Why Are Credit Cards Bad? I Never Pay Interest And They Make Me Money.
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Nobody is using a credit card to get ahead in life. That is what your career is for. A credit card cash back rewards could equate to a free meal at a nice restaurant once a year. Not too shabby. Just don't be financially irresponsible and stick with your budget when going to a store or shopping online.
One free meal at a restaurant is very shabby LOL
if you lose your job you will be in debt!
One free meal at nice restaurant per YEAR. damn so you will risk having to go into debt and have other payments that come with a credit card like surcharges and annual fees for one meal
@@testaccount3880 By using a credit card for the last 12 months, I now have enough money to travel to anywhere Europe back and forth 2 times with my gf. I also get access to lounges on the airport so I dont have to use money if I'm hungry. I also have bought two good quality t-shirts with points earned through my credit card and much more. I do pay an anual fee thats roughly 360$, but in total I end up saving a lot of money. I'm also much better secured when I shop online or anywhere really. Its without a doubt worth it.
I failed to hear the guy say he was looking to get rich using credit cards.
ROMEYYOUROCK then don’t listen to him and keep doing what you feel works for you. But I’ve been debt-free for over two years and I’m never going back again
A credit card isn't debt unless you let it become debt
Ruthless Lawn Gnome lol people don’t get only fools rack up huge debt on a credit card. Just spend what you have and pay in FULL before the end of the month it’s literally not that hard.
@John Lester What would have been your solution if you didn't have revolving credit to rely upon when you needed it to replace your truck, your daughter's engine, and your heat pump? Unless people are at a certain income level, it's difficult for a family to handle multiple expensive emergencies at the same time without using some kind of credit or loan.
Kellz exactly people just need to stop over spending on the credit cards treat it like cash or a debit card and no issues
GRAHAM STEPHAN
I don’t know how he doesn’t ever bring up the most important point and that is that credit cards give you the chance to use money you don’t have which will always be tempting and will almost always bite you at some point or another
RIght!!! Or it is easier to spend with a credit card thus the reason not to get one.
Self control is key it doesn’t work for everyone that is why it is good for people to have options
They don’t “give” you the chance to use money you don’t actually have. They can’t see your total balance in your credit card. Only thing they care about is that you pay off the amount that you charged from them. It’s up to you to spend wisely and not go out of control
That's how early on I ended up with 4 credit cards that were far out of my league to pay off and had to make settlement offers on each of 'em. The upside compared to the downside is far too lopsided, which is a common theme with student loans. At least student loans can launch your career, a car can get you to work or allow you to do driving hustles, and a mortgage lets you become a home owner while credit cards pillage the unfortunate and less disciplined to give to the minority of good credit card users.
He’s addressed this many times, but I’ve always found the argument lacking. Nobody is claiming that credit cards help build wealth, just that if you use them responsibly you can effectively get free money. This is true, it’s just that most people don’t use them responsibly. Every time it comes up, Dave always reframes the issue to avoid addressing the argument. Don’t get me wrong, I think Dave helps a lot people. But his plan is undoubtedly designed to help less-disciplined people (like myself). He can’t ever be caught saying credit is ok because he’s worried that people would use that to rationalize buying things on credit that they wouldn’t buy in cash.
It's not about a lack of self control. Credit cards are about using a structure the banks created to control your money. At least come up with your own money structure.
cdkx start listening at 4:40
Well said. Very well said.
The only topic Dave Ramsey is dead Wrong.
Completely agree. I have had a credit card since 2003, paid it off in full every single month (translation: zero interest), and received several thousand cash back. No, the cash back doesn’t build wealth but it’s hard to argue that isn’t a pretty cool perk
Credit cards are for smart,disciplined people...The caller is one of them..If you dont know how to handle the gun ,dont buy one..
HAHA! That's funny, credit cards are a poor peoples toy. I don't see multi millionaires like Dave Ramsey, or Mark Cuban vouching for credit cards!
Yeah, sure, okay lol.
MrJimmy3459 I’m sure they have them. Probably the black card by American Express.
MrJimmy3459 thats because ramsey is giving advice for the everyman. some can handle cards, most cant
@@MrJimmy3459 Is that why there are credit cards that are only issued out to users who make a six digit salary? A poor people's toy? How much hate is in you? If you were rich you would've purchased your blood pressure pills and comments like that would have never been made
Dave has been bitten by the credit card snake. And he is bitter.
John Ward and you are stupid idiot
There is a credit card boogeyman around the corner if you make the wrong move. Better play your credit card hand right. lol
@@thetruthnothingbutthetruth8338 and your incredibly rude.
And now he’s a multimillionaire. How about you?
In a nutshell.
Hi Dave and team! I have finaly managed to cut up and stop using my creditcard! I have managed to follow your system and cut my debt down from 15000$ to just the home mortgage in about 1 years time! Thank you so much for your help and your show!
His answer is terrible. No one ever claims to build wealth from credit card usage. It's a small perk for just spending your normal spend. And if you play it right, you can score flights to Japan and more for free, like me. I guess he's gotta keep up his anti-credit card because his target audience was terrible with credit anyway, just like how an AA counselor couldn't just say, "Welllll, a half glass of wine is ok with your meal."
