How To Master Credit Cards and Improve Your Finances (A Guide For Business Owners and Creatives)
Would you like to learn how to use credit cards to improve your spending habits, simplify your business and personal finances and never pay fees again? Join me as I show you how. (If you prefer to watch the video, please check it out here…)
My name is Lucas and Welcome! Today’s video is near and dear to me for 2 reasons: The vast majority of us don’t know how to use a credit card so we trap ourselves in an endless cycle of debt and fees. I’d like to change that.
The 2nd reason is, the 3 step process I’m going to share with you today is the same technique I teach all off my clients in the Big Split Program and i’m excited to show how it works!
Did you know that the average American has 4 credit cards - That’s a lot of accounts, due dates and balances to keep track of which makes our finances more complicated than they need to be.
Simply put, complexity creates confusion, so let’s simplify!
In step 1, we’ll create clarity. In step 2 we’ll concentrate our spending power and in step 3 we‘ll leverage consistency to improve our spending and pay zero fees. Now Let’s get to it..
Step 1: Clarity
The first step in Mastering credit cards is to get rid of most of your credit cards - reduce the complexity and simplify. I used to have 5 cards because I thought they’d help my credit score and they had sign up bonuses but I didn’t all of them. How about you?
How many cards do you have?
Make a list and then ask yourself, “Which reward is most important to you?”
Flights, cash back or hotel stays? I love earning flights so I kept that card and closed the rest - I invite you to do the same - Simplify your finances.
If you’re having a hard time wrapping your head around the idea, start with the cards that you haven’t used for a while. If there’s a balance, pay it off as fast as you can and close it out. And if you’re worried about your credit score like I was, go slow, close one at a time and watch what happens to your score. If you like what you see, keep going.
Remember, The goal is to reduce your interactions with multiple credit card companies, reduce the overwhelm and create Clarity. And that brings us to step 2.
Step 2:
When we CONCENTRATE our spending to one card, we turbo charge our rewards as opposed to using several different cards. For example, my cash back rewards were barely noticeable, I never earned enough for hotel stays and if i was lucky, I’d earn enough points for 1 flight a year.
But since I closed the hotel and cash back cards and CONCENTRATE all of my spending towards flight rewards, I receive 5 flights a year! The 2nd benefit of Concentration is that our spending is much easier to keep track of because it’s organized to one place.
Would you rather stress about multiple balances and due dates or streamline to just 1 account? Once you’ve picked a reward that’s most beneficial to you, set up all of your expenses to be paid with that card.
And If you own a business, you can instantly streamline your finances by having 1 card for the business and 1 for personal expenses. It’s an easy way to organize your finances quickly - plus, your bookkeeper will LOVE you!
And here’s a bonus tip..
Have your business and personal cards earning the same rewards. For example, I love to travel so both of my cards are with the same airline - that means every dollar spent on my business and personal life is getting rewarded and it simplifies my banking because there’s only one log in.
Step 3:
Is all about Consistency. When we pay our credit card bill once a month like they suggest, we struggle while they get rich. Luckily there’s a simple solution. All we have to do is make more CONSISTENT and frequent payments.
I used to wait till the end of the month to pay a huge bill and that would really throw me off, especially when the mortgage was due. And the minimum payments, we’re keeping me trapped in debt so i started paying more often.
Two payments per month helped, four payments a month was better but because I use my cards to pay for everything, two payments per week was perfect for me. By paying more often, our balance stays low, the smaller payments are easier to manage, we never pay interest or fees, and we’re more in-tune with our spending.
How I Do It:
I log in every Sunday to set up payments for the week. If I’m spending a lot, I make a $200 payment 2-3 times a week and my balance stays low. When the money’s tight, I make a $50 payment once or twice a week and, if necessary, pull back on my spending.
Most of us have no accountability for our spending because we have no connection to it. We don’t track our expenses, so spending gets out of control but imagine logging in to your bank weekly. You know exactly how much is in each account and how much your spending in real-time. It’s a simple way to stay in-tune with our money without having to budget. Plus, It’s incredibly simple to do..
I suggest starting with one payment per week and see how it feels. If it’s not enough, bump it up to two payments. And If you use your card a lot less, try 1-3 payments each month or pay off the expenses immediately. Experiment to see what works for you.
Now let’s recap the lesson and get you on your way…
Step 1: Create Clarity by eliminating the unnecessary. Pick a credit card & reward that benefits you and close the rest.
Step 2: Concentrate all of your spending power to one card
Step 3: Make Consistent & frequent payments to avoid debt and fees.
Today’s lesson is a tiny fraction of what I share in the Big Split program so if you’d like to transform your finances in 1 week, click here to schedule a free 60 minute call with me.
Remember, Credit cards are a money making product for big corporations and their business plan is simple, the longer you take to pay, the more money they make. Follow their guidelines and struggle OR simplify and earn more rewards.
Thank you for your time and energy. I’ll see you in the next one.
Lucas Z.