What's Wrong With A Credit Card If I Pay It Off Every Month?
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The Dave Ramsey Show I don't believe that I have never seen your show before. I have been saying the same thing for decades. This'll make it a lot easier. I've already shared the video. Thank you. Also, one thing that you missed mentioning is that when you buy with cash no one else knows what you are doing with your own money unless you tell them, but when you use a credit card a whole heap of strangers have detailed records of everything that you buy. Still gives me the shivers and everyone is doing it.
Gotta disagree with Dave on this one this helps people who don't yet have the discipline maybe bit once you have a budget and you know the things you actually need using a credit card with cash back and getting miles that is mathe atically better its objective there no buts and what he was saying that about him being arrogant for thinking he's smarter then the banks I think the bank's are looking at statistics and the behavior of paying off every month and spending on things you were gonna buy amyways is an anomaly so they cash in on the all the 99 percent of people that don't do that and that one person is a trade they're willing to take because they ripping off the rest of the people
Dave is fantastic, but I don't get what he is saying about how someone using credit cards think they are smarter than the bank. The motive for the bank is simple: they get a cut of each transaction and can potentially make more by late payments and interest. I pay the balance in full always and never have interest. Sometimes, not having enough cash can cause one to lose money. If I can save money by paying more such as buying in bulk but don't have enough cash to cover it, I'm not saving money. Also, how much cash do you want to have around? There is the gas cost of going to the bank to get cash constantly. There is also the risk of losing the cash or having it stolen.
If it's true that credit cards cause me to spend more, how much more? Is it more than 2%? If I'm spending 2% more but getting 2% cash back, I'm getting more stuff for free.
Its one thing to describe to people why credit cards are still not as good as cash in your mind, its another to get angry about how people who are in good financial standing want to spend their money. The guy just asked a question, he wasn’t asking for a rant directly at him. It seems everytime credit cards come up you get somewhat angry. I, for one, do feel the cash out flow when I lay down my credit card and as a saver in good financial standing, I find any spending freedom to actually be a positive because it allows me to enjoy some of my money a lot more than I used to and the cashback from my cards is a bonus I dont get paying with cash.
Outdated and not well thought out! Some of the main purchasing done by people who use cards to collect points and never pay a single dime in interest is not random purchasing but paying bills. Bills you would have payed for regardless: cell phone, power, water, internet etc... Combined with the fact that most younger gen people use apps to manage their cards, accounts etc: bank accounts and totals spent are looked at by those same people several times a day. Credit carda are payed off instantly, and the price is looked at twice or more. So the pain/ reward thing doesnt apply: people are more aware, they are more keen to how much they've spent, it's thrown in their faces more often they have to pay for things Twice: once at the store and once in their apps. They see their accounts go down when they purchase.
You don't have to be smarter than the credit card company, you just have to be smarter than the people paying interest every month.
You are smarter than David.
Plenty of people are smarter and much wealthier than Dave Ramsey.
@@jfkst1 I wonder how many of those are lurking in the comment section of his TH-cam videos.
@@stealz5000
His net worth is $200m. There are plenty of people with much higher net worth with different financial advice.
You didn’t listen to the video, obviously. He addressed that point. The video isn’t about whether you’re paying interest or not. The point is you spend more when you pay with a card than cash.
To me this person is using his Credit Card brilliantly
But what Dave is saying is this guy may save more and spend less if cash was used. But this guy is probably an exception to the rule. Most people will spend.
But the guy who racks in 200million in revenue is literally telling you to not use it. But you are better than that right?
@@rolandc3401 ye
@@jeezyj6697 Fosho :)
@@rubenmejia9020 well I wouldn’t buy my TV with cash or any items cost more than a thousand. I would pay groceries, or shoes, small item in general.
Credit cards are good for smart people.
And smarter people use cash.
Exactly if you don't have enough self-control to have a credit card than your never gonna make it lol
Sadpants McGee Debit cards are the same as cash.
MarkCEO09 wrong
Solid argument, Ryan.
