The Truth About Airline Miles

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Airline miles and credit card reward points feel like free money. So what's the catch... and who's really gaming who?
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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Philip Olson, CFP® and Andrew Matthews
Produced by: Katie Graham & Amanda Fox
Images by: Shutterstock
Music by: APM
SOURCES:
budgeting.thenest.com/percent...
www.creditcards.com/credit-ca...
www.frugalrules.com/how-do-cr...
www.fool.com/credit-cards/201...
247wallst.com/banking-finance...
www.nytimes.com/2016/03/27/yo...
www.psychologytoday.com/us/bl...
time.com/money/3896999/airline...
www.theatlantic.com/business/...
www.cmu.edu/homepage/practica...

[@TwoCentsPBS]

Clarifications & Revisions: The on-screen graphic at 1:10 reads "$163,000,000" but should actually read "$163,000,000,000".

[@harshitbatra860]

Pin this comment

[@joshua_sykes]

I was wondering that... Thanks for the correction! =]

[@anantmishra6783]

you guys are so cute! :')

[@skyblupers]

Pin this bro

[@andrewreviewschannel883]

Omg

[@MarkWTK]

Wow, you guys are a one of a kind couple on youtube! thanks for All the Life Tips over the years !!! and that's my 2 cents :)

[@jgtv6269]

天吉Mark great video, great comments always good to spread the knowledge!

[@nunyabusiness896]

>over the years The channel is less than 6 months old...

[@MarkWTK]

@@nunyabusiness896 ohhh haha, i feel like ive seen them somewhere before😅 then should i change the statement to "over the months" ? or you could imply that the videos posted on 2018 & 2019 are posted on 2 separate years

[@TwoCentsPBS]

Thanks 天吉Mark! Yes, indeed, our little channel launched in October 2018, so we just passed the 6 month point. We're incredibly humbled and grateful for all the support and love you guys have shown us over such a short time! - P

[@hashasbashbash2724]

You ripped this off of Adam ruins everything

[@Universal15862]

Treat a credit card like it's your debit card and pay off the balance on time. You'll be fine as long as you're smart about it.

[@enigmaticennui]

@Nicholas C Or y'know just be consciously aware of your spending

[@ItsGroundhogDay]

I get convenience, protection (every merchant does not have direct access to my bank account), and rewards. I haven't paid a dime in interest in years. I live within my means.

[@pawala7]

Our credit card companies automatically debit the amount from the bank at the end of the month so we never have a balance to worry about. There's literally no downside if you understand self-control and basic math. Though personally, I redeem my points through Amazon gift cards.

[@BeatrixOnyx]

Or just don't bother with them.

[@blackworldtraveler3711]

Nicholas C I don't need to watch this video at all. Been treating my AmexBlue and Visa Platinum like a debit card for 30 years in 40 states 57 countries with no penalties,fees,etc.. Use one weekly for groceries,gas,and minor purchases. Use MasterCard for mostly travel. Have a current cash balance of over $1200 in both accounts paying $150 a week into my AmexBlue and prepay before purchases so never a debt with them. Pain receptors.😂😂😂 Make no sense to me other than some excuse. My points pay my monthly Audible and Netflix subscriptions. And I have free lifetime global flight benefits as career benefit so not concerned with mileage points. Most people are financially stupid which is why I bought and still own several thousand shares of stock in MasterCard/Visa and over $700/mo. reinvested dividends in my Roth IRA.

[@user-py7mz8oj7o]

Hope everyone's enjoying the flights I'm paying for :(

[@jrzeminemgrl2]

Thanks 😊

[@subhammandal2552]

Thanks human

[@fartexpertable]

You’re not paying for shit. Nice one playing victim though.

[@marcscattolin1554]

@@fartexpertable they're paying for the higher prices merchant fees cause

[@anikamukherjee7027]

@@fartexpertable In the video they mentioned that people who pay interest on their credit cards give the credit card companies the money they need to pay for the "free flights" for other people. So they're basically just saying they miss payments sometimes

[@QRSC-fh2ob]

Paying cash activates the areas of the brain associated with pain? That's funny 😂😂 Someone once said that spending borrowed money is like going to a wedding, but paying it back is like going to a funeral!

[@NotShowingOff]

QRS3C273 abstract things are difficult to feel. That’s why things like credit is addictive. It makes you feel like you have more money than you have.

[@VJETRA]

The real money ,you can see it , you can see it going away from you and you feel kinda bad, but these electronic thing , you CAnt see shit. so that making each payment look like Nothing and feel like Nothing but the joy of the goods you have purchased

[@Lillith.]

Paying borrowed money back is like being released from prison.

[@muhammadbinnaeem9327]

I love how your titles are more close to click bait titles but the content is pure Gold. I have a playlist labeled "For Life" your videos fit into that list... always.

[@tiago_mota]

I really want to see the blooper reel of this episode just to see him mispronounce "anaesthetized"... :)

[@shmlanda]

🤣 He comes off to me like he practiced how he was going to deliver his lines long before there wad an opportunity to catch the blooper.

