#020 – On this episode, Mayra goes over some of the benefits and the downfall of using credit cards. Are getting points, cash rewards, and free airline tickets worth the hassle?
Feel free to message Mayra at Instagram.com/DebtFree.Latina
Transcription
[0:00] Travel hacking, extra points, frequent flyer miles, all the things that you can get when you use a credit card. Let’s talk about all the things we’re not talking about when it comes to credit cards.
[0:17] Welcome to Debt-Free Latina, the podcast where you can finally realize your dream of being debt free and feeling peace about your financial future. And now your host, Mayra Alejandra Garcia.
[0:35] Hola, hola. Thank you so much for being here. I get the question of Mayra, why are you so against credit cards? And it’s not that I’m against them. I feel that people are not talking about the harm that they cause. Yes, there’s a lot of benefits to a credit card, especially if you have one where it has an annual fee. Therefore, the points are really tempting, right? I mean, you want to have the extra cash, or the extra money for a flight or a stay at a hotel. There’s tons of benefits to it. But let’s talk about when things go wrong, what happens? Have you been in a pinch and unable to pay your credit card and now you have added interest, now you have all the things that you were hoping you would not? I mean, we’ve all been there. We’ve all been at a place where… I mean, if you’re listening to the show, you have debt, and you’re trying to get out. And you probably have not paid the complete balance of your credit card at one point or another and why? I mean, we plan to pay it when it’s due, but things happen and you can’t always pay it when it’s due. And the added stress. Let’s talk about the stress. When you see a bill, even if you have zero interest, when you have a bill coming in every single month and you know you still owe a certain amount. Let’s talk about that. It’s stressful. It’s not happy mail. It’s stress mail. But nobody talks about that. Like everybody seems to be like well, the extra points and the rewards and the added bonus of extra frequent miles or whatever. But it takes time to track all these things. So what are you going to give up in order to track all these things? See, the credit card companies have already done tons of research on us and we’re still falling for this over and over and over.
[3:05] And roughly, I hear that you tend to overspend about 20% more when you use a credit card, even if it’s a debit card, versus when you use cash. So you tend to overspend when you use plastic, whether it’s credit or debit. Now, let’s think about that. Why? Why is it that we tend to spend more when we use plastic? Well, because money, when you actually see it and you feel it, it’s different. I don’t know what it is about it, how that affects our psyche, but it really does when you have cash, it’s like it’s a different feeling than just a number on a screen at the grocery store. It’s just different. So if you’re not trying the envelope system, I highly recommend it. And that’s pretty much, you pull the cash out for the categories in your budget that you tend to use the most like groceries, eating out, maybe clothing, whatever it is that you tend to overspend on, pull it out in cash. Set an amount in your budget for it and pull it on cash and see how different you’re going to manage your money. You are, I guarantee you, if you pull it cash. Oh Mayra, but going to the bank is so annoying and I don’t want to go to the ATM, and going to the ATM once a week is so hard. And yeah, it’s an inconvenience, but if you work it into your schedule, like for us, our bank is at our grocery store. So we go to the grocery store anyway. So while we’re in there, we pull the cash. Oh, but you know, I don’t want to have to carry coins. Yeah, have a little coin purse. If you’re a guy I mean guys carry coins in their pockets and not a big deal most of the time. But girls, I mean, there’s some cute little coin purses. And you tend to collect a big amount of coins when you’re using cash. Let’s talk about that. What do you do? You don’t want to have to go through the machine that counts for you and takes a percentage of your coins. No, no, no. One of the things that I do, and actually did recently was, I took my coin low purse through the self-checkout, and I put all my little coins in there. And I do that about every couple of weeks. So I don’t carry a whole lot of coins all the time. There’s ways around this. You want to maximize your dollar and you want to make it go further, carry cash. Best thing I’ve ever done, carry cash. You can’t overspend if you don’t have it.
[6:07] So another thing is that these credit card companies have done the research right? So not only on we tend to spend more when we use plastic, but they know that it’s going to take time and effort to track points and to be able to use them at a certain time, before they expire and all the things, takes coordination, takes time. And most of us are busy already. We don’t have time for that. I mean, if you’re gonna block out time to do that, I hope you’re blocking time to budget. I mean, it’s true, but we tend to forget about budgeting. We tend to forget that it has to be continuously every month, at the very least once a month. Also, travel hacking. It’s a whole skill. Really. I mean if you’re gonna learn that skill, I really hope that you’re mastering budgeting. And that you’re mastering investing and building wealth. Nobody that I know that is super wealthy is travel hacking, like nobody. The really rich people, not very many of them are travel hacking. It’s okay to budget a vacation every once in a while and then you carry cash, so that you stay within your allocated amount for your vacation. That’s okay. There’s nothing wrong with that. And for us, like me, that decide, you know what? Travel hacking isn’t for me, I don’t have the time. I don’t have the energy. It’s not something I want to spend my time on. That’s okay. I still go on vacation. I do. And 2021, I’ve been to Seattle in March and I went to Vegas over the summer. I still travel. So travel hacking isn’t the only way to travel. We’re gonna be talking a lot more, a lot more about this travel hacking in the next couple episodes.
[8:18] I do want to give you an update on what’s happened in the last couple of weeks. I had an amazing group of people surround me and support me. One, I want to give a shout out to Celia Gutierrez. She is an attorney out of Las Vegas and she’s a mindset coach and she offered to help me, and she pointed out there were a couple of mind blocks that I had. And she called me and we worked through it and let me tell you, she’s amazing. When I tell you she was able to unlock another level of passion towards what I know and love, which is talking about money, helping people build their knowledge in money. I am so very thankful for her and everybody else that has come around. I mean, from, I had Brian Bennett who pretty much told me nothing wrong with my web hosting. I know that was one of my concerns. Thank you so much, Brian, for showing me that there’s nothing wrong with my hosting. I really have the best support system around me and I’m so thankful. So as I discover some of the opportunities around me I will be giving you updates. One of the things that’s really, really important to me, is to not accrue any business debt while I build this business. It’s something I value very much and so if I’m here telling you, be debt free, stay debt free, I’m gonna do the same. Thank you so much for being here. I cannot wait to continue to talk about how these companies are, they’ve done research on us. It’s not, we’re not winning anyone.
[10:26] Thanks for listening to Debt-Free Latina. Make sure you hit that subscribe button so you can take Mayra with you on your journey to become debt free as you build financial wealth. Looking for more? Follow Mayra on Instagram @debtfree.latina, on Facebook @debtfreelatina, and online at debtfreelatina.com.