Chainsaws and Credit Cards

Chainsaw cutting a log

Post Highlights:

  • Credit cards are powerful, dangerous tools. If you fail to understand them and use them poorly, they can become an endless source of misery and debt.
  • Credit card variable interest rate increases are tied to the prime rate, so as the Fed raises the interest rate, the interest rate on your credit card will rise too.
  • If you’re carrying a large balance, consider taking advantage of a 0% introductory rate on a balance transfer to a different card. But make sure to pay it off within the allotted time frame.


50 years ago, I was putting myself through college working with a tree crew outside of Chicago taking down huge, majestic elm trees. They had been infected with the tiny beetles that caused Dutch Elm Disease. In an effort to stop their spread, the moment beetles were detected in a tree it was removed and burned. Usually, these trees showed no sign of infection.

Not only was a beautiful tree lost, the lumber that could have been harvested was lost as well — unlike the trees killed by the chestnut blight of the early 1900s. While that wiped out virtually all the mature chestnut tress at the time, at least it left behind an appropriately named and  beautiful wood: wormy chestnut.

Because we were taking down trees as quickly as the beetles were detected in them, most were still healthy and robust. This meant they were still filled with sap and water, making them far heavier and harder to deal with than a dead tree that had had a chance to dry out. We were also working in an urban setting, which meant taking trees down that were between houses. It wasn’t just a matter of cutting them at the base, jumping back and yelling “Timbre!!”

The essential tool for this job was the chainsaw. Actually, chainsaws of all sizes. The saw you use to cut the stump flush to the ground is a much larger beast than the lightweight versions the climbers used taking down the top of the tree in pieces. For those, they’d tie a rope to the branch and cut it loose. From there the ground-man would slowly lower it to the ground, ideally avoiding the houses near-by.

Ideally, but not always. I remember the time we roped a large, heavy branch, cut it and watched in horror as it swung in a long arc gathering speed until the butt end smashed into the homeowner’s garage door like a medieval battering ram. That metal door folded like so much tissue paper, although with a far louder sound.  Luckily, the car usually parked behind it was out.

Once all the pieces of a tree were on the ground, they had to be cut up so we could load them into the dump trucks to be hauled away and burned. This required still another range of different sized saws.

We worked six days a week, ten hours a day but the money, at twenty dollars a day, was great. It was hard, physically exhausting work. By the end of the day it was easy to get careless, sloppy.

I did this work for three seasons and almost all day, every day, I was using a chainsaw to do it. I am the only person I ever met, who did this work for any length of time, who doesn’t have a scar or much worse, from a chainsaw. Part of this is sheer luck. I once had the saw kick back and the spinning chain slapped my thigh. It ripped my jeans to shreds, but I managed to pull it back such that it left only a slight red mark behind. It didn’t even break the skin.

But the other, and I think even more important part, was that I was the only person I knew who never stopped being afraid of them. I never lost my respect for just how dangerous a tool a chainsaw is. How one minor lapse, one time, can lead to a world of hurt. In fact, once school was done and paid for, and I quit that job, I never touched a chainsaw again.

Big tree

Still, I loved the work and, when taking down and cutting up huge elm trees, chainsaws are hands-down the best tool for the job. You just had to be very careful.

Of course, I didn’t realize just how dangerous a chainsaw was until I’d seen them in action for awhile. Initially, all I could see was how much fun and powerful they were.

When I left college, elm trees and chainsaws behind, I was introduced to another very powerful and dangerous tool: the credit card. While chainsaws today have numerous safety features the raw, elemental versions I used back in the day lacked, credit cards today seem to have become even more dangerous. Or at least more readily available to younger people not fully aware of the danger. Even as they became more useful and came with greater perks.

In my case, I didn’t get my first card until I was out of school and working at my first professional job. I was probably ~24 years old, and like that first chainsaw when I was 18, when I first picked it up I had no understanding of the danger, only of the intoxicating power.

