019. AMEX Black & Bilt Card Review- Your Credit Questions Answered

Lifestyle

Oct 31

Credit card companies don't exist solely for you to rack up points—they're also in it to make money.

Today, Amber helps four listeners with their credit card questions. Get ready to learn the pros and cons of the elite AMEX Black Card, why your network is your net worth and why you need to keep your credit score in mind when credit card hacking.

In today's episode, we cover the following:

A recap of Amber's experience at the Bob Moses & ODESZA concert (2:20)

Crystalizing the mission of this podcast and the steps to building wealth (8:21)

Upcoming episode alert: send in your questions about protecting yourself before marriage, postnups, and (12:12)

1st question: Are the bigger cards, like the American Express Centurion Black Card, worth it? (13:27)

The benefits of the AMEX Centurion Black Card (16:35)

2nd question: What do you think about the Bilt Mastercard? (23:08)

3rd question: Why do wealthy people get more things for free? (29:18)

4th question: Can you talk about opening and closing credit cards for credit card hacking and how that would hurt your credit score? (34:18)

What is a credit score and why it matters (34:50)

Factors that affect your credit score (36:18)

The big picture: how your credit score will determine the interest rate on your mortgage (40:12)

TRANSCRIPT

Speaker 1 (00:02)
Hello, Rich Girls. Welcome back to the Old Money Podcast. This is the show for the ambitious woman who is building the trust fund she wishes she was born with. I am your humble host, Amber Frankhuizen. Consider me your guide, your sherpa on the way to financial fitness. Oh, maybe I'm like a trainer, but pretend like this podcast is the gym for your brain, for your wallet, for your bank account. I'm really happy you're here. And I'm really excited about today's episode. And different than my normal idea flow, I've rearranged the schedule again because as I said, anything that comes to me that's a request from the audience is going to get prioritized. Now I in my human design, I'm a manifesto. So typically I'm like, Oh, my God, I have all these great ideas. I got to get them out. Blah, blah, blah. And that works too. But this is like me in a generator mode. Generators, their strategy is to respond to things. So generators, a lot of people that have the generator human design are very often the ones that are putting up those like, Ask me anything stickers on Instagram, and then replying to the prompts to get the energy to get going.

Speaker 1 (01:12)
I really recommend sidebar, by the way. But looking into your human design, for me, it's been a game-changer in energy management. It's a combination of all these different practices like the Aicheng and your chakras and astrology and the Kabbala, all these things. Anyway, my point is to tell you that today's episode, I'm answering four questions that have come in through the DMs, old money podcast on Instagram. I'm also on TikTok causing a lot of problems. I'll get back to that in a second. But on Instagram, I got four amazing questions in response to some of the recent episodes that I thought we should talk about, mostly credit card questions, really good questions. So we will dig into that. But before we get into those, let me take you on a little tour of my week. I'll do a personal professional best like I do with my team in our team meetings every Monday morning. Again, if you're a business owner, the Personal, Professional, Best methodology is from The Traction, EOS operating system. So Traction is a book. It's all about business operations. I am obsessed. Lots of good little tricks and tips in there. So I recommend it definitely wholeheartedly.

Speaker 1 (02:16)
But let's talk about personal best first, because I wanted to recap the most amazing experience that I had recently. And when I say most amazing, it's interesting because I actually had a horrible time. But I went to go see Odesza. I'm obsessed with electronic music. I feel like bands, groups, I don't know how do you call them DJs like Odesza, like Rufus du Sol, they're on a different frequency. They figured something out. I always listen to that music. And I'm like, Oh, they know something we don't know. This art is on a different level for me. And I was so excited about the show. I'd been looking forward to it for months. We bought these tickets earlier in the year. And I was so excited about obviously the art, diving we were getting into it. And the show was at... I don't know what the name of the stadium is called, but it's down in Chula Vista in San Diego. Saquon, I think that's what it is. If you've ever been there, you know that it is one of the ugliest places to see a show. It's in the middle of nowhere. The traffic control is terrible, but just the venue itself, it has this like Southwestern motive or Native American motive.

Speaker 1 (03:21)
And it's just not the greatest vibe for, I would say, the overall esthetics of the place. So it's such a contrast to see somebody like Odesza who plays on these huge arenas, stadiums. They put so much production value into this show. It was beyond incredible. I was humbled that they brought all of their magic to this, what I think is an ugly little stadium. Sorry, they might not be a sponsor of the show, but it's neither here nor there. My point is that it was humbling. The amount of art, the amount of energy and activation and all of the people involved in the show. They had this incredible drumline. They had everybody that's featured as a singer on one of their songs. They had come out and sing their song. I was in tears at one point. But I also, like I mentioned, had a really bad time. And it was my own fucking fault. I had a bad time because I was not resolved from all of the stuff that was happening at work and in life. And I had had a really heavy, challenging day the day of the show. And we get there.

