I Will Teach You to Be Rich: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works by Ramit Sethi

CHAPTER 1
OPTIMIZE YOUR CREDIT
CARDS
How to beat the credit card companies at their own game
You’ll never see an Indian driving a two-door coupe. Really, think about
it. If you have a neighborhood Indian—let’s call him Raj—this guy is
driving a practical four-door car, usually a Honda Accord or Toyota
Camry. However, Indian people aren’t just fanatical about driving
sensible cars. We’re absolutely nuts about hammering down the price to
the last penny. Take my dad, for example. He’ll bargain for five straight
days just to buy one car. I’ve been along for the ride on these weeklong
negotiating sessions with him before. Once, as he was literally about to
sign the papers, he stopped, asked them to throw in free floor mats (a $50
value), and walked away when they refused. This, after he’d spent five
days bargaining them down. As he dragged me from the dealership, I
stared straight ahead, shell-shocked.
As you can imagine, by the time I went to buy my own car, I had been
steeped in a rich tradition of negotiating. I knew how to make
unreasonable demands with a straight face and never take no for an
answer. I took a more modern approach, however: Instead of spending a
week going from dealership to dealership, I simply invited seventeen
dealers in Northern California to bid against each other for my business
while I sat at home and browsed around the internet, calmly reviewing
the emails and faxes (yes, really) as they came in. (For more about
buying a car.) In the end, I found a great deal in Palo Alto and walked in
ready to sign the papers. Everything was going smoothly until the dealer
went to check my credit. He came back smiling. “You know, you have
the best credit of anyone I’ve ever seen at your age,” he said.
“Thanks,” I replied, actually wanting to say, “AWWW, YEAH, I
KNEW IT.” That’s because I was a weird twentysomething Indian who
chooses a four-door Accord for his dream car and prides himself on his
credit score.
Then the dealer said, “Hmm.”
“Hmm?” I asked.
“Well,” he said, “it looks like you have great credit, but not enough
credit sources.” The bottom line, he told me, was that they couldn’t offer
me the low-interest option we had talked about. Instead of 1.9 percent
interest, it would be 4.9 percent. That didn’t sound like much, but I
pulled out a notepad and did a quick calculation. The difference would
be more than $2,200 over the life of my car loan. Because I was getting
such a great deal on the car, I convinced myself that the higher interest
rate was okay, and I signed the papers for the loan. But I was still pissed.
Why should I have to pay an extra two grand when I had great credit?
Most people weren’t raised like me, so I understand that you probably
hate negotiating. Most Americans do. We’re not sure what to say, we get
nervous about looking cheap, and then we look at ourselves and say, “Is
this really worth it?” In a pool of sweaty discomfort, most of us conclude
“No”—and we pay full price.
I have a fresh perspective: It’s not worth negotiating everything, but
there are a few areas of life where negotiation is a Big Win. In this
chapter, I’m going to show you how to go on offense and squeeze as
many rewards and benefits out of your credit cards as possible. You’re
going to start winning against them. And for the first time, negotiating is
going to be fun.
The Usual Credit Card Scare Tactics
Virtually every section on credit cards in every book starts with these
three scare tactics.
Scary stats. According to the Prosperity Now Scorecard, the median US
household credit card debt is $2,241, and the median student loan debt is
$17,711. The Fed Reserve notes that “Four in 10 adults in 2017 would
have to either borrow money, sell something, or simply not be able to
pay if faced with a $400 emergency expense.”

I Will Teach You to Be Rich: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works by Ramit Sethi