It is NOT arrogance to pay one's monthly bills on time! It's excellent handling of one's finances!
Until something happens and you can’t pay the monthly balance
@@billybgonzalez and then you get another job, or have money saved in order to pay your balance. Biggest piece of advice I'll ever give, DONT SPEND MORE THAN WHAT YOU HAVE
@@MomoKunDaYo Exactly!!
@@billybgonzalez Then you get to pay the minimums….
@@aggressivepizza2394 then you’re paying interest on the remaining balance!
Dave's wrong on this one. He's generalizing. I've done this for over 30 years. No debt, home paid for.
It's safe..
If you keep the usage within the budget you have set for cash then you gain the benefits and pay no interest.
I think what Dave is trying to say is that not everyone is disciplined enough to have that control. His mentality is more in the lines of "just stay away completely even if you mastered the loop hole to avoid any potential debt rabbit hole"
*100% CREDIT CARDS FOR DECADES* $0 debt at the end of the month. Rewards makes cash too *EXPENSIVE*
Maybe it has worked for you. But society as a whole.......NO. Society in large is in debt to the credit cards. Statistically speaking, if everyone paid their debt down immediately after charging it, and gift you reward points. Their profit would be severely diminished, potentially even eliminated. The term "You are what you eat" is not always true. The banks eat stupid, but stupid they are not.
I agree. I generally like Dave's advice, but this is wrong. Dave should have clarified the difference between a responsible credit user and an irresponsible one. I have a credit card that I've been using for years and racking up benefits without paying interest. I've used the points on vacation multiple times. It's free money. Dave is clueless on this one. There is no reason not to do this for those who are responsible.
I agree. Smart people can manage using credit cards.
I've always disagreed with him on this. I get 2% cash back on everything I buy. I've made thousands of dollars over the years and have never paid any interest nor have I bought anything extravagant.
Hope you are getting some of the 3, 4, and 5 percent bonuses out there as well!
Exactly. This is advice for people that NEED Dave’s advice. As in people who aren’t financially responsible or are ignorant to the damages of their poor financial choices.
@Johan w Yeah I disagree with you as well. I am a grown man with a net worth of several million dollars. I'm not a child. I know the difference between cash and credit and I don't need someone telling me I don't know how to handle my money. Whether I use cash or a credit card has absolutely nothing to do with if I spend money or not. Perhaps most of his core audience is less educated, but the people I know would laugh at that kind of "guidance".
Yes!
Johan w Agree with your point and the point Dave is trying to make. When you know you’ll get 3% more or some kind of money back, you’ll be okay with spending a little extra at the grocery store. When you have that in mind every time you spend, you’ll most likely have spent more than you would get back. But if you know you will never get that money back, you’ll be more frugal with it. Common sense. Of course people can be millionaires with no debt and have credit cards. I think people should listen to other people’s advice and tailor that to their life. Nobody has to follow Dave’s advice to a tee. You’re the only person living your life and have to deal with the consequences of your (good or bad) actions, so if you think having a CC is better for your life then you do you. Maybe you’d rather use credit cards & be in debt to get your child to be able to play that expensive competitive sport growing up. Maybe that sport is what disciplines them, matures them, makes them accountable, teaches them leadership and working on a team, makes them develop good study habits because they have to stay on top of their work in order to play, and helps gets them out of drugs or following a bad crowd. Maybe you and your spouse are already working two jobs and the CC helps you get your child to play that sport for 15 years. Yes, maybe doing this might set you back on saving and you’ll have less money to invest for your retirement and you may not become an everyday millionaire. But to you that is more valuable and fulfilling to have your child play that sport seriously growing up than racking up a bunch of money when you retire at 70. At the end of the day it all depends on what your values are. //Also side note, I do have a friend that uses her CC for when she travels to work to buy a plane ticket and hotel room and the company reimburses her 100%. She gets a ton of airline miles from that and maybe pays an annual fee of $95 for the CC but she gets all the airline miles. I don’t think a credit card is a bad investment in that case because maybe she spent $95, but she got thousands of dollars for free in free flights for a planned yearly vacation. I’ve never heard Dave’s two cents on that particular case of having a credit but I already know what he’d say- don’t get it because you’ll be tempted to use it for other things and in turn, spend more. Budget for the vacation. // I do like his advice and it’s very sound proof and safe. The sacrifices you make while following his advice helps you develop your character and behavior. He teaches you not to take more than you have and not be gluttonous with money. No man is perfect and Dave’s advice might not always be perfect for your situation, but there is power to what he says and teaches.