Way to completely ignore the essence of his response and make a wholesale fool of yourself. I will make it simpler for you, since you're not able to follow a thought from start to finish. *Statistically*, credit cards have been *proven* to lead consumers into irredeemable amounts of debt, this has been shown time and time again, the stats are there for all to see. Statistically, credit card companies KNOW that consumers WILL NOT by and large "cheat" their system" to a 0 loss 100% profit margin, because, once again, credit card companies are divinely aware of consumer spending habits with credit cards, so they don't to fear the marginal percentage of players that do not fall into their trap, you're considered a tax write off. The other 99% of people fall right into the credit card companies traps. *YOUR* understanding of his response is the only thing that's TERRIBLE.
MMMMmyshawarma, whats your net worth? Probably 20k
Quit being dumb. Cash is King, debt is dumb, and a paid for home mortgage takes the place of the BMW of the status symbol of choice. No one cares about the plastic in your pocket.
What do u use credit cards for
MMMmyshawarma what do u use credit cards for and how do u use it
Thank you Dave for all of your videos and tips. I've been listening to you on and off for the past few years when I would ride in the car with my dad. Just found your channel here on TH-cam and I can't stop watching. At 19, I'm just trying to get as much knowledge as possible before I go off into the real world. Keep up the good work!
Stupid logic to compare credit cards to smoking! A credit card is for convenience. Nobody uses a credit card to gain wealth.
Why not use a prepaid credit card?
usnftc why not never use a credit card and use cold hard cash instead?
"Nobody uses a credit card to gain wealth."
And yet we are one trillion dollars in debt
I beg to differ with that statement
Because cold hard cash is gone the second you spend it. Use a credit card the way it's intended to, and you can literally travel the world for free. Been doing it for years. W/o credit card rewards, those travels would've set me back tens of thousands of dollar or more. That and a public toilet seats carry less germs that the average $20 bill... just saying
Deniz Wesley You can travel the world by putting money into United's gift registry. If you can't prepay it don't do it.
So all bills in my house go to a 2% cash back card. I have yet to spend "Extra" power and water to get "Free" money back.
Nope, i just get free money back and save when i can.
Dave's 100% anti CC policy is for those with 0 self control
The only thing he is right about is if you are spending with a card, you are more likely to spend more. So sure, it could be bad for some people. But there are plenty of people in the world who have some self control.
I actually called to close one of my accounts the other day, got put to their "don't close your account dept" and i was given 1000$ credit once i spend 1000$ within 90 days. Took me 2 days to spend it, i just pre paid on my water bill. 100% gains? I'll take it.
The people he deals with do not have self control. That is why he is like thinks this.
Yup.
It's not about a lack of self control. Credit cards are about using a structure the banks created to control your money. At least come up with your own money structure.
They bank on you slipping up. Even if you win you don't win big and if you lose you don't lose small.
I do the exact same thing, literally how can I spend more when the bills are a set amount??
If they make you spend more than you would in the first place... you lose money
lol all these people talking about credit cards like they are not bad. think about this logically. Why would I give you money to borrow my money to use my credit line? How does that work? The target person is the 98% percent who rack up so much and can't pay it off every month because then I get interest. If everyone did the scenario this man lives in then it would be a risk to issue credit and pay people cash back and airline miles because they would be bleeding money. those of you who are making money off credit cards are an exception not the rule. The reality is that most people DONT pay them every month. Its better for people to be taught to avoid them in the first place for their safety.
That's true! There are people who are the exception and not the rule. They manage credit well and stay disciplined with money. However, most people live on credit as a way of life. I have two cards but hardly use them to cover an expense. I admit it can be tempting to pull out a credit card especially when you see something you really need or even want. I believe Dave is against any type of credit ( except a 15 year mortgage ) because of his personal experience on what he went through. I don't blame him for that, but at the same time, those that handle credit cards responsibly, keep up the good work. Those who run up debt and charge on different purchases. stop where you're at and get on a budget. Credit is not right for you at this time. You need to get out and stay out of debt.
Brilliantly said. Most people do not utilize credit cards the way the caller does. I am like the caller, but I purposely spend cash on certain expenses to attempt to keep myself in touch with the realities of my spending.
The psychological affects of swiping versus going into your pocket and pulling out bills is true too. For me, I made specific rules that I adhere to prevent myself from having to carry balances on the cards. It is important because as humans we will easily categorize things that are virtually universal "wants" as "needs"
I use my credit card to pay everything but soon as it clears in 2-3 days, I pay it off with my bank account. Not by any means getting rich off of it but it’s free money adding up every time I use my CC.(1,3, or 6% cash back depending on type of merchant) But you have to have discipline and know how to manage your finances.
No it’s not lol we are going more and more in a digital age you should hide inside your house never walk outside there might be danger awaiting around every corner life is risky. The issue just like the anti gun fanatics simple people need to learn control sometimes the people who may stumble a bit come out better and appreciate saving more after an incident with a credit card still it’s simple use it like cash or a debit card and your fine. The amount of benefits if you spend it on just normal bills that you would spend anyway is great and its a nice buffer from a thief and your actual account if they steal your debit info that is directly tied to your bank whereas a credit it isn’t.