Speaker 1 (04:23)
And as the opener was playing, which was Bob Moses, another favorite of mine, there was a couple that was sitting in front of me, like right in the row in front of me. And we had good seats, but I'm looking at this amazing performance, Bob Moses on stage. I'm dancing, I'm singing. And this person in front of me cannot stop watching their Instagram stories. And I'm talking full-on shrimp mode. The back is hunched, the neck is broken into the phone, and they're watching Instagram stories and not just Instagram stories. By the way, I'm standing up right behind this person. They're sitting in their seat so I can see their phone. They're watching these ads on Instagram stories, and I'm immediately bothered. I'm like, Hello, sir. There's art happening right in front of you. Whether you know the band or not, participate. Maybe you're not a big fan or you don't know their work or whatever. But I was like, Gosh. They're giving us so much, these artists, these creators on stage, they're giving us so much. And you're sitting here consuming something that you could be doing at home on your couch. But you paid for a ticket, you're in the seat, yet you won't consume what this creator is presenting right in front of you.

Speaker 1 (05:25)
And it just made me agitated. And it's not a very high vibe mentality. I should have been cleaning my energy, not judgmental, not worried about what was going on, but I could not let it go. And then Bob Moses ends and there's this intermission, they're changing the stage. And Justin and I are sitting there waiting for the show to start. And I see the couple in front of us and the girl pulls out this little baggy of tricks. She's got a little bag of drugs and they take whatever they take. And when I talk to you about like, you know how in high school there were some girls who would come to a party and they'd smell a bottle of vodka and they'd be like, I'm so wasted. Oh, my God. This is so crazy. I never do this. That's what this couple did. Because five minutes ago they were sober watching Instagram stories about a barbecue joint, I kid you not. And the next thing I know, they're both so fucked up that they can't stand up straight. They're falling all over themselves. And this girl live streamed the entire show from her phone right in front of my face.

Speaker 1 (06:31)
So the lesson, there's a lesson here. I did not have a good time because I was so in my head and I could not get around the distraction of this couple in front of me. And it also really ruined my time. And I was upset with myself afterwards for ruining my time. But it was a really good reminder for me that I need to stay in my own lane and focus on my art and then the creators that are giving life to me, not focusing on the consumers around. And I just, I don't know. I really feel like old money is going to the opera, dressing up, being fancy. And new money is going to Odesza and having the money to spend on the right drugs to have a better time and block out all of the noise that you don't want to hear. And for me, it was an opportunity to really dive into the art and the community. And I just felt so out of alignment. And it brings me back to, again, like I said, staying in my own lane, cleaning up my own energy before I go anywhere else. And so that's been a big focus of mine, too, because it was an opportunity squandered.

Speaker 1 (07:37)
And I'm sharing this only to say I'm struggling here and there as well. And just we work so hard for these things and these milestones, and they don't always go as planned. And it's okay because I'm just ready to go back and see them again. So I don't know, Fredagain, is touring all over New York right now. I'm like, should I get on a plane? I don't know. Anyway, that's what's going on in my life personally.. It was great. Their show was so great. I mean, we didn't deserve them. Love their work. So anyway, professional best. I'm really lit up about stuff here on the professional side, I will have to say. I mentioned this on one of the last episodes about, I think it was about the credit card payment and debt stuff. But I have really been crystallizing this mission and these values and the steps to building wealth. And as I shared with you, I went to the ASPIRE conference and one of the speakers there, Andrew, who's the CEO of ASPIRE conference. I'm going to another money seminar with him soon. But he really talks about what I believe to be the conventional wisdom, the three steps they say that you need to do to build wealth, which is create wealth, keep wealth, and protect your wealth.

Speaker 1 (08:44)
And in my view, it's missing two really key components. I think there's two more steps. I think at the top of that list, you have to talk about mindset. Mindset has to be included in there because you can create wealth and try to keep it. And if your mindset's not right, you'll just be spiraling in that forever. And then the protection piece of it, it's like, do you have a healthy relationship with protecting it? Do you also know when to give back or give out or relax? It's not about working your whole life to build this wealth and then not enjoy it, right? That's the other piece I think it's missing, which is you've got to do more than just create, keep and protect. You've got to optimize it and enjoy it. You got to enjoy the journey along the way, or else it's not going to be a fun journey for you. I don't subscribe to people suffering their whole life to save money. For what? You're not enjoying your life along the way. So for me, with the mindset too, I think it's really about identifying some of these money stories that we've learned.

Speaker 1 (09:41)
And this is where I'm really crystallizing the message with, and all of the work that I'm doing with this podcast, which is, where did we get these ideas about money? Where did we hear things like, oh, money doesn't grow on trees, or it takes money to make money, or whatever these things that... Where did we hear those things from? Mostly from our parents, from our teachers, from our society, our peers. Mostly, honestly, we're hearing that from broke people. Where are we getting our advice from? We are taking advice from people who are not leading the lives we want to lead. This reminds me so much of a family that I grew up very close to. And I remember from a very young age, they were so anti-credit card and respect. They always paid for everything with cash. I remember as a kid them saying how bad credit cards were and how dangerous they are and how debt is so terrible. And sure, for them it didn't work. But what it did in their children was it bred this idea that these children were not capable or smart enough of being good stewards of the money.