Credit Cards are not the problem. The problem is a lack of discipline. Having a lack of discipline will hurt you in multiple areas of your life other than your finances. Why doesn’t Dave attack the issue of lacking discipline instead attacking the credit cards which can’t be used by themselves?
listen to what he is saying, he's saying that you are going to spend approx %15 more with plastic than if you had cash...its been proven multiple times..
Ben Wernham I’m currently studying psychology and the one thing that most of my prof have said is that psychology is very bad at predicting what a certain Individual will do at any given moment, rather Psychology merely describes trends of how Individuals behave in environments
what about people that have to dip into a cash advance or their 401ks or savings because of unemployment? it's not behavior when difficult circumstances put you in a corner
False, credit cards are the problem. You're broke. No one cares what you think.
Daniel Reeder what a well thought out and rational argument...instead of using ad hominem attacks why don’t you formulate an argument
He's forgetting that when cash is stolen it's gone. Credit cards can be cancelled when stolen. Cards also can give 1-2% back. Use a credit card and pay the full balance every month. If you are not disciplined enough to do that then sure, use cash.
Plus cc offer fraud protection!
@@lanaj1107 So does a debit card. It doesn't have to be physical cash.
Actual Cash or debit card are intended when he says cash. That being said i agree with Dave for most people. I use my Amazon and Costco cc as a debit card and pay it daily. So i don't overspend but still get rewards.. Dave needs to be strict when people call because flexibility for overspenders just translates to " playing with snakes".
Amen
You must watch minority report.
This is the kind of video that reaffirms that Dave is great for people who don't understand money, but the dude has a depression era mindset when it comes to credit.
...which is the default mindset one should have when it comes to credit.
Remember he's rich and you're not.
His show is based on helping people who have messed up finances. Don't you think he should be hard. That's why people like him be he lays down a clear path to getting out of debt. Whether you agree with his principles or not you must agree that he provides structure to people who are in chaos
Well its like alcohol. Dave deals with financial "alcoholics"and the best solution is no alcohol. But for regular people moderation is fine.
@@Terry-nr5qn good analogy!
A good credit card will give you 1-3% cashback. That's hundreds of dollars a year for the average middle class person if they use it for most purchases. if you are financially disciplined and you pay it off every month, there is no downside.
I agree, if you keep the usage within the budget you have set for cash then you gain the benefits and pay no interest.
I think what Dave is trying to say is that not everyone is disciplined enough to have that control. His mentality is more in the lines of "just stay away completely even if you mastered the loop hole to avoid any potential debt rabbit hole"
yeah but his audience cant think about that....
Agreed I use for only bills and business transactions and get around 8 grand back annually tax free only use what is necessary and if I have the cash in the bank. It’s free money. Responsibility is key
@@Jeramithehuman the IRS consider reward for personal transaction as a discount, but for business it is different.
I've learned to make purchases with 2 of my credit cards for the 1-3%, then transfer extra money to my savings. My discipline is when I make purchase, I already have the money in my checking account, so I payoff the card before month end. Take advantage of the interest free period. When it ends, call to negotiate a lower rate. My max is 3 and rotate the use of each paying the balance by month end. It's all about discipline and using the cards wisely.
Also, with 2 different cards, the $150 bonus for signing up went straight to savings.
Lol Dave mocking this guy’s arrogance when Dave is coming across much more arrogant...
You can be arrogant when you are 100% right talking to a buffoon who is 100% wrong.
@@michaelh5055 The guy is not 100% wrong and Dave is not 100% right in this case
@@michaelh5055 You can never be arrogant.
