In short
Credit cards as either a tool or a trap; how they work, how people get hurt, and how to use them safely (paying before statement due date, budgeting, avoiding minimum-payment traps, and treating cards like a bill).
Guest backgrounds
Dave Ahern, a “star podcaster” with experience as a bank manager; Evan Ray hosts and discusses credit-card education and budgeting.
Key claims
Minimum payments don’t prevent interest/fees; they mainly delay serious consequences. Carrying balances compounds quickly at very high APR (often cited as ~15–20%+ above mortgages). Credit limits don’t equal affordability. Credit-card points can mislead people into overspending. 0% APR offers are risky if you can’t pay off before promo ends.
Notable examples
A man used a ~$20,000 credit-card cash advance to buy GoPro stock, lost most, and still owed the balance at ~25% interest. A college friend cycled debt by maxing one card, opening another, and assuming future income would fix it. Fraud examples: unauthorized $2,000 Italy train-ticket charge handled quickly via credit-card dispute.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOPersonal Credit Card Mishaps
0:59 to 2:01
Dave shares a cautionary tale about a credit card investment gone wrong.
“The other night I'm online shopping for Brenner Inc.”
Personal Credit Card Mishaps
3:37 to 5:10
Dave shares a cautionary tale about a credit card investment gone wrong.
“I probably would say I think the worst thing I ever saw was a gentleman.”
Cycle of Debt in College
5:10 to 6:34
Explore the dangers of accumulating credit card debt while in college.
“And so he lost most of his investment and he still had to pay back the$20 ,000, which was at a smooth 25 % interest rate.”
Understanding How Credit Cards Work
6:34 to 10:12
Get a detailed overview of how credit cards function and their implications.
“And I've made a ton of credit card-related content in the past, just as a disclaimer, on YouTube and TikTok and that sort of stuff.”
The Upsides of Smart Credit Card Use
10:12 to 12:44
Learn how to benefit from credit cards without falling into debt.
“Does the interest rate actually affect somebody if they pay it off on a monthly or weekly basis or something like that?”
Importance of Heart Health Testing
13:45 to 14:05
Discover the significance of comprehensive heart health markers.
“Simulated trading tools for informational purposes only.”
Understanding Credit Card Interest and Debt
15:17 to 19:13
Learn how credit card interest works and the dangers of revolving debt.
“What's the best way to get started in the market?”
The Credit Card Trap: Mismanagement Risks
19:13 to 21:22
Explore how mismanagement of credit limits can lead to financial struggles.
“They can be a fantastic tool, but they can also bite you in the butt very, very hard.”
Budgeting and Credit Card Usage
21:22 to 23:32
Find out how budgeting can help manage credit card spending effectively.
“not as savings, not as an emergency fund, not as, oh, I'll pay it off later, but as if you go buy a$50 vase, you could pay that$50 vase in cash right now, but you're choosing to do it with a credit card for some reasons.”
Benefits of Credit Cards: Building Credit
23:32 to 26:34
Understand how credit cards can aid in building your credit history.
“Like you said, credit cards can be an incredibly valuable tool for people, which I wholeheartedly agree with.”
Show all 16 chapters
Advantages of Adding Authorized Users
27:41 to 28:09
Discover the benefits of adding children as authorized users on credit cards.
“Adding your children onto your credit cards as an authorized user because to kind of go against what you just said, actually at 18, I did have some credit built up because my parents had added me as an authorized user.”
The Importance of Fraud Protection
28:09 to 29:27
Learn about the advantages of credit card fraud protection compared to debit cards.
“So because of being as an authorized user, it helps a lot to have a very long credit history and that adds a ton to it.”
Maximizing Credit Cards Benefits
29:27 to 32:11
Discover the benefits of cashback and how to properly manage credit cards.
“Credit cards have much, much better fraud protection.”
Building a Healthy Relationship with Credit Cards
32:11 to 36:22
Understand the best practices for using credit cards responsibly.
“And what I mean by that is that it's something that is good for you, but it needs to be used properly.”
Warren Buffett's Credit Score
36:22 to 37:14
Learn a surprising fact about Warren Buffett's credit score compared to yours.
“Those are all fantastic ways to have a healthy relationship with your credit card.”
Encouraging Audience Engagement
37:14 to 38:38
The hosts invite listeners to share their credit card experiences and provide resources.
“Do you know why he doesn't spend on his credit card at all?”