Speaker 1 (10:44)
And for them, maybe using credit cards is bad. But for me, I'm going to Miami for free next week just for using credit card. So for me, it's not so bad. Do you know what I'm saying? There's different ideas out there and we have to be really careful about where we get those ideas from. And also just acknowledgment of the fact that these wealthy families, they're playing by completely separate, different rulebook than we are. So the advice that we get from the broke people, so to speak, quote-unquote, I'm quoting, you can't see it. What they're doing on the financial side, the wealthy side, it's totally different. When we were growing up, we were told talking about money, politics, sex, religion, it was all bad, right? Well, you want to know what conversations are happening at the dinner table of wealthiest families in the world? They're talking about money like it ain't no thing. They're talking about money. They're talking about business. And just imagine being exposed to those types of ideas and getting the vocabulary and the background or just the context. As a child, you have years more experience just navigating those types of conversations if you're raised in a family that treats money as something to not be afraid of.

Speaker 1 (11:47)
Do you know what I'm saying? And to the other point of that, too, we have this whole romantic idea in this country, in this culture about marriage and love and all of these things. And quite frankly, at the end of the day, it's a business decision. It's a legal piece of paperwork. And that is what I'm really excited for. This leads me to my professional best, is that we have somebody incredible coming on the podcast to talk all about pre-nups. This amazing family law attorney has agreed to come on the podcast and talk to us, educate us about how to protect ourselves before marriage, going into marriage, post-nups, navigating divorce, separation, all these different types of things that I don't think get enough air time. So if you have any questions, if you are about to get married, if you've just gotten married, if you have questions, send them to me. I'll put this up on the socials as well, but send them to me in the DMs. I will have her answer them specifically. I'm going to give her scenarios of different types of people, different types of women, and what they should be looking out for, what to do if you've been given a prenat, presented with one, all this stuff.

Speaker 1 (12:50)
So I'm so excited about this. This really goes back to that third tenant of that conventional wisdom of building wealth, that protection piece. And it's so important to be educated so that you can protect yourself and protect what you've worked so hard to build. So while that's to come, we still have questions to answer today. I'm so grateful for you all sending in your questions, oldmoneypodcast@gmail. Com, go to the website, go to social. And also while you're there, subscribe to the podcast if you haven't done so already, if you could be so kind to check that box, push that plus, really helps the podcast grow and reach more people when you subscribe, when you rate, when you review. So I would appreciate that. Let's get to the first question that I had in my inbox this week about credit cards, the question said, Can you talk about bigger cards like the Amex Black Cards? Are they worth it? Of course, I can talk about bigger cards. I'm obsessed with bigger cards. We started with this travel hacking podcast episode because I thought it was a good intro. It's the basics, giving you the lay of the land.

Speaker 1 (13:51)
But also I wanted to talk about stuff that was achievable for where I know most of our audience is, like how you could start playing the game today. I'm going to be honest with you, I don't think many of us can play the Amex Black Card game yet right now, nor do I know if we want to. So let's break it down. Let's talk about the Black Card, the famous, famous Black Card. You've seen it in the movies. You've heard it in Legend and Lore. It's like made out of metal. Fyi, you can get other cards made out of metal these days, so it's not super fancy. It's been the biggest flex for a very long time. And I think that's probably the biggest con right off the bat. If you're attracted to getting a credit card to flex it to throw it down on a restaurant table when you're out with your friends, maybe you need therapy instead. But that's just my opinion. However, the Amex, and it is Amex, not Amex. If you say American Express, you might get judged. I'm just warning you here. But the black card is actually called the Centurion card, and it does have a big list of benefits, but it also has a pretty high standard and bar to even get in to play this game.

Speaker 1 (14:56)
So first and foremost, you cannot apply for an Amex black card, a Centurion card. You have to be invited by American Express. And while the criteria for getting that invitation hasn't been published, the rumor is that you have to be a high earner who has spent and paid off between $350,000 to $500,000 across all of your American Express accounts in a calendar year. That's because they want to know, are you going to actually use this card? Are you going to be worth it for us? Because remember, this is the biggest thing about credit cards. The credit cards do not exist just for you to rack up points. The credit card companies exist so that they can make money on you spending money. They want to make sure that this is a really elite, high-level bar to get into because they want to make sure that it's worth it to give you all the benefits that they're going to give you. But in order to be given those benefits, not only do you have to meet the spending criteria, it's sounding like the Hermes game, is it not? You also need to pay a $10,000 initiation fee and a $5,000 annual fee.