I agree. Dave sounds angry with the guy who sounds like he is just wanting his question answered.
@@michaelh5055 I'm glad Dave got to you instead of Charles Manson.
I'm the opposite. When I have cash I spend with reckless abandon. I misplace and lose bills. Cash just seems to slip out of my pockets! With my card I track every penny. To all the wannabe Captain Obvious, I know this wasn't the point of the video. I know there's a difference debit/credit card. My point was not to argue with Dave! I was just getting something off my chest. If you don't like it, So what! Don't care.
Must be a Daniel thing cause I’m the same way with cash! Card has all my money and I’m disciplined
Daniel Roberts lol
@@danielroberts585 Oh Danny boy:)
Definetly a Daniel thing
Sometimes I wonder if its a generational thing? I’m sooo much better with a card than cash (as I can track and plan better). My parents are the exact opposite and I can definitely see them spending more with a card. Dave’s saying the caller is arrogant, but we’re not all the same.
Sorry man, you're wrong on this one. Been using credit cards for 30 years, never carry a balance and I never buy more than what I needed.
Call him wrong when you have more money than him.
Rigoberto Pérez by that logic, you cant disagree with someone who has more money than you.
@@Redallstar1 if money wise, of course not. It's like an obese person contradicting a healthy one.
@@rudipell90 being good at earning money and being good at saving money are two different things. By being good at saving money I simply mean buying what you need, using available discounts, sticking to the budget and similar. Just because someone earns more, doesn't mean he is more knowledgeable how to spend money more efficiently (Dave is great at saving money obviously, but not perfect). You can literally save money if you responsibly use credit cards.
@@jcj6892 Yes but those credit card fees are priced into the product prices anyway. Even if you pay cash.
I am the exact opposite. When I pay with a credit card, I can go online and see what I spent. I can see exactly how much I spent on food, clothes, utilities, whatever. With cash, it is so much more difficult to track unless I keep receipts or write down where I spent money. Keeping a budget is so much easier for me using credit cards than cash.
James Drylie same here. I love having a paper trail online so I don’t forget what I spent like I do so easily with cash.
Same!!!
Exactly. I get an instant push notification to my phone whenever my Discover card is used. As I leave the store or get back home, I see on my lock screen exactly how much I spent. Same feeling as using cash for me.
Hes just old
A debit card will do the same thing.
Honestly, tell me if I’m wrong but if you have discipline, you can have a great cred score and also treat a cc like it’s cash.
Nope
@@SummeRain783 If you’re not responsible enough to use a cc just say that.
@@SummeRain783 another shepeople in the flock.
@@One.Six92 sure buddy. If that helps you sleep at night
@@SummeRain783 sleeping well knowing I have better self control than you, absolutely
Why does Dave go off on this guy calling him arrogant and insulting him? I didn't sense any arrogance from his question.
Ya Dave seemed to be assuming a lot on the minimal information provided and not actually talking to the guy. Seems like the guy has his spending habits and finances fairly well under control and supposedly never having to pay any interest, but that is certainly by far the exception when in the easy habit of using plastic for everything. If someone is experiencing problems with their finances, switching to a cash-based system could be very helpful for many in the road to financial recovery to help them better understand and realize where all their money is going to.
Fricke Fitness that is the one trick pony show.
Yeah I was very surprised that David brought in personal attacks when the guy said he has never paid a dime in interest and gets a ton of free miles.
I think the guy just wanted to know why it was a bad idea and Ramsey had to belittle the guy instead of just saying "it's been proven that people spend more using plastic vs cash" ... he didn't need to get rude about it.
SmashBrosBrawl seemed like he was jealous
Dave is right on a lot of things for most people, but this argument is akin to saying well you better not drink because everyone that does becomes an alcoholic.
I like that analogy!
Right. I have the self-discipline to resist spending 12-18% more with plastic. Indeed, I'm more likely to buy something if I have the cash in my wallet. Ramsey is simply speaking to an individual about averages.
