Cool burn of a friend.

[Anonymous]

Till this week I was borrowing a friend's address for my US credit and banking. Which means in the last year 10 credit cards have arrived there, plus AUs.

He's rather conservative about money, and was complaining about the low rate on his savings. He doesn't quite "get" that tthe number of cards I have has no impact on the amount of money I spend, that it's for building my score and taking advantage of best return for the purchase type, SUBs, etc.

So when today he said I'm crazy to have so many cards I pointed out that I earn a better rate of return on my spending than he does on his savings! 

[FireMedic1]

So teach him how it works and wake his hind end up. Got a Disco. Refer a friend and you both get $50. That may work.

[iced]

---

@Anonymous wrote:

Till this week I was borrowing a friend's address for my US credit and banking. Which means in the last year 10 credit cards have arrived there, plus AUs.

He's rather conservative about money, and was complaining about the low rate on his savings. He doesn't quite "get" that tthe number of cards I have has no impact on the amount of money I spend, that it's for building my score and taking advantage of best return for the purchase type, SUBs, etc.

So when today he said I'm crazy to have so many cards I pointed out that I earn a better rate of return on my spending than he does on his savings! 

---

Being conservative with spending myself, I'm gonna go ahead and side with your friend on this one.

He might be really inefficient with his savings if it's all parked in a traditional savings account, and if so there's a wag of the finger to him. Spending doesn't earn a rate of return at all, though -- I suspect what you mean by rate of return is that you're getting X% cash back (on top of the SUBs), which is as fallacious as saying you saved $200 by buying something for $300 instead of $500. You spent $300 instead of $500, and if you're getting 3% cashback you're just spending 97% of what you would have otherwise. The SUBs are cash or equivalents, but that well dries up pretty fast and more banks are going the route of Chase/American Express on clamping down. It's certainly not a long-term sustainable way to earn wealth and nobody's ever going to turn $50,000 into $250,000 via SUB.

[Anonymous]

---

@FireMedic1 wrote:

So teach him how it works and wake his hind end up. Got a Disco. Refer a friend and you both get $50. That may work.

---

It'a not his style. I know he has an Amex Platinum, TD Cash and some sort of Capital One, but have no idea how he decides to use which.

He's got a good income, no debt and likely has a greater than 800 Fico score (I can't imagine how he wouldn't). He'd been planning on moving money into an investment account at TD Ameritrade, so with them being bought by Scwabb I told him how he can replace his Amex with a Schwabb, collect a good SUB and get 1.25 cents per point when he transfers to his account. That's a far better return than his current return of "all just sititng there since he's had the card" 

[Revelate]

TD Ameritrade investment account... and even the S&P 500 is up 25.30% YTD.

If he was all cash... that's really the only way to complain about return haha.  I fell over laughing recently when I heard "next year is not going to be as good of a year for the stock market as this one has been;"  no kidding .  If I ever get a year like this one again...

[Anonymous]

---

@Revelate wrote:

TD Ameritrade investment account... and even the S&P 500 is up 25.30% YTD.

If he was all cash... that's really the only way to complain about return haha.  I fell over laughing recently when I heard "next year is not going to be as good of a year for the stock market as this one has been;"  no kidding .  If I ever get a year like this one again...

---

That's pretty much what I told him.  Just the average annual return is so many times the 1 or 2% he's getting (I don't keep up with what bank accounts pay)

Anyway, he's in the process of getting that set up, but I doubt he'll ever be like me, opening and discarding credit accounts in order to maximize returns.

[Anonymous]

---

@Anonymous wrote:

So when today he said I'm crazy to have so many cards I pointed out that I earn a better rate of return on my spending than he does on his savings! 

---

This is a great burn, and really just slapping the context right into his face...

but it also makes me sad.  sad that savings interest rates are so low that credit rewards on spending will generate more than a savings account.  What a country