Opting Out of the Credit Card Game

The Jesse Mecham Show

YNAB

Kids & Family, Education

4.7 • 1.1K Ratings

🗓️ 13 January 2020

⏱️ 11 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

For better or worse (probably worse), credit cards are a major part of our financial world now. Cash is becoming less and less convenient to use every year, and debit cards continue to lack the same level of fraud protection that credit cards enjoy.

This isn't coincidence either. Jesse attended a "payments trends" conference in 2019, where the main topic was how to make payments easier, to remove as much friction as possible from the process of buying things. Why? Simply put, when you spend more money, more often, payment vendors make more money.

The problem is, you can't win the credit card game. Not only do payment vendors make money when you spend, the banks that underwrite credit card debt know (because they have studied human behavior) that when you swipe a credit card, you tend to spend more money. Credit card points and rewards are carefully designed to entice you to spend more money, because banks know that you will likely carry higher debt levels with a credit card.

So if you can't win the game, maybe the solution is just to opt out.

Also, go to https://www.youneedabudget.com/bootcamp/ to sign up for the YNAB Debt Bootcamp!

Transcript

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0:00.0	Hello, Ynabers. My name is Jesse Meekaman. This is podcast number 411 for
0:09.0	Wienab, where we teach you four rules to help you stop living paycheck to
0:11.6	paycheck, get out of debt and save more money.
0:15.0	Internally, over here at Wienab we had some people in our hashtag personal finance channel.
0:19.4	I don't know if you have to say hashtag, I don't think it actually is a hashtag but it's a slack channel it's called
0:23.5	personal finance where we discuss personal finance and we were discussing my rant
0:30.0	related to playing the game that is debt and using credit cards for points and
0:36.8	basically sitting around a table with a bunch of high-powered, highly
0:40.5	capitalized, highly sophisticated bankers that are in it to make money and are doing
0:47.4	it very, very, very well.
0:51.2	And you know, the discussion was probably the same discussion you might have had with me and you, where I didn't get to participate,
0:59.0	where you would say, like, well, am I supposed to opt out of, how do I even opt out of this game?
1:03.5	Like, I have to use, I can't use cash, it's just too inconvenient.
1:08.2	It is, it actually is becoming more inconvenient
1:11.0	to use cash the other day.
1:12.4	I used cash for something.
1:13.7	I don't remember what it was. It was slower than swiping. It used to be that swiping
1:18.2	actually took a little while. You had to wait for it to authorize and for the
1:21.3	modem to dial or whatever.
1:23.0	No, not anymore.
1:24.0	A lot of the new terminals are so quick and yeah, even better.
1:30.0	So it kind of made my point actually. I remember a year ago, a little over a year ago, I went to a
	...

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