What’s Wrong With A Credit Card If I Pay It Off Every Month

The more I learn about money the more I realized that what I’m learning about is physiology because money is easy but what’s hard is the mental work that you have to do.

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1. The danger of having a Credit Card
– People think that the only problem with credit cards is going into debt
– So as long as you’re paying it off in full then everything is going to be okay
– However, the truth is that that’s not true

The Study that was Done:
– Psychologically, when you spend cash, your brain reacts to it pain
– But when you use credit, there is no pain, because you know you don’t have to pay it for now, and plus you are just swiping
– The study showed that people that use credit card tend to overspend around by around 18%

Tip: that’s a lot money that credit card companies make in transactions fee and also of money you save just by not using it

2. The I’m not Stupid Bias
– It’s okay Tommy I know exactly what I’m doing and I’m not overspending money
– I only buy exactly what I need and I call it a day
– This was my friend that has a 600k mortgage on a multi-family home, with an amazing career and which had over 10k in student loan debt ( his 10X smart than me analytically but we psychologically it’s a different answer)

Here is what happens:
– People always think that they are special and so did I
– That you’re not overspending money and that you are always going to pay it off in full each month
– But if I ask you how money did you spend last month ( 80% of you would know) –
– If I asked you if the pandemic took your job how would you pay it for it ( a lot of you wouldn’t know )

My advice:
– Understand that these companies are billion-dollar company
– And the effort that it takes not to mess up
– Could be an effort you could be using for something else

3. Then why do I have it
– If the average person spends more than 18%
– If the average person has a 6000 balance
– If the average bankruptcy involves some of form consumer debt
– Then why I do I still have one

Because I figured out a way to Bi-pass the psychological problem
– The problem is we focus on not overspending
– We focus on getting points ( that make us spend a ton of money)
– But we forget about the important stuff like a credit score

The way I use it is like this:
– I just use it to build and maintain credit, to make it easier to get into real estate
– I don’t carry any credit cards
– And I only have one automatic bill on it each month and it pays itself of each month ( this way I don’t go into debt but I also build my credit score)

4. However this might change
– because in reality, I don’t need a credit score to prove my creditworthiness ( I can just do manual underwriting )
– and honestly a part of me just like making things easy for the bank

Overall:
– the reason you don’t want to use a credit card even if you pay it off in full
– is because the brainpower that requires can just be spent on investing

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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