Transcript
Automatic transcript. May contain errors.0:00Evan Raidt:This show is sponsored by Liquid IV. Summer is here and let me tell you I could not be more excited. From running down to the lake for an early morning fishing trip before work or running my favorite trails or even yard work you name it. I just love being outdoors when it heats up. But with that heat comes dehydration and sometimes I feel like water just doesn't cut it. That's exactly why I started throwing Liquid IV's hydration multiplier sugar free in my bag every day. one stick 16 ounces of water and you're hydrating faster than water alone and the best part is it holds up to four hours powered by their liv hydro science formula with electrolytes and essential vitamins science-backed clinically researched and honestly you can just feel it working currently white peach and rainbow sherbet are my favorites you just tear them open you pour them in simple as that you're done get moving with superior hydration from liquid iv tear pour live more Go to liquidiv.com and get 20 % off your first purchase with code investing at checkout.
0:58Evan Raidt:That's 20 % off your first purchase with code investing at liquidiv.com. The other night I'm online shopping for Brenner Inc. Yes, I still use a Brenner, I know. And I'm getting ready to check out when I suddenly realize, yet again, I cannot remember my stupid password. But that's when I noticed they've recently added at the top of the screen that purple shop pay button. One click and my name, done. Address, done. Card info, done. Done. Check out. Done. Honestly, it's one of the best things in online shopping right now. That button is Shopify. And if you're running an online business or thinking of starting one, Shopify makes the transaction just as easy on your side.
1:36Evan Raidt:They give you inventory tracking, payment processing, analytics, marketing, and much, much more all in one place. No jumping between platforms, no chaos. And if you get stuck, they have 24-hour support that genuinely is the best. See, less carts go abandoned and more sales go with Shopify and their ShopPay button. Sign up for your$1 per month trial at shopify.com slash beginners. Go to shopify.com slash beginners. That's shopify.com slash beginners. I honestly think that that minimum payment is one of the sort of, at least in my opinion,
2:14Dave Ahern:the sort of scummy ways that the credit card companies have it phrased to me. because in my mind, if I see minimum payment, I think, okay, if that's the minimum, then that's the minimum that I need to pay to avoid any bad things happening to me. At least me personally, that's the way I read it. And I feel like they, they phrase it that way specifically. But the truth is, like you said, that minimum payment has nothing to do with you not paying any, any fees or paying any interest or anything like that. That's just before they're going to start taking you to, to a debt collector or something. We're going to go down a...
2:55Dave Ahern:Greetings, everyone, and welcome back to At Any Rate. My name is Evan Ray, and we are here to help you make sustainable financial changes without breaking a sweat. And today, we're going to be, as always, tackling a touchy subject that applies to pretty much everything in the financial sphere. And today, it is credit cards, hotly debated, again, as everything else is. But today, I have back my star podcaster, Dave Ahern, who's got some great experience. I think as a bank manager that will lend itself really well to today's episode. And I think you have a lot of good insights and personal anecdotal experience because I always think that that is one of the most powerful ways to convey topics, convey information, and convey how it tangibly affects people's lives.
3:36Dave Ahern:That's so important to me. So Dave, without any private specifics like social security numbers or actual credit card numbers or anything, unless you're willing to share, what is the worst credit card mishap that you think you've seen in your personal life or when you were working as a bank manager?
3:52Evan Raidt:Oh, well, that's a great question. I probably would say I think the worst thing I ever saw was a gentleman. This was probably, gosh, it would have been 2010, 11. he had a credit card with about$20 ,000 limit, and he thought it would be a bright idea to do a cash advance on the credit card to invest in the stock market. And so he had gotten a, air quote, hot stock tip from a friend or family member, and he took out a$20 ,000 credit card loan to buy GoPro, which if you are not familiar with that, Back in that day, GoPro was one of the hot stocks of the stock market at the time. And it was going to the moon.
4:40Evan Raidt:And he wanted to partake in that to the moon growth. And he got in towards the top. And the last time that I saw him, he had lost almost everything. And he still owed the$20 ,000 that he owed. that he figured he would make a whole bunch of profit and he would just pay off their credit card. Well, it didn't quite work out that way. I think it went up for a little bit and then it just crashed. And so he lost most of his investment and he still had to pay back the$20 ,000, which was at a smooth 25 % interest rate. So yeah, that was a horrible, horrible thing that I saw.
5:24Dave Ahern:That is absolutely horrific. Sadly, any story I have isn't quite that crazy. But my story would be that in college, I had a friend who would spend a lot of money towards his truck, just towards upgrades on the truck and everything. Now, at the time we were in college, he did have a job, but he was definitely not earning a ton of money, definitely not enough money to afford the thousands and thousands that he was putting into the truck. And so he just got caught in a cycle of ranking up as much debt on a single credit card as he could and then opening another one and racking up as much as he could on that one.