[@HaouasLeDocteur]

I agree with all of it but let’s not forget that you get more than rewards for that annual fee. Often, that comes with travel insurance, purchase protections, sometimes even roadside assistance... they can be life savers.

[@earlh]

Have you checked how much those services cost if buy them yourself?

[@flymetothemoonriver]

My card comes with those same benefits but no annual fee

[@halkon4412]

@@flymetothemoonriver Which card is that? To my knowledge, there's no feeless card that offers the same level of purchase protections and insurances as something like Chase's Sapphire line, which starts at just $95 a year. Nothing's truly free, and $95 per year to have all your major electronics purchases insured, rental cars insured, and all flight delays insured, is just a straight up good deal if you travel.

[@octaldecimal2729]

@@halkon4412 capital one quicksilver card

[@halkon4412]

@@octaldecimal2729 Quicksilver doesn't have those benefits. The "travel insurance" only covers bodily harm, and doesn't cover lost luggage or trip delays (the last one being the main use of Chase's travel insurance). The rental auto coverage is secondary, meaning you still have to go through your normal insurance provider and incur any rate increases when filing a claim. Chase offers primary insurance on their cards, which bypasses your auto insurance provider entirely.

[@someone5781]

I'm so glad that I'm graduating college while watching this channel. You guys are giving me tips and help that I didn't know I needed! Keep up the fantastic work!

[@Dipesh1234]

There is a new financial coach in town. Love your videos

[@russelltennis15]

That research must have been performed on a different generation. To me, I spend cash much more freely because it’s untraceable. Every time I swipe a card it gets automatically deducted from my online budget tool. The pain of spending comes from cards and not cash.

[@thegreat9481]

Damn you’re that narcissistic?

[@johnspitta6725]

Could you link to the online budget tool? Thanks

[@Lillith.]

Cash money is money my budget doesn't know about. It's usually money I borrowed from my past. I paid something for someone and got cash back.

[@FedezD]

the pain comes by giving something (the cash) in exchange of the product, with plastic you get your product AND your card... no exchange. Age/Generation is not relevant.

[@JuanCarlos06]

I havent paid interest on my credit card since 2006, and I've been cashing in on all my reward points every 2 months or so :)

[@needlequill]

I closed my credit card because of overspending reason. Never paid a cent or a fee for interest, but spent way more than I did before owning a credit card

[@josejones4413]

Uhm why didn't you just hide it in an obscure place? Out of sight, out of mind. You just lowered your average age of account and most likely took a hit on your credit score.

[@Guerrilla727]

Good luck building credit

[@chrisli3295]

Jose Jones better than being lured into wasting more money on credit

[@chrisli3295]

Guerrilla Gaming why would you ever need a credit? Don’t buy a house, don’t buy any car on credit. Don’t borrow any money

[@Py16777216]

Yea, I have an 807 credit score since I made it a goal to have perfect credit by the time I'm 30 but probably won't ever buy a house unless I cash out some mutual fund in 10 or 15 years. I prefer people owe me money so I can get good APR returns rather than being only wage slave. Like I would buy a house if in the corse of the entire 15 year mortgage I paid only 10% in total intrest on the principal, but it's like 3% per year and in 30 years a $300k house is going to cost near or over $600k and that's a great rate. That's not worth it. If I had to use credit and carry a balance for another reason, I would just get a low intrest personal loan of a few tens of thousands or at like mortgage rate intrest levels over 36 months then pay it off way sooner to avoid most of the interest.

[@eddiethompson1326]

I absolutely love what you put on here. I watch all the episodes and they have helped alot. Always a great tool to help you know, 1) what new questions to ask. 2) what new information to seek out and dig deeper. and 3) new unexplored topics to think about. Love the work. please keep it up

[@paull7551]

i feel like this is true for an older generation. I tend to spend my cash more then a credit card... If i dont see the money in my bank account. its spending money, AKA cash in my wallet.

[@salamista]

Exactly. Once it left my bank account it's like it's already spent.

[@CinnamonToastChris]

I'm the exact same! With debit/credit cards I see the money diminish/bill go up. With cash I can just hand it over and don't have to look at it again.

[@justmekatiec]

Paul L I am 30 and feel the exact same way. If that number is going to stare back at me in black and white numbers on my screen, it feels way more real to me than cash, which leaves less of a trail. I don’t want to be the kind of person who thinks the research doesn’t apply to them, but I legitimately think it might not. I’ve thought about this a lot as I’ve observed my own behaviour and been very honest with myself. We have to know ourselves, as we can only control our own finances.

[@paull7551]

@@justmekatiec, I just believe the research backing up the claims that people tend to spend more money using a credit card is out dated. The evolution of credit cards and bank accessibility is parallel with the evolution of phones.

[@l.c.8475]

I do think it's easier to stick to a budget using cash though since its easier to limit what you want to spend when you're not actually spending you can just say that you will only withdraw x amount per week unless it's an emergency

[@binaryorbitals]

For some reason KZbin hasn’t been recommended me these amazing videos for the last 5 weeks. After seeing this video, I’m glad that PBS is correctly spending their money by teaching me how to correctly spend my money!

