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You would think I would feel excited about this invitation. The invitation is on thick and
glossy card stock. Even the envelope says, “By invitation only,” and “Your immediate
response is requested.”
It is obvious they are trying to make me feel like I am someone special. Is the invitation
for a wedding or retirement party of a good friend?
It is a credit card offer from Capital One, to get their coveted Quicksilver card (you
know the one that Samuel L. Jackson promotes during March Madness).
Admittedly, I do think their commercials are fun to watch, but what is NOT fun is going
into credit card debt, sorry Samuel.
It had been a while since I looked at a credit card contract. I thought, “let’s see how
generous of an offer this invitation is for me.” I mean, there is $0 annual fee, 1.5% cash back and $0 fraud liability. They really wanted to reward me.
Wait…have you ever read the fine print?
With this particular “invitation,” I mean offer, it says that my annual percentage rate
(APR) would be at 26.99%! That’s a bargain! NOT!!
The contract does say, “We will not charge you interest on new purchases, provided you
have paid your previous balance in full by the due date each month.”
I know, I know…some of you say you pay off your credit card every month. According
to research, over half of you would be lying because, over 50% of all credit card holders carry a balance.
But wait…I get unlimited cash back at 1.5%. Why would I want to miss out on them
giving me free money?
Capital One like all credit card companies are “for profit”. Why in the world would they
want to give you and me money?
Think about that for a moment. Their very job is to make money…a lot of it. So why
would they give you some of their money?
Studies show when you spend with plastic you spend an average of 12-24% more than if
you used cash. Translation, credit card companies are willing to give you 1.5% in exchange for 12-24% more spending. That is the equivalent of you taking me out to a nice steak house and in return I take you out to a fast-food restaurant.
Now zoom out for a moment. One of the top financial priorities American’s have is getting out of debt. However, if you keep borrowing money, you will never be debt free.
It sounds simple, but you must be willing to say “no” to debt in order to become debt free.
If you want to quit smoking, don’t buy cigarettes. If you want to lose weight, don’t buy ice cream (That’s a hard one). If you want to get out of debt, don’t have credit cards, stop going into banks and stop borrowing more and more money!
Thanks for the invite, Capital One. I think I am going to pass. Dave Ramsey says it best,
“What’s in your wallet…CASH!”
Strong Tower Consulting Can Help!
Unsure of how to stop using credit cards or what to do next? Contact Justin to meet for 30 minutes for guidance on how to accomplish your next financial goals.