5:59Dave Ahern:And it was just piling and piling and piling. And every time I would talk to him, he would say, you know, when I graduate college and I get a good paying job from college, I'll pay this all off. And I definitely saw that experience more, maybe not quite that extreme, but more often than you might think. That concept of, hey, I'm working towards something that should, quote-unquote, guaranteed, give me higher income in the future. And so I feel very comfortable racking up whatever I want right now, quote-unquote, knowing that in the future, very soon, I'm going to pay it all off and it'll be like nothing ever happened.
6:33Dave Ahern:But the math just never works out that way. And I've made a ton of credit card-related content in the past, just as a disclaimer, on YouTube and TikTok and that sort of stuff. So if you're curious at all, you could definitely search that up and see some additional content and education on it. But Dave, could you quickly outline how a credit card actually works from start to finish? Because I think there are a lot, a lot of people out there, pretty much everybody. I'm not actually sure what the percentage is. Pretty much everybody has some form of a credit card. But I feel like, I don't know, it's probably 30 % or less of those people actually understand what is happening when they use it or sign up for one.
7:13Dave Ahern:Absolutely. So a credit card is a revolving credit.
7:19Evan Raidt:And what that means is when you apply for a credit card, the bank, whichever bank you're applying to, whether it's Bank of America or whether it's Capital One, will give you an amount of credit that you could use. And when you repay it, you get it to use it again. So there it's called revolving credit. And when you apply for a credit card, it's considered a hard pull. So what that means is when your credit card is run through the application process, the credit agencies see that you're applying for a credit card and that actually dings your credit score. And so it's a really good idea to be judicious about how much you do hard pulls.
8:00Evan Raidt:Hard pulls are considered things like a mortgage, an auto loan, a personal loan, credit cards, any of those kinds of things. When you check your credit through your credit card, that's a soft pull and it doesn't impact your credit score. But when you go in to apply for a credit card, they are going to ask for income information. They want to know how much you make. They're also going to run your credit to see what kind of credit score you actually do have. And generally, the higher credit score you have, the easier, for the most part, it will be to be approved for said credit card. When you get an offer in the mail and it says you're approved, all that means is you're actually approved to apply for the credit card.
8:42Evan Raidt:It does not guarantee that you will receive said credit card. So always kind of keep that in mind. So when you go through the process and apply for the credit card, they're going to ask you for all the pertinent information, social security number, employment information, where you live, income, all those kinds of things. It'll do a hard pull and they'll run the credit. But generally within, depends on the company, within an hour to several days, they will get you back a response, whether you've been approved or not. And then once you've been approved, they will send you the credit card. Now, at this point, you still have to verify everything that's going on with a credit card.
9:21Evan Raidt:Some cards will offer different rewards. They'll offer different perks to signing up for the card. For example, you may get two years of transactions with no interest or maybe six months with no interest or the first 30 days you get$200 if you spend this amount of money. All those things are verified. But one thing that you do need to check before you apply for a credit card is what kind of interest rate are they going to charge you on ongoing purchases. It's all fine and dandy that they offer you all these perks, but generally after the perk is done, then they're going to start charging you an interest on the balance.
9:59Evan Raidt:A credit card after that is, like I said, it's a revolving balance. So if you spend$200 and you pay off$200, you get that$200 back to use in the future on that credit card. So that's generally how it works. Did I miss anything?
10:13Dave Ahern:No, I think that covers everything. Does the interest rate actually affect somebody if they pay it off on a monthly or weekly basis or something like that?
10:23Evan Raidt:No, if they pay it off before the statement date is due, then there is no credit card interest that will be charged on that card. Yeah, I think that that's one of, if not the, keys to this whole thing that I think personally dismantles.
10:40Dave Ahern:I mean, to go over some of the ways that people are generally hurt by credit cards, people are charged interest if they carry a balance. So that$100 purchase that you put out, depending on how long you let it sit, might become a$120 purchase. And maybe if you'd seen it cost$120 up front, you wouldn't have even wanted to buy it up front. But because you saw this price and thought you could afford it, then you overspent from what you could actually afford in cash, and you end up paying interest on it. if you get charged any fees or late fees, if you don't pay it on time by its due date, then you'll also be charged late fees on top of the interest.
11:12Dave Ahern:Sometimes if you're transferring money or transferring balances between credit cards or if you're doing a cash advance or withdrawal or something like that, you can get charged fees along the way. And there's also some interchange fees. So they always get a little money tacked on top of transactions that they earn money from. And those are all the ways that the credit card companies make money off of you. and a lot of those are completely avoidable if you follow what Dave just said. If you pay it off before the statement is due, then many of these fees, interest, late fees, that sort of stuff, you will not pay and they will not earn a single dime off of you.