Speaker 1 (15:58)
Holy cow. Remember, we learned about this on the credit card hacking Travel Points episode? Sorry, I do not remember what I called it. But we talked about this. Do you make back that annual fee and the initiation fee? If you are going to sign up for the Centurion card, you would have to, in my mind, to make sure this was a good investment for you, ensure that you are going to get double, if not more than that back on your return on the investment. So, for example, in your first year, you're paying $15,000 just to hold this card just for the opportunity to spend on it. So my question would be, are you going to get $15,000 or more back in benefits from this card? Well, let's look at some of the benefits, okay? So one of the first things when you get the benefit of the Amex, Centurion, Black Card is airport lounge access. Well, if you've listened to some of the past episodes, you know that this was snatched away from a bunch of people thanks to Tom braided. Okay, not thanks to Tom braided, but thanks to Delta Airlines overbooking their lounge because they let people roll over their points from COVID when they couldn't travel.

Speaker 1 (16:58)
And now they have too many people in all their lounge and using their benefits. And this is why American Express holders were so upset, because typically with this card, you get access to the Centurion lounge, the Delta Skyclubs when you're flying Delta, and priority pass airport lounge. But based on the new changes through Delta, that status was going to change. And at the time of this recording, I don't think that's been resolved. The Delta CEO came back and said, Oopsies, we overplayed our hand. We're going to backtrack on that a little bit. But I haven't seen any formalized news about what those changes are going to be. So think about it. What's the type of buyer profile that's using this card? It's likely somebody who's traveling often and has an expectation of a very high level of service, right? It's interesting, though, because are they flying private using this card? Are they not? You're at that upper echelon, but not flying private yet. So you're still looking for commercially available things, and this is a really big benefit that may or may not be available moving forward. The other thing, as it relates to status on airlines, is that the black card would also offer card holders Platinum, Medallion, elite status with Delta, and you can't get that benefit with any other credit card, which is why it was such a big perk.

Speaker 1 (18:02)
But again, you can't always count on companies playing by the rules we set out to play with them, right? And so that's why you got to keep your head on a swivel and make sure that you remember these credit card companies exist to get money from you to earn money on you, and they don't owe us anything. So they can change the terms and conditions any time they need to. In addition to the Delta elite status, you also get hotel elite status with four different hotel chains: Marriott, Hilton, Intercontinental, and Regalless and Chateau, which I'm assuming is a very fancy French brand that I don't know how to pronounce. And that status can get you upgrades, late checkouts, resort, credit, spa credit, free breakfast, that whole dog and pony show, if you will. Another benefit that you get by having the Centaurion card is an Equinox membership. So the Equinox gym, you're looking at a $500 initiation fee and a $300 a month minimum membership fee. So you will be able to get a free destination access membership for Equinox, which is actually a pretty good deal. Another random ass bonus and random partnership that they have is one with Sachsville Avenue.

Speaker 1 (19:10)
So when you have this card, you're getting a thousand dollars per year in Sachsville Avenue credits. So this is where it becomes really easy to see that cost benefit analysis of, okay, if I'm paying $5,000 a year, but I'm already going to be shopping at Sachs, I'm going to get a thousand dollars off per year. I think they give it to you in $250 increments per quarter. Is that going to make sense for me to earn that quote-unquote, initial investment back? And with this, I think it's really interesting because I don't know if you've been in the Sacks Fifth Avenue recently, but for me, it's not doing it. And $250 when you're spending at this level, think about the ratio of what that amount of money means to you if you are spending what they say the requirement is to even get access to this card. So let's do a little bit of math. So remember, in order to be offered the Amex Centurian card, you should be spending between 350 and half a million dollars a year. So just to make easy math, let's say that you're spending on your credit card half a million dollars a year, right?

Speaker 1 (20:11)
If they're giving you $250 per quarter, that's 0.05 %. That's not half of a %, it's 0.05. If they're giving you a thousand dollars a year, that's 0.2 %, okay? So if you're a normal everyday consumer, actually, this is not even normal, this is on the high end. Let's say you're spending 50,000 dollars a year, but you're running everything through your credit card. So you're spending not half a million, but you're spending 50,000 dollars per year. That's the equivalent of getting 25 bucks for free at Sachs-Fith Avenue. So you're getting a hundred bucks a year. When you think about it in a ratio in that way, it's not that much of a benefit. You know what I'm saying? So anyway, randomly you get a thousand dollars in credits at Sacks Fith Avenue for purchases. You also get a free Clear membership, which is the alternative to TSA Precheck. But Clear, I don't know too much about it, to be honest with you. I don't know if that also transfers to global entry or if that's different. Anyway, I have global entry and TSA Precheck wouldn't trade it for the world. Also, with this card, you get 24-7 concierge service.

Speaker 1 (21:14)
So that's help making travel plans, reservations at restaurants, et cetera, et cetera. You can get tickets, all those types of things. But it does also take somebody reaching out to that concierge to make sure that things are done right and on time. And my biggest thing has always been like, do I have the time and resources to reach out to the concierge? Normally, people would have an assistant office manager, EA, somebody like that that would help them with these things for coordination. You also get international arrival service and other random lifestyle perks like a wine-related concierge, a wine specialist, wine-buying offers. They're really leaning into their ideal client avatar, am I right? And then the number one thing about this card is that it doesn't have a spending limit. So there are no spending limits with the Amex Black Card. So you can easily buy really big ticket items, put it all on the card, and hopefully pay it all off so you don't carry a balance. Those are the benefits to the card. Is it worth it? You really have to exercise all of the benefits in order to squeeze every last dollar out of it.