Fortunately, when the first bill arrived, my older and wiser sister happened to be sitting nearby. I tore it open. I had charged $327.96. That seemed right, and unremarkable. But then I noticed, in large print meant to be noticed, I was only required to pay ten dollars.

“Hey sis,” I said, “check this out. I can buy $327.96 worth of stuff and I only have to pay $10!”

It took her awhile to stop laughing at me. Sisters can be cruel. But then she directed me to the small print meant not to be noticed where it said any balance I carried would be charged at an interest rate of 18%. It was like when that chainsaw slapped my thigh and tore up my jeans, a close call. She saved me from loosing a financial leg (and arm!).

As with chainsaws, not everyone is so lucky in their first encounter with credit cards. Sometimes the damage is deep and takes years to recover from. Some never recover at all. Many should do what I did with my chainsaw back in the day: Put it down and walk away.

But for those who never stop being afraid of them and who treat them as the powerful, dangerous tools they are, credit cards can be as effective at enhancing your financial life as chainsaws are in taking down trees.

In my foreword for her book…

I quote Kristy Shen saying:

“If you understand money, life is incredibly easy. If you don’t understand money, life is incredibly hard.”

So, too, with credit cards. If you understand them and use them well, they are a valuable tool that can simplify your life and yield benefits every time you spend money. If you fail to understand them and use them poorly, they can become an endless source of misery and debt. Using them well is not hard. Here’s the core rule:

Pay them off in full every month and never carry a balance.

With that understood, the right cards offer lucrative signup/welcome bonuses, cash rewards, points for flights and hotels, awesome perks, and are great for everyday purchases. This is precisely how we use them ourselves. With guidance from our friends at CardRatings, and noting that the following are affiliate links that will result in this blog earning a commission if you sign up, here are a couple of the best of the best at the moment:

Freedom Unlimited

Sapphire Preferred

That second card is the one we use ourselves. If you want to see others, or check out what is currently the best choice if you are reading this post at a later date, just hit the tab labeled Credit Cards in the bar at the top of each page here in the blog.

If you are looking to buy a chainsaw, you are on your own.


By way of full disclosure, Card Ratings is an affiliate partner. If you click on the links and make a purchase may receive compensation.


Here’s a compelling read on an important topic…

Navigating Retirement After the Death of a Spouse


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Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.


  1. vorlic says

    Yes, Mr Collins.

    Back in 1999, when I started my degree in German and Italian, there was a branch of the National Westminster Bank ON CAMPUS. They were handing credit cards out like they were going out of fashion. I, like all my peers at the time, signed on the dotted line.

    Unlike my peers, I felt very nervous about it. So, after two weeks I cut it in half, and walked into the branch to cancel the deal.

    Today, my peers are generally massively in debt. Sure, they have a degree (I jacked my course in after less than a year), but I am free.

    Destroying asymptomatic life at great cost? Seems very familiar right now…! But well done for proving that it really is an ill wind if it blows no one any good!


  2. Crew Dog says

    Due to wise advice on the FIRE interwebs, we always use full protective equipment (including chainsaw chaps) when using chainsaws. Likewise, due to wise advice from PF books (back in the day), we always pay our credit card balances in full every month.

    As you say, it’s good to have a healthy respect for the potential consequences of both.

  3. FIRECracker says

    “If you are looking to buy a chainsaw, you are on your own”.

    Bwhahaha. JL, You crack me up.

    Chainsaws are fun, but machetes are even better. A friend once gave me one to help clear some branches from the wild shrubbery and trees on his land.

    Let’s just say he won’t be making that mistake again.

    Love the chainsaw and credit card metaphor. Your English degree is clearly showing :). And of course, thanks for mentioning my book and for writing the best foreword ever!

