The Truth About Credit Cards: Are They a Trap or a Secret Weapon for Smart People?

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Why are credit card rates so high 25-30 %? I’m going to explain it to you. Pay close attention. All it was an interesting story today talking about how the Teamsters Union Teamsters Union is putting together itself a credit card. Putting itself together a credit card and this is the same Teamsters Union Sean O’Brien that has gotten together did a podcast with Josh Hawley. Quite frankly, Josh Hawley doesn’t understand money and how it works.

because they were pushing for the Bernie Sanders idea that credit card interest rates should be tapped at 10%. Even Donald Trump basically talked about that as well. But again, I think he was just doing it for political reasons. But the union wants to put together a privileged credit card for the Teamsters Union with Capital One, but their APR is 27.4%. Why?

Well, you just said that was bad. Now you’re going to charge that maybe because you’re getting a VIG on it now. Anyway, take that and put that aside. OK, the reason why credit card interest rates are as high as they are is, well, if you go out to dinner, you go out to dinner and you have yourself a big dinner and you don’t pay the bill on your credit card, you can’t regurgitate your dinner. OK.

You go out you buy televisions furniture all this stuff. Do you think you think cap? What you beat all those companies? They’re gonna come after the furniture your used furniture that you bought That’s why That’s why the interest rates are so high You could if you wanted to and people do this

People do this crap. Okay, go to go sometime just and watch you know, they have bankruptcy court and see what transpires in bankruptcy court. People will you know, they can declare bankruptcy X amount of years, but when they get to a certain point in time, when they get to a certain point in time, they just bang out their credit cards full declare bankruptcy and again,

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What’s the credit card company going to do? Is it really worth their while to go after them? I mean, they can, but it’s an exercise in futility. That’s why your rates are so high. Okay, you don’t pay on your car. Okay, they’ll repossess your car. That’s why rates are lower. Makes sense, right? You don’t pay the mortgage on your house. Guess what? They’re going to foreclose on your house. They’re going to take your house. There’s something that they can take. From a credit card? Nothing.

That’s why the rates are so high. Let’s just play pretend here to understand credit. No, it’s too high. It should be down to 10%. OK. If they ever said, you know what? We’re going to cap credit card rates at 10%. You’ve got to have a credit rating that’s off the charts. They’re going to basically check into your background with a microscope.

They may, even some of the larger credit cards, they still may make you sign off on, you know, don’t pay this, we’re gonna put a lien on your house. That’s what would happen, okay? It would change the dynamic. It really would. 10%, Rachel, okay, well you’re gonna have to, you you don’t pay this, we’re gonna put a lien on your house. They would find a way to do that. And again, if you weren’t capable of doing that, you’re not getting a card.

There’s no way, no how. You’re not going to get a card. Credit cards are for suckers.

suckers or people that are smart. What are you saying Chris? You’re know, polar opposites. Well, two things can be true at the same time. Credit cards are for suckers. People want to go out and buy things that they can’t afford. They can’t afford. I have to have it. I got to have that pocketbook. I can’t afford it. I got to have that pocketbook. I got to have that purse. I got to go out to dinner. I got to go on that vacation. You can’t afford it. You’re going to actually do understand what that type of interest rate is and how that compounds. Okay.

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Play with a compounding calculator and see how much more you’re going to pay for that dinner, that vacation, that handbag, those clothes, whatever it may be. Okay, if you can’t afford it, you don’t buy it. Now, credit cards can be used by smart people where they use them for accounting purposes, tracks your spending. Obviously, you’re not spending more than you have. You pay it in full and you collect points.

Oh, I love it. I said, I put everything I can, everything that’s humanly possible on my credit card. Why collect points? I got a free flight here when I got to go somewhere, got a hotel. Why wouldn’t I do that? It’s paid in full every month. But Chris, some people, know, they get trouble. Wait, wait, wait. OK, listen, I get it. I get it. I understand that, you know, something

God forsaken happens and you know, got a hole in the roof of your house. You don’t have the money or hot water, but again, you should try to put money away in case bad stuff happens. It’s kind of like you self insure because guess what people, okay? Can you name me one person out there that hasn’t had some unforeseen problem or bill that has popped up over the course of the year? Expect it. It’s not a black swan. Okay? It didn’t come out of nowhere.

It’s going to happen. Bad shit’s gonna happen. So you prepare for bad shit to happen. You put money aside so you can handle the bad shit. My mother’s gonna get ticked off of me because I swore a couple times. Sorry, Ma. Anyway, neither here nor there. Okay? Be smart with your money. Be smart with your money. Live within your means.

Understand what credit is. Understand how you can use it properly. Do not get yourself in a hole. People clamoring for 10 % interest. They ever institute that which is never going to happen. all of the politicians. See that’s the funny thing is it shows you how full of crap they all are.

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never going to happen. They know it’s never going to happen. That’s why they can con say, we got to demand this and we got to demand. They’re demanding it to make themselves look good. They can’t be that dumb. Watchdog on wallstreet.com