11:49Dave Ahern:And there's so many arguments out there of saying that credit cards are bad. I've heard credit cards called the devil or devil's tool and that sort of stuff. I've heard them called a lot of horrible things because of how many people that they have hurt. A lot of people have been financially ruined by credit cards. That is a sad, true fact. And I'm not trying to victim blame or say, hey, they were idiots for letting that happen. I think that it's a lack of general financial education that leads people to make certain decisions or desperation from being in a worse off situation where they may have or feel like they have no other options.
12:24Dave Ahern:But for people who are able to afford purchases that they make, people who are able to comfortably move money around as necessary, maybe reduce their spending a little bit and still get by with that reduced spending, if you just continually pay off your credit card and you never carry a balance, you will never owe them anything. And all you will get is the cash back from it. You'll get those initial bonuses that they've talked about. All you will get is the benefits from it, building your credit from using it, that sort of stuff. you will only see the upsides and you will be completely dodging the downsides.
12:57Dave Ahern:But what are some other ways that you see that people are hurt by credit cards? Or maybe you've seen people spout as, hey, credit cards are bad because blank.
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15:17Evan Raidt:What's the best way to get started in the market? Download my ebook for free at stockmarketpdf.com. Well, the most obvious is the interest that you get charged on the balance. And the way credit cards work is because they're a revolving balance, it keeps charging you every month. So just to use easy math, let's say that you have a$1 ,000 balance on your card and you do not pay that off and they charge you interest on that. Then that interest goes on top of that$1 ,000. And then the next month, if you don't pay that off, then it's now the$1 ,000 plus the interest plus interest added on top of that.
15:59Evan Raidt:and most people, what happens when they get in trouble is how they hurt themselves is let's say you get a$5 ,000 limit on a credit card. The vast majority of people, not vast majority, a lot of people will think of that as air quote free money and they'll go out and spend it and not really pay attention to what they're doing and the next thing you know, that$5 ,000 will turn into$11 ,000 by the time they pay it off because of interest expense that's charged on top of the balance that they've charged. And when people pay a minimum amount, let's say your minimum due for the month is$50, it's all fine and dandy, but if you're only paying that$50, it could take you up to six or seven years to pay off that credit card as you're paying the$50 off.
16:53Evan Raidt:Now, the problem is that most people, when they start to see a little daylight, let's say you have a$5 ,000 limit and you have$4 ,800 balance and you pay that down to maybe$4 ,000, they'll charge you back up. And so it just becomes this kind of self-reinforcing cycle that they get into this trap of really hurting themselves. And because it becomes so expensive, because credit card interest rates, for those who don't know this, are generally the highest in all of the borrowing spheres that you want to look at. If you compare it to a mortgage, it's generally anywhere from 15 % to 20 % higher than a mortgage.
17:38Evan Raidt:Double, if not more, a car loan. Double, if not more, a personal loan. And so it can be very, very expensive to take out a credit card debt. And what a lot of people will do is if they have a decent credit score, they may go out and buy open two or three credit cards. And so instead of having a$5 ,000 limit, they have$15 ,000 or$20 ,000 and they charge all of them to the max. And then what's happening now is that they're paying the minimum fees because that's all they can afford in their budget is$50 here,$75 there,$60 here. And yeah, that's$200 they're paying, but it's all going to three cards and it's all minimum payments.
18:22Evan Raidt:And if you're ever curious about this, let's say Capital One, for example, it's a card I have, so I'm familiar with them. When you look at your credit card statement, they do send you a statement every month, which most people probably just throw in the trash. But when you do actually read the statement, they will tell you on the statement, if you make a minimum payment, this is how long it'll take, and this is how much you will eventually ultimately pay. And if you pay more, they will give you like a bit capital one gives you like, I think two. So they're like, if you pay double what the minimum payment is and just the minimum payment, so they can show you how quickly you can pay it off and how much it'll, it'll cost you in the long run.
19:04Evan Raidt:So bottom line, credit cards can be very dangerous if you don't understand how they work and how to control yourself when you're using them. They can be a fantastic tool, but they can also bite you in the butt very, very hard.
19:17Dave Ahern:I completely agree. with you not paying any fees or paying any interest or anything like that, that's just before they're going to start taking you to a debt collector or something. We're going to go down a really, really bad road. But you are still going to owe interest on the entire rest of your balance. And I ran some math before this as well. The average American has around$7 ,000 in credit card debt, so even more than the examples you were giving. And that adds up to adding$5 a day, which after just one single month is an additional$153. so now you owe$7 ,153. If you start stacking up nearly$200 every single month, and like you said, that's only going to compound, now that 0.07 % daily, based on a 25 % annual interest rate, 0.07 % daily is just going to stack higher and higher and higher and higher over and over again, and that will balloon like crazy.
