Rachel, don't forget that credit card companies not only make money off of fees and interest, but off of transaction charges the seller of the product you are buying has to pay to use their services.. which is why you see some vendors offer discounts for cash payments. As an online vendor, more than once I lost money on a sale - due to transaction fees.. which all get passed on to the consumer.. even the cash buyers have to subsidize the added cost in most cases. Thanks for posting this video!
I have been using credit cards since I was 18. Paid them off fully every month and have never paid a dime in interest and have made thousands off cash back rewards. By the time I was 25 I had a credit score in the high 700's, bought a house with 2.5% fixed interest. Not everyone can do what I do but there are many that can.
I agree. I received my first credit card when I was 20. I've never been a big spender on much of anything (meaning, I make money, I just prefer to live a simple life), so when I received that first credit card, I made a couple of small purchases and paid the minimum (meaning I carried a balance) for a couple of months - just to be able to show the credit card companies and credit agencies that I was responsible with money/credit. I had the actual cash in my pocket to pay for that $30 dollar keyboard at Best Buy, but intentionally strung the payments out for about 2 to 3 months. But, I did that only for the first year I had the card, then quickly stopped that practice. Ever since I was 21, I pay the full payment each month. I don't care what the interest rate on a card is (could be 50% and I'd never know) because I pay it off (actually, I pay the full balance, not the payment they say is due). Interestingly, the thing that Rachel starts to talk about, but never quite gets there is that an emergency fund or savings is great to have, but if you actually need access to a large amount of money, having a credit card with a high credit limit and good credit score can be a good thing. A modern example - your 10 year old used car needs $10k in repairs, but a newer used car would run you $15k dollars. You have a couple of choices and paying $10k in repairs is an option if you have a high credit limit but not enough cash in the bank account (because you only have $1,000 dollars in emergency fund). Another example - international travel and possibly having an emergency in a foreign country. Lots of examples....if you pay off the card each month...great. If not, then credit cards are not a wonderful thing.
Almost the exact same situation I am in. Bought a home at 26 a couple of years ago at 2.7% interest. Credit score 790s. It’s definitely possible, you just have to be disciplined & responsible.
Yep, us too! We now travel for nearly nothing now. Going to Europe for 3 weeks this year, it will cost us $500 for the 2 of us for food and misc entertainment. Everything else was paid using points. I am super diligent about paying my card off every 2 weeks. I have all our bills except property taxes and mortgage paid on my card.
I can attest to spending more (even if you pay it off every month). When we’ve done experiments on the months we only use cash/debit cards we save over 50% more. I’m way less likely to buy something if I know it’s coming directly out of my account. I’ve also found that we come way under budget in categories when we only use cash/debit (hence saving way more). The psychological effect is real.
That's true if you wait until the end of the month to pay. However, most of us who use CCs responsibly don't wait that long. I pay as soon as a charge posts - not at the end of the month when I would have forgotten how much I charged. That way using a CC is almost like using a debit as my account is adjusted on a daily basis and I feel the "pain" of disappearing money! I then post to my electronic budget. But in the meantime I get lots of reward points which I use for extras. I find a lot of the talk about CCs from old folks comes from the time they waited until they got paper bills and were surprised by the totals. Checking accounts daily and paying off purchases s soon as they post make all the difference.
Exactly this 💯. Yes I pay my credit card in full every time but I do see myself spending more when using credit instead os debit. Definitely psychological. And that’s where many miss the point.
The system is gross. But yu are not going to change it, and you are participating in it whether you want to or not. By paying cash, you are paying a 2-3% premium so people like me get rewards. Thank you.
I totally understand why some people should not use credit cards. If you aren’t a responsible spender, it’s a dangerous game. However, I am extremely responsible with my money, & I use a credit card for purchases I would have made anyway. I use different credit cards that get me more cash back depending on the type of store I’m buying from. For example, a certain card at grocery stores because I get 4% cash back, or I use a certain gas station for 3% cash back, etc. I pay then off in full every month. I’ve gotten thousands of dollars in cash back over the years. It just takes discipline, but I realize a lot of people don’t have that discipline & use them irresponsibly. It all depends on the person.
Thanks Captain obvious. Here’s another obvious fact: Most people are bad with money, that’s why they’re broke even though they can borrow thousands and thousands of dollars… If they were good with money they’d take the loans/debt and make more money but they’re not in the right mindset! That’s why they are broke.
I've paid cash for all my purchases for over 20 years and never felt like I needed credit. I even saved enough to buy a brand new Ford F-150 Lariat with cash and the sales person looked at me like I had two heads.
Do the math. How much do you spend in stores every year? Let's say it's averaged to $20,000/year (it's probably more). So, every year, you've paid swipe fees of $400-$600 a year, and gotten nothing for that. So over 20 years, you've paid $8,000 - $12,000 in swipe fees.... for the privilege of paying in cash.
I too used to think "I'll use this credit card for an emergency" but then what about the balance on the CC and the interest, who pays it? I do. It's better to put money aside and use _THAT_ as an emergency fund. My family is the type that uses a ton of credit cards, get themselves into debts, and then don't pay them or pay them when CC calls them or sends them letters. I'm debt-free and plan on being that way for as long as possible. Anyway, good advice, Cruze, and you have good intentions, but everyone is different so some will use CC responsibly and others irresponsibly. So.. yeah.
Yeah, that was my model before as well. Now how much rent is going up buying a house will be cheaper in the long run. Having good credit will definitely make purchasing a house easier.
Here’s an idea. You can adhere to the Ramsey Solutions Team’s principles & use credit cards responsibly. Just because others are irresponsible doesn’t automatically mean you have to be irresponsible as well.
I’m in the process of paying off credit card debt (I actually cut up my credit card a little over a month ago ✂️💳). What Rachel says at 5:54 gives me encouragement. Can’t wait to get to a point where I don’t owe anyone anything.
This is an amazing message. I hadn’t thought of this before! Huge thank you! I get caught up in the dang rewards. Please continue talking about this topic. And maybe the steps to take to break up with our credit card, and the steps to take to start budget and using the Debit card instead. So inspiring.
Just pay the card debt down. No magic here. Just realize that by using a debit card instead of a reawrds card, you are paying a 2-3% premium to do so. The retailers STILL charge you the swipe fees if you are using a debit card. So, if you spend $20,000/yr in stores, you are paying between $400-$800 a year for the privilege of NOT using the credit card. You okay with that?
Just because other people are bad with their money, doesn't mean you should be too. If you are responsible with your credit, keep using it, having a higher score will be useful at some point in life, but you don't know when until that time comes.
My debit card was cloned after I used it at a gas station. My bank responded quickly and I did not incur any penalties, but I was lucky. I choose not to use a debit card to avoid this. I use my credit card and pay it off twice a month. Be responsible with your spending no matter what payment method you use.
It's completely comical to see debit card bros falsely claim they offer the same levels of consumer protection as credit cards when in actuality if you read the fine print, you have a shorter grace period than most credit cards, many merchants outright refuse to issue refunds to debit cards and bank accounts, and regardless by nature, credit cards are more superior in protecting your assets as they are an intermediary between your bank. When you use a debit card, the money has already left your account, but with a credit card, it's the lender's money so you're not immediately on the hook for the losses. Too bad Ramsey fans are such children and refuse to accept that he's just plain wrong.