[@Okay_Is_Wonderful]

As someone under 30, cash doesn't seem like a better option though. I earn nothing, I don't build credit, and if it's lost or stolen, I have no recourse. Rewards programs can be a trap though if you don't read that fine print. Miles would be wasted on me, so I stick with cash back. I also have one store card for a vendor I shop with frequently. If you let that discount/reward lure you into overspending, or can't pay it off on time for any other reason, you probably paid more than that percentage you got back.

[@Iffy50]

Agreed, credit cards are the best possible way to go. Just make sure you don't have a balance, because that makes you a sucker. You shouldn't have to pay a single penny for your card.

[@joonastalvinen]

Or get a debit card. You can't overspend and you can't be lured into buying more to get extra points

[@Okay_Is_Wonderful]

@@joonastalvinen Also a valid option, but it only fixes the third of my concerns. You earn nothing on your regular purchases and you don't improve your credit score. The pull of these programs is only subconscious if you don't actively think about it. You have to know your own limits, strengths and weaknesses, before choosing the spending strategy right for you.

[@ItsGroundhogDay]

@@joonastalvinen Also, if someone makes a mistake with your debit card, they're making a mistake with your money. Hopefully you aren't cleaned out waiting for the bank to straighten out the mess. If someone makes a mistake with a credit card, they're making a mistake with the bank's money.

[@fathan16]

@@ItsGroundhogDay couldnt have said it better. People who pay with cash/debit cards are suckers.

[@Kyle496]

My Amex, cap one, Citi, and others have no annual fees plus I always pay them off before interest is incurred. They also all have rewards. As for the charging the merchant bit, that applies to all cards, even debit. Unless we all go 100% cash it's something everyone is marked up for, nothing an individual can do about that. Also depending on how much you spend at a specific store, a branded card (like Lowe's synchrony) is a necessity. I'm building a home so 5% off basically everything is a big deal, especially where there isn't other stores within a decent driving range that offer similar products.

[@granitemoss1451]

@Yussef Saber The merchant fees are built into the price, regardless of payment method. So even if you use a debit card, you're still paying the merchant fee. Same with cash, it's just built in.

[@johndirac6707]

Debit does NOT charge a fee. This is why Costco, which always tries to hit low prices, will only accept debit and cash (Except for specifically a costco card, which gives you 3% cashback and thus completely offsets the 3% transaction fee). If you use a service such as Stripe or Square, yes you get charged a 3% fee across debit and credit, but that's because these two companies pocket the profit from debit cards.

[@timhershel2940]

@@johndirac6707 They do charge a fee for debit to the merchant. That is not true at all. However when a debit card is processed as a debit card so it is a flat fee to the merchant not a percentage. When it is processed as credit it is a percentage. That is why some gas stations have a special price for debit. The thing with Costco has nothing to do with fees and keeping prices low. Visa and Costco have a deal to keep Visa as the exclusive credit card there.

[@humantrash7980]

@@johndirac6707 I paid at Costco using a credit card

[@stelioconstantinides5926]

I've watched almost every one of these and aren't stopping anytime soon!! These are so good!!! Where have they been all my life

[@HikerHansen]

I paid my credit card off EVERY month, to get those Oh So Sweet Wells Fargo Rewards! But I rationalized $1000 PC upgrades and buying a $2000 camera while in college all because I thought I could save on my next purchase with the rewards. But I found myself barely noticing 5% sales at the grocery store, so why was I paying so much attention to the 1.5% rewards?! I finally cut that dopamine inducing plastic up and I pay for things in CASH now.

[@feras5017]

Good thinking A lot of people know what's right but a lot less do it

[@nunyabusiness896]

So what part of your brain missed the part where you spending $3000 straight from your bank account? Cash back is a "nice to have", it doesn't make things free. I never understood this line of thinking. I've had a credit card since I was legally able to have one and never bought anything I wouldn't also buy in cash, bitcoin, australian dollarydoos, pesos, or any other form of currency. I use a card more for the fraud protection, lack of being able to be lost or stolen like cash, ease of use for online (see if anyone wants a money order in today's world, not to mention the hassle of getting one), and sure, the points don't hurt. I've paid it off every month since inception and have never paid a dime of interest.

[@HikerHansen]

@@nunyabusiness896 Yeah, I was using a credit card the same way you were. But in my case, the points were hurting. I was spending to much, even though I was paying it off each month. So if you're confident it's not effecting you, more power to ya. It's just a lot of other people don't realize the "rewards" are effecting them how much they buy. I still use a debit card for online purchases, with the same fraud protections. But it feels different now that the money directly comes out of the bank.

