A (3:08)

Yeah, I mean, there's a.

B (3:09)

You did some research on this, right?

A (3:10)

There's a moral argument to be made. Yeah. My book, Breaking Free from Broke. Here's the quote from, from the book, a 2023 study by the Federal Reserve. They set out to determine who pays for these credit card awards. And the results, though expected, are alarming. In the report, the Fed said, we estimate an aggregate annual redistribution of $15 billion from less to more educated, from the poorer to richer, and from high to low minority areas, widening existing disparities.

B (3:38)

Simple.

A (3:38)

And here's. It gets worse, John. As they dug into it, families with household incomes below 40 grand are less likely to even qualify for these rewards, but they're more likely to pay late fees. And addition, the family's making 100 grand or more, obviously more likely to have access to these reward cards and less likely to pay late fees and interest. So it's not saying you're a bad person if you use the, the rewards. This is not like a moral argument to say John's a better person than you. I mean, I'm just kidding.

B (4:02)

I'm not.

A (4:03)

John sleeps better at night because of it.

B (4:05)

I, I, I, Yeah.

A (4:08)

And can you play the game? Sure. Is it worth the 2%? Let's say you spend 25 grand. I mean, is it really worth that?

B (4:15)

Well, they put in huge font. Cash back. Yeah, right. Cash back.

A (4:19)

Well, and they go, well, it's points now, John. It's not cash. What's a hundred thousand points? I don't know. It's like Chuck E. Cheese. You spend a hundred, A hundred dollars at Chuck E. Cheese to get a thing that's actually worth $7.

B (4:30)

Right. So you get like a, like a cool monogrammed Bluetooth speaker. Like because I got a hundred thousand.

A (4:34)

A no name brand.

B (4:35)

Yeah.

A (4:36)

You get some, you know, one of those sticky hands.

B (4:38)

Yeah.

A (4:38)

Pack of gum and you're like, I.

B (4:40)

Spent 20 bucks for this refurbished like New balances. Right.

A (4:43)

So can it be done? Can you be super disciplined and beat the cyst? Sure. I don't think it's worth the brain calories and the energy and the money spent to try to do it personally.

B (4:52)

And if, if you, I mean, geez, I don't want to make it a moral issue, but I, I want to call these programs to task. If you like the idea of somebody's of wealth being redist distributed from the least of these in our communities to pay for your flights and hotels, knock your lights out for me. George. Just got gross. And again, we can line up the things that, that I need to work on. I'm not a better person than anybody, but in this one particular thing, this is just a hot button issue with me. Y. The, the banks aren't your friends, the credit card companies aren't your friends, the airline companies are not your friends. They're running businesses. They would not be giving you these flights if it was, if they weren't making that money up somewhere else. Right. There's an, there's an old saying in the Internet world. If you get online and you log in and you have to put your, your email address in for free and you get a product for free, you're the, you're, you're, you're the product right there. You, they want you. Right. So it's similarly asking that next layer question, who's paying for these flights? Actually, who's paying for the advantage I just think I got because they're not hooking you up like your friend or your neighbor.

A (6:03)

Well, when you think about this, let's say you do spend 25,000 a year on travel. I think we'd all agree that's a lot. That's a, that's a, someone's traveling a lot with 25 grand a year and 2%, it's 500 bucks. You could put 40 bucks in a savings account every month and give yourself the rewards.

B (6:19)

Yeah, absolutely.

A (6:20)

And so you're never going to convince me because of humans being emotional creatures that psychologically you're not going to spend 500 more on that card over the course of a year because you're going, well, I'll get some points, might as well get the nicer flight.

B (6:33)

Well, and if you. If you fly, like, like if you fly Southwest or America, you fly these companies all the time. You get flight points for participating. I'm okay with that. Right. Because they're marking up that your ticket and they're going to give you a piece. That's fine.

A (6:44)

If I fly 25 times of Southwest, I'll get a free flight.

B (6:47)

Knock your lights out. That's fantastic. That's awesome. It's that next level of, hey, my gasoline, my Snickers bar, my whatever, your haircuts, which is a. I mean, that's a lot of money.

A (6:58)

I'd get some serious cash back, but instead, here's what I do with my haircuts, John. I pay cash and I get a discount.

B (7:04)

I do. Because we used to say barber. He gives the cash discount.

A (7:07)

Exactly. So I'm like, well, I'm making more by paying cash than by swiping my card. Which, by the way, hurts the small business owner because they've got to now pay the 3% fee or pass it on to you all to get my 2% cash back. So either way, you are not the one winning. It's the card processing companies. It's Visa, it's MasterCard, it's Amex, it's Discover, it's Southwest, it's Delta. And these are not evil companies. This is how they do business. And you need to understand how they're marketing to you. There is a reason they're always offering you, hey, John, you're so wonderful. Here's more line of credit. We're going to give you an extra $5,000 in credit that you can spend. You're telling me psychologically, I don't get the dopamine hit that tells me I am winning. The banks love me.

B (7:47)

Yeah, they love you. So I. I don't know. As for me, in my house, we solve for peace. And if I can opt out of a system. I like that. I like that.

A (7:56)

That's truly how we love people. Think. Well, they just have to say that on air. Dave secretly. No, you can check his wallet. You can check any of our wallets. There is not a single credit card to be found. And it's not because we're scared of Dave finding out. It's because we truly have no need for that.

B (8:11)

Opt out of the system.

A (8:12)

Once we started following the Ramsey plan, we're like, oh, we can just use our own money and have freedom and control over our life. Great. Sign me up. Screw the rewards. It's just, again, where's the George Kibbles T shirt. Screw your awards. I like the one that says, go fund yourself. That one I'm still trying to get as part of Ramsey Merch.

B (8:30)

That's fantastic.

A (8:31)

Yeah. I don't know that Dave's gonna go for it yet.

B (8:34)

He could.

A (8:35)

I like that, though.

B (8:36)

I hear a lot on the show.

A (8:37)

Imagine if America said, go fund yourself. Go fund your own retirement. Go fund your own credit card rewards, and America would be a better place. Instead of making banks and lenders richer.

B (8:45)

If you made a shirt that said, go fund yourself, and I made one that said, that gives me hemorrhoids. You and I would both.

A (8:50)

We'd be billionaires.

B (8:52)

America would buy those T shirts.

A (8:53)

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