Yup! I had a situation where someone tried to use my credit card for like $700 and I had to dispute it immediately. I closed the account and got sent a new card. I would die if that was my debit account
I pay mine off every two weeks too, thought I was the only one to not utilize the whole grace period (like the people who use every inch of an on ramp, no matter what).
Using a credit card allows me to do a version of the envelope system online. Surprised that more people do not talk about this. I have an online bank that allows me to split my savings account into categories. Each month I deposit a pre-determined amount from my paycheck into each category, then every two weeks I pay off my credit card from money gathered from each category. If a category reaches zero, which rarely happens I cut back at that point. If you do this right you will rely less and less on your paychecks and more on the online buckets/envelopes that have accumulated money over time.
I travel about 45% of the year (160 days) for work. In 2017 when I went aggressive with paying off my student loans and car loan, I quit using credit cards full stop. It for sure helped me get to the goal of being debt free. To this day, I still do cash envelope budgeting for my dining and groceries since I always find it easy to overspend with those categories. However, after a recent run of gigs I had in Europe, I was curious post--covid era how easy it would be to only use my debit card. In Germany, France and the UK I ran into several problems at hotels, restaurants, and particularly rental car companies. Yes my debit card had a Visa logo, and I tried with a 2nd debit card with a MasterCard logo. From the minute I got to the airport, the rental car company would not accept debit, only credit. Same thing at dinner - I asked a restaurant manager why they didn't accept debit cards and they said that the merchant in their country (France) was 100% liable for fraud with EMV cards (the standard type of card we all use today, ie chip cards). The manager said merchants are not liable for credit card fraud, therefore the restaurant associations out there and their banks all require their account holders use credit. So, I'll always be a fan of what the Ramsey crew teaches, but for my line of work, ill have to keep using a credit card when abroad. Dave says he 'travels as much as the next person', but for someone like me who travels in coach, stays at 3-star hotels, does this monthly both in the US and abroad, I just wanted to chime in with some real world personal experience here. If you're someone who lives in the US, doesn't travel because you're getting out of debt and don't travel for work, then you can probably get away with only using a debit card and cash. And in that scenario always default to cash for your daily spending since fraud on your debit card is no fun to deal with. Just my two cents Rachel! (Or two dimes with inflation ;)
@@WeBeatMedicare6969 Sounds like you need to read more novels. By using "Ain't" which one did you mean- "Am not nobody got time to read this novel", "Are not nobody got time to read this novel", and "Is not nobody got time to read this novel"?
I follow 99% of the Ramsey principles besides this one. I have one credit card. Have never carried a balance nor paid a single PENNY in interest. Not even an annual fee! Have $1200 in points that will let me take a fun trip nearly anywhere in the U.S. for free. I'd say that's a pretty good deal, in addition to all the other benefits my card gives me.
I just responded to someone above in near agreement with you. However, the one thing to watch out for, is that those $1200 dollars in points shouldn't sit for too long...they get eroded away in inflation - meaning if you earn $100 dollars a month for 12 months, I wouldn't keep those points for 2 or 3 years...inflation will make those less valuable. But, in general, I completely agree with you and do the same thing.
If you have DISCIPLINE AND INTELLECT to stick to your budget and pay it off monthly you can use them. 18% interest for those who don't have these abilities, well, they SHOULD NOT use them. But, PLEASE GIVE SOME CREDIT TO THOSE OF US WHO ARE INFORMED ENOUGH TO Succeed AT THIS.....I DO NOT PAY INTEREST AND HAVEN'T SINCE 1980!!!!
4 people cannot pay of their balance 6 people can’t. Those are coin toss odds. That is like walking to the middle of the football stadium and saying you were either going to get tackled or going to get some extra points..
I have a Paypal debit card that I use as an “envelope” for all my variable / fun money. It’s so easy to just load more money to it and there’s no connection to your actual bank. Don’t know why more people don’t do this.
I have paid off my credit card about 3 years ago and I’m not using a credit card anymore. I also have my mortgage paid off and working on paying off the car I’m driving. When that’s done I’ll be saving ($1400 per month) money so, I’ll have a good emergency fund in 2 years time. The paying off stuff will be getting done within a 3 year time period. 🎉🎉🎉
I bought my last vehicle with cash and not with their line of credit. The car dealer looked at me like I was from Mars. I told him I'm paying with cash so take my money or the lot next door will. He took it.
Actually, you can often buy a car at a better negotiated price if they know your financing it because the dealer also makes money on the finance. Read your fine print on finance, if they allow early pay off, pay off loan within 30 days and it cost you nothing but dealers hate it and your car price could be a few hundred less than a cash deal. Been there, Done that...many times. They also usually allow you to put 2K -5K down on a card which you also can pay off the next statement. They want to sell the car and will do anything to do it if they get finance kickbacks. YNNV
I agree and I prefer to pay cash as much as possible. However you may be out of luck with just a debit card if you are traveling outside the US. Some car rental and hotels accept credit only.
After getting in debt, the trying to use a debt payment plan, then getting served, going through bankruptcy and then finally being discharged I don’t use credit cards anymore. I don’t want to go through that again.
4:46 when you realize that the credit card industry is like a big silent version of the Hunger games where you only win because others are being crushed to death under the accumulating interest fees!
I'm pretty sure the Ramsey crowd has at least one credit card each, if for nothing other than travel and renting cars when needed (unless they get a limo or uber everywhere) - it's just their job to tell everyone else not to have one.
I dont want to touch credit cards! I have family members tell me well that means you won't be able to buy aa house or rent a place. well im determined to find ways around all of that. its way more stressful trying to keep up with credit card bills that it is to just work around the debt system. I will even pay cash for a mobile home if that's what I have to do. I dont care
All these people I see comment on Rachel’s and Dave’s channels stating they are wrong about not having credit. Think I will listen to the ones who have money, not credit.
Always keep multiple forms of payments. If your debit card is compromised, you need a different form of payment. Also you can keep a budget and use a credit card. Not that difficult.
I'm debt free and have a fully funded emergency fund and haven't paid interest in years. I have a credit card not for credit score purposes but for protection. I had my debit card hacked and I dont walk with cash. I would much rather have the banks money hacked then my own money. So keep your cc just discipline. She is addressing only 1 type of cc person. I understand why it won't work for some but it definitely works for a lot!
I have the money and can pay for whatever I need or want. I use my credit card. I use the rewards to add back to savings or to help others. This past year at Christmas I had $128 in cash rewards from a credit card. That $128 was an additional amount to put to sponsoring children in my area that needed food. I would not leave money on the table by not earning the rewards. That extra donation cost me nothing more as I NEVER carry a card card balance.
I only use credit cards. As someone who has had their checking account hacked - trust me you don’t want that to happen. I use credit cards and pay them off weekly. Haven’t had a monthly balance in 20 years.
We have people like Robert Kiyosaki who encourage debt; then you have people like Dave Ramsey who avoid it at all costs (2 extremests), its important to learn the benefits if both sides. What if, for example, you want to purchase a forplex to generate wealth, but you can only afford 20% of it? What if you wait to purchase your dream home but you're too afraid to finance so you decide to wait to buy it in full only to realize that the house that you waited for has appreciated 1.5-2x its value, now costing you more.
Haven’t had a credit card since late 2018. I agree the only time I missed it was the few times I’ve rented a car. Other than that I’ve somehow survived without one, weird.