The thing is, Dave has to stay constant for the sake of his program. You give even the slightest bit of compromise to those who are on the edge of the discipline, and they will fall into the trap. This is why there is no compromise with his mentality, and it comes from a self admitted lack of discipline as he considers himself a spender.
Not a great analogy because the world would be objectively better if no one drank alcohol
@Antonio Iniguez Everyone gets the analogy bro lol. Statements like this don't need to fit into a utopian world view like no one drinks or uses credit products. Alcohol helps some people. It destroys others, same for credit products. I don't believe in banning something or preaching no one us it to safeguard against some peoples lack of personal responsibility.
I've been using credit cards like this my whole life. I've never paid interest and my credit score is 840+. Missed the mark on this one...
His point is, if you used cash rather than credit cards, you’d spend about 15% less on than you would with cash. Sure your not paying interest but your buying 15% more.
@@Redallstar1 according to what lol. Some study that is probably conducted wrong?
@@devinotero1798 did you watch the video. He explains it.
@@Redallstar1 no he doesnt lol. He just mentions a study, he doesnt explain the premises and other information of that matter
@@Redallstar1 alright if that is true why does he use debit cards their plastic. I would never spend more with a cc than a debit card. If u treat your cc just like a debit card you win. He said you spend more on average with a cc, yea if you’re not responsible with it. If you don’t have the money in your checking account then don’t buy that item simple
By this logic, a debit card is just as bad as a credit card....?
Aeriel Corey Right! I agree with most of what he talks about but not this topic. He is assuming everyone processes using a credit card the same way and that is erroneous.
It does encourage the same spending habits as a credit card, yes.
Yup, the psychology is the same. Dave should be telling his viewers to live on physical cash. But that's very difficult to do. I've tried to use physical cash several times in my life. It's workable if you're single in an apartment with no car, and spend your days as a hermit reading library books. But if you have a house, spouse, kids, car, or live in the burbs, you need a debit card. Either that or carry $500 around everywhere.
Aeriel Corey Nope it is similar but not identical at all you aren't literally rewarded for spending as much as you can on any type of credit card even when unnecessary, you don't go in debt from one, it is connected to your checking and in no way impacts your credit score. A debit card can serve as training wheels for a credit card so whether for credit cards or not everyone should be in favor of debit cards!
@@denisenoles3159 You missed the point and the logic! and you are brainwashed by the industry. Wells Fargo has a great credit card go get it! LOL! People like you are a waste of time trying to explain anything to. LOL! Go get that credit card!
Dave you’re making absolutely no sense on this one.
He’s not wrong
He's not always right, but he's never wrong. lol
My point of view based on what I think Dave says is that you can't get wealthy using card.
I’m hearing some sense
That’s because Dave is wrong, knows he’s wrong, but refuses to update his system to account for this.
Why are you insulting the guy. He only asked you a question!
I agree 100 percent. He insulted the guy before even having a discussion . It was completely uncalled for.
In one of his videos, I counted him use the words "stupid" and "idiot" more than 8 times. That's the hallmark of an arrogant disrespectful person; not surprised no one in his team checks him on it, cos he'll certainly unleash on you. There's always something beautiful about a wealthy man that respects others, and uses clean language.
Not only that but they guy who asked the question is actually right, you 100% need a credit card when you travel with your family, hotels or car rental agencies won't let you in if they don't hold a deposit on your credit card,
And he got the REAL answer! 😌
Wow...what a bunch of snowflakes lol..you call this insulting? It's teaching, take it or leave it.
I spend way less with my card than with cash. If it’s cash, it already out of the bank and practically halfway out my hands!
Claire Lubrano you look like the nerdy guy from the movie,"we are the millers"
Tyrone Watermelon never seen the movie but I looked it up and you should really get your eyes checked. I don’t look anything like him and I’ve never heard that before.
Tyrone Watermelon
Get a life, troll. Bet you're broke af
@@giggityeffyou Im 100% sure you are broke since all the videos on your youtube channel are recorded using a calculator.
