There are plenty of arguments for either an all Credit Card scheme or all Debit Card scheme. When you use all debit, you miss out on all the cash back points that you could obtain by using a combined set of cash back credit cards. Should one really just cut up all credit cards and forgo all the cash?
Hey everybody this is beat the bush today we’re going to talk about credit versus debit and which is better a lot of people will ask hey what if i pay on time i don’t have any credit card debt and you want to use the point in the credit card in order to get the advantage some people might say that you should not touch credit cards at all because they’re evil that
Will get you into debt the fact of the matter is credit cards are good for people that are very much in control of their credit cards i thought about a simple criteria at which you should just use credit cards or debit cards there are a lot of people on one camp or another saying you should only do this or that but really it’s not it depends on the type of person
You are if you are a person that pays off your credit card every single month you don’t have any credit card debt then yes you should use credit cards and you should use the credit card points to your maximum advantage because that represents a good amount of side benefit in terms of points in terms of cash and that can represent something like a thousand or two
Thousand dollars a year based on your spending and your percentage cash back on your credit cards however if you owe anything on your credit card it just means that you’re not very good at budgeting and perhaps you’re prone to overspending and this means that in the future you’ll probably spend a little bit too much – and you’re going to owe some stuff on the credit
Card in that sense having the credit card will actually get you into debt because you’re going to be using that to cover expenses that you cannot pay for and that is the worst way to use a credit card there are three arguments for using debit cards only and number one is that credit cards tend to make you spend more if you spend more it’s kind of negates the effect
That you get on cash back well if you’re a type of person that is not very prone to marketing and you can walk in the store and walk back out with nothing in your hand then you are not prone to this rule where you would spend more to four credit cards the second argument is that you have to use a little bit of brain power in order to figure out which cards use
Keep track of your cards make sure everything is paid on time well you can minimum is this by when if you do use your credit card you use auto-pay and that you keep a little cheat sheet like i do for every single category it does take a little bit of brainpower but i mean what else are you going to think about right i mean for me and a lot of other people who use
Credit cards just for the crash bag the effort is well worth the cash back and when you round off how much you earn per hour in this effort is actually a lot the third point is that millionaires actually never talk about gaining their fortune from all the cash back they’ve received it’s true because when you do your cash back you can only get so much every single
Year maybe 1,000 or 2,000 it will represent a very small portion if you’re a millionaire but the deal is it does represent something it’s certainly not going to be a majority but every little bit helps to dig a little deeper i want to figure out which portion of the us population we actually benefit from actually using credit cards in 2014 the average household
Income is fifty one thousand dollars 939 i just put this here in comparison to the credit card debt right here in 2015 the average credit card debt is $15,000 762 now the average apr for that credit is about 15% you multiply this out assuming you pay it every month and not let it accumulate then every year you would actually be spending two thousand three hundred
Sixty four dollars and 30 cents on the credit card interest alone you’re not even putting extra principle to pay to pay it down now back to my point of if you even oh a little bit you really should not be using credit cards at all because even if you owe a penny it means in the future you’re going to rely on the credit card in order to gain access to a little bit
More cash so that you’re going to use it to buy stuff just because it’s there in that sense if you owe anything it’s best that you just pay it all off and cut up your credit cards and never use them again because that’s the way the general population uses their credit cards and if you’re the general population if your average or lower you really should cut up all
Your credit cards pay it all off first and then cut them up don’t ever use them because you can see here 15 percent it’s way bigger than what i talked about with five percent ten percent cashback it’s way bigger than this interest rate that you have to pay if now if the average credit card debt is fifteen thousand it means there’s only a very small population that
Actually do not carry any credit card debt i’m guessing it’s about ten percent or less those ten percent are actually the people that should be using credit cards because you use them you don’t have credit card debt you’re not paying in the interest rate and you’re paying the credit card every month you can use those cash back credit cards and then you can just
Collect the cash back to your advantage so there you have it using credit cards and debit cards is not a clear black and white thing some people would say oh i’ll use credit cards only everybody should use credit cards other people will say just use debit card there’s no clear indication it depends on the type of person you are if you can take advantage of the
Credit card if you do use it if you’re not a responsible user by all means use cash only so that’s all i have for you today i hope this makes it very clear about who should actually be using the credit cards philosophically speaking credit cards are actually best used by people who do not need the credit at all so there you have it please give my video a like over
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Transcribed from video
Only Use Credit or Only Use Debit? | BeatTheBush By BeatTheBush