20:38Dave Ahern:And that is just the average American. That's not including people that owe much, much more than that. And this definitely all stems from people spending more than you have. Your credit card limit has nothing to do with what you can afford. Your credit card limit is simply what the bank has deemed you are trustworthy to borrow from them or how much they think they can earn from you. The math that they're running behind the scenes, which you may be able to comment on. But they are not in it to protect you financially or anything. As with every company in capitalism, they are there to earn money.
21:10Dave Ahern:and if they think they can earn money off of you by giving you a higher limit so that you spend more, so that you pay off less of it, so that you owe more interest, then that is what they will immediately do. And so for me, one of, if not the first baselines here is make sure that your credit card spending fits within your budget as spending, not as savings, not as an emergency fund, not as, oh, I'll pay it off later, but as if you go buy a$50 vase, you could pay that$50 vase in cash right now, but you're choosing to do it with a credit card for some reasons. We'll explain it a little bit, but you are just choosing to do with a credit card, not because you could only afford it with a credit card.
21:51Dave Ahern:And so if you don't have a budget at all yet, or maybe you have a budget and you haven't worked in a credit card yet, definitely look up some budgeting templates. We have a great free one available at einvestingforbeginners.com slash budget. And that is a great way to get you started, fit everything in your budget, including credit cards, and please throw those in the spending category. And one other thing that I want to mention that I think trips up a lot of people is I see a ton of content online because it's really entertaining. I don't want to say click baity because it's not like they're lying, but it's an exciting thing to see when people point out points.
Read the full transcript
22:24Dave Ahern:I think that credit card points can be misleading. It leads a lot of people to assume that, hey, if I go spend a bunch of money, I'm going to be able to get a bunch of free flights and all this sort of stuff. All I have to do, I'll get some cash benefits to here and here and here and here. And those are all stores that you've never actually spent money on yourself, but now you feel like you're getting free money to spend in those places. And it just leads you to end up spending much more money than you would have otherwise just to accrue these points that you feel like are going to benefit you in the end.
22:55Dave Ahern:That's definitely ignoring the straight cash back idea. If you're just getting 1 % on everything, then yeah, that's straight free money that you can use elsewhere however you decide. But if it's, oh, spend this, you'll get X number of points, and if you sign up for this card, then we'll give you some money to go spend here, here, here, and here. You just have to pay us an annual fee for that. If those are places that you're not already spending money, and overall that's not money that you're already spending, then you're just forcing yourself to spend more so that you hopefully get a little bit back.
23:25Dave Ahern:And that scale does not usually weigh back out to even when you do all the math on that. But with those negatives out of the way, Like you said, credit cards can be an incredibly valuable tool for people, which I wholeheartedly agree with. So how do you feel that credit cards help people?
23:40Evan Raidt:Well, they can help people in a lot of different ways. Before I dive into that, I want to throw out one little tidbit. If you are somebody that has gotten into some credit card debt and are struggling to get out of it, one way to help yourself is to look for a personal loan because those are fixed rate amounts, generally half or at least a lot lower than credit cards. And you can consolidate your credit card debt and you can take out a personal loan and pay the credit cards off with a personal loan and then pay the personal loan off, which generally is a fixed rate anywhere from three to five years and a lower rate.
24:23Evan Raidt:And you can save yourself a lot of money if you want to do that. So that's a way that you can kind of help yourself if you're struggling right now and you have a lot of credit card debt and you're looking for a way out. That's one way you can do it. So moving past that, credit cards can be incredibly helpful. And I think probably the number one way that I think of them is building your credit. When you are starting out and you're younger and you don't have credit, a credit card is an easy way to start building your credit. And this is critically important because as you go through life, the better your credit is, the cheaper things will be for you.
25:01Evan Raidt:So i.e. buying a home, buying a car, taking out a loan. Maybe you want to finance something. Maybe you want to open a business and you need some financing to do that for personal reasons. And if you don't have any business credit, they will look at your personal credit. And so all those things will help you save money. And it's not just about how much you can borrow. It's also about what kind of interest rate you have to pay for that particular debt. And the lower that is, the more money that saves you in the long run, which gives you more cash flow to do the other things that you want to do. So it's always a good idea to try to help improve your credit.
25:41Evan Raidt:And a credit card is the easy, simple way to do that if you kind of make Make sure that you are disciplined about how you use it. And over time, it will help build your credit. And so that's another great way. If you have kids, a great way to help start building credit for your kids is have them added as an authorized signer to your card. You don't give them a card. Obviously, you're not going to give an eight-year-old a card. But if you sign them up, most major credit card companies will allow you to do this. And that helps you build their credit so that when they turn 18, they're not like most other 18 year olds like I was and probably Evan.