[@nunyabusiness896]

@@HikerHansen Actually, the debit card does not have as many protections as a full credit card, and it also doesn't build credit to boost your credit score for things like a house mortgage. You'd be better served by getting a credit card, setting it up to autopay from your checking account, and getting a labeler and putting a sticker that says "debit" over the word "credit". Just forget the points are even there, I don't even think about points at all, I just occasionally remember when logging into my account and say "oh, nice, points". Take this opportunity to fix your impulse control problem, it might help you in other ways in life.

[@HikerHansen]

@@nunyabusiness896 There are still some mortgage companies out there that do manual underwriting which doesn't require a credit score. I was also able to get some fraudulent transactions that showed up on my Capital One debit card refunded because of it's fraud protection. Are there more that cards have that I'm not aware of? And I did have autopay set up when I had my credit card, but even if I set it up again and did my best to treat it as a debit card, I'd still be one step closer to being tempted by the rewards when I really want something. And I just want to get as far from those temptations as I can.

[@thisisnotok2100]

Don't do debt, that's it. The borrower is slave to the lender.

[@NickShvelidze]

Easier said than done

[@lagflag]

Not if you pay off your card every other day

[@SophiFike]

No debt, no credit cards, no car loans. That's freedom.

[@liawatson5789]

No it the right amount of credit increases your credit score. Your credit score enables you get loans, a mortgage credits cards, etc.

[@NoAnimePD]

@@ursamajor7468 >you need some debt. >why? >So you can qualify for more debt!

[@flyingostrich88]

Two Cents: "Credit cards aren't objectively good or bad" Also Two Cents: *makes a video listing only negative things about credit cards*

[@RealRiders]

Because we already know the good parts. If we didn't, we wouldn't have a credit card in the first place.

[@FManAngryAmerican]

The only positive thing about credit cards is when you use it on cocaine.

[@SidV101]

No they mentioned that it’s a 0% interest loan if you pay your balance off in full every month

[@koipen]

Looking at the effect of purchasing behaviour on credit card vs. cash was a nice splash of good economics - love these vids for well-baked takes like these!

[@SubZeroEric]

3:46 that “pain” sound made me laugh way too hard 😂

[@weirdnomad8868]

I stopped using credit cards two years ago. I was shocked by how much money I saved by not spending as much. Forgoing those 'rewards' was the best thing I ever did.

[@Chris-wk8nu]

just buy gas on the card

[@NReluctant]

After saving my miles for a very long time and spending lots of money with the reward program, I discovered that I wouldn’t even be able to book a flight with my family because they wouldn’t let me book a flight for myself with points and pay for other seats at the same time. However, they were nice enough to let me cash it in for a purse that was a nice gift for my mother, although the purse probably cost around $100 if I had bought it by itself. Needless to say I no longer use miles reward programs.😆

[@olandir]

I've been thinking lately about the fact that you can become "complacent" with money especially when you are in a decent place financially. The comment about how credit cards (and even debit cards) take away the pain of spending is very true. I have an Amex with "Plan It" and though I like the system that allows you to divide a large purchase into 3,6, or 9 payments with a set small fee and no interest, it also makes it easier to justify those purchases more and more. I don't have a rewards card or annual fee but I can see what you mean about credit card companies devising new ways to make you spend more even if it's unconsciously and I consider myself pretty wise with money but they can still "get you" if you are complacent. The point about "taking a step back" and looking at the whole picture is really valid.

[@bigsalo8598]

I've always felt more "pain" using a credit card than cash. I think its because i link my bank account to the credit card, and I see cash as money thats already been removed from my account. having the cash out of my account is like its already spent. that of course means that going to an atm feels like spending money

[@saadi1851]

How does that work? So your credit is paid back automatically with your bank balance whenever you make a purchase on your credit card?

[@viamare9084]

Just found your channel 3 days ago, I like your videos.. very practical.. keep it up guys..

[@VanJR.]

Binge watch your videos all the time. Love it!

[@brailleme7441]

I do two budgets at the same time. One is weekly and the other is monthly. While I side hustle and do great coupon stacking with online rebates on top of the paper coupons. I don’t account that into my budget or what I make on my online job. Budget is only based on my full time job. So I treat credit cards like a debit card. Cash is kind of inconvenient in my case. I treat the cashback as a weird savings account in case of emergencies. I had saved up for so many years that when I lost my place I pay a long stay hotel using that cashback and got my own place. I also do high interest online savings account so I can make up for the devaluation that cash goes through and now I’m looking to buy my own place. A lot of finance things are about your own mindset (it’s why I took real minimalism instead of the annoying type so I stopped buying t-shirts and other money draining habits). Learning about couponing, the free services the library offers and the correct budget for you is key.

[@DrSohailSAhmed]

Great channel you guys have. Keep it up. It has been very informative & valuable. Thank you...

[@nalod23]

My parents encouraged me to get a credit card, I said sure and took it, the bank took it off me after I never used it.

[@mannyjeanpierre4062]

this couple must be undercover employees of Dave Ramsey. Its a mirror of what he says all the time. Good channel still

[@b.sharp.]

Idk, the say that it is fairly impossible to live without a credit card at around 4:46

[@teev7]

I don’t think so because they are not at all against credit cards like Dave Ramsey is...

