[0:00] it's brian preston the money guy
[0:03] all right uh this next question is from
[0:06] kevin
[0:09] kevin says what are your thoughts on
[0:11] credit card churning for sign up bonuses
[0:15] if you're a responsible user seems like
[0:18] an easy way to make a couple thousand
[0:20] dollars a year with minimal effort
[0:23] so i'm going to expand upon this
[0:25] question because this is what kevin's
[0:26] really asking hey i see this opportunity
[0:28] and i can go do this credit card thing
[0:29] where i sign up and change and sign up
[0:31] and change and transfer and change and
[0:32] transfer and change
[0:34] should i do that am i if i'm
[0:36] would a good financial mutant do that is
[0:38] that a way i should think about it or is
[0:41] there a different way i should approach
[0:42] and think through that type of decision
[0:44] making
[0:45] kevin's a financial mutant because he
[0:46] asked this question certainly this is
[0:48] the mindset i love the mindset because
[0:50] all of us it's kind of because i'm very
[0:52] similar in the fact that i remember when
[0:55] not coming from money
[0:57] reading the wealthy barber and
[0:58] millionaire next door right as i
[1:00] graduated college and i was just on fire
[1:02] to figure out how i could maximize every
[1:05] dollar that came in my control and you
[1:07] can see that in all the underpinnings of
[1:08] what our teachings and and what we've
[1:10] done
[1:11] um and i commend kevin for thinking that
[1:14] but i wanna as an older financial mutant
[1:17] i wanna i wanna i have a saying that
[1:20] immediately pops in my brain is don't
[1:22] get busy doing nothing
[1:23] because there are so many things that
[1:25] you will exert calories for
[1:28] to do and you're going to look back
[1:30] later and go
[1:31] what that was a lot of work for not much
[1:34] incremental benefit and this is the
[1:37] thing i think when you find out that
[1:38] there's this opportunity of what's
[1:40] perceived as free money
[1:42] free money with from these credit card
[1:44] companies if as long as you're keeping
[1:46] up with it you can bounce around take
[1:47] advantage of the sign up bonuses and
[1:49] there are websites that will help you do
[1:51] this treat this as a hobby um and and
[1:54] that's fine but there's a part of me i
[1:56] think of you you and i go back to the
[1:59] calories that we're talking about
[2:01] if you look at what your time is worth
[2:03] and the calories exerted to make sure
[2:05] you keep this up that you know that
[2:07] you're managing because these accounts
[2:09] as you're opening up all these accounts
[2:11] you're not going to want to run around
[2:12] and immediately start closing them
[2:14] because if you do that you'll find very
[2:15] quickly closing credit card accounts can
[2:18] have a detrimental impact on your credit
[2:20] rating so you need to be you need to
[2:22] really think about the curation of your
[2:24] credit record as well when you're
[2:27] opening up all these credit cards and
[2:29] you don't want to you're not trying to
[2:30] set some guinness world record of having
[2:33] all these accounts like there are people
[2:34] that are doing that type of stuff
[2:36] because i just think it's more you're
[2:38] creating more opportunity for you to
[2:40] screw something up because what if all
[2:41] of a sudden you didn't pay attention to
[2:43] all the disclosures they're sending that
[2:45] credit card that you set up to get a few
[2:47] thousand miles or rewards they start
[2:50] charging you 95 a year
[2:52] for annual fees
[2:53] and they they charge you the annual fee
[2:56] you're not running that credit card
[2:57] because you use that four years ago so
[2:59] you could go on this trip for free and
[3:01] get a hotel
[3:02] well you didn't you didn't have that on
[3:04] auto pay
[3:05] and they they charge you interest then
[3:07] they ding your credit card because
[3:09] there's just a lot of things that can
[3:11] slip through the cracks even for a
[3:12] financial mutant that i would tell you
[3:14] to be careful of this siren song because
[3:17] this is your your you've got your boat
[3:19] headed towards the destination of
[3:21] becoming a financial mutant and creating
[3:23] incredible success but you hear this
[3:25] awesome sound from these mermaids that
[3:28] are you know trying to take you off
[3:30] track and get you trapped in something
[3:32] this is a siren song i would focus on
[3:35] don't get busy doing nothing use your
[3:37] financial mutant skills to figure out if
[3:39] there's a side hustle or a way you can