@Lucia Hernandez way less than $400. Plus costco has some amazing deals. But there are plenty of free credit cards that offer rewards that don't require any fees or memberships
I guess I half agree and was trying to just use just debit card until my bank kept locking my card if I made online purchases and they would keep saying there was fraud activity but it wasn’t it was just normal purchases, so I had to switch to CC’s. Also I think it’s Clark Howard who is against debit card use.
Yes I wouldn't use a credit card again. I have been in debt with three and all it does in eat away to you and so not worth it, I'd rather have savings for huge purchases and be able to pay out right rather than having something that causes stress and anxiety over paying it off
I get what she is saying but I need an apartment. In the bay area, you need a 700 or above. So do you. And I pay off my cards at the end of the month. I've been doing it for 2 years. Never once have I paid interest.
I literally follow all of the other ramsey principles except for credit cards. As a result of following their principles I do not have credit card debt and I literally pay it off every single day.
FWIW, Ramsey doesn't introduce anything new to the equation. His folksy "stern Dad" approach is just salesmanship. Everything else is well-worn personal finance dogma. And his credit card stance is BS.
Thanks, I got into a debate yesterday over this exact topic & the Dave Ramsey video I found I guess came off to them as a bit of a gut punch to them. I think it turned them off. This one breaks is down, actually gives more facts out, & puts it more politely. I'll think I'll share this one next time.
Whenever you get income, you can also budget for bills, groceries, gas, etc. by over paying on your credit card, if you're worried about over spending. Kind of works as a pre-paid card. Then you get more rewards that way, also. And avoid having to pay more in interest, also.
I mean I understand the sentiment, but I do use a credit card for purchases I was going to make anyways. I usually use the cash back for free coffees. So not a bad gig. Also, Apple Card has a great visualization of your spending and probably tracks it better than Everydollar. But anyways, not everyone should have a credit card for sure.
I just redeemed $200 in credit card points. I don’t pay interest because I pay my credit card off every month. It’s easy if you’re responsible. Also. Fun fact. When someone steals your debit card information it’s hard to get that money back but with a credit card, stolen money is easy to recover. When I go on vacation I don’t want to worry about trying to find a rental car company that will accept me. Sounds like hogwash.
I think the rewards gimmicks are predatory. Paying with cash makes you aware you have this amount of money for such and such purchases. I think the average interest rates are much higher now, well north of 20%.
I am 67 years old and when I was in my 20's I borrowed money for my first car. I realized then how bad dept was. Never again! Larry Burkett showed me a better way.
Great advice, I was doing good with my 1st credit cards for awhile and then it got out of hand. I had to start thinking how were people living before credit cards, they were just fine. I am now changing how I do my finances. Debit card and using my own cash. That's the way to do it. Even when you have a credit card you still need to have your own cash in the bank to pay it off so what's the point. Love this video!
In in my mid 40's now. I've had credit cards since I was 18. Wanna guess how much I've paid in credit card interest thus far? $0. Guess how much I've got in cash back, points, whatever? Substantially more that $0 I buy my cars in cash (with one exception where I took the financing option to get an extra $2k off, then promptly paid the whole thing off after the 1st payment). My home is paid for. My FICO score is over 800. You can absolutely be responsible with credit cards. From what she mentions, it sounds like the majority of people are.
We pay our card off in full each month (also no annual fee). Most all hotels we use do not take a debit card. Having cash can be risky and time consuming and not optional. We go out to eat Saturday night..oh wait, I can’t as I can’t get cash as bank closed hence use a CC. Don’t suggest take cash out early as my account earns interest so I prefer to have it stay there earning interest rather than pulling out cash. Applied for a job and they check credit history-one applicant applied and not offered due to no credit score (red flag as no score thinking wrong identity).
Great video! I totally agree with Rachel. I paid mine off every month before closing it but i spent way more each month and that amount could’ve been in savings. I get that using it vs debit does things psychologically in the brain than “borrowing.” The game is not worth any amount of points/miles/cashback imo.
I have 13 credit cards, charge a cheap recurring subscription or charge on each except for one every month then autopay the statement balance. So anything like $5 amazon gift card reloads, cloud storage subscriptions, gym membership, netflix, etc… then autopay it. Every month I have 13 ontime payments reporting every month and low utilization. The last one I use for daily.
You can dispute a charge through a credit card company -- not so with a debit card or cash! My credit card company ruled in my favor on a dispute, made the merchant stop bothering me and told the collection agency to jump in the lake. Never heard another word about the charge. Problem solved.
Most of these arguments are pretty bad but the biggest part I can’t get over is the “I don’t like these credit card companies because they are taking advantage of people therefore I don’t want to be part of it” which is fine if you actually believe that but how can you say that when you literally partnered with the 2nd largest creditor Mastercard to do the gazelle debit card. So you won’t be part of it then but if there is business and profitability than it’s fine to work with them?
I think using credit cards for online bill pay specifically is totally acceptable. In my budget I know what all my fixed bills / expenses are and pay them online. So using a CC for those bills gets me about 1k/yr in cash back. But I only use debit for any variable expenses.
So Rachel says to not use a credit card because they make money off of people not financially educated? How is that different from just about every other business, especially real estate? How many people getting a mortgage really understand what they are doing?
@@Gio-nl7eg Medical field. They profit from sick people. They rarely tell the risks unless asked or forced by disclosure laws, and nobody questions them like credit card companies. Credit card companies even now list the amount would grow to if only minimum payments.
ya, the issue is 48% of people hold a balance on their card. So the advice only works for 1 out of 2 people and the other half paying interest the rest of their life.
And what about those who live frugally, often work two jobs, but don’t make a lot, and then life happens times 12? Car accident, divorce, unexpected pregnancy, bad fall, get priced out of an apt, and whatever may have been saved is wiped out? And the bad luck just never stops…
It's weird that I'm supposed to not use a credit card because other people who are not me, have never been me, will never be me, and could never be me, have gotten into trouble by using credit cards.
I use a credit card. My balance is paid automatically every month. My purchases have a degree of protection. I couldn't care less about rewards. I use their app to check charges to my account often. A questionable charge on my credit card can usually be resolved before the end of the billing cycle, while one on a debit card deducts from my account immediately. When I use a credit card in a restaurant, I usually tip with cash. I am more likely to use cash in a locally owned business, or I at least try to add a tip to cover the bank's fee. Advising to 'never use a credit card' is sloppy advice. Although risky for some, responsible use of a credit card is possible.
I never spend more, money because I am using a credit card, I pay off the balance every month and this month I got three items for my home that I needed for free that would have cost me several hundred dollars. I do not owe anyone any money. I have a budget that I follow. I totally disagree with your attitude that because some people can not be responsible with their cards and receive benefits of using a credit card that I shouldn't use a credit card. That is not logical to me. I get many things for free that I would have to spend money on. Cashback has save me thousands of dollars over the years. Your reasoning just doesn't make sense.
I use my credit cards for my fixed bills, gas and groceries. I also use it for protection against fraud. I would hate to use my debit card and it gets hacked and my legit money comes out of my account and it takes longer to get the money back especially if I’m traveling! No sir. I had someone charge my credit card for $700 and disputed it immediately and closed the account and got a new card.
I was super responsible up until my late 20s now I’m paying them off which feels great. At 20 years old I would’ve been like year sure but life happens and I understand this !
