Pros And Cons Of Using Credit Cards

The pros and cons of using credit cards. For a lot of you, you're going to be shocked at how I describe this. So many of you, you have a weird energy and relationship to debt. You can't be in debt. Well, guess what? Almost everyone that I know that's wealthy is in good debt. So you got to get your head straight about debt and credit cards. Here we go. Specifically, I want to talk about three things today. Number one, how do you use credit cards wisely? In fact, so wise that you make them what I call investment cards. Number two, what's the utilization and the proper process for it? Because a lot of you don't even do that properly, including when your child is 18 years old. Day one, I have a video. You have to watch it on how to open your first credit card application because the demise of your credit score starts with the wrong application. And then number three, we're going to talk about the mishaps and all the mistakes that we see people making not only destroy their personal credit, their corporate credit. So get a pen and paper. This is a big one. Number one, the pro of how to use credit cards wisely. So first of all, let's describe and just define what is debt. Debt is the cost of money. Simply, that is it. So if you look at good debt, debt that is good actually is zero, one, two, three, four, depending on an industry, maybe even 5% is good. Where bad debt is just because you don't make enough money. Now I know that's a really different description than most of you have heard, but the only reason a lot of you have bad debt is because you're outliving your ability to make money. So is overspending really your problem or is the lack of your ability to make money the problem? I'm going to say it's your lack of ability to make money. If you make as much money as you want, you can buy what you want, use your credit cards, pay them off every month and you're healthy. What most of you do is you outlive your paycheck and then you live the rest of the month on your credit cards and you think that someday magically you're going to catch up. That isn't the problem is your spending. Now for some of you, you are a little out of control, right? You buy way too many just things that you don't need that are lifestyle things that aren't actually contributing to good debt or actually improving your life. So some of you, you can't fall in that lifestyle trap. You got to watch it. But for the most of you, you got to learn to make money. I have said since I was 17 years old, the more money you make, I mean, first of all, money can solve any problem and the more money you make, the more things you can have, the bigger life you can have and better and bigger, the more lives you can change. So the people who can treat, who actually make the most money actually give the most contributions to charities, nonprofits and foundations. So a lot of you, let's get this straight. It's okay to have credit card debt. In fact, credit cards now, I call them investment cards. Why? Because if you get the right kind of card and I think American Express should sponsor me. So that's my plug right there. We're going to send this out to them. American Express, small business platinum is my favorite card. You can at least six X points, you can get pretty much unlimited runway on them. You use them to pay bills, get points. You say, what are the points for? To buy other assets, other equipment, travel, hotels. You want to know how a lot of people travel in first class styles because they use their credit cards and the points strategically and smartly. So a lot of you, you're using it because you don't make enough money. So before we continue on that, I want to give you a gift. I have a workshop that I do every three weeks. It's called the millionaire intensive and marketplace. It's a place where you're going to learn to make money. The first two hours is set up of what it takes to be a millionaire. And then we move into your business so you can actually sell something online on zoom and make some money. That way you're learning to make more money so you can spend what you want. So credit cards are not bad. They're great. In fact, you have to have them. If you're in Bitcoin, there's ATMs. I mean, what do you think that looks like? It looks like a credit card that you're going to actually hold your Bitcoin on. I mean, you're exchanging that way, everything. There's places since COVID that don't even take cash anymore. So you can't just live in a cash and a check based system. You've got to learn to effectively and in a healthy way, learn to use credit cards wisely, smartly, move them into investment cards. How do you master the usage of credit cards? Like I said earlier, you want to pay them off every 30 days to keep it at 0% interest. So the only way that it bumps up in any interest on any card is when you carry balances month by month by month. Also you want to keep your usage no less than 30% of your overall amount you are given. So if you have a hundred thousand dollar limit, a $10,000 limit, you want to be making and spending on that card. So you want to be using it, paying it off, using it, paying it off. See a lot of you, you're avoiding the financial system and the financial services world. The more you actually activate in the financial