DON’T PAY with Cash or Debit!! This is better...

What's up, you guys? It's Graham here!

So, we've all heard the saying that cash is king. Well, you know what? I think we're slowly entering an era where cash no longer has quite the power and leverage it once used to have, and instead we're seeing the shift towards credit. Credit is king! And you know what? I would say this is actually a good thing.

I was thinking about that for myself too, and I realized that I don't think I've paid for something with cash or with a debit card in probably over two years now. Now, partially the reason for this is because I can't figure out where I left my debit cards a long time ago, and I just never bothered replacing them. Also, I never carry cash on me besides when I use it in the beginning of a YouTube video like this for emphasis on what I was talking about. But otherwise, besides that, it's just an inconvenience to carry cash.

So that just leaves me with a wallet and a few credit cards that I carry around with me at all times. This is, in my opinion, the ideal scenario that gives you massive advantages over paying with cash or, even worse, a debit card. Usually, this is the point in the video where it gets pushed to my audience, who then makes the assumption that putting money on a credit card means you can't afford something because you're using debt to buy it. Or maybe they think that credit is the root of all evil, or maybe they have the old school psychological belief that you're more likely to spend more money on a credit card because it's credit than if you pay with debit or cash.

But I'm a firm believer that none of this really applies in this day and age, for pretty much all currencies are digital in some way or another. And here's why you should end up putting everything on a credit card and how it's actually a good idea as soon as you smash that like button!

See, when you pay for something with cash, it's gone from your hands as soon as you spend it. Or if you end up losing that cash, well then you've got to go and find it. Or if that cash is stolen from you, then good luck ever getting that back! Like, if you buy an iPhone from someone on Craigslist and you pay with cash, and maybe that person misrepresented what the phone was and you didn't find out until later, well you're probably out cash.

Or let's just say that you go and buy something, and it breaks and the store refuses to make it right. Well, in that same situation, you're probably out money. Very similar to that with a debit card; any time you use that, you're giving the entire world a direct line to your actual money. Anytime you use a debit card, whether at an ATM or when buying something, you're basically just directly pulling out cash from your checking account.

So, if your debit card is ever compromised or stolen, your actual money is gone. And if your debit card is ever mischarged, well guess what? Again, your actual money is gone. I realize that most debit cards have fraud protection, but the fact remains is that it takes time to get your actual money back. Sometimes this means going without your actual money for a few days — sometimes a few weeks — until the fraud is proven and the money is put back into your account.

Now, with a credit card, on the other hand, you accrue a balance on that card, and then you pay it off in full at the time it's due. During that entire process, none of your actual money is used. It's kind of like being able to use someone else's money for 60 days completely free, and then at the end of the 60 days, you just pay that person back what you owe. The credit card really just becomes the buffer between you and your money over here.

So, this just means that if someone steals your credit card information and charges $2,000 at Walmart, this doesn't mean that your $2,000 is gone from your account. Instead, this just means that you just temporarily owe the credit card company the $2,000 until you call them up, report the charge, and the entire charge is reversed.

When something like this happens, you're not out any of your own actual money at all, like you would be with a debit card. Especially when you have a credit card from any sort of reputable company like Chase or American Express, your chance of being negatively impacted by any sort of fraud on your account beyond just making a quick phone call is slim to none. I probably had over a dozen instances of fraud on my accounts, all of which were reversed with a quick phone call without any money out of my actual account.

Compare that to using a debit card, where if my account had fraudulent charges on it, my actual money is gone until I call in to reverse the charge and get my money back.

The second reason you should put everything on a credit card is what's called purchase protection. Many credit cards offer this as a perk of using their service, and this reason alone should be reason enough for you to start using credit cards for everything. This means that credit cards will ensure your item against theft or damage typically between 90 and 120 days after you buy something using the credit card. I've ended up using this several times, and it has paid for itself many, many, many times over.

For example, I ended up buying a jacket with my American Express Platinum, and while I was out one night, it was stolen. I called up American Express, I reported that it was stolen, and within 24 hours, they reimbursed me for the entire cost of the jacket.

Having this also helped me out tremendously when I bought a brand new MacBook Pro. It was in a backpack; I had the backpack in the backseat of a car one night. Someone smashed the back window of that car, stole the backpack with my laptop in it, and thankfully, it was covered under the American Express purchase protection. Just try to get that type of service if you buy something with a debit card or with cash.

Secondly, we have credit cards that offer what's called price protection. This means that if you go and buy something, and then all of a sudden you find it somewhere cheaper within about 90 days, you can submit that cheaper price to the credit card company, and they will end up reimbursing you for the difference. This is an amazing feature to have and very cool to use, especially before Black Friday when everything goes on sale.

Third, we have what's called return protection. This means that if you go and buy something and then decide to return it at a later time, and the merchant for whatever reason says you can't return it, your credit card company will step in and accept the return on their behalf and then credit you back the money. This is such an amazing perk to have, especially if you need a refund or need to return something.

I'm excited by merchants' normal refund or return policy, or if you buy something on final sale with no returns requested, oftentimes you can just end up getting the return through your credit card company.