So much debate of this. I think both sides are 100% correct. I've always used a credit card, always paid it off every month, and enjoy about $1500 per year in cash back. I also like how any fraudulent charges don't come out of my bank account balance right away, I can check my account 1-2 times per month and sleep well knowing my checking account remains safe the whole time. That being said, I dated someone who had a different experience. Her family had some serious legal issues , her parents ended up burning through all their money trying top resolve them, and she stepped in to help pay bills so that the electricity and gas stayed on in their home. It cost her a fortune, she maxed out all her cards and ended up in bankruptcy. I tried pointing that this was NOT her fault. But her experience with the credit card companies and debt and bankruptcy was traumatic and caused her to avoid all credit cards. I can't say she was wrong either.
Every apartment I've ever applied to required a credit check. Not having a credit score reduces already limited options. In this housing market? I don't think so.
Budgeting is definitely much more difficult when you are using credit cards. If you use credit cards for everyday spending the day you pay the bill there are already new charges on it that you are not seeing or paying because that will be on the next statement. That means you are always in debt even when you pay the statement in full. It is near impossible to stick to a budget with credit cards because it is just too hard to track.
It is not difficult if you check your cards daily and pay off something as soon as it posts and then record it in your budget tracker. NO need to wait until the end of the month. If you pay as soon as something posts you will never be in debt and you don't have to worry about the end of the month total or any interest charges.
No it's not. Charges will appear on your card as quickly as on your bank account. If you are budgeting and tracking your expenses, the only extra step is remaining aware of your bank account balance to ensure your card balance never exceeds your cash-on-hand. Not rocket science.
Hi Rachel, you're sharing a way of life and that is debt-free living, and I agree with it. It doesn't mean that there aren't responsible credit card holders, and that there aren't cases where having a credit card might make things happen more quickly, but ultimately what you're suggesting is a WAY of life. I agree with you and Dave. It IS a choice, wether to be responsible and have a good credit score or whether to live debt-free. It's kinda like vegetarianism and meatatarian. The latter will say that vegetarians lack certain minerals etc, but the vegetarian can get them, just in more unique and maybe through more task-intensive preparation methods. Ideally, I think a vegetarian diet is healthier. Living without debt is such a foreign concept to a lot of persons that to live without it appears like a fairytale and impossible to achieve. But, just change your MIND. 😊
I have had a credit card. I never got cash back. However I’ve now realised that there’s no point in spending the banks money and instead use my own money. It’s a false illusion to own a credit card and spend on it and it’s also a trigger and just allows you to think spending the banks money is normal. It isn’t. Just use your own money. ❤
I'm listening to Dave Ramsey podcast, Dave Ramsey TH-cam and your you tubes and trying to get into a gazelle mindset (which is hard with my adhd). But I'm also trying to get my husband on board. I already have been doing a budget system for 15 years, I'm finally saving up. Plus with starting to tackle my debt earlier last year I got one credit card paid off. I have 2 and my husband has 1 he needs to pay off still. I plan on cancelling all mine but my husband is adamant that he's keeping his Capitol one for emergency purposes. Deer are huge in our area and we would have a car wreck any day.
Really enjoy the show and I hear the point about people receiving rewards because of other people paying interest. However, when the bank pays you interest on your savings, it doesn’t seem to be a problem then? Seems a little hypocritical.
I think it is easy for you to have these guidelines because you have money to back you up. And the inconvenience to rent a car w/o a credit card is a lot more complicated than you said. Not all car companies in every city will allow debit card rentals. I think you should offer some of your advice to people who have a handle on their credit cards and not only present the case that no credit cards are the ultimate way to achieve wealth and now you get an "A" for doing it w/o credit cards.
Love your earrings. I am trying to not use credit cards or bank loans. I had both paid off then hubby went to hospital and used credit card/bank loan to pay bills.
We just stopped using our credit card (paid off in full every month) for moral reasons - as much as it is up to us, we aim to live at peace with everyone. We don't want to be responsible for another's suffering, (I know that you can present a hypothetical argument that at any time, you might be causing another's suffering) but KNOWINGLY doing so bothered us. This was a personal conviction xx
paid with cash house, paid with cash truck. at 65, my CR just sits ther. i don't care. i do care i get1000-2000back every year for utilities, food, etc. it costs ME, nothing.
A credit score is a "mug's score" They give you a high number because they can bleed you out with some security that they can just harvest rather than needing to chase. Just don't have credit - it then costs nothing to have something you don't have. I don't have a membership of the local women's club - go figure!!
Congratulations of having a bad credit score, but that works for you. What works for me is having a 835 credit score and paying off my credit card every month. People are different, no one like the same things and thank God that is so. Can you imagine if everyone like to eat the same food every day or drive the same car every day or do the same thing everyday?
Rachel, don't forget that credit card companies not only make money off of fees and interest, but off of transaction charges the seller of the product you are buying has to pay to use their services.. which is why you see some vendors offer discounts for cash payments. As an online vendor, more than once I lost money on a sale - due to transaction fees.. which all get passed on to the consumer.. even the cash buyers have to subsidize the added cost in most cases. Thanks for posting this video!
thank you. it is a mixed revenue stream for them. it is not all, ''off the backs of single mothers, struggling.'' they continue to give ''1/2 facts''
How do u accept payment if you’re an online vendor that doesn’t like cc’s?
I have been using credit cards since I was 18. Paid them off fully every month and have never paid a dime in interest and have made thousands off cash back rewards. By the time I was 25 I had a credit score in the high 700's, bought a house with 2.5% fixed interest. Not everyone can do what I do but there are many that can.
I agree. I received my first credit card when I was 20. I've never been a big spender on much of anything (meaning, I make money, I just prefer to live a simple life), so when I received that first credit card, I made a couple of small purchases and paid the minimum (meaning I carried a balance) for a couple of months - just to be able to show the credit card companies and credit agencies that I was responsible with money/credit. I had the actual cash in my pocket to pay for that $30 dollar keyboard at Best Buy, but intentionally strung the payments out for about 2 to 3 months. But, I did that only for the first year I had the card, then quickly stopped that practice. Ever since I was 21, I pay the full payment each month. I don't care what the interest rate on a card is (could be 50% and I'd never know) because I pay it off (actually, I pay the full balance, not the payment they say is due).
Interestingly, the thing that Rachel starts to talk about, but never quite gets there is that an emergency fund or savings is great to have, but if you actually need access to a large amount of money, having a credit card with a high credit limit and good credit score can be a good thing. A modern example - your 10 year old used car needs $10k in repairs, but a newer used car would run you $15k dollars. You have a couple of choices and paying $10k in repairs is an option if you have a high credit limit but not enough cash in the bank account (because you only have $1,000 dollars in emergency fund). Another example - international travel and possibly having an emergency in a foreign country.
Lots of examples....if you pay off the card each month...great. If not, then credit cards are not a wonderful thing.
Almost the exact same situation I am in. Bought a home at 26 a couple of years ago at 2.7% interest. Credit score 790s. It’s definitely possible, you just have to be disciplined & responsible.
AGREED!!
Yep, us too! We now travel for nearly nothing now. Going to Europe for 3 weeks this year, it will cost us $500 for the 2 of us for food and misc entertainment. Everything else was paid using points. I am super diligent about paying my card off every 2 weeks. I have all our bills except property taxes and mortgage paid on my card.
That’s what I’m talking about! Get it!!! 🙌🏾
I can attest to spending more (even if you pay it off every month). When we’ve done experiments on the months we only use cash/debit cards we save over 50% more. I’m way less likely to buy something if I know it’s coming directly out of my account. I’ve also found that we come way under budget in categories when we only use cash/debit (hence saving way more). The psychological effect is real.