The bottom line is the credit card companies are smarter than you. Your hoping nothing happens to your life when you borrow their money and you avoid paying interest. Some people that gamble win, but most lose eventually. This isn't brain surgery and the lenders are not your friends. Dave is 100% right. Just stay away from them.
Brain washed... People are in debt because they lack discipline.. credit cards companies are not smarter.. you serious?
Horizen, It's not about smarter but how disciplined are you to ONLY spend on your credit card that you can pay off that month. If something happen in your life, where will you get the money to pay for it without a credit card? Same thing.
Exactly. All the rich people he meets don't use credit cards because they avoid debt. The key to having money is to not have debt, and a credit card is a debt card in reality.
@@KTSpeedruns lol most rich people have debt and most rich people own credit cards, you dont become a multi billionaire by paying cash for everything, hence why most business get loans
Summary: the return isn't worth the risk.
STEVEINCOLOR PRODUCTIONS there isn’t any risk. You put your bill on direct debit so it pays automatically and you already have one months money set aside to cover it, there is literally no risk, in fact there is less risk as credit card companies help you out in product disputes 🤔
@@hitchjack But you spend more using a card. It's a proven fact.
@@jimroscovius not everyone does. When I have $100 in my wallet, I tip tip tip away. If I use my card, I just assume I'm broke and don't spend. Everyone's different
@@eeeeeeeeeeeeeeeeeo You and I aren't everyone. McDonald's starting taking cards after studies show the average person spends 17% more when using a card. Paying cash, they may not upsize, but when using a card, it's "Sure. Upsize, and I'll take a Shamrock Shake too!" The temptation is there.
People are not understanding. It has been proven time and again that you spend more. I'm sure there are the highly disciplined .001% that spend the same as if it were cash. That's why Dave is so strict about it.
You're suppose to use your credit cards for emergencies only (gas, a new tire, and things that you need not "WANT"). If I can't buy things like TV's, phones, and etc with cash. I'm not fixing to swipe my credit card. I don't care how bad I want it.
I love how Dave doesn’t allow counter arguments
who thinks theyll get rich with a credit card? the upside is getting some benefits for money you're going to spend anyway
The ONLY time I use a CC is when purchasing online from a vendor that I don't trust 100%. You never know where that CC # goes when entering it into an online form, and I'd rather not have to fight to get money back (out of a debt card), vs fight to not pay that CC bill in the first place.
This is the first time I've ever heard Dave Ramsey actually talk to someone about credit cards.
I will keep my credit card. I don’t care about studies. I am disciplined. I never carry a balance. In fact, credit cards keep me disciplined because I have a detailed record of transactions that make it easier for me to track and analyze. I also don’t do points. I do cash back.
Sure buddy
@@SummeRain783 Same here. Never had a balance, never paid interest and I'll be heading on a round trip vacation to Hawaii next month using my travel rewards.
@@mateus8676 doesn’t mean you’re not spending more
@@SummeRain783 Except I'm not spending more because I have a monthly expense budget and I monitor my spending.
You have a very limited understanding of how the system works
Reminds me of as a kid, mom, shopping at a "one day sale". Would come home and say, "great news! I saved $300!". Dad's reply was always, "yeah, but how much did you spend? You spent money. You didn't save money".
The credit cards companys always win when you pay with a credit card even when you pay in full. They get a 3% fee from the merchant and give you 1% back they still make 2% and get there money back in less than a month. If you don't pay it back right away they get 18% interest sometimes more.
*their
And he didn't mention when a business gets hacked like Target a few years back. My credit card company tried to stick me with the biggest charge.
I actually enjoy using my credit card to pay monthly bills. In no way do I consider the usage as a catalyst to get rich. Yet what I do know, is that if one uses a cash-back credit card responsibly, they could earn more money than what's offered in a traditional savings account, at a mere 0.02%. An account whereas I house my emergency cash flow. The credit card companies don't care about the pennies we're earning with a 1.5% rate. It's the consumers who are grossly irresponsible who are footing the bill. I am very responsible, with several money accounts. Even an investment and two retirement accounts. I'm very comfortable with my ability to handle credit responsibly, with a 796 FICO score. I'm not one of those average Americans who live check-to-check.
Dave Ramsey my brother I love you, but building wealth is not the only reason an individual might get a credit card. I am new to this country and I cannot do anything without credit (a credit score). The credit card gives me a way to “begin” to build credit in the event that I need that report to aid in my journey in building wealth. In no way am I under the impression that redeeming points or cash rewards from a credit card will make me wealthy. Instead I put my trust in the 7 baby steps to catapult myself toward financial freedom. Because I know how intelligent you are, I believe you are directing this lesson toward irresponsible persons who use credit cards. If so, I just wish you would say that.
I have a credit card, that's sitting under drawers collecting dust.
I had it for the time before I had an emergency fund.
Some ppl are dumb with CCs and some aren't it's all about discipline pay your dam bills lol
U still become broke when least expected
Depends on the individual and the card.
How exactly does a person become broke when least expected?
If things turn for the worst, and u cant pay your credit, thats when its game over!
Shafir Iqbal
Read my post again. I said I prepay my card before I buy. I used my cards like a debit card before there were debit cards.
Heck I have an excess of around $200 in my AmexBlue account right now. If that money sits in there past 6 months they send me a check. Can't repay debt if you don't have debt to begin with.
