When juggling credit card debt, a hidden “gotcha” is that the credit card companies have two classes of customers:

1. Those who pay in full each and every month.
2. Those who carry a balance (even $1!) from month to month.

Card issuers word their cardmember agreements so that those in Class 1 enjoy an interest-free loan each and every month, but those in Class 2 are hit with interest charges each day from the date a charge is made to the date it is paid off.

To avoid this “gotcha,” use the Two Credit Card Trick: On your card with the $5,000 balance, stop making new charges, but keep paying as much as you can each month. Use a new credit card (or dust one off from the sock drawer) for all your new purchases going forward, being sure to pay the full statement balance by the due date each and every month. This way, you’ll be enjoying an interest-free loan each month for the second card, while avoiding needless interest charges on the card you are carrying a balance on.

Another way to further capitalize on this trick is to do a balance transfer to a new credit card with a promotional 0% APR. The Chase Slate card is a great card to do this on, because it offers 0% APR for 15 months on balance transfers and is the only major credit card to offer this with no balance transfer fee (if the balance transfer is completed within the first 60 days of card membership). Many cards charge a one-time fee of up to 5% on the transfer—$250 for our $5,000 balance. I am not going to link to Chase here but you can find this via Google (note that they only approve applicants who have had four or fewer cards opened in the past 24 months).

A pitfall of the two card trick is that it could lead to bad financial outcomes if you do not control your spending behavior. Research shows that people spend more when using plastic instead of cash and coins. Mathematically, it will certainly lower your finance charges as compared with the alternative of continuing to use just one credit card on which you revolve a balance. However, this is of little benefit if opening or using a second card causes you to spend more. One must examine one’s underlying issues relating to income, cashflow, expenses, and behavior to rein in debt. Avoiding interest-bearing debts is ideal, and one can certainly look to many examples of people who managed to do so when it seems they should not have been able to do so, although on the other hand there are examples of people who have no way out of the debt trap such as Chase Bank’s recent ridiculous behavior of blaming Americans for their financial problems while looting the country (and earth) to the tune of trillions of dollars. Financial literacy does nothing for one’s financial wellness when in an intractable financial situation.

Nonetheless, there is no prize, award, or recognition for succeeding despite having come from a background of disadvantage, nor much compassion or remuneration given as reparations for it, regardless of one’s putative successfulness or lack thereof. There is also no penalty for people from backgrounds of privilege who present themselves as paragons of ingenuity and Protestant work ethic despite having accomplished zero when adjusted for the level of difficulty they have played the game of life at. Distilled, this is the satirical “blame yourself” movement I presented in a 2016 piece, where people are coerced into taking on a mantle of shame for the ramifications they face in life due to injustices committed by others (e.g., the 1%). The rich prod the poor by demanding to know, “What are you doing to help?,” whilst they fly their private jet a handful of miles to avoid a little bit of traffic (Elon Musk), or write songs about ostentatious frittering of wealth (Ariana Grande) rather than doing anything that would be even a little helpful to anyone. All the while, they remain indignant and entitled about it.

I like to look to the hyper-financially educated on websites such as Mr. Money Mustache and Bogleheads for what financial literacy and capability can do for someone even from a humble background (potentially). However, I recognize that such examples are still laden with privilege, hypocrisy, and survivorship bias, and pointing them out invites delusional lines of reasoning whereby the poor are blamed for their poverty while the wealthy are praised for presumed effort and ingenuity when in fact they are brazen murderers. In fact, I am one too. No coalescent discussion of any human issue, including financial literacy and education, can omit climate change. By flying across the globe, as I have brazenly done and in fact misguidedly praised as an antidote to materialism, I quite literally may as well be killing people in 2150 or even 2075 from climate-related calamities that will disproportionately kill off the poor and disadvantaged.

When, then, do the wealthy, even as they accumulate more and more grotesque quantities of wealthy, continue in 2019 in the age of information and the Internet to be entitled, ostentatious, and indignant that they bear no responsibility for the harm they are causing others via their behavior? How can the bulk of the world’s wealth, or even a sliver, for that matter, not be being dedicated toward ameliorating human-caused climate change? And, what does all this have to do with the Two Credit Card Trick? Well, if you can’t see the forest for the trees, then you are lost.

Update, 7/31/2018: Check out my new APR to APY calculator!

I am not one who can lecture you on the perils of credit cards from personal experience. I don’t have a redemption arc where I was once buried in credit card and student loan debt, but had an awakening and went on to dig myself out through sheer tenacity. I have 13 credit cards; buy everything using credit cards; got my first credit card at Age 19 (seven years ago); have received tens of thousands of dollars in credit card signing bonuses, cashback, and rewards such as Chase Ultimate Reward points, American Express Membership Reward points, Southwest Airlines Rapid Reward points, and Starwood Hotels Preferred Guest points; have never paid a cent in interest; and pay in full (PIF) every month by the due date (except during the occasional 0.00% APR introductory period).

I have not studied business or finance formally—I went to college for a Bachelor’s in psychology and a Master’s in applied learning and instruction. However, I have been interested in personal finance since I was a teenager in high school and read extensively via Internet searches before receiving my first credit card (a Discover More card, now called Discover It). I heard and internalized the horror stories about penalty interest rates, drowning in debt, bankruptcy, collections, et cetera. I avoided and continue to avoid consumer debt traps, aided by never moving out of my parents’ house, living in Florida where in-state tuition is cheap, having low-income parents which enabled me to receive the maximum Pell grant during my undergraduate studies, and probably a genetic or acquired lack of susceptibility to the lure of over-spending with credit cards.

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