That's true if you wait until the end of the month to pay. However, most of us who use CCs responsibly don't wait that long. I pay as soon as a charge posts - not at the end of the month when I would have forgotten how much I charged. That way using a CC is almost like using a debit as my account is adjusted on a daily basis and I feel the "pain" of disappearing money! I then post to my electronic budget. But in the meantime I get lots of reward points which I use for extras. I find a lot of the talk about CCs from old folks comes from the time they waited until they got paper bills and were surprised by the totals. Checking accounts daily and paying off purchases s soon as they post make all the difference.
Exactly this 💯. Yes I pay my credit card in full every time but I do see myself spending more when using credit instead os debit. Definitely psychological. And that’s where many miss the point.
I am 41 years old and have never once used a credit card. Best decision I’ve made financially.
By the way I don’t use any credit cards
Nice, I get 2% on everything cash back. Cheers
@@littlebob1261 Whatever floats your boat.
“The system being gross” really resonated with me
The system is gross. But yu are not going to change it, and you are participating in it whether you want to or not. By paying cash, you are paying a 2-3% premium so people like me get rewards. Thank you.
I’m a responsible adult and I will always have a credit card. You can still budget and use a credit card.
You can climb Mount Everest, only 40% can’t, but yeah, it is ok! You will make it.
No
I spend more with a credit card
I totally understand why some people should not use credit cards. If you aren’t a responsible spender, it’s a dangerous game. However, I am extremely responsible with my money, & I use a credit card for purchases I would have made anyway. I use different credit cards that get me more cash back depending on the type of store I’m buying from. For example, a certain card at grocery stores because I get 4% cash back, or I use a certain gas station for 3% cash back, etc. I pay then off in full every month. I’ve gotten thousands of dollars in cash back over the years. It just takes discipline, but I realize a lot of people don’t have that discipline & use them irresponsibly. It all depends on the person.
Thanks Captain obvious.
Here’s another obvious fact:
Most people are bad with money, that’s why they’re broke even though they can borrow thousands and thousands of dollars…
If they were good with money they’d take the loans/debt and make more money but they’re not in the right mindset!
That’s why they are broke.
Lol.
100 percent agree
EXACTLY
@@treidkr3 attitude? Lol
I've paid cash for all my purchases for over 20 years and never felt like I needed credit. I even saved enough to buy a brand new Ford F-150 Lariat with cash and the sales person looked at me like I had two heads.
🖕🖕🖕
📩✍️✅..
Do the math. How much do you spend in stores every year? Let's say it's averaged to $20,000/year (it's probably more). So, every year, you've paid swipe fees of $400-$600 a year, and gotten nothing for that. So over 20 years, you've paid $8,000 - $12,000 in swipe fees.... for the privilege of paying in cash.
@@mpsmith47304what are you talking about?
@@mpsmith47304 the person is not paying with debit card so no swipe card fee just plain old fashioned cash 💵 💰🤑
I too used to think "I'll use this credit card for an emergency" but then what about the balance on the CC and the interest, who pays it? I do. It's better to put money aside and use _THAT_ as an emergency fund.
My family is the type that uses a ton of credit cards, get themselves into debts, and then don't pay them or pay them when CC calls them or sends them letters. I'm debt-free and plan on being that way for as long as possible.
Anyway, good advice, Cruze, and you have good intentions, but everyone is different so some will use CC responsibly and others irresponsibly. So.. yeah.
I'm in my Forties and my husband and I also don't have credit cards. If we don't have the money, we can't buy it.
👍
Yeah, that was my model before as well. Now how much rent is going up buying a house will be cheaper in the long run. Having good credit will definitely make purchasing a house easier.
Here’s an idea. You can adhere to the Ramsey Solutions Team’s principles & use credit cards responsibly. Just because others are irresponsible doesn’t automatically mean you have to be irresponsible as well.
Would you go to an AA meeting and talk about drinking responsibly to people whose lives were destroyed by drinking?
@@vincent8900 Ahhhh Ramsey fans...
Always go to the extreme 🙄
@@15KHPCLUB lol not even close. I just find comments like the one I was replying to to be crass.
@@vincent8900 Just because you have no self-discipline doesn't mean everyone else should leave money on the table and live like children.
Yep. I even log my credit card transactions into the Every Dollar app. It's impossible to overspend when you're actually following a budget.
I’m in the process of paying off credit card debt (I actually cut up my credit card a little over a month ago ✂️💳). What Rachel says at 5:54 gives me encouragement. Can’t wait to get to a point where I don’t owe anyone anything.
This is an amazing message. I hadn’t thought of this before! Huge thank you! I get caught up in the dang rewards. Please continue talking about this topic. And maybe the steps to take to break up with our credit card, and the steps to take to start budget and using the Debit card instead. So inspiring.
Check out Dave Ramsey Show.
Just pay the card debt down. No magic here. Just realize that by using a debit card instead of a reawrds card, you are paying a 2-3% premium to do so. The retailers STILL charge you the swipe fees if you are using a debit card. So, if you spend $20,000/yr in stores, you are paying between $400-$800 a year for the privilege of NOT using the credit card. You okay with that?
@@mpsmith47304the retailer is the one paying the swipe fee, not the customer. Never been charged any of that in my life.
Just because other people are bad with their money, doesn't mean you should be too. If you are responsible with your credit, keep using it, having a higher score will be useful at some point in life, but you don't know when until that time comes.
My debit card was cloned after I used it at a gas station. My bank responded quickly and I did not incur any penalties, but I was lucky. I choose not to use a debit card to avoid this. I use my credit card and pay it off twice a month. Be responsible with your spending no matter what payment method you use.
It's completely comical to see debit card bros falsely claim they offer the same levels of consumer protection as credit cards when in actuality if you read the fine print, you have a shorter grace period than most credit cards, many merchants outright refuse to issue refunds to debit cards and bank accounts, and regardless by nature, credit cards are more superior in protecting your assets as they are an intermediary between your bank. When you use a debit card, the money has already left your account, but with a credit card, it's the lender's money so you're not immediately on the hook for the losses.
Too bad Ramsey fans are such children and refuse to accept that he's just plain wrong.
Amen tyler
Yup! I had a situation where someone tried to use my credit card for like $700 and I had to dispute it immediately. I closed the account and got sent a new card. I would die if that was my debit account
I pay mine off every two weeks too, thought I was the only one to not utilize the whole grace period (like the people who use every inch of an on ramp, no matter what).
I like to pay cash for my gas all the time
Using a credit card allows me to do a version of the envelope system online. Surprised that more people do not talk about this. I have an online bank that allows me to split my savings account into categories. Each month I deposit a pre-determined amount from my paycheck into each category, then every two weeks I pay off my credit card from money gathered from each category. If a category reaches zero, which rarely happens I cut back at that point. If you do this right you will rely less and less on your paychecks and more on the online buckets/envelopes that have accumulated money over time.
Here is an idea for a video. Give us a behind the scenes tour of Ramsey Solutions. Many of us will never get there.
