IBC vs. Credit Cards — Why Borrowing from Yourself Beats Paying the Bank

Credit cards are easy to use, widely accepted, and come with the illusion of financial flexibility. But here’s the truth: they’re also a fast track to compounding debt. If you’re relying on credit cards to fund your lifestyle, it’s time to rethink that strategy. Enter the Infinite Banking Concept (IBC), a smarter, more sustainable way to fund purchases while growing your wealth. Let’s compare how using your Life Insurance Policy designed to be used for Infinite Banking stacks up against traditional credit card usage.

The Real Cost of Credit Cards

Credit cards are notorious for high interest rates, often ranging from 18% to 25% APR or more. Add in late fees, annual fees, and variable interest rates, and it’s easy to see how they work against your long-term financial goals.

Let’s break that down with a real-world example:

Say you put a $5,000 purchase on a credit card with a 20% APR and only make the minimum payment (as an example, 2% of the balance or $100 per month). Here’s what happens:

• It would take you over 11 years to pay it off.
• You’d pay more than $6,300 in interest alone.
• Your $5,000 purchase ends up costing you $11,300+ total.

Even if you paid it off more aggressively—say over 2 years—you’d still pay nearly $1,100 in interest, assuming consistent payments.

Meanwhile, that same $5,000 into Infinite Banking? Different story.

How IBC Works Instead

With IBC, you use a specially designed whole life insurance policy that builds cash value over time. This cash value acts as your own private financing pool. When you need money, you borrow against the cash value in your policy, not from a bank. And here’s the kicker: your cash value continues to grow as if you never touched it.

So instead of paying high interest to a credit card company, you’re paying yourself back with interest, recycling wealth within your personal economy.

Key Benefits of IBC over Credit Cards

1. Lower “True” Interest Rates
Policy loans typically carry lower interest rates than credit cards, and you control the terms. For example, if your policy loan interest rate is 5%, borrowing $5,000 and repaying it over 2 years might only cost you around $265–$300 in interest, and you’ll retain uninterrupted compounding on your full cash value.

2. No Credit Check or Approval Needed
Because you’re borrowing against your own cash value, there’s no underwriting, credit pull, or hoops to jump through.

3. Flexible Repayment
No mandatory monthly payments, repay on your terms. Skip a month? No problem.

4. Tax-Advantaged Growth
Cash value grows tax-deferred, and loans can be accessed tax-free if managed correctly.

Use Cases: When to Choose IBC Over Credit Cards

• Emergency expenses
• Vacations or large purchases
• Home improvements
• Investing in your business or education

Any time you’re tempted to swipe a card, consider whether borrowing against the cash value in your policy makes more sense. Spoiler alert: it usually does.

Final Thoughts

Credit cards can offer convenience, but at a cost. IBC offers control, growth, and financial peace of mind.

Ready to Say Goodbye to High-Interest Debt?

Start using your money smarter with IBC.  Book your free consultation with me to discuss your options with whole life insurance.

This is not financial advice—this is for educational purposes only, offering a glimpse into a strategy that could unlock new possibilities.