How to Build Wealth AND Enjoy Life - Part 3

Welcome back to the final installment of our three-part series on building wealth while enjoying life. In this edition, we delve into the intriguing realm of credit card rewards, where the allure of "free" can either propel you forward or lead to unexpected pitfalls.

The Allure and Perils of “Free”

Lately, there has been quite the buzz about folks using credit cards with reward structures to build up points. They play the game of using the credit card for expenses, paying off the balance each month, and reaping the benefits in the form of air points or bonuses. But is this strategy a smart move, or does it come with hidden dangers?

Let's dive into it. 

The idea of getting something for "free" is tempting, but we all know, if it's free, you're probably the product. Over the past 50 years, paying for things has become ridiculously easy. From physically going to the bank to waving our phones or watches, or just clicking buttons online, the ease of payment is by design. But who designed it? Certainly not someone aiming to help you save more money.

So…

The question arises – should you take advantage of credit card bonuses if you can pay off the balance monthly? Well, it depends on your money personality. If you're disciplined with your money, then sure, go for it. But don't fall into the traps. Have a separate reserve fund for emergencies, pay off the balance promptly, and be mindful of the impact on your credit score.

Your credit card limit can also affect your financial profile, even if your balance is at zero. When applying for a mortgage, banks might assume you've maxed out that limit, impacting how much you can borrow. It's a sneaky detail that can have a significant impact.

If you know your money personality, and you have good control over your money, credit card bonuses might be a worthwhile experience. But, it's not a one-size-fits-all scenario. Your approach should align with your money personality.

That wraps up our exploration of credit card rewards. Stay tuned for our final blog, where we'll reveal the #1 game-changer for building wealth while enjoying life.