    • jlcollinsnh says

      Well, second best foreword ever, as folks will see when they read the one you wrote for my new book coming out this fall. 🙂

  4. David says

    I spent 2 summers working at a factory that made log homes. I used a chain saw a lot and also saws with blades ranging from 3 feet to 6 feet in diameter. I noticed very quickly that none of the permanent full-time employees had all their fingers. Fortunately, that inspired a healthy fear of saws. Also like you I was lucky enough to learn the risks of credit cards at a young age. It’s definitely an important lesson to treat credit with respect.

  5. Jon W says

    Great advice. The credit card companies were like vultures when I was in school. I signed up for a credit card from Associates National Bank. I still remember the first thing I bought was flowers for a girl I was trying to date. She ended up being nuts and at some point I realized the interest rate was over 20% and got rid of the card. It took me 9 years and a chapter 7 bankruptcy to get rid of my credit card debt. Now, 23 years later, like your chainsaw metaphor I use Cards as a tool for the rewards but usually pay them off even before the bill arrives.

  6. FMT says

    I don’t like the new “Buy now, pay later” programs, sure you won’t rack up as much debt as a credit card but maybe people, especially teenagers aren’t aware of the dangers. (I am guessing you guys have the likes of Afterpay now? In Australia, every shop has some form of buy now, pay later)

  7. Illia Kyselov says

    Thank you for a very interesting comparison, a chainsaw and a credit card are very interesting)) Perhaps not everyone will understand this right away, but the comparison was chosen extremely well! The article has a philosophical subtext)

  8. Douglas says

    Hi, Mr. Collins. Just wanted to let you know that we have incorporated your blog and book into our son’s home education program as part of his financial education studies. We really enjoy your writings and have learned more from you than any other writer on the subject of investing and finances. “The Simple Path to Wealth” is the most important book on investing and finances our son could ever read and study and we know it will be of great benefit to him. We appreciate you and thank you for helping us to present the subject of investing to our son in a way that is very easy to understand. Your blog and book provides the firm foundation that he needs to build his financial knowledge upon.

    • jlcollinsnh says

      Thank you, Douglas…

      …for the very kind words. They’d make a wonderful Amazon review for my book, if you are so inclined. 😉

    • vorlic says

      Likewise, Douglas. Great teaching material. Ours haven’t read the book yet, but it colours a lot of our “teaching moments” with them.

      We took the plunge last year with home-educating them (we kinda always wanted to, but this global psychosis motivated us finally to “take them out”).

  9. Steve says

    What’s even more crazy now is the places that are allowing you to compound that credit card debt. I was in Chile a couple years ago and everywhere I bought something, the vendors would ask if I wanted to make the purchase “con cuentas”. I asked them what that meant and they explained that instead of them billing your credit card all at once, they bill a small amount each week/month, but at a higher price. People are living so far on the edge that they don’t have enough credit left on their cards to pay all at once. Scary!

  10. David Crabill says

    We got both the Chase Freedom Unlimited and Sapphire Preferred cards three years ago. This year we finally cancelled the Sapphire Preferred (converting it to a Freedom Flex card is also an option), because it wasn’t worth the $100 annual fee to us, especially with the Freedom Unlimited card improving and now coming with extra dining benefits. We got the Sapphire card right before a big trip and locked in the large signup bonus, so we probably made some money on it overall. I’d say the Sapphire is mainly good to get if you travel a lot, especially internationally.

    I appreciated this article and the analogy. Fortunately I never had to learn the lesson the hard way!

  11. Harvey says

    Hi Mr. Collins.

    Great story, and great analogy of credit cards being like chain saws. The marketing from the credit card companies on the free perks, points and benefits also don’t help. My wife and I know many youngsters that sign up and have multiple cards simply because of the perks and rationalize that the cards pay for themselves. In order to redeem those benefits, they will feel compelled to buy stuff they don’t need. This self-inflicting pain on top of the high interest rates results in them never being able to save any money they earn. Also, don’t get me started on “Buy Now, Pay Later”. Many booby traps today for those that are not financially literate…

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