I'm not blessed,I just went to aeronautics school and later got a degree in metallurgical engineering degree in the Air Force.Anyone could have done what I've done if they were willing to live in a car at times to pay tuition.
Yes things can happen that's why I have medical,dental,vision insurance,umbrella,etc..
And a $70k primary emergency fund and $420k secondary emergency fund. This is what happens to your emergency fund when "things" don't happen for over 25 years....it grows.
And I own several thousand shares of Visa and MasterCard and get growth and over $600/month in dividends from them.
And there are many of us people out there. Ask Dave Ramsey.
Heck Tulsa alone is full of millionaires that live in a ranch style home and drive a Toyota.
Read the book "The Millionaire Next Door".
I'm that type.
We are stealth millionaires.
BlackWorldTraveler Well your blessed. Enjoy before u die👍👍
Bottom line: Credit card debt is bad debt because of its high interest rates and low minimum payments, and the fact that it isn't used to buy appreciating assets. Use your credit cards for the rewards and other benefits, but pay the balance in full each month. Ty
think about it..if you are able to pay off full balance each month on credit card why not just pay cash for what you charged and be done with it? if you lose your job suddenly etc... one less bill to worry about.
excellent, Dave spot on!
Dave, you are 100% wrong on your stance with credit cards. Responsible use of credit cards is one of the best ways to build credit.
Probably 90% of people aren't able to buy houses or other living units with cash because saving enough cash to buy upfront is almost impossible for the majority of people. If people don't use credit cards, how're they supposed to build credit so they can one day open a low-rate mortgage for a house? Good luck getting a decent mortgage without prior credit history.
I have two credit cards that I pay off every month, so I pay no interest ever. I buy only what I could afford to pay in cash just with my credit cards. I earn points for every transaction and get free money back with zero work required. With the cash back I get, I've been able to pay for weeks of groceries and gas at no additional cost. Plus, I establish great history so one day I can get a great mortgage.
Dave's advice for credit cards is very narrow-minded and only for people who act like irresponsible children who can't manage a credit card. Not all of us are multi-millionaires like you who can afford to buy a house in cash.
In short, credit cards are a great tool when people use them responsibly. Instead of criticizing credit cards, you should criticize the irresponsible people.
How can i spend less cash paying my utilities and telecoms with cash vs plastic?
250$ in cashback a year, save debit card transaction fees, credit card pays itself from checking account at ends of the month, FRAUD PROTECTION, chargeback possible for not delivered stuffs.
Dave's point is $250 a year is nothing. It's not even worth getting excited about. People in debt need to forget about credit cards, probably forever, or at least until they're years removed from their debt. I was in debt 12 years ago, almost to the point that I considered bankruptcy. Paid it off and learned from the stupid behavior (this was before I heard of Dave Ramsey). It helps that I married a saver, she really helps me. It was at least 5 years before I even considered applying for another credit card. I have credit cards now for the rewards, I use them as you describe, I get maybe $500 a year out of them in rewards - again, nothing to get excited about, but it's something I wouldn't have gotten otherwise. When someone in debt asks me for advice, I tell them to cut up the credit cards and pay them off just like Dave Ramsey does.
How are you supposed to build credit for a house if you have no student loans and bought your truck cash. I got 2 credit cards to build credit for a house. I pay them off in full every month.
Exactly. Dave gave a terrible answer. Just because you use a credit card does not mean you will be in thousands of dollars of debt shortly after. Just use your credit card and pay off the balance before the end of each cycle. If you don’t have the money in your checking account then DON’T use the credit card. Simple
@@RodrigorReyes123 Credit score is a distraction. You need a score so you get more debt? What's the point? Make a good income and do proper budgeting. Otherwise, you're doomed.
I wonder if the caller is married with children. Want a mess? Have an open credit card, and throw in a spouse, and throw in some kids. maybe a dog, a house - you've got a lot of areas in life that can quickly get the credit card out of control. This guy sounds like he is single with no kids, so the only variables he has in his life to worry about are his own. I have 3 kids - so I have an adult spouse and 3 kids ALL with their own variables and things that happen to throw a wrench in the budget on a regular basis that can quickly make a mess of the credit cards - and that is exactly what happened to us.
This is a good point I've never considered
Married with Children... great show.
*Sort your budget out*
I am 28 years old with no girlfriend at the moment but because I have had great financial habits and coaching from my dad, I proactively worry and prepare to teach a wife healthy financial habits, to teach kids from an early age healthy financial habits. I don't even have a wife but I have researched Smart Money, Smart Kids by DR and RC because I am not an idiot and can prepare for "Variables" in life. We make plans to teach our spouse and kids all kinds of things such as religion so why wouldn't healthy finances be in there as well? We prepare for the unexpected with insurance so why didn't you prepare on a wife and kids without healthy financials habits. BTW this caller was an elderly gentleman from the voice.