Speaker 1 (22:17)
So when you add up all the things like the credit to Sacks Fifth Avenue, the Equinox membership, the Clear membership, all those things have a number dollar value on it, right? But some of the things like access, like the concierge, the convenience, those might not have a dollar value on them. So you're going to have to weigh and do the math and weigh the pros and cons to say, Is it worth it for me to be spending this amount of money to have access to these things? And so I think $5,000 is quite high for an annual fee on a credit card, especially when you compare it to the Platinum card from American Express, which gets you many of the same benefits, and the annual fee is $695. So that might be more in line with your budget. And if you're dying to have an American Express card, I would also look at the Platinum option. So let's go to the next question, and I love this question so much, which is, what do you think about the built card? And just a reminder, this is not financial advice. I'm here to do the research for you and give you my opinions on things.

Speaker 1 (23:23)
But the built card is really interesting. As I'm aware, I think it dropped during COVID, so 2020, and the way that the built card is marketed is that it's a credit card that you can use to pay rent. Now, for most people, rent is one of the most expensive things that they pay each month, right? And most of the time, for most apartment communities or for landlords, they will charge you between one and three or even up to five % to use a credit card in order to pay your rent. And the reason for that is default. So in the real estate game, cash is King, and you want to make your rent roll every single month and having people rack up rent on credit cards, people can always default, declare bankruptcy, and then you're out of that money as a landlord, right? So built is meant to be the bridge between that. For people that are interested in playing the credit card game but are having to pay rent and missing out on those points, built is the rent credit card that has no fees. That's how they market themselves. So you wouldn't have to pay fees on the rent expenditure that you would make every single month because there's a way that they set it up here where they have in-network and out-of-network.

Speaker 1 (24:29)
It's like insurance, right? So if your apartment complex is in-network, you might just have a really easy way to have your built card associated with that apartment community that you're renting from. So it'll automatically pay your rent for you. If you're out of network, if you have a private landlord, they will make an ACH payment on your behalf and then just put that balance due on your credit card for you. So either way, if you're in network or out of network, they will pay your rent for you using this credit card or where you can earn points on it. It just depends if you're in network or out of network to depend on how they actually do it. And again, you don't pay any of these credit card fees in order to do so. The other thing that they boast just in general is there's no annual fee, there's no foreign transaction fees. So this is like the feeless credit card. The thing that they also do is that they give you bonus points on different categories and extra bonus points if you spend on the first of the month. So I think they're really leaning into this target market of people that are getting paid for the first, they're paying rent, paying for everything.

Speaker 1 (25:32)
If you're that type of person that's paycheck to paycheck and then you get money for the first and then you're going to go blow it, also get your points. So again, I just say keep in mind what you're buying into here, all of these cards are designed to encourage you to spend. And if you are spending outside of your normal budget or you're spending over and above to earn extra points, this card is not for you. The interesting thing about this card too, is that in order to get the points that you would earn for paying your rent, you also have to charge the card five times for every statement period in order to earn those points. This is a smart move on built part because what they're making sure is that people don't just use this for rent. They want to have people used to pulling out that card from their wallet and transacting with it in regular everyday life. So you could be smart about this and run a couple of subscriptions. Maybe you do your Spotify, your Netflix, et cetera, subscriptions through this card to get the card every statement period to five charges.

Speaker 1 (26:32)
However, it's like if you're not going to go all in on a card, then don't get the card at all. That's what I think. Because for me, in order to really make a dent in building points, I've got to run everything through the card. And my question would be, is this the best card to use? And again, that's up to you because as we've mentioned, some of the pros are you can earn points on your rent. You have opportunities for bonus points. They have categories, et cetera. There's no annual fee. They have things like trip delay reimbursement, trip insurance, auto rental, collision insurance, cell phone insurance, a lot of the same stuff, a lot of the same protections you get on other cards like the Chase Sapphire card, which has that $95 a year annual fee. But the thing that I would think here again is like, what's my bigger picture strategy? Does this fit into my bigger picture? Now, the definite downside of this is there's no sign-up fee. So you're not going to get a big boost of 100,000, 80,000 points right when you sign up. There's no benefit to doing so. The other thing, as far as I can tell, is that while you can transfer points to travel partners, it looks like you can only do so at a one-to-one rate.

