Ramit Sethi explains why chasing credit card rewards often backfires. People carry $22,000 in debt or spend $12,000 to earn a $500 flight, treating points as free money when they're actually costing them more. If you don't pay off your card monthly, the rewards game makes you broke.
If I hear another person in $22,000 of credit card debt telling me that they continue charging on their credit card. Why? For the points. Ramit, I am going to end this freaking YouTube channel. You will never hear from me again, ever. I'm going to be gone, wiped off the face of the Internet. Credit card rewards are seductive. And for a lot of you, it really feels like you're winning. Oh, I got an extra 45,000 points. Such good optimization. JetBlue Mint, here I come. You can get a free flight. You get elite status, you get access to lounges. Guys, I have all this. It's not that impressive, all right? Sitting around, waiting in line, 40 minutes to get in the lounge. Ooh, that's so cool. I love their chicken. Look, if you're already spending money on a credit card, I don't mind getting rewards. I do it, it's fine. But chasing rewards, making it a core part of your financial system, is just another way of playing. Playing small. And if you're not careful, it can come back to bite you. Especially if you find yourself spending more than you can pay off every single month. A free flight sounds great, but if you had to spend $12,000 to get a 500 free flight, you actually lost money.