26:21Evan Raidt:When we start off, we have no credit. And so this is an easy way to start building credit for your kids. So that's probably the major way that I think credit card can help. I know you got some other great ideas. Support comes from Wise, the smart way to manage the currencies you need around the globe. Fed up with losing out to hidden fees when you send money abroad with your everyday bank? Choose the smart way, WISE. You can count on the exchange rate you'd usually find on Google. No unwelcome surprises. Plus, ditch that where's my money feeling. Most transfers arrive in under 20 seconds. Join millions saving billions on hidden fees.
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27:10Dave Ahern:Thinking about refreshing the carpet in your home? Now's the time to do it. For a limited time at the Home Depot, get 10 % off installed carpet projects on trusted brands like LifeProof, LifeProof with PetProof Technology, Home Decorators Collection, and Traffic Master. Plus, with installation starting at just 49 cents per square foot, upgrading your space is more affordable than ever at the Home Depot. Offer valid June 11th, 2026 through June 28th, 2026. Exclusions apply for licenses. See homedepot.com slash license numbers. Yeah, I want to actually double down on that. Adding your children onto your credit cards as an authorized user because to kind of go against what you just said, actually at 18, I did have some credit built up because my parents had added me as an authorized user.
27:56Dave Ahern:And even currently now, if I go to check my credit history on one of my credit card apps, it still shows that I have credit history back to, I don't know, it's something like 1979 or something like that. I was born in 98. So because of being as an authorized user, it helps a lot to have a very long credit history and that adds a ton to it. And so I actually got a solid head start from that. And that is something that is very accessible for anybody to do. It's just something that not a lot of people are aware of as an option, might not see the benefits of, all that sort of stuff. But a couple other quick, huge benefits to me.
28:34Dave Ahern:One is fraud protection. I actually had a personal issue in the past, I think it might have been twice, where I don't know why. I've been targeted for these kinds of schemes for some reason. I must have a targetable face for whatever reason. But I have multiple times had people access my checking account and pull money out of it. still don't know how it happened in the end the bank doesn't know how it happened in the end blah blah blah whatever money was pulled out of the checking account and both times i was able to retrieve it and get it back but it was a a pretty arduous journey of of weeks or even in one case months of going back and forth with the bank and and showing things and explaining things and blah blah blah anything i could do to to get the money back versus there there was one time where i had a fraudulent charge on a credit card that within 20 minutes of contacting the bank and disputing the charge, the money was taken off the balance.
29:27Dave Ahern:Credit cards have much, much better fraud protection. And so if you're out and about spending your money essentially anywhere, but especially anywhere that isn't some major online retailer or whatever, or even if you're saving cards online to your Amazon account or something like that, if you save a debit card straight to your checking account or savings account on something like Amazon and somebody gets access to your Amazon account, them getting access directly to your bank account is a very different and harder to handle situation than if they got a handle of your credit card. And I don't know if you've had any experience in the past with that of people having disputes.
30:04Dave Ahern:Do you agree with that with being much easier to handle?
30:07Evan Raidt:Oh, yeah, much, much easier. I was sitting on my couch one day on a Sunday, and I got a phone call from my credit card company because somebody was trying to spend$2 ,000 on my card in Italy buying train tickets. And they're like, where are you? And I said, I'm sitting on my couch watching football on a Sunday in Minnesota. Why? And I said, so you're not in Italy right now? No, I wish, but no. Okay, well, somebody is trying to buy train tickets with your credit card number. So we're going to consider that fraud. Yes, it's simply fraud. Yeah, like you said, within half an hour, they got it wiped off, you know, closed my account, wiped the money off, sent me a new card, easy peasy.
30:48Dave Ahern:Yeah, all handled so much better. For me, I was actually at the gym in my apartment complex. And again, I don't know why I'm so targeted for this kind of stuff. But I started getting a crap ton of spam. I mean, I'm talking email spam every second, like an email every single second. And it was going on for like 10 minutes. And then I saw one notification come through from my bank saying, hey, a charge was made. And then boom, more spam. And so they had bombarded my email with spam so that I hopefully wouldn't see the notification come through of the charge that was made. And I ended up with, it was like several thousand unread emails in my account.