I'm the same way Claire, I've heard this before, and I think it is a generational thing. My bank account is like a high score that I don't want to reduce, whereas cash tens to burn a whole in my pocket.
I'm calling BS. When my employer pays me, they don't give me $100 bills. I get a direct deposit and I never see the cash, as most of you don't either. Paying your credit card off each month and getting Airline miles for it, good for you brother. Don't let someone tell you that is a bad habit.
Michael Duran you are not seeing the point.
You're not understanding that money is just a method of accounting. Cash, credit, if it was on the same terms it's the same thing. Don't attribute your cave man "trading" mentality to people comfortable with abstract concepts.
exactly. Credit is a necessary evil. You cannot just go without a Credit card these days. These people are good for paying back their Credit cards on time
This is one of the few times I disagree with DR! It’s a lot easier to track my spending and adjust my budget by tracking my credit card statements than it is to track cash spending. I think if you’re a responsible spender and pay off your balance every month and accrue $0 in interest, then there’s nothing wrong with using credit cards.
It definitely is easier, and also easier to spend more...ask me how I know.
Dave Ramsey’s advice is good for people who are clueless with finance and are impulsive spenders. It’s great advice for idiots.
Absolutely! Dave himself is an idiot; just one with money.
Hahaha...good one. Unfortunate but true.
That's funny knuckle head.
One reason I say this is Dave Ramsey advise is not to have a credit card because people may end up spending more. Yes that may be true. People will be spending more but it’s perfectly fine for responsible individuals. If I walk into a mall, I’m more likely to spend more - does that mean I shouldn’t go to malls anymore. If I live downtown, I’m surrounded by restaurants and shops, should I not live d/t. It all comes down to discipline. When I’m on a business trip how am I going to pay for hotels, meals, etc in advance. Carry cash all the time. I rather end up spending a bit more but responsibly with a credit card. It’s like saying alcohol should be banned. It’s fine to drink alcohol as long as the person drinking is responsible and within control. Tons of self-made millionaires have credit cards. And Dave also doesn’t believe it having a mortgage. Really? How can one save that much? By the time you save that much the price of the house would have changed. Some cities in NA houses more than double in 10-15 years.
See, I don't think it's about being an idiot. Self-discipline is a scarce resource, just like time and money. It's genuienly harder for some people, for most of people. It's harder to have self-control if you're a sleepless parent, if you deal with mental illness, if your life is disorganized, if you're hungry, if you're bored. Credit card companies prey on the majority of us. But for self-control-rich people, cashbacks and miles are amazing. :)
Dave you lost on this one. This makes no sense if you're responsible.
Enigma He's talking to the people that aren't responsible obviously. Even if you paid off your cards monthly and are debt free, he said statistically, people are more likely to spend more with plastic. If you paid with cash Every time you're less likely to do so especially if you don't keep a huge amount in your wallet.
Obviously not. Look at the title of the video and listen to the original question.
I have to disagree, Dave mentions that using plastic vs cash activates neurological response that is more sensitive than paying with plastic. I am sensitive to numbers, I know that 100$ its X number of work hours and so forth, I have all of my budgeting in an excel spreadsheet. When it comes to bills, things like internet are always kept at a minimum by keeping up with promotions and looking for bargains. Just because you pay with CASH does not mean squat, you have to be proactive about your spending is all, plastic or paper!
This guy is a fool. If you stupid enough to not know credit is cash then you deserve to not have none of both.
There is also no mention of what the neurological response to getting your statement in the mail. That is one massive OUCH I get every month and it reminds me to be as frugal as possible.
He's calling him arrogant, but then that makes him sound arrogant instead
Credit cards can either be your best friend or worst enemy depending upon how responsible or irresponsible you are with them.
Thats true
No. They are never your friend. They make spending more easier, even if you pay no interest.
Credit cards are never friends lol... A good friend will never leave you neither forsake you but credit card does.
Unless I missed part of the question, the only arrogance was displayed by Dave Ramsey. It seemed like a valid question.
Agreed, Kelly.
