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Hello, YNABers. My name is Jesse Meekam with

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another episode of the YNAB podcast, and I'm

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here each week to obsess out loud about

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spending purposefully, saving aspirationally, and even giving joyfully.

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It all comes down to just these four little,

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simple habits, principles, rules,

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ways of thinking. I

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got an email from,

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call him Jeffrey. I'll call him that

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because that's what his name is. He also

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sent this to budget nerds. He

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said, I just discovered your podcast. I'm catching up on

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old ones. Uh-oh. I'm curious as to why you think

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that people who pay the credit card play, the credit

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card float game, have nothing in their bank account. You

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are correct that if you have nothing in your bank

0:44

account, then paying the credit card float game is dangerous.

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I would say if you have nothing in your bank account and

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you are playing the credit card float game, you

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cannot not play it. You can't opt out

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of it until you have money in your

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bank account to pay off the balance for

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which you do not have money. But that is

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not what Jeffrey here is talking about. He says,

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I keep around 10 grand extra in my checking

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account. Therefore, I can use a credit card to

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essentially use the bank's money for an extra 30

1:09

to 45 days before I pay it off. It's

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a way of gaming the system as opposed to

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them gaming you. And Jeffrey,

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I will be honest. Oh, by

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the way, Jeffrey is a proton mail user,

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and I love that service. I just want to say that

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because at the bottom of his email, it says that, and I was

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like, oh man, Jeffrey and I, we share

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something in common. We both really enjoy that

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email service. Not an ad for

1:32

proton mail, but let me interrupt this podcast to give

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you, no, I'm just kidding. Big

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fan though. So that is

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the thing. That's the whole game here. Jeffrey

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is the credit card

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companies somewhere along the way, they figured out that

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they make money when people spend money. Okay.

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Cool, cool, cool. I make money

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when people spend money to subscribe to wine app. So

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no, no harm in that. They

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make money when people spend money and then they were kind

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of left with this. Dear of

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why do we get them

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to spend more money and

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they this scheme this brilliant

2:08

idea to start offering rewards

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and are they offer in

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the. You know, Amazon

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points. Back

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when still was a you know, crazy expensive.

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I mean way back he was like you

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get this much back at the pump, you

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know, cashback. Just credit

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card points in general. You can redeem for gift

2:29

cards and what not. But. These

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rewards. That. Was there. That

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was the scheme and it is

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brilliant. Absolutely. It

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is a stunning marketing achievement,

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a victory everywhere you look

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at it and they. There.

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And said about to have a spend more

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and so they rolled out a rewards program

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ends. I. Would say. And.

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I'm just guessing based on their behavior. like

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just what I see with my eyes and

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how they behave and I believe that does.

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Does a quote from Charlie Munger? you know,

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show me the incentive or say the behavior.

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I believe that is the quote. I'm.

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Sure, he said that. if he, if he didn't

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I'm sure he would have said it. And damn

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the incentive is for them to have you spend

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more money so they make more money on the

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spend their not in. Ah yes, they make gobs

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of money on the interest in the late fees

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and all that gods. But they also make money

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every time you spent. And

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they are incentivized to have you spend more.

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So they rolled out a reward program to

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incentivize you to spend more. and I think

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it is so subtle and so effective

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that we think we are gaming. Them.

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And they are gaming us also. I mean that

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and I don't have any proof Jeffrey like I

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don't I don't have any hard proof. I've been

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run and no credit card of. All.

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Of Twenty Twenty Three and our a Little Bit

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and a Twenty Twenty Four and I've just love

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the simplicity of it. It

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says. It has

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I believe. helped me

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to spend less it has made me

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slightly less impulsive know someone and Jesse

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if you're using YNAB you can't be

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impulsive oh yes you can yes you

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can you can just talk yourself out

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of your impulsivity by saying you're using

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rule three to roll with the punches

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and really you're just lying to yourself we

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all know how that goes so yes

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you can still be impulsive using YNAB and yes

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I am at times and

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I have noticed not using a credit

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card has made me less impulsive so

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show me the incentive I'll show you the

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behavior and they behave like they love these

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rewards programs which means they're

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incentivized to keep doing them which

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means I think they're still

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gaming us that's just my take I

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think I'll leave it at that this is this was

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an Ask Jesse where I just did one question but

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felt good so yeah we'll just leave it at

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that maybe I'll hit it next week with another

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maybe until next time

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remember credit card no credit card debit card

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no debit card new apple cart or whatever

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it's just for simple