31:28Dave Ahern:It was absolutely insane. But again, with a credit card, that is just so much easier to handle. And then the last thing here I mentioned just quickly before is cashback is legitimately free money, again, if you handle everything properly. they're giving you that because they're assuming that if they entice you with some cash back that you'll spend more than you would have otherwise and not be able to pay it off and no interest and we've already droned on about that enough but if you pay everything back on time then that percentage that you earn on your spending is just some free money that you get as a bonus for being able to handle your credit card properly so if you're able to treat it like the tool that it is that can be a straight quote-unquote guaranteed benefit back to you no questions asked so to go over quickly how to have want to outline how to have a healthy relationship with a credit card because again it is an invaluable tool that can't even i mean it can be substituted there are of course other ways to build credit but nothing is as accessible as tangible and has the other benefits that go along with it and protect you in other ways so it's important to build a healthy relationship with it so the way i think about it might sound kind of weird, but give me just a second, is to treat it like working out.
32:39Dave Ahern:And what I mean by that is that it's something that is good for you, but it needs to be used properly. If you do it too little, if you don't use a credit card at all, or very little, then you're not really going to reap many benefits from it. You're not going to be building your credit that much because you're spending very little on it. You're not going to be getting much cash back. But if you use it too much, more than you can afford to use it on, then if you went to the gym too much, you're going to hurt yourself, you're going to overwork yourself, and you're just going to work backwards. And same with a credit card, if you said, hey, I'm getting 1.5 % cash back, I need to go below a bunch of money to get a bunch of 1.5 % back, but you can't afford to spend all that, can't afford to pay it off, now you're putting yourself in a bad place.
33:15Dave Ahern:But if you hit that good in-between balance of using it properly, as much as you should, as much as you can afford, then you're just going to be getting bonuses along the way, and it'll help you out. As well as, mentioned it before, but the best mindset shift you can do for all this is to see it as a bill, something that must be paid, set it on auto pay. Or for me, I just have a routine of doing it weekly. My credit card doesn't allow me to set up an auto pay weekly. So I just do it manually. Maybe they add that eventually, but for the time being, I manually pay a weekly or at the very least just set it at auto pay so that it pays off the entire balance, not a set amount and have that out of peace of mind done.
33:51Dave Ahern:And just something that you have to pay, not something that you get to choose whether you're going to pay off or not. Another is that, and I've heard this one many, many times, is it is not an emergency fund. Again, life or death, spend money. Make sure that you're living. But in terms of planning for your finances, it is not an emergency fund. An emergency fund is cash or a savings account or something like that that you can pull from and spend. And if all that money went away right now because you had to spend it, you would be down some money, but that would be it. Whereas with a credit card, if you use that as an emergency fund, initially, yeah, you'll be down some money, but then you'll be down a little bit more money and a little bit more money and a little bit more money, and it'll just compound and compound and compound.
34:32Dave Ahern:So do not see it that way. I've definitely heard that before, but that is a very dangerous, slippery viewpoint to have on it. As well as don't dictate your spending power based on whatever your credit limit is. See that credit limit as the higher the better because you want to spend less than 30 % of your credit limit, or the lower the better, but at least less than 30 % of your credit limit so it doesn't affect your credit by you overspending. So a higher limit is okay. There's nothing wrong with a higher limit, but don't let that higher limit dictate how much you spend. In fact, about a year ago, I was able to get a pretty noticeable increase in my credit line, and I did not spend a single dollar more than I would have otherwise.
35:10Dave Ahern:I just saw it as a benefit to utilize a lower percentage of my limit and so help my credit even more, but not to spend a dollar more. And the last one, and this is just my viewpoint on things, is to ignore those 0 % APR offers because we want to avoid the APR period. I pretty much guarantee you, and it would be the same for me, if I went into a credit card saying, oh, it's got 0%, I can spend more than I can afford right now, I just won't do it in the future. I won't make a habit of it or whatever. It's going to be very easy to make a habit of it. It'll be very convenient or exciting or whatever it is to be able to take a bigger trip than you plan to or buy more clothes than you plan to or buy that piece of furniture that you thought you were going to have to wait on but buy it anyways.
35:54Dave Ahern:Do all this sort of stuff that you're going to get used to and when time rolls around six months, a year later when you are paying interest on it, you are still going to want to continue spending that or maybe you'll still have balance left over from the 0 % APR period. So in my mind, just treat it as usual. Assume that you're going to be charging an interest rate at the end of the month once the statement is due and just only spend what you can afford to pay off. That's all awesome.
36:23Evan Raidt:Those are all fantastic ways to have a healthy relationship with your credit card. So last thing I want to weave before you sign us off is interesting tidbit. Did you know that we all have better credit score than Warren Buffett, who was one of the richest men in the world? And that may surprise people. But here's the reason why. He doesn't use credit cards. He pays cash for everything. So he doesn't have much, if at all, a credit score. Now, can he go to a bank and probably borrow? I'm sure he could. Who's going to say no? He's not going to McDonald's and using his credit card to buy lunch every day.