+Veerendra Jadhav unfortunately not all of us had good financial coaching when we were younger and started off in the hole especially with student loan debt - hence the need for the Dave Ramsey show. Yes it's nice to say prepare for everything but major things happen that can sometimes gut your savings such as medical bills or job loss or home expenses. Yes the goal is to have the emergency fund fully funded to take care of these things but when you're behind and something happens that's when the debt happens. And you can't "teach" your spouse like a child - sometimes things happen man and life never goes exactly as planned. I had a few years of deep clinical depression - there was nothing my spouse could have said to get through. and it wasn't something either of us expected
I did the same thing as Bob. It was nice...until I realized that Dave was right about the fact that I might be spending more on the credit card than I would spend using cash. For me personally, it is VASTLY more difficult to spend within my honest means when I'm spending on plastic instead of cash. My psyche is my enemy when it comes to plastic. So I was always paying it off and never paying interest (and I got lots of perks). But I was also never making any financial progress toward long-term goals. Pick your poison...
That’s literally a you problem if you can’t control your spending on a card vs cash
We’ve had an AMEX that we pay off monthly for 10 years. No issues. If you don’t have the discipline to do that then Dave is correct don’t carry a CC
Dave is a very emotional man who is a self-admitted big spender. He had no control over his risky spending and investing, then when bankrupt. His is over reacting to credit cards. He teaches to the lowest common denominator. 30% of people pay their cards off each month, 30% don't use their cards, The other 40% thinks Dave is brilliant on his firm belief of not owning a credit card. If you don't have self-control, don't own a credit card.
Eric B butthurt credit card user
Eric B if you say so
So 40% accounts for the billion dollars of profit credit card companies make?
@@aitch1975 Only some of those 40% it's like lottery. Most people play and lose, but some win. Lottery is all luck, credit card game is knowledge and discipline. Both knowledge and discipline you can grow. Luck grows and disappears on it's own.
I feel like it's more 90% of people who use credit cards get screwed over with credit cards. And like 8% who either break even or gain a minuscule amount out of credit cards. 2% probably are the ones who are actually gaining the system
Ok Mr. Dave Ramsey..what about checking and savings accounts that waive maintenance fees if u have a credit card with the bank? If that isn't used would this be an exception in your rule book to avoid $15 monthly maintenance fee that the bank would charge otherwise?
For me, using cards activates the pain sensors in my pain when I use it just like cash.
I am trying to buy a house and someone told me to get a credit card to build credit & just to be on time with the payments. Is that dangerous??
Ana Duarte being on time with payments isn’t the only issue. People act like they’re safe just because they don’t pay interest on the card. The real issue is the psychology. Most people spend more money when using credit cards. If you use the card only for necessities, then you should be fine.
Dave: no one ever claimed to have gotten rich through credit cards. Don’t know why you think this. People can benefit, however, by sticking to their normal spending and earn perks like a free vacation each year or a month of groceries covered by credit card rewards points.
Basically, here is the problem, too much temptation to use money you don't have,to such degree that the benefits doesn't outweigh the risks..
I hope sir I listened to you before. I will try to finish my payments on my 2 cards.
Did he say "ripping off the credit card of one month of the interest of my purchases..." Lol what? Awww poor credit card companies. What a crazy argument.
I pay my bills on time 100% of the time, so credit cards don't worry me. If I do business with a small business owner, I haggle the price down with them by offering cash because I know all about the costs they face with people using credit cards all the time.
I think the point Dave was trying to make with people spend more with plastic in relation to this guys call, was even though he is not paying interest, he may be buying things that he would not necessarily buy if he was using cash and did not have the card, he may be making purchases just to get the credit cards perks, that he would not initially buy without the credit card, thus meaning more money out of his pocket, even if he is not paying interest, and that may end up being more money lost with the extra purchases then he is getting back with the card perks, just my take of Dave’s response in regards to people spend more with plastic
Credits cards offer extensive fraud protection, unlike a debit card. That is the main benefit of a credit card and he is totally clueless in his answer.
false. it's federal law now that credit issuers of debit cards (ie visa, mastercard, discover, etc) MUST offer $0 liability fraud protection. what you said was true maybe 20+ years ago. now, federal law requires them to extend fraud protection to debit cards.
I used my points from my Chase Sapphire Reserve card to pay for a round trip business class flight on Etihad.
I saved that money by not flying 😁
I don't understand how there is no upside when you can get 6% back on groceries and 3% back on gas. My Amex will give me back(save) an additional $300 a year.
Because you have to spend money. Why not invest your money into a Roth IRA and you would be a millionaire?
@@Convexhull210 so instead of buying groceries and gas, he should put both into IRA and not eat or go anywhere just?
Haiming Xu who needs a credit card to buy groceries and gas?
Matt Brown well you don’t NEED anything. I find it time consuming and inneffective to carry around cash and coins to pay for gas, and most people don’t use cash as well. So instead of earning 0% cash back on gas, why not earn 3 or 4 or 6%? do u hate money that much?
Haiming Xu I don’t go into debt to get money back. I put my money in the stock market and funds.
I travel alot and I have a American airline loyalty program credit card and once you become a platinum member your coach seats become first or business if they have a open seat
You're not going to get rich from making the most of the interest free periods on credit cards. If you're smart and disciplined you will make every dollar count more though. For someone who says that every dollar in your budget makes a difference to say they credit cards can't help you is crazy. They hurt most people, and that's what they're figures are based around- some people are still better off with them. It doesn't make a huge difference, and it's not going to make you millions, but it could save you a little on your mortgage.