services world, the more money you're going to get. So a lot of you that don't have any credit card utilization and you wonder why people don't give you credit cards, why a bank won't give you a credit card, credit card company won't give you credit because you don't look like you're financially viable. You don't make money, you don't spend money and you're not using it. In my make your kids millionaires book, I'm super aggressive. I'm as young as 12 years old. Get your kids understanding the difference between a debit card and a credit card and have them have both, but have them start using a credit card. It actually is going to boost your credit because it has to be under your credit score until they're 18. But now they know how to use it. You know, between 18 and 23 years old around that range, your child, if you have them will be solicited over 2000 times to get a credit card. So either you can control whether they go into extraordinary debt and blow their credit, which takes about seven years to fix or be a responsible parent, teach them responsible use, which means model it yourself. Now, if you have horrible credit and you've already blown it and you don't know about corporate credit, go to asklaurel.com, ask any question, make a request. And we're going to be right there helping you out all the time. 24 seven. We have somebody answering that line. If you haven't subscribed and click that notification button, I want you to do that right now, like right now, go do it. Just click, click and then every day, watch it. So I'm here five days a week, not for my health, for your knowledge. So those of you, especially those of you who say, Oh, I'm so scared of credit card debt. I just had somebody text me this morning and say, Oh, I'm going to finish all my projects. I want to get out of, you know, total credit card debt. And then I'll join your big table, but I don't really want to go into debt. And I'm thinking, well, the big table is an MBA, a massive bank account experience of a lifetime, not a massive bad attitude. So it's fascinating how some of you have a weird relationship to debt, putting a, I put big purchases consistently. I leased a private plane a couple of months ago. I put it on my American express card. Why? Because I wanted the points. I wanted to six X those points. That could take people in my family or my staff on anywhere between three and five plane rides for putting one of my private plane rides on American express card, a lot of great uses for it. But again, you got to be responsible. Ultimately your ability to make money will give you the ability to really use these cards effectively. Now let's talk about the con before we complete the video. What are the cons? Let's take a little deep dive into the mishaps of a lot of people. Number one, you don't research the cards. So what are the best cards? The big name cards, right? I've already said American express. I would go discover, I'd go to the bigger banks. I'd actually go to the bank that you put your deposits in. What's not going to help you that much are consumer cards, getting your local, you know, retail cards in the beginning. If you're actually in construction, the only one that I think really works well is to get a home depot card, get a Lowe's card cause you're going to want to use those just for the pro points, especially if you're buying a lot of materials. But outside of that, stay with the big cards, stay with the big banks. They're going to give you better credit, better points and a better system. The other thing my son pointed out when he was 21 years old, he had me come to Georgia Southern to teach about this topic. He said, mom, they don't even know the difference. The players, the student athletes at Georgia Southern didn't know the difference between a debit card and credit card. He said, I go to the bars now he's 21 years old. He said, they're using a debit card. If you think about it, if you actually had a debit card and you lost it or had it open tab, the bank's not going to fight for you. They're just going to take the money out of your bank account immediately. If you think about it, using a credit card gives you a little liability protection because if you had an open tab or it got stolen or the number got stolen, they'll replace it immediately. They'll shut it down. They'll actually pay you back on those charges. If you use bank cards, you're not going to have that kind of protection. So think about debit and credit card use. I don't carry around a debit card. It's very, very rare. I think I might have one in one of my vehicles just for an emergency. I use credit cards straight up. I want the points. I want the protection. I want to use somebody else's money for 30 days at 0% and then pay it all off and you do it again. It's going to raise your credit score. It's going to show the financial services world that you're viable and you deserve more money. Get your credit cards. Go to asklorel.com. If you have any questions on how to do this or how to fix it, if you've already screwed it up, and if you have somebody coming into 18 years old, call our office, ask for the application video on how to set up an initial credit card application properly. It's about a 45 minute video and make sure you do it right from the beginning. Talk tomorrow.