The Stacking Benjamins Show Outsmarting Unintended Consequences: How Good Money Moves Don’t Go as Planned (SB1731)
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Sep 5, 2025 In this lively discussion, personal finance experts Jesse Cramer and Paula Pant explore the unexpected pitfalls of seemingly smart money moves. They shed light on how paying off debt can ironically lower your credit score and examine the chaos that can ensue from misguided budgeting tactics. The duo dives into the sneaky traps of credit card rewards and the unintended consequences of government programs. With practical tips and sharp insights, they help listeners navigate the financial maze while ensuring confidence in their choices.
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Why Scores Drop After Paying Debt
- Credit scores can fall after paying off debt because scoring models like to see installment history and active accounts.
- That temporary drop doesn't mean you're worse off; long-term debt freedom and on-time history matter more.
Don't Chase Short-Term Score Moves
- If you won't need credit soon, don't obsess over a small temporary score dip after paying debt.
- Keep old cards open or run a small recurring charge to preserve average account age and activity.
When Metrics Become Misleading Targets
- Goodhart's Law applies: once a measure becomes a target, it stops being a good measure for behavior.
- Treat credit scores as signals, not the ultimate goal; eliminating bad debt is the real objective.