Getting rich has nothing to do with it? Imean why would I pay with a debit card when I can just do it with a credit card and get 1% cash back on everything.
You can even get up to 5% cash back plus welcome bonuses
Exactly. $500 a year for doing what I would do with a debit card and pay no interest. We’re winning !!!! We’re not spending more to get more. It’s just how we live right ? Lol
i agree you spend dramatically less if you only use cash
I think at the end of the day Dave just hates credit card companies for being the expensive middlemen they are, regardless of whether or not the user is intelligent and disciplined.
Credit cards are risky, even for a disciplined customer, like myself. I paid off 3 of my 4 credit cards and one more to knock out by this fall. Your best bet is to use a charge card. It reinforces your discipline to not spend more than you can pay back by the month's end. Credit cards are way riskier as they accrue interest and fees on the slightest balance that's left in your statement.
How about thos, using certain credit cards for perks such as extended 2 year warranties on electronics, now those are very useful!
If you spend credit card on stuff you need and getting back some cash for it, it is not dumb.
I used my credit card for groceries, clothes and metrocard and I get back cash .
Never paid any interest.
I paid off every month.
Picking up loose change on the floor won’t make me rich either but I still do it.
krogdog found money isn’t the same as spending extra to earn a little cash.
apple88cc channel what he was saying is him going about his life normally and earning money is much like picking up change
I have business and my yearly expenses run north of 100,000 dollars a year currently. And I use my 2% cashback fidelity card and I love it because I get roughly $2,000 cashback every year. According to the IRS money from cashback is tax-exempt, isn't that great. So if I put $2,000 a year in "good growth mutual funds" in my Roth earning DR's patented 12% return for 30 years with inflation of 3%. I will end up with north of $100,000 dollars of completely tax-free income. No tax going in, no tax on growth, and no tax on withdrawal. Unless 100k is nothing to some of you people.
Its true for the majority of the people they have no business handling snakes but for the selected few those rules don't apply otherwise we would never have snake charmers, snake catchers, or wildlife control.
+typeav what kind of delusional doomsday conspiracy nutjob are you? Nothing is going to happen to the retirement funds, if the law changes ppl will be grandfathered in. SS might lose steam but some forms of it will be there. And yeah I will easily retire in 30 years. I love what I do and I do well at it. those were just projected returns from my credit card Cashback. otherwise I fund over 1200 dollars PER WEEK into my retirement funds. I could retire in 10 years if I wanted to.
Get that type of talk a lot from some people who are not doing well financially.
I assume many are not happy,deep in debt,and gave up so I don't say nothing else.
Even my 94 year old mom heard the dooms day talk through the years and find it amusing.
Veerendra Jadhav Bravo. Well said
What happens if you have life threatening emergency and you use the credit card max ??
Cash back can't fund a roth ira. Roths can only be funded by earned income aka salary
1. I use my card for work expenses and get reimbursed. My card happens to build travel rewards.
2. For my personal use, I use it like a debit card. So, when I get back home, I transfer the balance.
Obviously, he has to go so one sided for people who don't have the discipline. But, don't pitch it like the whole world falls into the lack of self control pool.
I had a hefty car repair not too long ago. For some odd reason my rent shows up as redeemable credit. Car repair was free.
I only see them as tools & mental excercise to restrain me from buying so much cause i hate paying large full amounts by the end of the month
How do u make hotel reservations without a credit card?
Debut card?
I have a credit card and never carry a balance, when used in this way there is no downsize. I get credit is a slippery slope for a lot of people which accounts for Dave’s zeal but there are plenty of people who use and never carry a balance and unconcern whether the pain centre of the brain is activated...
I use my credit card for gas and bills then pay it off immediately nice way to build your credit rule of thumb for me is only spend what you have in the bank so you can pay it off immediately
In Australia, you can live without a credit card and I have met so many people here even in the city who has never touched one in their life. People don't even talk about credit points here. Sadly as McDonalds, basket ball, RAP and all these American stuffs started coming here, so does credit..
Amen to the last line!
If you think logically as to what Dave says about using a credit card, there is no advantage to using them. Even if you pay your balance every month, the credit card companies don't like that, so they tacted on an extra 2% fee if you buy with a credit card, they don't give you free money.
Not sure what 2% fee your talking about? CC companies charge the vendor to accept a card but not the consumer. Also yes there are some cc that have annual fees but there a many that dont. Again to me credit cards are like loaded guns. They are very dangerous and most of the time you dont need them. But in specific circumstances you may need to use them.
I don’t use credit cards for the points or any of that nonsense, the upside to credit cards is that you build credit score which is a pretty big upside. It’s not hard to stay disciplined, just don’t spend money if it isn’t in your account simple.
This is Dave Ramsey’s philosophy people. That’s it! I’m sure millionaires use credit cards; in fact there are classes of cards that are specific to high net worth individuals. Use them responsibly; if you can’t stay away from them like Ramsey advises. But if you are capable as this caller seems to be, don’t get so wound up in living your life by Dave Ramsey’s rules. He’s not God.