[@b.sharp.]

@@teev7 exactly

[@teev7]

They even have a video on what goes into your credit score, and the information/advice given is not what Dave Ramsey would condone. kzbin.info/www/bejne/pavFeIqCqb-Xpbs

[@Lilgamergrlie]

Mr. Sharp lol yep when they said that I was like Dave Ramsey would not approve 😂

[@ArjunAmrith]

Hearing you say dooblydoo makes me think you're related to Matt Collville 😂 Nice channel , love the content. Keep it coming 👍

[@Jason15Cooke]

I love your videos guys ! Please make more they really are great.

[@littlemusic4x]

Came here from TFD and am really liking the channel. It's so interesting how finance works in different countries. I'm from Germany and it's totally normal to always pay of your credit card (which a lot of people don't use anyway) every month. The bank just deducts the money from your account every month and there is nothing you can do about it. In a good and a bad way :D :D

[@MOBMJ]

Love your videos so fun and educational Thank you 🙏 keep them coming

[@adamtajhassam9188]

Glad I ran into this channel, Ty 4 watching us :) , always. I'm learning 3 things every day...

[@antonibald123]

That's a nice shirt you have there Philip

[@TwoCentsPBS]

Why thank you! Butterflies match my complexion... 🦋

[@jeremyjohnson6438]

You might already be doing this but there’s another youtuber who wears shirts similar to that and he’s linked them in the description and gets the cut

[@alexedwards1083]

Came to the comments to try and find the make!

[@mamoore06]

Love what y’all are doing! Keep this up and keep educating!😎

[@johnaguirre9079]

Keep up the good work guys. Eager to see more!!

[@RangerRuby]

The title is SO right! The truth about them was ugly. I always love watching the fun and educational videos from Two Cents!

[@rushabhshah8552]

Visa, MasterCard and AMEX wants to know your location 😂

[@lastflowers2401]

So.... irresponsible use of a credit card has negative consequences. What does this have to do with airline miles and using a credit card responsibly?

[@jeremyjohnson6438]

Benjamin Lemons I think they’re saying, look at the big picture and make sure that even if you’re paying your CC on time, you’re not spending more money. Which most people are apparently and don’t realize. Just something to think about

[@edkennedy7952]

Right, their just going on about people that misuse credit cards.

[@toofar7493]

Credit cards do have some advantages like if your card gets skimmed at a gas station they can freeze the card and cancel the transaction so you don’t own anything, but if you used your debit card you are out that money until it can get refunded. Also a lot of credit cards offer free insurance or warranties on purchases made with the card. If you are scared you will spend too much decrease your limit.

[@joonastalvinen]

Have a pin, you can't get skimmed. Problem solved

[@notroll1279]

Spot on. In the EU, credit card commissions were legally capped to 0.3% of the transaction amount a few years ago. Almost instantaneously, credit card companies slashed their bonus miles and other incentives. I terminated my Lufthansa branded credit card and swapped my otherwise un-redeemable bonus miles to a big coupon issued by a drugstore chain. Since then, I use a free credit card for purchases I do anyway (such as fuel) and for car rentals where they still are indispensable. Balance paid via direct debit so I can't run into their crazy interest rates...

[@uncreativename9936]

Damn, recently (well a year or two ago) in the US they raised them to 4-5% and since then I've gone to a handful of places that stopped accepting cards.

[@anadus]

The thing is, by not using credit cards, you also stand to "lose out". You're anyways paying the higher cost from retailers (who pass on the credit card companies' slice to you regardless if you're credit card holder or not). By paying with cash, you're helping fund that free flight ticket others are redeeming. If you are disciplined with the monthly repayment, the technically most optimum option is to use credit cards to maximize rewards.

[@clintrose4217]

This is excellent content. Thanks for keeping this channel going!

[@TwoCentsPBS]

Thanks so much!

[@mademan543]

I had several trips and hotels booked this year however due to covid19 everything has been cancelled, fortunately I paid with my credit card for everything and now my credit card company will refund everything even when some of the hotels won’t. Biggest perk of CCs is the insurance that’s built into them.

[@tedh7543]

This great couple offers fantastic advice. The best nugget of info is to go with no annual fee cards and pay off the balance each month. That way you reap the rewards offered without paying any interest.

[@smallmj2886]

Many airlines have split their fares in to base fares and carrier surcharges (formerly call fuel surcharges). Some reward programs only redeem towards the base fare, so that free flight ends up costing quite a bit of coin. Not to mention all of the extra fees for security, airport improvments, etc. For example, a $1300 round trip from my home airport to Brussels in August on Air Canada has $650 in base fare, $510 in carrier surcharge with the rest in other charges. If I tried to use rewards for this, I'd still be paying around $650 in fees in surcharges. The only reason the carrier surcharge exists is to dilute reward programs.