I travel about 45% of the year (160 days) for work. In 2017 when I went aggressive with paying off my student loans and car loan, I quit using credit cards full stop. It for sure helped me get to the goal of being debt free. To this day, I still do cash envelope budgeting for my dining and groceries since I always find it easy to overspend with those categories. However, after a recent run of gigs I had in Europe, I was curious post--covid era how easy it would be to only use my debit card. In Germany, France and the UK I ran into several problems at hotels, restaurants, and particularly rental car companies. Yes my debit card had a Visa logo, and I tried with a 2nd debit card with a MasterCard logo. From the minute I got to the airport, the rental car company would not accept debit, only credit. Same thing at dinner - I asked a restaurant manager why they didn't accept debit cards and they said that the merchant in their country (France) was 100% liable for fraud with EMV cards (the standard type of card we all use today, ie chip cards). The manager said merchants are not liable for credit card fraud, therefore the restaurant associations out there and their banks all require their account holders use credit. So, I'll always be a fan of what the Ramsey crew teaches, but for my line of work, ill have to keep using a credit card when abroad. Dave says he 'travels as much as the next person', but for someone like me who travels in coach, stays at 3-star hotels, does this monthly both in the US and abroad, I just wanted to chime in with some real world personal experience here. If you're someone who lives in the US, doesn't travel because you're getting out of debt and don't travel for work, then you can probably get away with only using a debit card and cash. And in that scenario always default to cash for your daily spending since fraud on your debit card is no fun to deal with. Just my two cents Rachel! (Or two dimes with inflation ;)
Ain’t nobody got time to read this novel
@@LA-wv7gf I’m self employed
@@WeBeatMedicare6969 Some of us read. If you don't, then ignore the longer comments. No need to criticize someone else's post.
@@padmusic387 That's what I do, too - pay as soon as something posts and then add that to my budget line.
@@WeBeatMedicare6969 Sounds like you need to read more novels. By using "Ain't" which one did you mean- "Am not nobody got time to read this novel", "Are not nobody got time to read this novel", and "Is not nobody got time to read this novel"?
mark 5.12
she is shaming the people that use credit wisely vs those that don't. i didn't know shame was/is part of the christian ethos...
Debt free. No credit card. Just Mortage.
Debt free. Use credit cards all the time. NO mortgage, because I said "debt free".
Debt Free is the way to go
I follow 99% of the Ramsey principles besides this one. I have one credit card. Have never carried a balance nor paid a single PENNY in interest. Not even an annual fee! Have $1200 in points that will let me take a fun trip nearly anywhere in the U.S. for free. I'd say that's a pretty good deal, in addition to all the other benefits my card gives me.
I just responded to someone above in near agreement with you. However, the one thing to watch out for, is that those $1200 dollars in points shouldn't sit for too long...they get eroded away in inflation - meaning if you earn $100 dollars a month for 12 months, I wouldn't keep those points for 2 or 3 years...inflation will make those less valuable. But, in general, I completely agree with you and do the same thing.
@@joejoe-bs6jq That’s a good point, I totally agree with you. I should try to use a good chunk of them by the end of the year.
Just booked a cruise and used my points for drink package..500$value very happy about that. Never paid a dime in interest!!
Just because you were successful, does not mean that we should encourage other people to risk their finances on a coin toss..
If you have DISCIPLINE AND INTELLECT to stick to your budget and pay it off monthly you can use them. 18% interest for those who don't have these abilities, well, they SHOULD NOT use them. But, PLEASE GIVE SOME CREDIT TO THOSE OF US WHO ARE INFORMED ENOUGH TO Succeed AT THIS.....I DO NOT PAY INTEREST AND HAVEN'T SINCE 1980!!!!
4 people cannot pay of their balance
6 people can’t.
Those are coin toss odds. That is like walking to the middle of the football stadium and saying you were either going to get tackled or going to get some extra points..
I have a Paypal debit card that I use as an “envelope” for all my variable / fun money. It’s so easy to just load more money to it and there’s no connection to your actual bank. Don’t know why more people don’t do this.
I have paid off my credit card about 3 years ago and I’m not using a credit card anymore. I also have my mortgage paid off and working on paying off the car I’m driving. When that’s done I’ll be saving ($1400 per month) money so, I’ll have a good emergency fund in 2 years time. The paying off stuff will be getting done within a 3 year time period. 🎉🎉🎉
I work for the county. When I got hired they had to check my credit history and score on top of the background checks. It was intense lol.
All this talk about credit score. I'm just a regular guy and I have never felt the need to ever check my credit score.
I bought my last vehicle with cash and not with their line of credit. The car dealer looked at me like I was from Mars. I told him I'm paying with cash so take my money or the lot next door will. He took it.
Actually, you can often buy a car at a better negotiated price if they know your financing it because the dealer also makes money on the finance. Read your fine print on finance, if they allow early pay off, pay off loan within 30 days and it cost you nothing but dealers hate it and your car price could be a few hundred less than a cash deal. Been there, Done that...many times. They also usually allow you to put 2K -5K down on a card which you also can pay off the next statement. They want to sell the car and will do anything to do it if they get finance kickbacks. YNNV
It’s not for everyone that’s sure.
I agree and I prefer to pay cash as much as possible. However you may be out of luck with just a debit card if you are traveling outside the US. Some car rental and hotels accept credit only.
Yep.
Never have used a credit card before! Only have been living on debit card most of my life with none of the problems described in the comments.
After getting in debt, the trying to use a debt payment plan, then getting served, going through bankruptcy and then finally being discharged I don’t use credit cards anymore. I don’t want to go through that again.
4:46 when you realize that the credit card industry is like a big silent version of the Hunger games where you only win because others are being crushed to death under the accumulating interest fees!
Even if she wanted to have a credit card, there is no way her dad would let her have this job if she did have one.
🖕🖕🖕
📩✍️✅..
I'm pretty sure the Ramsey crowd has at least one credit card each, if for nothing other than travel and renting cars when needed (unless they get a limo or uber everywhere) - it's just their job to tell everyone else not to have one.
That's good😄
I dont want to touch credit cards! I have family members tell me well that means you won't be able to buy aa house or rent a place. well im determined to find ways around all of that. its way more stressful trying to keep up with credit card bills that it is to just work around the debt system. I will even pay cash for a mobile home if that's what I have to do. I dont care
Exploiting others' interest/late payments for my flights and hotel stays is one of the most fun things I've ever done
I'll bet Rachel doesn't live in a neighborhood where it's dangerous to carry around enough cash to go to the grocery store...
All these people I see comment on Rachel’s and Dave’s channels stating they are wrong about not having credit. Think I will listen to the ones who have money, not credit.
🖕🖕🖕
📩✍️✅..
Always keep multiple forms of payments. If your debit card is compromised, you need a different form of payment. Also you can keep a budget and use a credit card. Not that difficult.
I agree
I'm debt free and have a fully funded emergency fund and haven't paid interest in years. I have a credit card not for credit score purposes but for protection. I had my debit card hacked and I dont walk with cash. I would much rather have the banks money hacked then my own money. So keep your cc just discipline. She is addressing only 1 type of cc person. I understand why it won't work for some but it definitely works for a lot!
I have the money and can pay for whatever I need or want. I use my credit card. I use the rewards to add back to savings or to help others. This past year at Christmas I had $128 in cash rewards from a credit card. That $128 was an additional amount to put to sponsoring children in my area that needed food. I would not leave money on the table by not earning the rewards. That extra donation cost me nothing more as I NEVER carry a card card balance.
I only use credit cards. As someone who has had their checking account hacked - trust me you don’t want that to happen. I use credit cards and pay them off weekly. Haven’t had a monthly balance in 20 years.
Me, too!
Same! I’ve been hacked via debit and credit card and the credit card hack was much less painful.
