There are no free money. These are loans. And making them attractive with cashbacks and rewards is done to trap unresponsible spenders. 95% of the time you don’t need to borrow money from the bank, unless you are in emergency or you are to invest these to achieve some payback (e.g. a loan to open your business).
These are loans. And making them attractive with cashbacks and rewards is done to trap unresponsible spenders
I am aware, which is why I specifically said
This is bad advice for anyone with good credit and spending habits.
For people who aren’t irresponsible spenders, it’s a bad financial decision not to take the short term bank loan. Sure, I don’t need to spend the banks money because I have enough in my checking account to cover it. But by not doing so, I lose money on any transactions that don’t charge me a fee to run my card.
If you’re not responsible enough to use a credit card and not destroy your finances, absolutely do not use them. But for those of us who are, it’s a dumb idea to eschew it just because you have the money on hand. Like I said, I haven’t paid interest in a decade and have made thousands from my normal spending habits.
If I followed your advice, I would be objectively worse off, because I’d be losing money from my rewards for no benefit whatsoever. And I can guarantee I’d be materially worse off, since my credit card is the reason my credit is as good as it is, and that bullshit has a pervasive and perverse effect on your life. It’s not only loans that are impacted, but insurance, housing and employment can be as well. So maybe I should have left good credit off, since responsible spending will build your credit up even if it is bad currently.
TL;DR - responsible credit card use is a good thing, and foregoing it just because you have money on hand is a bad financial decision. Pay that shit off immediately and there’s no material downside and you still get all the benefits.
