I’m an IDIOT for getting a credit card...

What's up you guys, it's great I'm here. So let's just say this: I did not expect to get so many views on the unboxing of the JP Morgan Reserve card. So if you're brand new here, welcome! My name is Graham. I flex credit cards, duplexes, and lotuses. So happy to have you a part of the family.

However, judging by probably half the comments I've received on that video, it became very evident that there's a huge lack of understanding when it comes to personal finance, how credit cards work, and how you can use them to actually profit and make money. Crazy concept, right? And what's even more shocking is that two out of three Millennials does not have a credit card. So it makes sense that there's a lot of misinformation floating around the internet.

So let's just get to a few of these comments and answer some of these misconceptions that escalated quickly. Let's go to the next ones. It's actually mental! [Music] You know what? Someone's got to get this guy a pizza! You know what, Pat? If you're watching this video right now, comment down below. I will be in touch with you; I will send you a free large Domino's Pizza of your choosing. Just let me know where to send it to and comment down below.

What has the Internet come to? How did I just watch a video on a dude who is all but sexually in love with a credit card unbox a credit card? Here's the thing—anytime you take the time to comment on YouTube, it's always very important to use proper grammar. You see, anytime you use or write out the word "to" (t-o), it's an adverb that means excessively, extremely, very, or additionally. So this means you could say something like, "Great video! I hit the like button, and I subscribed," or you could say, "I too can't spell good."

So this just means in the future, anytime you want to write out "what has YouTube come to," you're going to want to use what's called a preposition, which means the word "to" (t-o). This just indicates a direction of movement or place of arrival, meaning "what has YouTube come to?" The thing is, anytime you take this time to comment on YouTube, it's always very important you use proper grammar; otherwise, you lose all credibility. It's very important!

All right, fine. All jokes aside, let's get into it. It's become pretty evident that most people don't fully understand credit cards, have no idea how to use them, and don't know how they can actually profit off these credit cards to make money and get free stuff. If you watch this video, just trust me, it's gonna make sense. If you don't watch the video, you're gonna get a very severe case of "league mime." We don't want that to happen, so watch the video. I promise it will all make sense.

So anyway, here are some examples of exactly what I'm talking about. [Music] [Applause] [Music]

Now this is what most people seem to miss the point because having a credit card is not about debt. Buying something with a credit card doesn't mean you can't afford something. Now, when it comes to credit cards, there's absolutely a right way to use them and a wrong way to use them. It's a weird analogy, but I feel like a lot of people view credit cards almost like going to a casino in which the house always wins—except in this case, the house is just the credit card company. They just feel like credit cards are a losing proposition no matter what you do. Because of that, they stay away from it altogether.

Instead, though, I want you to imagine that using credit cards is more like playing a game of chess where you're not playing against a casino where the house always wins. Instead, your ability to win relies entirely on strategy and not luck. If you make the right moves consistently, you will come out ahead.

Now, the wrong way to use a credit card is if you only have $100 to your name, and you go out and you spend $5,000 on a credit card to buy "I'm a hater" cream. Then you just make your monthly payments for the rest of your life because you couldn't afford it to begin with. The right way to use the credit card is to have $5,000 available in your checking accounts. You go and buy $5,000 of "I'm a hater" cream and put that on the credit card. Then you pay the bill off in full because you have the money available.

But you decide to put it on the card for a few reasons. The first reason you do this is for security. If you had $5,000 cash in your wallet and it either gets lost or stolen, good luck ever getting that money back. Now on the other hand, if your credit card gets stolen and there's a fraudulent charge on there, 99.9 percent of the time, you can get that entire charge reversed simply in a matter of minutes. So just from this perspective, a credit card is superior.

The second reason you end up using a credit card is for purchase protection. For instance, with this card, if any of the items I buy are lost or stolen within the first 90 days, this card will cover it up to ten thousand dollars per occurrence. This means that when someone shattered the window and stole my $3,000 MacBook Pro computer from the back of Jeffy Beau's car, American Express covered that because I had just bought that computer.

This also means that if I buy something and try to return it and the merchant says, "Sorry, no returns," it's also covered under what's called return protection, where Amex will handle the return almost no questions asked. This also means that I get a free extended warranty with the American Express Platinum. They will double any warranty of any item you buy up to two years. This means when I bought my MacBook Pro and it comes with a one-year Apple warranty, guess what? American Express will double that to two years absolutely free!

