My beef with personal finance gurus

I have a confession to make today – I have serious beef with many personal finance gurus. I totally disagree with the following advice many of them give: use cash, do not use credit cards. Today I will explain why I believe using rewards credit cards make sense.

Don’t get me wrong, I understand why these personal finance gurus advise using cash for expenses and not credit cards. Because many people aren’t responsible with their credit cards. They get on crazy spending sprees and can’t pay their balance in full at end of the month.

A good example? I recently received a credit card statement around $4,500 in the mail (this card only sends paper statement, talk about keeping up with technology). Somewhere on the statement it says “if you only pay your minimum payment due each month ($44 in this case), the estimated time for repayment in full of your new balance is 26 years and 4 months.

Can you imagine paying credit card debt for 26+ years? Holy cow!

What’s crazier is that many credit card statements do not have such disclaimer about estimated time for repayment, SO some people get tricked thinking they only need to pay the minimum payment.

To make matter worse, some of these people keep buying things using their credit cards despite only paying the minimum payment each month.

It’s like a debt snowball rolling down a steep hill. The debt snowball gets bigger, Bigger and BIGGER, until it eats your ALIVE!

No wonder people get into serious credit card debt!!!

Why rewards credit cards make sense

If you are someone who is responsible with your credit card usage and follow the best financial advice that I have received, it makes absolutely no sense not to use credit cards for every day expenses.


Because you are leaving money on the table by not using credit cards. To be more specific, you are leaving money on the table by not using credit cards that give rewards.

If you pay your balance in full at end of each month, there’s no reason why you shouldn’t use rewards credit cards to earn passive income.

Sorry, I also don’t buy the notion that when you use credit cards for expenses you end up spending more money.

Maybe if you don’t have a budget system, but when you have a budget system that you follow meticulously, you won’t over spend.

Our primary credit card is Capital One Aspire Travel Master Card, which gives 2% travel reward miles for every dollar spend. Since gotten this card about 3.5 years ago, we have redeemed over $4,000 in reward miles. Yes that does mean we have spent a lot of money on this credit card but some of the expenses were from my work travel expenses.

Another credit card that we use is the Chase Marriott Visa, which gives 5 Marriott points per every dollar spent at over 3,500 participating Marriott locations (and 2 Marriott points at restaurants and 1 Marriott point for other expenses). To maximize the points, I only use this credit card when I’m staying at a Marriott hotel, typically for a business trip. Thanks to using this card, we managed to accumulate enough points to stay 5 nights in Osaka Marriott Miyako Hotel completely free during our 2 week travel in Japan last September. The hotel room cost almost $400 Canadian per night. So we essentially earned $2,000 in passive income by using this credit card.

In total, that’s over $6,000 in passive income that we wouldn’t been able to earn if we didn’t use rewards credit cards for every day expenses. If you have been reading this blog for a while, you know I’m all about having my money working hard for me so I don’t have to. That’s why I think it makes the perfect sense to use rewards credit cards.

So we will continue using rewards credit cards whenever we can. This is our way to earn more passive income and have our money working hard for us. 🙂

Now I have not tried credit card churning yet but I have looked into this strategy a bit more lately. I don’t ever plan to become a full time credit card churner but will definitely try to get as much “passive income” as possible.

Dear readers, what’s your view on using credit cards and rewards credit cards? Are you with me or with the personal finance gurus?

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66 thoughts on “My beef with personal finance gurus”

  1. Hi Tawcan,

    Creditcards make sense if you make good use of them like you do. But many people just ring everything on their card and drown in the bills latter on.


    Mrs. Moneypenny

    • Definitely very true that many people just ring everything on their cards and get drown in the bills. If they can’t pay off the balance in full each month, they should definitely follow these gurus’ advice and staying with cash.

  2. You know my wife and I were just having this debate…for me, I can’t use a credit card. I have to have cash or a debit, it’s just something about the instantaneous hit that affects me psychologically. My wife on the other hand is disciplined and can use a credit card responsibly…so she does. I think that is why we call it personal finance…each person must find what formula equates success best for them. Some use credit and some do not:)

    • Hi Clint,

      That’s great that you have realized that you need to use cash or a debit card. Totally true, it’s all about your personality and personal finance is… personal!

  3. When you have a population that can’t control spending the boring gurus will hit more of the masses to say “pay off debt and don’t use CCs.” For people who can control their spending using CCs with reward perks is a no-brainer! The Wife and I use the gold amex for points to travel with. We haven’t paid in full for a flight in a LONG time.

  4. I don’t want to suggest that an alternate universe where credit cards did not exist to such an extend would be a better situation, but its seems a little convoluted to be exhilarated at a situation where the retailer as a course of business marks up things by 2%, on which the bank network and credit card company claims half and the other half is returned to you as a “reward.”

    • Hi kelaa,

      That’s an interesting way to think about these “rewards.” I definitely have seen some vendors giving a small discount if you use cash instead of credit/debit cards.

  5. I love the article but I have the opposite opinion for credit card rewards.

    For the VAST majority of people, it is a terrible idea. Trust me, the smart people over at visa don’t just give out free money. Some can do it with a budget but I would say 99% get trapped. There are way better rewards that don’t hinge on a 20% interest rate.

    Leverage off a HELOC or margin with much less risk and a higher reward.

    The net worth of American families $81,400 in 2013. That’s some scary stuff.

    • Hi DiviCents,

      Yes for vast majority of people credit card can be a terrible idea. That’s why personal finance gurus say don’t use credit cards to these people. But I think the gurus should have a statement along the line like “but if you can manage your credit card balance and always pay in full, take advantage of credit card rewards.”

  6. A lot of people just run up their credit cards then pay the minimum for those it is good advise
    For those who can pay it off each month it isn’t good advise. I don’t have the best rewards card but my credit union just sent me an upgrade 3 dollars for every 1 on gas 2 dollars on restraunts I think. I could have those reversed then a special online thing where you can get from like 2 -8 rewards ordering from like lowes through their member mall. Of course it varies from time to time.

    Since I finally payed it off again I’ve kept buying to a minimum so that I can buy more stocks and save more in my account


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