I use VISA or Master Card when I travel international , very easy you don't have to cary cash money and still stay within monthly budget
We have people like Robert Kiyosaki who encourage debt; then you have people like Dave Ramsey who avoid it at all costs (2 extremests), its important to learn the benefits if both sides. What if, for example, you want to purchase a forplex to generate wealth, but you can only afford 20% of it? What if you wait to purchase your dream home but you're too afraid to finance so you decide to wait to buy it in full only to realize that the house that you waited for has appreciated 1.5-2x its value, now costing you more.
He is not against financing your home. He is against credit card or car loan debt. Pay cash for those, finance home, pay it off early. Pretty simple.
Haven’t had a credit card since late 2018. I agree the only time I missed it was the few times I’ve rented a car. Other than that I’ve somehow survived without one, weird.
Absolutely hate using cash. Such a hassle. A credit card with rewards and auto payments in full each month is such a better option
Keep thinking that
@Scott Thacker I certainly will. I made $400 off my costco visa card this past year. Not one penny of interest
And how much is your Costco membership?
@Lucia Hernandez way less than $400. Plus costco has some amazing deals. But there are plenty of free credit cards that offer rewards that don't require any fees or memberships
@@leonkennedy3398 all that risk for a measly $35/month
I guess I half agree and was trying to just use just debit card until my bank kept locking my card if I made online purchases and they would keep saying there was fraud activity but it wasn’t it was just normal purchases, so I had to switch to CC’s. Also I think it’s Clark Howard who is against debit card use.
Yes I wouldn't use a credit card again. I have been in debt with three and all it does in eat away to you and so not worth it, I'd rather have savings for huge purchases and be able to pay out right rather than having something that causes stress and anxiety over paying it off
I get what she is saying but I need an apartment. In the bay area, you need a 700 or above. So do you. And I pay off my cards at the end of the month. I've been doing it for 2 years. Never once have I paid interest.
I literally follow all of the other ramsey principles except for credit cards. As a result of following their principles I do not have credit card debt and I literally pay it off every single day.
Me, too - that's the key!
FWIW, Ramsey doesn't introduce anything new to the equation. His folksy "stern Dad" approach is just salesmanship. Everything else is well-worn personal finance dogma. And his credit card stance is BS.
Thanks, I got into a debate yesterday over this exact topic & the Dave Ramsey video I found I guess came off to them as a bit of a gut punch to them. I think it turned them off. This one breaks is down, actually gives more facts out, & puts it more politely. I'll think I'll share this one next time.
Whenever you get income, you can also budget for bills, groceries, gas, etc. by over paying on your credit card, if you're worried about over spending. Kind of works as a pre-paid card. Then you get more rewards that way, also. And avoid having to pay more in interest, also.
I mean I understand the sentiment, but I do use a credit card for purchases I was going to make anyways. I usually use the cash back for free coffees. So not a bad gig. Also, Apple Card has a great visualization of your spending and probably tracks it better than Everydollar. But anyways, not everyone should have a credit card for sure.
I just redeemed $200 in credit card points.
I don’t pay interest because I pay my credit card off every month. It’s easy if you’re responsible.
Also. Fun fact.
When someone steals your debit card information it’s hard to get that money back but with a credit card, stolen money is easy to recover.
When I go on vacation I don’t want to worry about trying to find a rental car company that will accept me.
Sounds like hogwash.
I think the rewards gimmicks are predatory. Paying with cash makes you aware you have this amount of money for such and such purchases. I think the average interest rates are much higher now, well north of 20%.
I am 67 years old and when I was in my 20's I borrowed money for my first car. I realized then how bad dept was. Never again! Larry Burkett showed me a better way.
Great advice, I was doing good with my 1st credit cards for awhile and then it got out of hand. I had to start thinking how were people living before credit cards, they were just fine. I am now changing how I do my finances. Debit card and using my own cash. That's the way to do it. Even when you have a credit card you still need to have your own cash in the bank to pay it off so what's the point. Love this video!
The point is the free flights, concerts, credit score building, Cashback, airport lounge access, seat upgrades etc
In in my mid 40's now. I've had credit cards since I was 18. Wanna guess how much I've paid in credit card interest thus far? $0. Guess how much I've got in cash back, points, whatever? Substantially more that $0 I buy my cars in cash (with one exception where I took the financing option to get an extra $2k off, then promptly paid the whole thing off after the 1st payment). My home is paid for. My FICO score is over 800. You can absolutely be responsible with credit cards. From what she mentions, it sounds like the majority of people are.
We pay our card off in full each month (also no annual fee). Most all hotels we use do not take a debit card. Having cash can be risky and time consuming and not optional. We go out to eat Saturday night..oh wait, I can’t as I can’t get cash as bank closed hence use a CC. Don’t suggest take cash out early as my account earns interest so I prefer to have it stay there earning interest rather than pulling out cash. Applied for a job and they check credit history-one applicant applied and not offered due to no credit score (red flag as no score thinking wrong identity).
Great video! I totally agree with Rachel. I paid mine off every month before closing it but i spent way more each month and that amount could’ve been in savings. I get that using it vs debit does things psychologically in the brain than “borrowing.” The game is not worth any amount of points/miles/cashback imo.
I have 13 credit cards, charge a cheap recurring subscription or charge on each except for one every month then autopay the statement balance. So anything like $5 amazon gift card reloads, cloud storage subscriptions, gym membership, netflix, etc… then autopay it. Every month I have 13 ontime payments reporting every month and low utilization. The last one I use for daily.
Thanks for DR solutions and you for sharing this information , always helps
I still maintain a CC can be used responsibly...
You can dispute a charge through a credit card company -- not so with a debit card or cash! My credit card company ruled in my favor on a dispute, made the merchant stop bothering me and told the collection agency to jump in the lake. Never heard another word about the charge. Problem solved.
Most of these arguments are pretty bad but the biggest part I can’t get over is the “I don’t like these credit card companies because they are taking advantage of people therefore I don’t want to be part of it” which is fine if you actually believe that but how can you say that when you literally partnered with the 2nd largest creditor Mastercard to do the gazelle debit card. So you won’t be part of it then but if there is business and profitability than it’s fine to work with them?
I think using credit cards for online bill pay specifically is totally acceptable. In my budget I know what all my fixed bills / expenses are and pay them online. So using a CC for those bills gets me about 1k/yr in cash back.
But I only use debit for any variable expenses.
Same 🎉
Most Utility / Bill companies charge a fee to use credit or even debit cards online no?
Different strokes for different folks. I love cash back interest free living. But that’s just me. 😆
I have learn a lot watching Rachel and dave about how not to use my 2 credict cards,0 balances for a wile now..!
The problem with these shows is they fail to admit the good side of credit cards and condemn everyone as a whole who has them
So Rachel says to not use a credit card because they make money off of people not financially educated? How is that different from just about every other business, especially real estate? How many people getting a mortgage really understand what they are doing?
@@stevenporter863 because many other businesses acknowledge there are pros and cons. Rachel just says the cons
@@Gio-nl7eg Medical field. They profit from sick people. They rarely tell the risks unless asked or forced by disclosure laws, and nobody questions them like credit card companies. Credit card companies even now list the amount would grow to if only minimum payments.
I understand the principle of not having credit cards, but if you’re responsible then there isn’t a problem. Take advantage of the perks.
ya, the issue is 48% of people hold a balance on their card. So the advice only works for 1 out of 2 people and the other half paying interest the rest of their life.