So in other words credit cards are bad if you are irresponsible..... however if you are smart enough to get one with no annual fee and don't pay any interest then it can be okay.... the cash back would be nice
Dave has to realize that we're not all millionaires and credit card rewards mean a lot to us cuz we're not rich
It's 1% cash back for most cards. Meaning you're charging $50,000 to get back $500. So you can't have it both ways - charging $50k a year on a credit card, paying off the balance in full each month, using your debit card or cash to pay for everything else you need, then saying the $500 cashback reward is truly significant because "you're not rich."
Yes, I agree that rewards can sometimes be low but if you use your credit card normally and buy things that you would normally buy with cash the rewards can add up and you can get free flights. Flights are expensive so free flights mean a lot more to us than they do to rich people.
There are apps that allow you to get cash back and bonuses with a debit card instead of a credit card.
I want to explain why credit cards are a good idea and a bad one. They are a good idea if you know how to spend correctly and pay your bills on time. If you want to ever buy a house then you need one just so you can build up that credit BUT you need to pay all your bills on time and spend the money responsibly. The way to use a credit card well is to just pay for the things you would normally pay for like gas or a soda or something that way you get the money used up without over using it and owing money or under using it and owing money. Then all that’s left is to keep track of how much you spent and have enough at the end of the month to pay for it. What makes it a bad idea is if you can afford to pay for it at the end of the month or can’t spend responsibly. That’s about it and if you can’t comprehend how to actually use it correctly don’t use it at all because your brain probably isn’t much larger than a peanut...
Credit cards are a great instrument BUT you have to use them correctly. And by that I mean do not carry a balance over 30 days. For years now I've had two cards and have been using them as "charge cards". The difference between credit and charge is that charge cards are 100% due within 30 days. You pay them off every month and at some point in that month there is a zero balance and you avoid interest charges. Neither card has a user fee fee for their usage. The issuing card companies collect a 'merchant's fee' from the sellers who are set up to take their credit cards. That's fine. 99% of merchants accepting credit cards will charge me the same amount whether I use cash or credit card. There are no disadvantages in using credit cards as charge cards. In addition to being convenient and having perks it also has some layers of protection. Using cash is risky. But it's best to use cash if you're irresponsible and impulsively spend. So, credit cards can be a wonderful thing and in the wrong hands they ruin people's lives.
Should you pick up a 5 dillar bill of a ground if you see it?
Dave: no because i know absolutely no one who became a millionaire by picking up money from the ground.
Stupid logic, people who advocate for proper use of credit cards do not make an argument in the slightest that its a tool for becoming a millionaire.
people have made buckets of money on you tube views draw your own conclusions here.
I use my cc to buy gas for my car. If i would have used cash the total would not be cheaper. In fact, the opposite happens. I get points that add up at 5% that i redeem for usable gift cards. Plus im building credit. I had excellent credit when i bought my first house. These are plusses that you failed to mention.
Craig Reustle sallie mae card was a beast. I got a 2% back unlimited, 3% back groceries, 5% rotation card, and a travel card
Craig Reustle you don’t need a credit score and cash back is a joke.
Matt Brown how is free money a joke?
Hammer329 - because there’s no such thing as free money. You have to spend an enormous amount and pay interest to get a small amount back.
Matt Brown not if you stay on a budget and pay it off every month
We're all irrational, emotional, imperfect human beings and at some point or another, we will be tempted to swipe for unnecessary intended expenses or the card will incur unauthorized expenses from theft.
Willpower is overrated. One of the best ways to stay away from debt is to don't own a credit card.
The Dave Ramsey show what is your opinion on Bitcoin kodakcoins and an implant ? Is this debt?
What you do is you set your bills to charge to your card and you leave the card in a drawer somewhere. Then at the end of the month you only have one bill to pay, which is also paid in full automatically because you set it up that way. And every $10,000 I spend I get $165 I can transfer to my brokerage accounts and buy more mutual funds.
However I would say if you're getting out of debt, get rid of the things and learn to live without them for at least two years.
Well done. It's about scraping to find any extra dollar that can be saved and invested. There is actually an opportunity cost by not purchasing using a CC.
Dave often says that millionaires did not become rich by relying on a CC. That may be true, but the average millionaire (as documented in The Millionaire Next Door) is very frugal. Their spouse is often even more frugal.
Millionaires exploit any opportunity they can to generate extra revenue to invest. In my opinion using a CC and investing the cashback amount fits into the millionaire mindset of frugal and disciplined living.
You are correct in saying that folks who have difficulty controlling their spending or have actual debt should get their house in order before thinking of investing and using a CC.
Exactly what I've said on this channel before. I only auto pay my $30 internet bill on it ever month. I don't even care about the miles or rewards, I only do it to have a good credit score so I can buy a house one day.
+jcrowley1985 there are mortgage companies out there, like Churchill mortgage, that will do manual underwriting which doesn't even need a credit score.
+jcrowley1985 you dont need a credit score to buy a house or get a loan
_> And every $10,000 I spend I get $165 I can transfer to my brokerage accounts and buy more mutual funds._
Way to go knot! Just make sure you go for the 12% average mutual funds!
Say you have a pre-planed budget for 2k spending each month, doing it on the card and then paying back in full before the month makes allot of sense cause you get like 200usd back and that is free food.
Now this assume that you can handle the temptation and learn to stick to your budget and always remember never ever go over budget. Infact I would write a computer program that automatically freeze the card if you go over your decided budget on the card
Did the guy hang up lol?