Take that cash payments; again, credit cards just are superior. The third thing is that you get credit card membership perks. With the JPMorgan Reserve card, I get free United Club membership, and that is a five hundred and fifty dollar value. This means that any time I go to an airport to travel, I get to enjoy all the lounge access, relax in a nice leather chair, sip a drink from the open bar, enjoy free food, free Wi-Fi, and in the Amex Centurion lounge, I can literally take a shower and get a free massage. And this is really just the beginning.

So that brings me to this comment here. Well, you know what? I'm glad you asked, and the answer is to get those sweet, sweet points. Check out this billionaire who bought a one hundred and seventy million dollar painting with his American Express card—not because he couldn't afford it, it's because he simply wanted the points!

No, see, I do the exact same thing, except I don't buy one hundred and seventy million dollar paintings. But it's because of this that I haven't paid for any travel or plane tickets in the last three years. I can pretty much travel anywhere around the world first-class many times over simply because of credit card points. And while I travel there, I can enjoy getting a free massage at the Amex Centurion lounge while enjoying free food and free drinks.

But wait, there's more! [Music] The thing is, when done correctly, you own the banks. For instance, I got the Chase Sapphire Reserve. I got a hundred thousand points on this, which is basically equivalent to three round-trip plane tickets anywhere in North America, plus the $300 annual travel credit on top of that. And then you could just go and downgrade this to the Chase Freedom, which is a free card.

Even take this Amex Platinum, for instance. This card costs me five hundred and fifty dollars a year just to keep this, but I get back $200 of free airline credit, $200 a year of free Uber, $100 a year of Saks Fifth Avenue credit, I get purchase protection, extended warranty, and I get sixty thousand bonus points just for signing up for this credit card.

Now let's be real here, man. If you actually think you need to go out and spend four thousand dollars on a credit card just to get back twelve hundred dollars in points, then you really shouldn't be using a credit card. This might be a little too complicated for you; you should only be doing this if you have four thousand dollars worth of expenses that need to be paid anyway. But you decide to put it on the card to get the points and purchase protection—then simply paying with cash and getting nothing.

For instance, I just bought a property and needed to spend twenty-three hundred dollars on a plumbing repair and also eighteen hundred dollars on a new washer/dryer. That was four thousand dollars that I had to spend anyway, so I opened up the JPMorgan Reserve card, put four thousand dollars on that card that I was spending anyway, but now I got some points.

Now in another example, I had to buy about fifteen thousand dollars worth of material for a home remodeling project. So what I did is I opened up three credit cards. I put five thousand dollars on each card to hit the minimum spend, and from that, I instantaneously got two hundred and fifty thousand points. Then guess what? Magically, I paid off all the cards about a week later, paying zero interest, and that was all pure profit.

Now keep in mind here that was zero debt. I paid no interest, and the annual fees on the cards were greatly rewarded by all the points and free travel I got in return. Now this is not about spending money you don't have for points you don't need. This is about learning how credit cards work and then using that to your advantage.

For me, I pay absolutely zero dollars in interest. That's right, I pay absolutely nothing, and I put each and every one of my expenses on the card and then simply pay it off in full at the end of every single month instead of paying for it cash along the way. Remember that anytime you put something on a credit card and you pay it off in full before it's due, you pay nothing in interest, and the credit card company gets nothing from you.

That is exactly how you get to play the system to your advantage. Now I'm going to be totally transparent here as well and say that most likely the majority of people out there don't have the discipline to do this. Having a credit card is very much like playing with fire. You can either use it to your advantage and use it to keep you warm and cook your food, and if you don't use it correctly, it can absolutely burn you.

Most people simply don't have the financial knowledge or literacy to use cards correctly, and unfortunately, because of that, they make credit cards profitable for the rest of us. Credit card companies would not be throwing us these incredible perks if it wasn't profitable for them, and this is something I absolutely want to change.

The only way to change this is by showing people how to use credit cards responsibly and change their mindset away from "credit cards are evil" to "credit cards can be good when used responsibly." When I have the money to pay it off in full, I simply put it on a credit card instead of paying for something with cash so I can get the purchase protection and points and benefit from this. That is the proper way to use the credit card, and it's really as simple as that.

Okay, so for anyone else with an attention span of longer than 20 seconds, thank you so much for watching! I really appreciate it. If you guys enjoy videos like this, make sure to smash the like button, smash the subscribe button if you haven't already. Also, feel free to add me on Snapchat and Instagram. I post it pretty much daily, so if you want to be a part of it there, feel free to add me there. Thank you again for watching, and until next time! [Music]