[@fmaz1952]

This video is very true on a social scale but sort of irrelevant on an individual scale. 1. If I pay cash, I will still pay the same inflated price than a credit card user. 2. The benefit of a travel card usually include travel insurance and rental insurance. Unless you travel uninsured, the annual fee is paid for real quick. 3. I pay my balance in full every month, even the months than I'm unable to pay it in full. How? I have a line of credit. So that broken car goes on there, at 9%, not 17+%. (And then I pay the LOC ASAP)

[@Excalibur2]

What is travel insurance? Is that for something if you travel abroad? Not sure if most people can afford to travel enough for that to make sense.

[@John_Fx]

Also, if you opt for cash back rewards instead of stupid points, you can save 1-5% on a lot of things you buy.

[@ibqtubu]

ScarletNight the travel insurance can be used whether you fly abroad or not. If you aren’t flying enough to reap the benefits of travel insurance or miles, don’t get a credit card that offers miles. There are cards that offers cash back or spending points in lieu of miles too. For instance with my Amex I can use my points on flights, hotels, rental cars or Amazon purchases just to name a few.

[@whimsy-chan1188]

@@Excalibur2 depends on the person and how much you travel, don't travel abroad without some form of travel insurance.

[@jaime9344]

Really wanted to see y'all at SXSW but Austin traffic is crazy. Great job as usual. I have my kids watching y'all. (yes I'm a Texan y'all ).

[@TwoCentsPBS]

Awww thanks! Indeed the traffic is nuts. Maybe we'll organize a meetup later on! ; )

[@jaime9344]

@@TwoCentsPBS I will be there!

[@andrestorres4715]

At the moment, I'm getting 10% back for groceries, 5% for gas, tolls, target and drugstores, and 4.3% back for almost everything else. I have no annual fees, never pay interest or late fees.

[@jeep2.418]

I just went to Sound Field because of your video and I'm not disappointed! Now I have 2 channels where I look forward to new content. Thanks!!

[@TwoCentsPBS]

That's so awesome! Our show got a great kick-start from shout-outs like that, so I'm grateful when we get to help other new PBSDS channels!

[@Warfieldization]

Thank you for video. Where can i read research on stiff like this. For Example, the Carnegie Mellon one you reference

[@SantoshRatnala91]

Thanks for the helpful video. You guys rock :)

[@darrelllee2107]

There's not a single person out there that got rich from credit card reward programs. But there is a time that it is worth it. Corporate cards. If you have a corporate card that you can upgrade, even for a fee, to one with rewards, it is worth it. I spend a little over $500/week on my hotel, a little over $215 on transportation (car service and Amtrak), plus whatever meals through the week - I'm racking up nearly $4,000 in expenses per month. Last year, I spent nearly $60K on my corporate card. This is money that I HAD to spend to travel to client sites and it was really spending company money but I got the points. Otherwise, it is best to just bankroll everything. Like the video said, it is a psychological thing. Even if you spend just 5% less due to the "pain" associated with spending cash, you're saving more than you would be getting. Believe me, you can't outsmart the credit card companies. They have this figured out.

[@RodrigorReyes123]

Thanks guys! As a 3 year responsible (so far) credit card user this was super informative!

[@spiden6436]

Found myself guilty of a couple of these things. Thanks guys for the heads up👍🏽 Keep the good videos coming

[@TwoCentsPBS]

We've definitely been guilty of them too, and the shift away from the "norm" of using CC has been slow and awkward for us!

[@TwoCentsPBS]

We've definitely been guilty of them too, and the shift away from the "norm" of using CC has been slow and awkward for us!

[@MoHasYoutube]

Thank you so much for this video! I do have a question though: does this apply to people collecting miles of flights they're taking anyway? I have a Star Alliance Frequent flyer card which I use collect miles on everytime I happen to fly on a Star Alliance airline. I don't have any credit card associated with, usually choose the cheapest air fare possible, and in many cases I'm travelling for work and my flight has already been paid for by the company. Is that (logging actually traveled miles) the same deal as in credit card miles or are they different? Thanks again.

[@digital_down]

There are two different kinds of miles. Miles in terms of miles traveled, and miles as a kind of points that can be redeemed.

[@charlesmendoza9618]

If my cousins are paying for my flight.. thank you cos.

[@finitewehosh6542]

I haven't used a credit card to date. My approach has been ensuring I always have a sufficiently large emergency fund and make sure my Bill's are always offset by at least a month. When I do have more money than expected, that money usually goes into investing in something that I can later easily sale in pinch of I need quick cash. Usually guns.

[@aznandyroo]

Love the use of "Doobly doo"

[@Watch-0w1]

Nothing is free, always a cash

[@Iffy50]

It really is free if you are diligent. They make their money on people who have a balance.

[@ItsGroundhogDay]

Expensive cash? No thanks. I'll take the rewards.

[@fathan16]

Theres a fee associated with cash too. Called inflation.

[@BenDurham]

Almost didn't cash that one!

[@ItsGroundhogDay]

@@BenDurham Oh, that's what it said?