This is so true. Never thought of it like this paying with credit is taking a risk. But I did use them for a year to get my credit up now they just sit in my drawer
I don't think Credit Cards are bad as long as you pay them off every month. Basically only use a credit card if you have the money to currently pay it in full.
You can make the argument "well, why not just use a debit card then", it is because credit cards are safer since the money does not directly come out of your bank account - not as bad if the card gets stolen. A credit card also allows you to build up your credit score (when used wisely as stated above) whereas a debit card does not.
It basically boils down to do not spend money you do not have.
Dave Ramsey, I’m not saying this has happened or ever will happen, but have you ever thought of what a multi millionaire could do with 2% cash back on purchases? That’s potentially thousands and thousands of dollars that could be given away, tithed on, or reinvested.
i spend cash with little thought because i dont track my cash, i can see every transaction on my cards
Dave's opinion of credit cards is unfortunate, probably because he deals with many people who misuse them. A credit card is merely a payment tool, therefore it's not good or bad. It depends on how you use it. We have lived by a strict budget for many years, and credit cards are our payment method of choice. We check our budget categories to see how much we can spend in each area--that controls our spending. We have no debt (house and cars paid for, etc.), fully funded IRAs, etc., and pay off all other bill in full each month. We give 12% to 15% of our income to church/charities, and have a credit score consistently in the 800's (have hit 850 twice!). We make about $100 a month in rebates from our credit cards--FREE money! I would advise Dave not to throw the baby out with the bath water. Some people can handle credit cards responsibly, and actually make money from using them.
As some have said most are not responsible with them...... very very few are. It doesn’t build wealth no but maybe give you a few free points here and there for free gift cards etc..... I get 5 percent on 99 percent of my purchases.
I've been paying everything I can (bills, groceries, gas, car insurance) with credit cards and then paying them off every month. I get a few hundred dollars in cash back every year and free airline tickets. They are not always bad, as long as you use them right.
What did he say at the end the only way is to " what " daily ??
"There is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus."
They make $$ on 95% ppl and a lot of it but the 5% of us are winning. Cash backkkkkk
😎 exactly they are great with good self control lots of people don’t understand how to use them.
You have to be really RESTRAINED to pay off the credit cards at the end of the month. Items that occur monthly you can use the credit cards, just pay it off and enjoy the savings or points for items. I would not use credit cards to get ahead either.
You only have to be really RESTRAINED if you have stupid habits and have been trained and brainwashed by society with stupid ideas. Have you noticed children from healthy households don't feel eating healthy and exercising as such a burden even though bad foods and obesity is everywhere? That's the same thing that happens with people coming from financially healthy families. Paying off credit cards, saving, living below your means isn't a burden and doesn't require effort because they really know any better.
Why do you have to be really Restrained? I have my credit card setup on automatic payment. I don't do anything, it just pays my credit card off 3 days before it's due automatically. I just get a notice saying it's paid. Now to be fair I hardly ever use it and all that gets put on it is my monthly Verizon. But what ever balance is on there at the end of the month gets taken care of automatically.
marboro
Why have automatic payments at all? If you can't remember all of your monthly payments it means that you have too many payments. Get rid of them.
I can’t agree with Dave on this one.. the caller was not saying that credit cards build you wealth at all... but to use them responsibly and receive the cash back and/or points and payoff the balance monthly is not a negative in my mind.
This is such a controversial topic. I think my views of it depends is the right answer... Thanks Dave
I paid cash for a new refrigerator…. And it definitely hurt😢😢😢
Dave suggests credit cards are bad because surveys suggest that people who use cards tend to spend more. He further argues that it hurts when you pay cash but it is painless when you pay with credit cards. First I suggest that everyone should objectively evaluate their own behavior and operate in the manner that they believe best serves their interests. Second let me suggest an alternative way of using the pain idea. That alternative is key entering every credit card receipt into personal finance software. By that a) you review each purchase as you enter and b) you review each purchase when you reconcile your credit card statement every month. Especially for that second review the euphoria of the purchase is long over. Aside benefit is the reporting the software provides. If you appropriately categorize purchases you can easily see how much you are spending in a period of time. Another benefit is not carrying around cash. Who wants to risk losing cash by dropping your wallet or through crime. A final benefit is one Dave's caller stated. Many cards give 2% back, or airline miles, or other perks. A modest $2,000 a month at 2% cash back is $480 year. That's a nice perk. By the way, everyone should have a rainy day fund. If you have one of those then by using credit cards you can keep more money in that fund an earn interest on that.
Credit cards are like gasoline - use them. improperly, and you will get burned. I know, because I got in over my head in bills, to the tune of $35000. I was purchasing things I didn't have money for! I got so broke I bought a Big Mac with a credit card! So, off to credit counseling and bankruptcy court I went. Then I made this vow: No more credit cards! I haven't had one since 2005, and I'm paying for things with cash. I have been getting credit card offers in the mail, and I just tear them up so I won't become tempted. credit card and debt free.
Don’t pay collection agency I owe $20,000 in credit cards debts with 17 cards the key to get out of paying it just don’t talk to them or answer there letters I Ben doing this for 6 years and never got sued yet this way they don’t know where you live