And what about those who live frugally, often work two jobs, but don’t make a lot, and then life happens times 12? Car accident, divorce, unexpected pregnancy, bad fall, get priced out of an apt, and whatever may have been saved is wiped out? And the bad luck just never stops…
It's weird that I'm supposed to not use a credit card because other people who are not me, have never been me, will never be me, and could never be me, have gotten into trouble by using credit cards.
How did she get a mortgage? Did she buy a house with cash? Did her husband have a credit score?
I use a credit card. My balance is paid automatically every month. My purchases have a degree of protection. I couldn't care less about rewards. I use their app to check charges to my account often. A questionable charge on my credit card can usually be resolved before the end of the billing cycle, while one on a debit card deducts from my account immediately. When I use a credit card in a restaurant, I usually tip with cash. I am more likely to use cash in a locally owned business, or I at least try to add a tip to cover the bank's fee. Advising to 'never use a credit card' is sloppy advice. Although risky for some, responsible use of a credit card is possible.
I never spend more, money because I am using a credit card, I pay off the balance every month and this month I got three items for my home that I needed for free that would have cost me several hundred dollars. I do not owe anyone any money. I have a budget that I follow. I totally disagree with your attitude that because some people can not be responsible with their cards and receive benefits of using a credit card that I shouldn't use a credit card. That is not logical to me. I get many things for free that I would have to spend money on. Cashback has save me thousands of dollars over the years. Your reasoning just doesn't make sense.
I use my credit cards for my fixed bills, gas and groceries. I also use it for protection against fraud. I would hate to use my debit card and it gets hacked and my legit money comes out of my account and it takes longer to get the money back especially if I’m traveling! No sir. I had someone charge my credit card for $700 and disputed it immediately and closed the account and got a new card.
1:03 Is this the same 40% of people who can’t come up with $600 for an unexpected emergency?
I was super responsible up until my late 20s now I’m paying them off which feels great. At 20 years old I would’ve been like year sure but life happens and I understand this !
What happened?
So much debate of this. I think both sides are 100% correct.
I've always used a credit card, always paid it off every month, and enjoy about $1500 per year in cash back. I also like how any fraudulent charges don't come out of my bank account balance right away, I can check my account 1-2 times per month and sleep well knowing my checking account remains safe the whole time.
That being said, I dated someone who had a different experience. Her family had some serious legal issues , her parents ended up burning through all their money trying top resolve them, and she stepped in to help pay bills so that the electricity and gas stayed on in their home. It cost her a fortune, she maxed out all her cards and ended up in bankruptcy. I tried pointing that this was NOT her fault. But her experience with the credit card companies and debt and bankruptcy was traumatic and caused her to avoid all credit cards. I can't say she was wrong either.
Every apartment I've ever applied to required a credit check. Not having a credit score reduces already limited options. In this housing market? I don't think so.
Budgeting is definitely much more difficult when you are using credit cards. If you use credit cards for everyday spending the day you pay the bill there are already new charges on it that you are not seeing or paying because that will be on the next statement. That means you are always in debt even when you pay the statement in full. It is near impossible to stick to a budget with credit cards because it is just too hard to track.
It is not difficult if you check your cards daily and pay off something as soon as it posts and then record it in your budget tracker. NO need to wait until the end of the month. If you pay as soon as something posts you will never be in debt and you don't have to worry about the end of the month total or any interest charges.
No it's not. Charges will appear on your card as quickly as on your bank account. If you are budgeting and tracking your expenses, the only extra step is remaining aware of your bank account balance to ensure your card balance never exceeds your cash-on-hand. Not rocket science.
Hi Rachel, you're sharing a way of life and that is debt-free living, and I agree with it. It doesn't mean that there aren't responsible credit card holders, and that there aren't cases where having a credit card might make things happen more quickly, but ultimately what you're suggesting is a WAY of life. I agree with you and Dave. It IS a choice, wether to be responsible and have a good credit score or whether to live debt-free.
It's kinda like vegetarianism and meatatarian. The latter will say that vegetarians lack certain minerals etc, but the vegetarian can get them, just in more unique and maybe through more task-intensive preparation methods.
Ideally, I think a vegetarian diet is healthier.
Living without debt is such a foreign concept to a lot of persons that to live without it appears like a fairytale and impossible to achieve. But, just change your MIND. 😊
Read the letter that comes with your un-asked for card. I always see 29% interest..😝. Really enjoy throwing it in trash.
Cash and debit is best for merchants cause they don't pay transaction fees so the money isn't being widdled down
I have had a credit card. I never got cash back. However I’ve now realised that there’s no point in spending the banks money and instead use my own money. It’s a false illusion to own a credit card and spend on it and it’s also a trigger and just allows you to think spending the banks money is normal. It isn’t. Just use your own money. ❤
I'm one of those people that don't have credit card ever... banks are offering me but nah, i can pay cash. Cash is king.
I'm listening to Dave Ramsey podcast, Dave Ramsey TH-cam and your you tubes and trying to get into a gazelle mindset (which is hard with my adhd). But I'm also trying to get my husband on board. I already have been doing a budget system for 15 years, I'm finally saving up. Plus with starting to tackle my debt earlier last year I got one credit card paid off. I have 2 and my husband has 1 he needs to pay off still. I plan on cancelling all mine but my husband is adamant that he's keeping his Capitol one for emergency purposes. Deer are huge in our area and we would have a car wreck any day.
Completely agree!!!!
Completely wrong
Really enjoy the show and I hear the point about people receiving rewards because of other people paying interest. However, when the bank pays you interest on your savings, it doesn’t seem to be a problem then? Seems a little hypocritical.
You can still budget the same way with the same methods with the credit card…
With $90 extra each month 🙌🏽
I think it is easy for you to have these guidelines because you have money to back you up. And the inconvenience to rent a car w/o a credit card is a lot more complicated than you said. Not all car companies in every city will allow debit card rentals. I think you should offer some of your advice to people who have a handle on their credit cards and not only present the case that no credit cards are the ultimate way to achieve wealth and now you get an "A" for doing it w/o credit cards.
Everyone claims to drive a car better than the average person, and everyone claims to outsmart the average credit card user. Be humble!
Love your earrings. I am trying to not use credit cards or bank loans. I had both paid off then hubby went to hospital and used credit card/bank loan to pay bills.
Cut them up
Thanks !
Good information
What about a credit card for a car such as a firestone card? and it's strictly for the car and nothing else. 🤔
How can we put our spending money on card so we don't touch our bill money? We don't like using physical cash.
We just stopped using our credit card (paid off in full every month) for moral reasons - as much as it is up to us, we aim to live at peace with everyone. We don't want to be responsible for another's suffering, (I know that you can present a hypothetical argument that at any time, you might be causing another's suffering) but KNOWINGLY doing so bothered us. This was a personal conviction xx
I have no balance, but I'm starting to agree with you.
paid with cash house, paid with cash truck. at 65, my CR just sits ther. i don't care. i do care i get1000-2000back every year for utilities, food, etc.
it costs ME, nothing.
A credit score is a "mug's score" They give you a high number because they can bleed you out with some security that they can just harvest rather than needing to chase. Just don't have credit - it then costs nothing to have something you don't have. I don't have a membership of the local women's club - go figure!!
Privileged.
Congratulations of having a bad credit score, but that works for you. What works for me is having a 835 credit score and paying off my credit card every month. People are different, no one like the same things and thank God that is so. Can you imagine if everyone like to eat the same food every day or drive the same car every day or do the same thing everyday?