i'm literally saving 15 a month for doing the exact same thing that i am already doing. If someone was gon na give you fifteen dollars faux free every single month, would you say no, i mean i don't and again it's not hard to do this. It's very easy. Once you get into a routine you're, not even thinking about it, then the last piece of properly using credit to your advantage and not to the advantage of the credit card companies is credit utilization.

Now i talk about this all the time because it's so important, but just because you have a credit card limit of one thousand dollars. That does not mean you should spend one thousand dollars each month, even if you're paying it off every single month. That's still no bueno. You want to only spend about 30 percent of your limit each month, so in that scenario, that'd be 300 a month.

The reason being is you want to prove to the credit card bureaus and the credit card companies that hey you've got the ability to spend a thousand dollars every single month, but you have financial constraint and you're responsible and you only want to spend 300. So you have the ability to spend this much, but you're only spending this much because again, you have the financial constraint. This is huge in building a good credit score. Okay, this is the number one thing that credit bureaus look at is your financial constraint and how you're able to manage the money you have available to spend.

They don't care. If you make two million dollars a year. No, they care about how much you're spending versus how much you have the ability to spend and guys banks don't want you to know this stuff, because if you know this they're not going to make a single penny off you, okay, they want you to overspend. They want you to over splurge.

They want you to run into target and spend a hundred dollars. When you only needed paper, towels. Look, you can't let them win. Okay, it's very easy to not let them win.

So it's really important that you spend your money wisely and financial discipline is just as important as having discipline and help in schooling in athletics. Your financial well-being is just as important, but that's basically how you beat the credit card companies at their own game. Now i did a tally on how much i've spent in interest since i've had a credit card versus how much in benefits i've gotten from having a credit card, and i want to show you the results. So, as you probably guessed since i've had a credit card when i was 18, i've spent zero dollars in interest in the last seven years and i've generated eleven thousand two hundred and forty nine dollars for free in cash back rewards all right.

One card used used to come with a small uber credit each month, so i use 389 of free uber rides and i've used my credit card discounts on its. You know, like applicable hotels over the last seven years, to account for about eighteen hundred dollars in savings. So that puts us at a net profit of thirteen thousand four hundred and thirty eight dollars for doing the same things i would have done with or without a credit card, plus certain credit cards come with certain insurance policies. So, for example, if you bought a laptop with a credit card, and then you accidentally dropped that laptop into the pool, and you didn't have like a manufacturer warranty on it, your credit card will actually replace that laptop for you for free.

You know if your credit card does this. If you read your terms and conditions, look all i'm trying to say is there are so many good benefits and perks from having a credit card that you shouldn't. Let it go to waste just because of your lack of financial responsibility. So as long as you're practicing safe credit, you have a 99.9 chance of beating the credit card companies at their own game and for some reason, if you're the anomaly and that point zero.

One percent that just somehow fails at the credit card game then no worries there's always plan b. You know this, so if your credit does need some fixing then definitely check the link in the description. I'll leave a playlist to all of my other videos about credit. Where i talk about how you can properly fix your credit, get it back on track, so you can start beating the credit card companies at their own game.

But ultimately i hope you found this video helpful. That's why i made it and if you did, i would really appreciate if you can hit that like button. It means a lot to me. It really does and subscribe for more content like this, because i'm always releasing great financial content for free.

First of all, and second of all, just to get you ahead of the guy sitting. Next to you, because a lot of financial information is proprietary and not a lot of people know what's actually going on. So i'm trying to kind of break down that curtain and give as much information as i can to anyone willing to listen, so you should definitely subscribe either way. I really just hope you enjoyed the video good luck in the world of credit, and i will see you in the next video you.