Seasonal Worker Money Talk Session 6

Seasonal Worker Money Talk Session 6

Credit Cards!!!

Oh my gosh. This can be a tricky and opinionated topic! Everyone expressed interest they would like to talk about credit cards so let’s do this.

Credit cards can be a tool. Like any tool – if you use it properly – this can serve you exceptionally well. If you use them improperly they can truly shatter your life. (Not to be too dramatic, but.)

I hope our previous discussions have given a resounding message about building a foundation and the encouragement of building blocks.

If you are struggling to keep your finances organized still (don’t be discouraged – just keep going – it can take a while to get habits in place!) then I DO NOT recommend getting and using a credit card.

How do I know if I am ready for a credit card if you:

Have your finances organized
Are not missing payments or overdrawing any of your accounts
Emergency money is saved
There is some buffer money
Overall you know how much $ you need to cover your monthly expenses
Generally know much $ you can spend and not feel the pinch

Then maybe –
You are ready to consider a credit card.

Remember!

As we talked about before, there are so many people and businesses out there that are willing and ready to take your money if you are not conscious of it. If you are not ready or don’t have the habits of discipline yet – then hold off on getting a credit card.

Be wise and informed with your money.

Steps When First Getting a Credit Card:

> Ensure no annual fee – when you are just getting your feet wet with this, avoid “advanced tactics” if it’s your first card. Just get a simple cc with no hassles.
> Set up automatic payment!!! Oh my gosh. We were traveling once and got to a place with poor wifi. I couldn’t log in to finish submitting the payment. It was such a pain. All money matters that can be automated should be automated. Set up automatic payment in full of the statement balance.
> Pay the statement balance in full every month!!! If you cannot do this, then do not get a credit card. The way you will pay interest is if you don’t pay off your balance every month. This is completely in your control and you should never pay even a penny to a credit card company (unless later down the way you know with absolute certainty that you will get value out of an annual fee card.)
> If you at all feel a rush when you swipe or don’t feel like you have an awareness of how much you are spending – STOP.
> Remember – a credit card can cause so much havoc to your life if not used as a tool to benefit you.

Here are the cards we use:

Amazon credit card

United Chase Card – we are going to Spain for $45.20 each because of this card!

Barclays

Venmo

Others off and on over the years.

The biggest thing is as long as you are paying off your balance every month then you will never be paying anything extra on your card.

Tips:

If you ever miss a payment by accident and get charged a late fee – call!
You are usually excused one late payment a year.

What you say is, “Hello, I am so sorry, I had my payment due date slip by. Is there anything we can do about this?”

The person will likely go look and then reply, “Ok, I see you haven’t missed any payments this year. We can waive that late fee for you.”

Then go and immediately set up automatic payment!!!

Rewards & Hacking

Some people write books on this and are much more into rewards than we are.

In general, I would say, have a card you get something back on. Start there. The Amazon card is very easy for rewards if you ever buy anything on Amazon.

I find the Venmo credit card to be quite convenient too because it has no foreign transaction fees. So many people use Venmo now so having a Venmo credit card with decent rewards is also nice and easy.

If you see a sign-up bonus offer that looks good to you – go for it!

Tips to Make Sure You Get Bonus Offers:

* Use your calendar!
* I put it right on my calendar, “Spend $3,000 by this date.”
* Read the details – most sign-up bonuses have a minimum spend amount within a certain time. Spending $1000 or $3000 within 90 days is common. So look for that clause because it’s sad to sign up, get the card, use the card, and then still miss the bonus.
* If the sign-up bonus waives the annual fee for the first year, make sure you put it on your calendar to call and downgrade the card!

Small Business Etiquette

When I am shopping at a small business I try to use cash.

Businesses pay a percentage to the credit card company every time someone swipes. So I try to save that small business the fee and pay cash.

Redeeming Rewards:

Read the details and crunch the numbers on the highest value for the reward options.
It is common for reward options to be cashback, gift cards, or statement credit.
It is almost always the least value to get cash back!
Gift cards are usually the next least value.
Statement credit is usually the highest value.
(Not always, and it will depend on the card and reward type, but often, this is the case, so read the details.)

For instance, here are the reward option values for my Barclays card:

2500 points = $12.50 cash back
2500 points = $25 statement credit
5000 points = $25 Subway gift card

The value difference between those reward options is significant! So take a careful eye over your options and look for the best value.

Other

Because this might be the last meeting for now, I want to brush the surface on investment brokerages. There is so much that could be said and I know people have questions. (We can keep talking about this more, and in a month or so when we all settle back into our next round of seasonal jobs, maybe we can try to pick this up again!)

If you have already opened a brokerage account with someone other than the two I am going to list – good job! You took action and that is the first biggest step. Out of fear, I hesitated for YEARS (years!? Like why? Why did I lack so much confidence in myself and my abilities to figure things out?)
So if you have opened one that is just fantastic.

Open a Brokerage Account with:
Vanguard
Fidelity

We have the majority of our investments with these two firms.

What sets them apart:

Vanguard

Owned by its shareholders. This is the biggest advantage Vanguard has. It makes them different than any other brokerage firm.
They are not beholden to shareholders. It’s owned by the people who invest in it.
Jack Boogle founded the index fund. This and many other reasons is why Vanguard can charge some of the lowest fees.

Fidelity

A very close competitor to Vanguard. Originally when we were looking for a fee-free international debit card, only Fidelity and Charles Swabb offered them at the time.
Fidelity has worked hard to remain neck and neck with Vanguard on offering low fees. They also have an international fee-free debit card and HSA (Health Savings Account) options which is why we also use Fidelity.

We use both of these firms and each has a strong brand reputation. Vanguard has the highest percentage of any of money because to me you can not top that they are owned by its investors (which is me!)

Again, so much more could say. That will be another day. But if you find yourself ready for this step before we can meet again, Vanguard and Fidelity are the ones I would focus my time on.

With that, our delightful in person seasonal worker money talk sessions come to an end in the woods. I am so impressed and inspired by how committed and interested each of you are in bettering yourself and having a say in the trajectory of your lives.

It has been an absolute pleasure to accompany you on this journey. And, onwards we will continue.

When I reflect on how much my financial literacy has grown in ten years, five years, and even within this last year, I am so excited to see where we all go together in the next one, five, and ten years to come.

Always remember, we are what we think. And you are worth it.

If you are just joining feel free to browse through:

Seasonal Worker Money Talk Session 1 

Seasonal Worker Money Talk Session 2

Seasonal Worker Money Talk Session 3

Seasonal Worker Money Talk Session 4

Seasonal Worker Money Talk Session 5