Speaker 1 (27:37)
Now, if you listen to the episode of the... I was going to say the Chase episode. And oh, my gosh, Chase should sponsor me because I talk about their freaking credit cards all the time. But if you listen to that, you've learned that I really benefit from using the travel partner bonus point transfer opportunity. So, for example, I just recently transferred points over to Mariot Bonvoie at a 50 % rate. So I got a thousand points for free when I transferred my points over to them, which not only paid for this whole vacation or about to go on, but is going to pay for half of our next one. So really big benefits there. Another con of this card, which shouldn't be a con because if you're playing the credit card game, you're not worried about APR, right? Because we're not ever leaving a balance on our card, right? We're paying it off in full every single month, right? So the cons is that it's a pretty high APR, 25 % to 29 %. But honestly, I think that's standard about now. There's no sign-up bonus. There's no annual fee. Also, this is not a good card for you if you have a mortgage, because if you have a mortgage, you are not going to earn any benefits from the points, which is the whole principle of this card of paying your housing cost, which is probably your highest and biggest cost per month.

Speaker 1 (28:44)
So not the best for you. So what do I think about the build card? I rent, and it's not a part of my repertoire. That's all I'll say about that. Is it good for you? It very well might be. If this is the way that you want to start building points and can start playing the game by using your rent to build those points, I mean, God's Speed. Always, of course, read all of the reviews. Again, I love nerdwallet. It's a really great site. But if you just Google built, rewards, cards, pros and cons, you'll get a whole bunch of data there. Always do your research because take a shot, this is not financial advice. Okay, let's go into the next question, which is a little bit more esoteric, a little bit bigger picture, less tactical. But I think it's really an important question. And this person asked me, and we were having a dialog about this, but the summary of the question was, Can you talk about how you said wealthy people get more stuff for free? Why is that? And honestly, this didn't occur to me until recently when I was watching this Netflix show about Cristiano Ronaldo's wife.

Speaker 1 (29:40)
I think it's Georgina, I'm not quite sure. I watched some of it and it struck me. She was shopping in Italy somewhere, and she's trying on all these beautiful dresses. I believe it was Roberto Cavali. And she goes to pay. And as she goes to pay, the sales associate hands her the bags and says, We talked to our manager, and this is on us. You can have all of this for free. And I was like, Oh, my God. For somebody who can actually afford it, here they go giving it away to her. This is what proves my point as to when you get wealthier, money means less and less because there's a different currency exchanged here. And she didn't need to exchange money. Her wearing that brand is a marketing expense for them because now her wearing it, now she looks like an ambassador of the brand, she's going be photographed in it. You know this effect, the influencer effect. And that's the other thing as well, is when you build clout an audience, you have people looking to you to see what you're doing, where you're going, what you're buying. All of a sudden, brands are going to see you as a channel to promote their messages, which in turn will get people to be influenced and go and buy the product, or it will give them a positive brand association.

Speaker 1 (30:56)
So I was thinking about that in a different form of currency than just money. Impact is really the biggest currency here, especially when you're talking about brand relationships, right? But the other thing that came up recently was this whole Taylor Swift, Travis, Kelsey conversation. And it's been so fun to watch this unfold and all of the chatter around. Is this a PR relationship? Is this real? Are they getting married? Mr. And Mrs. Americana. Oh, my God, the cheerleader and the football star. It's great to watch. And while I can't claim to be a Swifty, I appreciate her music, but I don't know any of it. I'm really happy to see her happy, and I love this. But do you think that Taylor Swift is paying to go sit in the box with Brittany Mahomes? Do you think she's paid for anything related to the drinks she's been drinking with Donna, Kelsey. Do you think she's been paying for the popcorn? Do you think that she paid for the supposedly ranch with her hot dog? No, Taylor Swift is not paying for anything because as you get more and more access, you have more impact, you have a bigger network, all of a sudden, more things become available to you.

Speaker 1 (32:03)
And we're going to talk about the network effect coming up soon. I rearrange the schedule, as I said, because I think this is one of the most undervalued resources that we have. People think so much about money. And when I'm talking about these traditional paradigms of building wealth, create wealth, keep wealth, protect wealth, I want to take it back to, are we enjoying wealth? Are we building relationships within our wealth? Are we being generous with our wealth? Are we sharing it with the people that we love? Because there is so much more to gain from having a very big network than there is from having a very big bank account. And one of the things can influence the other. But think about it this way. For example, we talked about the Hamptons. If you want to go vacation in the Hamptons, you got to know somebody that lives there. If you want to go during the hot season end of summer, you're going to be staying in somebody's house. And that's because it's the place to be. And so people are not Airbnb or VRBO-ing their house during that period of time. They're there enjoying it and doing the lifestyle.

Speaker 1 (33:02)
So if you want to go stay, there isn't a Ritz Carlton to go check into. You have to have access by having somebody in your network that you can go stay with. And that's what continues to keep it so exclusive. There's other things too, where sure, you might pay membership to Chipparioni Club or Zero Bond or Soho House, but having access through network, that's how you get exposed to more. That's how more opportunities come to you by being open and available and saying yes. And I think one of the biggest things about that is getting comfortable with our own, I would say, self-worth and our own self-identity in order to expand our influence, expand our impact, be seen, be connected, be a connector. How we find our worth in that? And that's something that I struggled with for a really long time of do I belong at this table? And I'm here to tell you that, yes, you do. And I'm saying that to myself. I'm saying that to you. Yes, you do. You have something unique to offer, and you don't need to be from that ILK or from that family or from that social class or whatever it might be to participate.