37:02Evan Raidt:So if you're food for thought, if you're feeling a little down about your credit score, just remember one of the richest men in the world, you have a better credit score than he does. That does feel really dang good. Do you know why he doesn't spend on his credit card at all? He just doesn't need one, and he's not a fan of debt, and he doesn't like to have debt for his businesses. He doesn't like to have debt for his own personal. He lives in the same home that he bought in the 1950s. and as one of the richest men in the world, he still lives in a$35 ,000,$40 ,000 home that he bought in the 1950s.
37:38Evan Raidt:So he's frugal, shall we say.
37:41Dave Ahern:That's fair. I guess we should, to be fair, address all of the billionaire listeners to say if you're a billionaire and you're only spending$30 ,000 a year, then the credit card bonuses that we're talking about probably won't make much of a difference for you. So if you're a billionaire listening, just go ahead and spend cash. It's not going to hurt you whatsoever. Beautiful. Well, as always, please comment below or feel free to email me at evan at einvestingforbingers.com. I'd be really interested to hear any stories you have about credit cards or any other tips or tricks that you think we missed in this episode.
38:12Dave Ahern:That would be great to hear. And like I mentioned before, we have a budgeting spreadsheet available so that you can try to fit your credit card into things. or maybe if you're currently in debt and trying to work your way out of it, you can add a section for that so that you can plan ahead for how you're going to get yourself out of this situation and then plan for the future to not get in it again. Again, at einvestingforbeginners.com slash budget. And remember, as always, financial freedom is built one smart move at a time. Keep it simple. Keep it steady. And at any rate, I'll see you next time.
38:40Dave Ahern:Peace. The information contained is for general information and educational purposes only. It is not intended for a substitute for legal, commercial, and or financial advice from a licensed professional. Review our full disclaimer at einvestingforbeginners.com.
39:14Evan Raidt:Titch motorcycle from a 50 page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense. There's no place like Chrome check responses, set up required compatibility and availability. Various 18 plus. You can't reason with the sun. Trust us. We've tried this summer.
39:35Dave Ahern:It's time to put that angry ball of fire on mute. Columbia's OmniShade technology is engineered to protect you from the sun's harsh rays that can burn and damage your skin. The sun is relentless, but so is our gear. Level up your summer at Columbia.com to spend more time outside and less time slathering on aloe lotion.
39:54Evan Raidt:You're welcome. Columbia. Engineered for whatever.
From the publisher
You can download Evan’s free monthly budgeting spreadsheet here:https://einvestingforbeginners.com/budget/
In this episode of At Any Rate, Evan Raidt and Dave Ahern tackle one of the most misunderstood tools in personal finance: credit cards.
They open with real-life horror stories—from a $20,000 cash advance to chase a “hot stock tip” to a college student stacking cards to upgrade his truck—and use them to show how easy it is to slide into crippling debt.
Evan and Dave also walk through the emotional and behavioral side—why points and 0% APR offers can push you to overspend, and why your credit limit is not your spending power.
But it’s not all doom and gloom. They outline the right way to use credit cards: as a tool to build credit, get fraud protection, and earn cash back—without ever paying a dime in interest.
You’ll hear practical tactics like weekly or automatic payoffs, keeping utilization low, consolidating high-interest debt with a personal loan, and even how parents can give their kids a head start by adding them as authorized users.
Topics Covered:
How credit cards actually work (revolving credit, hard pulls, limits)
The dangers of “free” points, perks, and 0% APR offers
Why your credit limit is not your budget
Consolidating card debt with a lower-rate personal loan
Fraud protection: credit vs. debit in real-life examples
Timestamps:
00:00 Intro and credit card horror stories
03:25 How credit cards really work (applications, hard pulls, limits)
06:40 Interest, fees, and why minimum payments are a trap
11:20 Average American credit card debt and compounding math
15:05 Why points and 0% APR can push you to overspend
18:40 When to consider a personal loan to wipe out card debt
20:20 Using cards to build credit and help your kids’ credit
23:10 Fraud protection: why Evan and Dave prefer credit over debit
26:20 Building a healthy routine: budgets, autopay, and utilization
30:35 Warren Buffett’s “bad” credit score and final takeaways
Resources Mentioned:
Free monthly budgeting spreadsheet:https://einvestingforbeginners.com/budget/
Have questions or a credit card story to share? Email Evan at evan@einvestingforbeginners.com or comment below—your questions help shape future episodes.
Remember, financial freedom is built one smart move at a time. Keep it simple, keep it steady, and at any rate, we’ll see you next time.
Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening.
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