[3:41] better yourself
[3:43] in your own career go make more money
[3:45] invest more money in things that will
[3:47] actually earn you eight to ten percent a
[3:49] year and not just you know nibble around
[3:51] the edges now
[3:53] i'll leave a little bit because
[3:56] i would focus on getting a core card
[3:59] um i would focus on you know maybe if
[4:01] there's something that fits into your
[4:03] hobbies and other activities that
[4:04] benefits you but i would not be chasing
[4:06] having 26 cards in under my control yeah
[4:09] it's you know it's interesting brian you
[4:10] you just hit on something i was on the
[4:12] phone with buddy yesterday we're about
[4:13] to go on a trip and i was like oh i was
[4:15] like hey i was gonna i was gonna go to
[4:17] the atm because i needed cash for this
[4:18] trip and but i got an email from costco
[4:21] that said my you know you get your
[4:22] annual rewards thing right yeah i got
[4:24] mine and i was like i'm just gonna go to
[4:25] costco and i'm gonna go ahead and redeem
[4:27] this thing and that will save me a trip
[4:28] day 18 was like he said costco just
[4:30] gives you money it's like well yeah you
[4:31] know i've got the car and he's like you
[4:33] spend that much at colorado no i don't
[4:34] spend that much at costco but i use this
[4:36] for
[4:37] eating out or filling the blank or
[4:38] something like he's like wait what and
[4:40] so i walked them through the three or
[4:41] four cards that i use
[4:44] and it was like very concise and very
[4:45] well i use this one for when i travel
[4:47] and i use this one on amazon and i use
[4:49] this one for eating out and it was
[4:50] simple that doesn't take me a whole lot
[4:52] of energy or effort and those dollars
[4:54] those rewards do just kind of build up
[4:57] if i were trying to implement this
[4:58] strategy where i'm like signing up for
[5:00] all these new ones and
[5:01] i just don't know that the
[5:03] benefit would be worth it i don't i
[5:05] don't know that you call it the cost to
[5:06] fund ratio right yeah i don't know that
[5:08] the the utility i would derive from that
[5:12] would justify the additional time that
[5:15] it would take to do that but you have to
[5:17] make that assessment for yourself you
[5:19] have to determine okay what is my time
[5:22] actually worth and is doing this a good
[5:24] use of my time or exactly i said could
[5:25] that time be better deployed so towards
[5:28] some other activity well realize these
[5:30] credit card companies are brilliant i
[5:31] mean the way they make you churn through
[5:34] different categories by different
[5:35] quarters does anybody really know what
[5:38] what's going on i think the only thing i
[5:40] remember is that the fourth quarter of
[5:42] every year discover card is good for
[5:43] amazon that's it i don't know any of the
[5:46] other categories so i think bo just hit
[5:48] on something that's very powerful
[5:50] i like having a core card that gives you
[5:52] two percent back on everything and then
[5:55] he mentioned like the costco card is
[5:57] great because it gives you four percent
[5:59] back on like gas yep even if you're not
[6:01] buying it at costco that's right um and
[6:03] then you know they use it for travel and
[6:05] there's three percent backgrounds
[6:07] on restaurants and travel i think and
[6:09] then two percent one it's it's a really
[6:11] good card
[6:12] in in some ca
[6:14] respects and
[6:15] like bo said it's consistent
[6:18] you don't have to waste any calories
[6:20] trying to figure out what's the best
[6:22] category or card to use
[6:25] focus on that because you're going to
[6:26] figure out that you think you're so
[6:28] smart and get cute with these credit
[6:30] card companies by getting all these
[6:31] initial rewards
[6:33] they are smarter than us that's right
[6:35] they have whole departments trying to
[6:38] sell this stuff to you um and i just
[6:40] don't want you to get trapped in
[6:42] something of unintended consequences
[6:44] when maybe you just need a few good core
[6:47] cards that you by the way are paying off
[6:49] monthly you guys know we give you access
[6:51] to credit card
[6:53] use credit card debt is no go
[6:56] you can't if you can't if you're running
[6:58] credit card debt you need to cut them up
[6:59] get rid of them go t-total status on
[7:01] them but if you are a responsible
[7:04] financial mutant
[7:05] use the benefits of some of the core
[7:07] cards don't get cute with it because
[7:09] they will it will catch up with you in
[7:10] the long term