Credit Card Points Aren’t Worth It If You Carry a Balance

Dave is always reserved about credit cards because of how much overspending he sees. In this clip from our latest podcast episode, Barry Choi and Dave talk about when it’s not worth it to earn credit card points.

Listen to the entire podcast episode about credit cards and loyalty points out now on all platforms!

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Do you worry in general as you talk about that with credit cards? You know, I’m very reserved about credit cards because I feel that people don’t have any kind of inkling of pain when they use a credit card and they just tap as opposed to when they take cash out of their wallet and yes, you don’t see that much anymore and I’m old fashioned but people are overspending on credit cards. There’s no doubt about that. You can see it with all the spending summaries I get. People freely admit that. We can see it in the consumer debt figures. That as we try to optimize for points, it makes us careless on the discipline we need to decide what we actually should be buying in the first place.

It is 100 percent a game and I’m 100 percent guilty of that, right? Like, like sure, of course, using cash, seeing it come out of your wallet, seeing the last 5 bill, you’re like, Oh yeah, maybe I shouldn’t buy that drink. Then again, 5 doesn’t even buy me a drink these days, right?

We used to joke. Yeah, yeah. I’m not even a water if I’m lucky. Um, but yeah, it’s true. Credit card spending is, is on the rise. You know, Canadians have record debt levels. I think the last survey I saw was like trillions in debt. It’s absolutely crazy how much that we have. And yes, people will spend more with credit cards. So you really need to be disciplined in this game. So let’s be clear. If you’re in debt, or you’re carrying a balance whatsoever, loyalty points are not worth it. It’s just the math that’s not math. You’re paying 20 percent interest to earn 2 percent in points. Like, you’re not coming out ahead.