Speaker 1 (34:06)
But as you build your network, as you build your net worth, more and more things will be offered to you that will magnetize to you so to speak, that you might not necessarily have to pay for. So we'll come back to that more in a different episode. But I thought that was a great conversation to have. And we have one more question to talk about today before I let you go. The last question is, can you talk about opening and closing credit cards for credit card hacking and how that would hurt your credit score? So that's such a good question. I touched on it really briefly in the credit card episode. This is back to the tactical stuff, right? And that episode on travel hacking, it's really like a beginner crash course, okay? This is more of an advanced level move of opening and closing credit cards. But I think to answer this question, we have to start with the foundation of what is a credit score and why does it matter. A credit score is a three-digit number. It can range between, I think the lowest is 600 to 850. Is that right? Let me check.

Speaker 1 (35:06)
Oh, my God. No, I just opened my account. 300 is the lowest credit score. You could have 850 as the highest. And your credit is judged based on different criteria. And a credit score matters because it's going to help lenders decide if you are a good person to lend money to essentially. So a credit card company or a mortgage company is going to check your credit score and your credit history when you apply to borrow money from them to determine what interest rate they might charge you. So, for example, if you have a lower credit score, it's usually indicative of the fact that maybe you don't have the best credit history, you've missed some payments, et cetera. So you're a little bit riskier to that lender. They might charge you a higher interest rate. If you have a very high credit score in the Excellent category, you will be looked at as somebody who's more trustworthy or less of a risk for that lender to lend money to. So they might reward you with better terms for that loan. Or if you're trying to rent an apartment, for example, that apartment landlord might have criteria of a credit score that you need to be above in order to rent the apartment because it's basically a judgment of your creditworthiness, like how risky are you to lend to, rent to, et cetera.

Speaker 1 (36:18)
So there's a whole bunch of different things that affect your credit. Number one, on-time payments. To lenders, this is your history of on-time payments and indicates whether you're going to make payments on time in the future. Remember, credit card companies have their own business too, it's not all about you. So they need you to make your payments on time so they can make their payments on time. It's a very heavy indicator of a credit score. Now, what percentage this all blends together? I have no idea. And all the algorithms at the three credit bureaucals are the ones that determine that. So you might have a slightly different score at transUnion versus Equifax or whatever. So on time payments is first. The second thing is oldest credit line. The age of your oldest credit line indicates to lenders how much experience you have in building credit. So that matters as well. Credit used, which is called the credit utilization rate, shows lenders how much credit is available to you and how much is being utilized. So we talked about this before, but if you have four different credit cards, they all have a credit limit of $25,000 on it and you pay off your credit cards every single month, you should have a zero % of your available credit card used, which is a great score, your utilization rate.

Speaker 1 (37:24)
You're using zero % of that credit because you're not carrying a balance. But if you have four credit cards that have a $25,000 limit on each of them and you're carrying $15,000 on every single card, now your credit utilization rate is 60 % because you have four times $15,000 on each and you're using $60,000 of credit with the $100,000 totally available to you. So a lender is going to say that, see that and say, Wow, they're using a lot of their available credit, so might not pay ours back. Also, you're going to be judged on your credit score on recent inquiries. So every time you apply for a new credit card or you do a hard credit check, like I said, to get an apartment or a car or a house or mortgage or whatever, it's going to mark as an inquiry on your credit report. And some lenders tend to see too many recent inquiries as a sign of risk, meaning, okay, if this girl is frantically trying to open credit cards left, right and center, maybe she's in financial trouble. Maybe we don't want to lend to her, right? Also, new accounts. So to lenders, like I said, opening too many new accounts in a short window of time could point to credit problems.

Speaker 1 (38:32)
And then lastly, they look at available credit, which again plays into the credit utilization rate, how much credit is available to you? If you have plenty of available credit, that would indicate to lenders that you can manage credit responsibly. Now we're talking about do you open and close cards all the time in order to get that bonus point sign-up offer on all of these different travel credit cards? Again, to recap, some of the more advanced players in this travel hacking game can open between one and two or even three credit cards a year just to get those big bonus points when you sign up for a new card. So, for example, I'm on my favorite website. You know what it is? Nerdwallet. Com. Not yet a sponsor, but I'm manifesting it. And nerdwallet has travel credit cards from our partners and they have all these cards listed here. The first one on the list is the Chase, Sapphire, Preferred. It's the one that has the $95 annual fee. And the intro offer is when you spend $4,000 on purchases in the first three months on the card, you will get 60,000 bonus points. The next one on the list is Capital One Venture Rewards credit card.