[@gingerredshoes]

Posting in March 2021, and I have found that spending cash has taken on the "less real" quality that swiping a card used to for many people. Because cash can only be spent in person, I very seldom used it in the past year. In person purchases require interaction with other humans who potentially carry covid. Almost all of my spending has been done online, including grocery shopping for curbside pickup. Gas stations are all swipe your card to buy fuel. (Yes, you could go inside and pay with cash at the register, but pandemic.) In fact many businesses are now ONLY online, drive through, or for pick up, and those all require purchase with a credit or debit card. I bought a meal at the drive through with cash yesterday and it felt like paying with funny money, with no consequences to my bank account because it didn't change my bank balance. There's a topic for further research.

[@tommy35ss]

All that said in my other comment, it is a great video. I just differ in opinion on advice.

[@brbosi]

Could you cite these studies? I wonder how old are they. Today it hurts much more seeing a purchase pop up as a notification on my phone than when I use cash. The culture has changed so much over the last decade that depending on how old these studies are they might be quite obsolete.

[@marer1000]

You are exactly right, a new scientific study that was conducted last year stated the same thing you concluded. Nowadays as more things are digitized and purchases are moving online, the pain receptors that most people experience are now tied to their online accounts and the purchase history these website displays. The agenda that video like this pushes have been outdated for over a decade.

[@AgentMrX7]

what caught me was that i had too many credit cards for no reason. three cards with about 1-2k balance on each and i thought i was fine, but when i added them up i realised i was $5K in debt. I still can't get over that i had no idea how much debt i was in that it shocked me.

[@saber-seathearn82]

If you’re the pilot you always have free rides! #lifehack #twocents

[@esm3lokis31]

You guys are pretty amazing with your info! There is something You have to see that just goes perfectly with what you do!!! How can I contact you?

[@systematic101]

That's why all my cards are $0/year fee and have a cash back reward. I have 1 card at costco that gives me 2% back on gas, 3% at restaurants, and 1% on everything else. We already had a costco membership so I don't count that cost. I have another card (my main card) which I use for everything I would use cash for but I can use the card as long as there isn't an additional fee. As a result I get about $20-30 back each year for the costco card and about $120 back for my main card. AS for interest I've only ever paid it once. It was about $46 during college. The student loan was late and tuition was due so my options were credit card or use the schools payment plan. The payment plan would have cost me $150. So I did the math and put it on my card. This is the same card that gets me 1% back. Tuition was about $2500 so I really only paid $21 in interest. Since I've had that card I've gotten about $1300 back. I even pay my property taxes with my credit card which means my property taxes are 1% cheaper than they would be without the card. I even want to pay for my house with the thing but I'm pretty sure they wouldn't have given me a $250,000 limit back then.

[@Justin-ol6vk]

Wait the captions at 3:04 don't add up, I feel like I missed out on something important

[@sunnycharan5505]

I love your videos coz, your videos are nice animated figures and running numbers. Can you do 1 more video on how to save money in different ways. What could best investment plan to save for future.

[@MJ-rd9mt]

Great video! Thank you.

[@rhyps]

You should change the title of this video to "The Truth About Credit Cards". It has a lot of educational value.

[@Solisium-Channel]

At American Express people were encouraged to book with delta for more value for their points and earning more points. either way people got screwed because often time booking with delta was way more expensive then doing it through like, Expedia. For that extra 100 bucks they’d spend with delta they’d get 1 dollar or less in points depending on what they wanted their points for.

[@AlwaysAmTired]

I think there are ways to teach people to use credit instead of teaching them they'll become victims to credit. Like how we teach people to be smart about mortgages, car purchases, etc, we can teach them to be smart about credit cards. If 40% do it now, why assume others can't learn?

[@feras5017]

If everybody learned how to use CCs there will bo no CCs

[@AlwaysAmTired]

@@feras5017 no, the cc companies make by far the most money by charging a percentage fee to the business every time you swipe. They would do just fine if everyone paid on time.

[@roguee529]

So, my brother is paying for my flyer miles and cash back. Sweet!

[@mentonerodominicano]

I'm one of those to have had to pay the interest multiple times (due to poor spending habits, unforeseen emergency circumstances and issues at work that severely cut out my pay for many months) and let me tell you all that interest (and yearly fee) just about doubles the cash balance I have in miles.

[@NarcisismoTV]

I simply love you guys!!

[@danielnotman3051]

Any know where Philip got his shirt?? It looks awesome!

[@connorjensen443]

Disciplined use of reward yielding credit cards can be a really great financial tool though. You just have to plan out how you're going to use them just like you'd have to plan out any other aspect of your financial health. I personally keep it simple and stick to cashback cards since I don't have frequent travel expenses. On every purchase I make, I essentially get a 1.5% to 5% discount. On top of that, I get better fraud protection and perks like 90 days of damage and theft insurance on anything I buy. No annual fees, and I use the card the same way I would a debit card-- only spend money I have and always pay off my balance in full. It isn't that hard, and I'm disappointed you guys took the scare approach with your video. I think you guys need to redo this one and give more information about the benefits of credit cards.

