Ramit SethiRamit Sethi: The No-BS Guide to Living a Rich Life

Should you go into credit card debt to earn more rewards? #personalfinance #money #financialfreedom

6 Apr 2023 · 1 min

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0:48

A short transcript excerpt from Ramit Sethi's YouTube video debating whether to use credit cards for rewards while carrying debt. In this clip Speaker B questions Speaker A's choice to put at least $2,000/month towards a credit card balance but then recharge it to earn rewards, and cites a high interest rate ("26%" used as an example). The exchange highlights the tension between chasing rewards and the cost of carrying high-interest debt.

Questions this video answers

26% (used as an example by Speaker B).

"At least $2,000 a month" (Speaker A's stated typical payment).

What's your interest rate? We'll just say 26%, because I bet it is. And how much do you currently pay every month?
It varies. I pay. It really does vary.
Why?
Because I try to put as much as I can when I can.
How much?
I usually put at least 2,000amonth towards it, but then I charge it back up. That's the problem. I will. I will pay. And then I'll use my credit card so that I get points like, what the fuck?
Why? What are you talking about?
I'll pay. I don't use. I don't use because I don't want to use my checking account. Because you don't get any rewards to use your checking account when you pay. Are you kidding.
Me right now?
What? What? That's. You're supposed to do that. The right. You're supposed to do that, right?
Who told you. Who told you that you're supposed to go into more debt to earn $0.01 in rewards?
Well, you just don't get any rewards when you spend money out of your checking account.
Who cares? You're in debt.