And finally, I think I saved the best for last, and that is extended warranty protection. Many credit cards will just extend the manufacturer's warranty of whatever item you buy using the card, typically up to an extra year. For instance, the Chase Sapphire Reserve provides an extra year of coverage for any manufacturer warranty that is three years or less. So, if you go and buy some electronics and it just happens to break right after the manufacturer warranty expires, well no worries! Call up your credit card company, and they will handle it on their behalf.

Now we have pretty much my favorite reason for ever using credit cards, and that is to get those sweet, sweet points. Just open up a credit card, put your normal spending on that card, and rack up free hotel, free airfare, free travel, or cashback all for deciding to use a credit card over a debit card or paying with cash. It's because of doing that that I booked an entirely free trip to go and visit Dan Locke, paid for entirely with credit card points. I got my round-trip plane ticket paid for free, I got a 27th floor room at the Marriott downtown Vancouver facing the city and the harbor, guests wide, entirely for free!

I also enjoyed free food and free drinks at the airport while I was waiting for the flight for the low price of free, using the Priority Pass lounge access that is free if you just mastered the art of credit card churning.

Which is basically the practice of opening up a credit card, meeting the minimum spend to get the sign-up bonus. You can pretty much travel anywhere in the world entirely for free just by doing this maybe twice or three times a year. Then the net cost to you of actually doing this is usually like 10 to 20 minutes of your time per credit card.

I also have a bajillion videos about how to do this and exactly what's involved in the best credit cards for getting all of this stuff, so I'll just link to those in the description.

Finally, the last reason to use a credit card for everything is to improve your credit score and credit utilization. Here in the United States, your credit score is a huge factor in determining whether or not you can get a loan to buy a house, car, business loan, or anything else that has to do with borrowing money. It also determines the interest rate you pay when going and getting that loan.

If you end up trying to get one of these loans without having a credit score or without having a good credit score, you're either just not getting the loan in the first place or you're paying an extraordinarily high interest rate from subprime lenders. Just having some type of credit going in the very beginning is going to be one of the most valuable things you have ever done, and doing that is a great way to start building up your credit score up into the point where you're ready to actually buy a house or finance a car or do anything to leverage your money.

And again, I have a ton of videos about how to do this, so I'm just gonna link to all of those in the description.

So, I'd like to personally think that for those reasons I just mentioned, it should be compelling enough to use a credit card for everything you do and just ditch cash and debit card altogether like I do.

Except when I say this, there are two very important distinctions I do want to mention. First of all, you should never pay a single dime in interest. You should always pay off your entire credit card in full at the end of every month. You should not spend more money on the credit card just because the money isn't immediately taken out of your account. And finally, you should always have the money available at all times to pay it off in full.

I just pretend all the money I put on a credit card is cash. If I don't have the money right then and there to pay for something in cash, I will not go and put it on a credit card. If you know you can't handle this and you know you don't have the self-control to follow this, then do not use a credit card, and instead stick with debit and cash. Not getting all of the perks I mentioned are a lot better than the alternative of you handling a credit card improperly and racking up debt.

The second thing I want to mention is that Dave Ramsey often cites psychological studies that suggest that people are more likely to spend more money on a credit card because that money doesn't seem real to them. Now, I can't find that study, but I believe he suggested that people, on average, spend 10% more putting something on a credit card than they do with a debit card.

So, here's why I believe that this advice is a bit outdated and why it no longer applies. First of all, his demographic tends to be a little bit older than mine, and they grew up in an age where cash and debit were a lot more common than paying with a credit card. Therefore, I believe that for older generations, cash and debit just seems more real, and with credit cards, it seems more like imaginary play money.

However, many younger generations didn't grow up paying with and carrying around cash. We live in an age where it's just numbers on a computer screen. We pay with PayPal, Venmo, Apple Pay, and for many people that I know, we all just rarely carry around cash. I would say when it comes to myself, 99.9% of the times I have any sort of cash on me, I end up spending it. That's one of the reasons I don't carry around cash.

I think for most younger generations, we calculate how much we have available to us based off the numbers on a computer screen and what's in that account. Because of that, when we have cash, it's unaccounted for in the bank account. Therefore, it seems like almost extra found money that isn't necessarily budgeted for, and if you spend it, it doesn't really matter because the numbers in your account are the same.

Now, it's because of that that I believe that younger generations are more likely to spend cash than they are to spend extra on a credit card. I really believe that as we become more digital, the spending with credit and debit is going to have a much bigger psychological impact on us because we could see those numbers on our screen.

So let me know in the comments section what you guys think. Maybe I am totally wrong about this, or maybe I'm not. Let me know down below!

So again, just to recap, the reasons I put everything on a credit card account is to:

1. Add an extra layer of protection between myself, what I buy, and my actual money.
2. Take advantage of the many credit card perks with extended warranty, purchase protection, and everything else that goes along with using a credit card.
3. Take advantage of all the free travel points, cashback, and everything else that I get by just using the credits over debit or cash.
4. Increase my credit score and credit utilization so that when I go and buy more real estate, I am getting the best loan I possibly can, and am paying the lowest interest rate.

That just means that I have more actual money back in my bank accounts. Then all I do is pay off the credit card in full at the time it's due. I pay no interest, I don't go into any debt to buy something, but I reap all the benefits of using credit.

So, with that said, you guys, thank you so much for watching! I really appreciate it. If you guys enjoy videos like this, as always, smash that like button, smash that subscribe button if you're not already subscribed.

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Thank you again for watching, and until next time!