With inflation lingering like a chronic cold, everyone is looking for ways to stretch their dollars.
Credit card companies know this. That’s why we constantly get all those offers for “rewards cards.” Use card X and get airline points…card Y and get “free” hotel stays…card Z and get cash back. You’d be nuts not to grab one—or even two—right?
People ask me which rewards card I recommend.
For most folks, it’s the one with the name of a trusted financial planner’s name on it.
In other words, his or her business card. And while that won’t get you very far at Walmart or Amazon, it can help you control your spending, increase your savings, and coordinate all aspects of your financial life.
But you asked about rewards cards. So, let’s consider credit card usage for a moment.
Lending Tree recently (October 2023) offered this snapshot of “Credit Card America”:
- Americans have $1.031 trillion in credit card debt (the highest in history), with an average APR of 21.17%.
- 56% of all credit card accounts carry a balance
- Louisiana ranks 35th among states in average credit card debt—$6,475 per person
Given these grim statistics, it’s no surprise that CNN recently reported that Americans paid $105 billion in credit card interest in 2022. (FYI, that’s enough money to buy one new, $75,000 Ford F-150 pickup truck every single day…for 3,835 YEARS straight!)
I’m frankly surprised these financial firms don’t give their rewards cards names like “The Clever Card.” They’re masters at appealing to our egos. They make us think we’re being smart and savvy, when, actually, they are leading us, zombie-like into a dark alley where they can beat us up and take our money…and then do it all over again next month!
Each person who comes to me for debt counseling has a wallet full of these “rewards” cards. Often, they’ve been transferring balances from card to card, fooling themselves into thinking that they are beating the system by finding “low” introductory, teaser rates.
The truth? In their maxed-out state, these folks are stressed out and worn out.
How about we say, “Enough!” Instead of trying to find clever ways to save, let’s adopt a Clear, Customized Coaching approach instead. It’s easier than you think:
- Create a clear financial plan. Start with an honest assessment of where you are, where you want to get to, and what actions you need to take to get there.
- Make sure your financial plan is customized. You can buy a financial system “off the rack,” but it won’t fit well. Even the most sophisticated software fails to factor in the number one reason for financial plan failure—human nature. That’s why the most critical component is to…
- Get coaching. World class athletes have coaches. Top CEOs have coaches. These elite performers recognize that coaching is not something you grow out of—it is something that keeps you growing.
So, back to my favorite rewards card (i.e., your financial planner’s business card)…
Find an advisor who can guide you in developing a financial plan that is clear about your circumstances and tailored to your unique goals, and who can help you navigate the human frailties (of fear and greed) that derail so many.
By the way, I’ve put together a free list of questions everyone should ask (and answer) as they approach retirement in an uncertain economy. Write to me at email@example.com, and I’ll get that list to you right away.
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.