It’s the time of year that people approach me for help in shoring up their finances. One of the questions they inevitably ask is, “What kind of rewards card do you recommend?”
I always tell them the best rewards card I’ve ever seen is the one with the name of a wise financial planner on it. (In other words, his or her business card.)
I reply like this not to be snarky or self-serving. I do it because I honestly believe there’s no greater reward than having an expert help you corral your spending, increase your savings, and coordinate all aspects of your financial life.
As far as those credit cards that offer “rewards,” you might as well tell a fish that the delicious-looking bait on that shiny hook is a “reward.”
Studies have found that when credit cards offer consumers “rewards,” most consumers spend more and increase their debt levels.
As of 2021, 84% of U.S. adults had a credit card. And nearly three of four Americans have a credit card by age 25.
Are we really surprised that most folks are staggering under massive amounts of debt, with no clear plan for the future? (By the way, that description also fits our nation as a whole.)
We could call this kind of approach to spending the Clever & Cute Plan. Financial firms are masters at appealing to our egos. They make us think we are being smart and savvy (or clever and cute), when, actually, they are leading us like hapless rubes into a dark alley where they beat us up and take our money. Sadly, next month, we’ll let them do it all over again!
Every person who comes to me for debt counseling has a wallet full of “rewards” cards. Often, they’ve been transferring balances from card to card, thinking that they are beating the system by finding “low” introductory, teaser rates.
Typically, these folks are maxed out, stressed out, and worn out.
How about in 2024, we drop the Clever & Cute Plan and go with the Clear, Customized Coaching Approach?
What does that look like?
First, you create a financial plan that’s clear. That means you start with an honest assessment of where you are, where you want to be, and what actions you need to take to get there.
Second, you make sure your financial plan is customized. You can buy a financial plan “off the rack,” but it won’t fit well. Even the most comprehensive software packages fail to factor in the number one reason for financial plan failure—human nature.
That’s why the third critical component is coaching. World class athletes have coaches. Top CEOs have coaches. These elite performers recognize that coaching is not something you grow out of—it’s something that keeps you growing.
That leads us back to my favorite rewards card—your financial planner’s business card.
Find someone who can help you put together a plan that is clear about your circumstances and customized to your goals and dreams, and can coach you through the human frailties (of fear and greed) that can derail even the best of plans.
Here’s to a new year full of financial progress!
Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.