Speaker 1 (39:34)
When you spend $4,000 on purchases within the first three months, you will get 75,000 miles. There are people out there that are really dedicated to playing this game that are opening these new cards all of the time when these big bonus offers come to cash in on the intro offer bonus points. This is more advanced. So if you are new to the game, I do not recommend this at all. It takes a lot of research, a lot of diligence to make sure that you're not missing payments, you're not closing cards too quickly, not opening them too quickly. Because as we just discussed, a lot of these things like a lookup inquiry on your credit account, too many of those can look really bad to lenders. So for example, if you're trying to play the credit card game and buy a house in five years, you might want to be careful about what your credit score looks like because while you might be cashing in on 60,000 points or 75,000 miles, your credit score is going to determine your interest rate on your mortgage. So you might be getting, okay, $700, a thousand dollars here and there on these travel hacking things, but you got to think about this big picture.

Speaker 1 (40:35)
So, for example, I've got a mortgage calculator open right now. If I'm buying a million-dollar home, I'm putting 20 % down, I'm doing a 30-year term on my loan, just flat rate, fixed rate rather, and my interest rate is seven %, my total interest paid over the course of having that opportunity to buy the house with this mortgage, I'm going to pay $1.1 million in interest. However, if I pay six % interest, I'm paying $926,000 in interest. So I'm saving what? Over $100,000 in interest that I'm just earning because maybe my credit score was better, so I got a better interest rate from the bank. So if you want to talk about getting a thousand dollars here and there from hacking your credit card, that's totally fine. But what I really want you to focus on is getting a hundred thousand dollars off of your mortgage over the course of the loan, because that's a significant amount of money that you can't hack your way to. And that's why having a credit score that's healthy is so, so important. So again, when you're doing a lot of inquiries, that can really hurt your credit score.

Speaker 1 (41:34)
Also, if you're closing credit cards, it's going to decrease your total available credit. So that's going to adjust your credit utilization rate. For example, if you have two credit cards, both are giving you $25,000 in credit, but you close one, you're carrying a $5,000 balance. On $50,000, that's just a 10 % credit utilization rate. If you close one of those cards and now you have $5,000 owed on a $25,000 total allowed credit, it, that's 25 % of your credit utilization. Are you following? Because that's what's going to really make a difference in your credit score. So if you're closing them, you need to make sure that you're opening them so your credit utilization stays healthy or just don't carry a balance and it's not a problem. The other thing too is length of credit history. You don't want to close out the cards that you've had the longest because as we talked about, the length of your oldest available credit card is going to factor into your credit score and you want to keep those cards open longer. An alternative to closing credit cards is negotiating the annual fees away. If you're not going to be using the card, sometimes you can call and say, Hey, I'm not going to be using this card for the next year, but I'd like to keep this account with you for this year.

Speaker 1 (42:40)
Can you waive the fee, the annual fee? And I will tell you that I have done this successfully and it has worked. I did it with Capital One when I was in my cards are frozen in my fucking freezer era, and I wasn't going to use them and they were immutable to that. So that's an opportunity for you. But you do need to follow up on that year after year. And then the other thing to keep in mind is just more money, more problems, as they say. The more cards you have opened, the more chances there are for things to go wrong. And for an old subscription to hang on on an old card, you totally forget about it, you totally forget to pay it. And now all of a sudden you've got mispayments, it just can get really, really messy. So that's definitely this opening and closing cards all the time to get these travel hacking points. I don't think it works out in the long run for most of us that really want to maintain a healthy credit score, but it's an opportunity. Again, this isn't financial advice, I'm just letting you know what I would do.

Speaker 1 (43:34)
With that, thank you so much for sending in your questions. We got four of them done in one episode. I'm really happy that feels very efficient. Let me know what other questions you have. I'm happy to research, talkabout anything you want to talk about anything you want to talk about. Let me know what's going on in your money life, in your money world. And in the meantime, thank you so much for spending your time with me. Your time is so valuable. And I'm so honored that you are spending it with me on The Old Money podcast so we can all get rich together. I will talk to you on the next episode. Bye-bye. Feeling rich? I hope so. Thank you for joining me on this episode of Old Money. If you have questions you want answered, email me at oldmoneypodcast@gmail. Com or hit us up on social. We are at Old Money Podcast and I am at your service. If this episode spoke to you, inspired you, helped you, if you took a single note, it would mean the world to me. If you could please just take a minute to write and podcast. And if you're not doing so already, subscribe.

Speaker 1 (44:30)
And if you have friends who like getting rich, please share this episode with them, even if it's just on your Instagram story. And I'd love you more than Jeff Bezos loves Amazon Prime. Thank you so much and I will talk to you on the next episode. Remember, I'm not your lawyer, I'm not your tax professional, and I'm not your financial advisor. The content presented in this podcast is intended to entertain, educate, inspire, and support listeners and their personal and professional development and does not constitute business, financial, or legal advice. In addition to that, this episode may contain paid endorsements and advertisements for products and services.

Resources

Episode 017: Travel the World for FREE- Hot Hacks for Your Credit Cards

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The content presented in this podcast is intended to entertain, educate, inspire and support listeners in their personal and professional development and does not constitute business, financial, or legal advice. Please note that this episode may contain paid endorsements and advertisements for products and services for which individuals on the show may have a direct or indirect financial interest in products or services related to the episode.

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