The Truth about Credit Cards

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In this episode, I go over some things about credit cards.

The truth about credit cards

Credit cards are the number one marketed product behind insurance.

Buying on credit is a relatively new thing.

Some statistics.

78% never pay their balance each month

the average interest rate is 18 to 26%

the average amount of credit cards one person owns is 6

average debt stands at $6,270.

Americans owe almost one trillion. across almost 506 million card accounts. Below, you'll find some of the most prominent trends that emerged.

The average amount of debt by generation in 2020:

Gen Z (ages 18 to 23): $16,043

Millennials (ages 24 to 39): $87,448

Gen X (ages 40 to 55): $140,643

Baby boomers (ages 56 to 74): $97,290

Silent generation (ages 75 and above): $41,281

Chris Hogan talked about the 2 big credit card bills

One $75.000

And the other $200.000

And how do we tackle this amount of debt? One step at a time

I pay off my card every month so I can get the miles. Studies have shown that people with that focus spend, 12% more so they can get more points. Studies have also proved that 90% of the airline miles are never redeemed.

Then the flights you can you it on are horrible. I don't know of any millionaire that said they made all their money with their points

most people say they have credit cards for the points and pay them off every month

I had a credit card in 1984 that I used to buy a motorcycle for $1500. It took me at least 10 years to pay it off. Every time I would make a payment and make extra on that payment, they would raise the interest rate to match the extra amount paid so it took years to pay off the credit card.

Using credit cards does not elicit a pain response in the brain to where using cash does.

You don’t feel like you’re giving the cashier anything. With cash you give them the cash and you get the product. With credit you give them the card, or just insert it. And you get that card back. It doesn’t feel like you gave up anything. You need to feel cash. You need to have the sense of loose when you pay with cash. When you go-to McDonalds or anywhere else, you tend to spend more money because its so easy to pay with a card.

The ease-of-use results in a UN realistic sense of the actual amount you are paying.