[@ItsGroundhogDay]

Nice summary. I don't understand why anyone would use debit cards or why they would use cash unless they don't have a choice. I carry a little cash just in case, but I rarely use it.

[@richard1113]

@@ItsGroundhogDay Exactly, I usually have some cash in my wallet for those rare "cash only" situations.

[@ruthiemuqatach5942]

You are not getting a discount on every purchase, merchants have to raise prices to make up for the huge 3 percent fee on every credit card purchase. And rewards cards take higher fees.

[@connorjensen443]

@@ruthiemuqatach5942 Given how I can't singlehandedly abolish credit card merchant fees and change consumer prices, yes, I still do save money getting cash back on purchases where I would have otherwise gotten nothing. As much as we can dislike and oppose predatory systems, we still have to live within them and make the best decisions we can for ourselves if we're able.

[@ruthiemuqatach5942]

@@connorjensen443 YOU are making merchants pay more. Don't blame the system.

[@JaydonTobler]

Personally, I see my Chase and Amex points as kind of travel "savings accounts." For example, if an emergency comes up with my family and I need to jump on a plane, then I have my points as a backstop. I won't need to pull out from my saving or anything because that's a big no-no. I have probably $1500-2000 worth of points right now, which is plenty enough for an emergency. Anything after that, maybe I'll use them for a vacation if I ever take one? Other than that, my cards are really just there for credit history.

[@mimprincesa]

Yes the one thing i see people keep missing or choosing to ignore is the surcharges which definitely adds up. The reward points are not worth much and ure probably better off saving on the surcharges and giving yourself a holiday

[@BoxStudioExecutive]

Virtually all businesses (except some gas stations) charge the same price to customers regardless of how they pay. Pay that surcharge in cash like a sucker

[@CharlesPhan]

Such good advice but with nowadays in "inflation living" i think people use credit cards the wrong way. I would understand gaining the rewards when you do have the money to pay within your means and also reaping the rewards. but still good to know!

[@ikhbjhbkm5]

I'm actually surprised the CC companies don't cancel the customers like myself. I've never paid interest in 20 years, always chose the cash back option, rewards checks have been fairly obscene lately. There must be a rule forcing them not to cut the disciplined uses off.

[@arnoldomonterroso8417]

hf32jkm5 I am the same way never paid interes in 25 years.

[@taylor1038]

They still break even with transaction fees for vendors. You're just not a cash cow for them like some less responsible users.

[@gregorflopinski9016]

Got a credit card ad on this video, now thats funny

[@jameshandaja1536]

So that's why they are so hell-bent on banning cash, to stimulate (wasteful) spending & consumption

[@shaereub4450]

For me, it's the exact opposite. I am mindful about my spending on a card, and stick to my budget. Cash: unless i get it out for rent or gas, i see it as extra to spend.

[@qmzp2]

Literally just got my first credit card a few hours ago, good timing!

[@justaprankbro]

I don't think it's cash vs card so much nowadays as it is online shopping vs physical store shopping. A great deal online seems expensive in store often

[@Dan99]

Can you make a video about the overall benefits and drawbacks of credit cards?

[@MSMIstudio]

1. Set up the budget you can swipe per month like it's your cash and pay off the balance on time. 2. Choose a credit card without an annual fee and never fall into cash advance status then you can take advantage of a good amount of cashback from the company.

[@iwantmyfriescrispynotburnt3981]

Omg.... why isn't this taught in public school or college.... we outcher here learning the pythagorean theory while trying to make it on ramen.... I love y'all... keep the knowledge coming! 😍😍

[@teev7]

Yep, but Pythagorean’s theorem is equally important because people who work in construction like my uncle and cousin for example, say that they use it all of the time. Surveyors even use it. I’m pretty sure other professions use it; I’m aware of these two because the people I know in these professions say they undoubtedly use it.

[@sevalle83]

well i have a discover miles card, all my bills are set up on auto pay to that card...then i turn around and pay it off...paying things i have to regardless and getting airline miles that aren't restricted. My credit card isn't used for discretionary spending only auto pay for bills.

[@starblomma]

One thing to add: credit scores. As somebody from Germany, where credit cards are rarely used, I didn't plan on getting a credit card when I moved to north America either. But try renting an apartment without a credit history, believe me, it's no fun. So I basically got a credit card only to build up a stupid credit score -.-

[@side-fish]

What about those miles accelerating services like Pointshound or Rocketmiles? I know the reception for Rocketmiles isn't that good, but in general, what do you think of those?

[@snowballeffect7812]

Credit cards are inherently bad. The only reason I have one is so I can build credit to buy a house and get 2% - 5% back on purchases.

[@BeatrixOnyx]

I've managed to have a good credit rating without using credit cards. I was able to become a homeowner by 25.

[@snowballeffect7812]

@@BeatrixOnyx what was your credit score? You can have an ok score and buy a house with a tiny loan in the middle of nowhere, but a domicile for city-living is pretty impossible for the average person without building credit somehow.