I had listened to Dave for a while and used cash. I feel that this effect is the opposite for me. I am a numbers person and I imagine the numbers going down in my bank account when I spend with a card. But cash doesn't seem as real to me. I don't like to have too much of it on me because I have this irrational fear of: What of I get robbed? I call it irrational because I have never been robbed. I personally feel, for me, the money goes faster when I am using cash than when I am using a card.
Im with you i can have my credit card and $20 cash but i rather use the cash at the gas station because i hate owing...but i think this is for the impulsive buyer, i never buy anything without thinking about it for a month and looking for the best deal
Alumnikiid well Daves logic also applies to debit cards. If you don't like credit you can use debit.
I have to agree with you on this since I too think the same way. Whenever I buy something using my debit card I visualize the numbers in my bank account going down. On the other hand I treat cash as a "static" currency in the sense that I have X amount of it in my wallet and spending it won't affect the numbers in my bank account for that particular transaction. I know I'm spending my own money either way but I feel as if the pain receptors Dave mentions go off when I pay using a debit card rather than cash.
***** I am glad to hear I am not the only one.
I have a suspicion that these studies that people spend more with credit cards are biased and possibly wrong. When I worked at a bank I noticed a huge difference between people who spent everything in cash and everything on cards (be it credit or debit), the cash spenders were much poorer. So if you have a study with one poor person who uses cash and one middle class person who uses a card and you see the middle class person spends more money, you might conclude that when people use a card, they will spend more money. But this isn't the case in NY example, the card user is richer than the cash user that's why. Further, the people who make these studies are making these studies to convince shop owners to pay the fees to accept credit, so it is biased. I am skeptical of these studies.
Greg Carlson I'm glad someone has the same mentality as me
A good budget and self control completely crumbles this argument.
Alex Green no no, it’s proven... 😂
Which studies conclude that the OVERWHELMING MAJORITY of people don’t have with a credit card.
Very true otherwise for the small percent of people that do have that
Exactly. But it is good to remember self-control is a scarce resource, just like time and money. If you're self-control rich, use credit cards (or pay a gym membership and go exercise). You're a rare bird, and credit card companies (and gym chains) are making money on the vast majority that is not so disciplined.
right every year i get hotel rooms for free for about 10 days with my CC....never pay late...
Yup. My sister spends way more money with cash than with Credit Cards. And I now taught her to pay credit card balances monthly so that she doesn’t pay interest. Dude is just scared when it comes to debt.
I have a card I use specifically for fuel and company expenses that I cover. I get reimbursed next day and make several payments a month. 2% rewards, earn around $50 in rewards every month. That's a free $600/year. Tell me what's wrong with that, Dave.
"Bc youll spend more than you wpuldve if you just paid cash!"
Like people keep parroting that line no mattdr how much you emphasize its money you were going to spend anyway and the only "splurge" may be that one night i may just drop 15 bucks on a pizza and cheesy bread
@@jlogan2228 just add one more shepeople to his flock, lol.
This doesn’t apply to this video because your an exception
You could have saved 1000 dollars if you paid via cash... No rewards required...
@@livinghope1561he wouldn't have made any money back if he paid cash 🙄.......
Dave is so entrenched in his own way of thinking that he just KNOWS there can’t possibly be another viable option. And the caller’s the arrogant one?! 😂👍
marked3life Owing multiple creditors is that "viable option"? Lol!!!
44fastgun Hopkins if someone is good with money, it's fine. I am ultra frugal and getting points through credit cards is free cash. I've never missed a payment in 2 years :)
As Ramsay says, 80% behavior. My behavior is different than average
exactly. he needs to admit that it can be okay for a select few
Frozenarmy mc so how much is your retirement worth if you withdrew all of them then? How much is your net worth? How's that mortgage reminding balance looking?. I'll wait.
What's the point of living if you don't splurge every now and again anyhow? Some people don't have to be this cheap.
I don't agree with Dave on this one. If Jim is debt free and can pay off his credit card bill every month, then the guy is living within his means and in control. Might not work for many others but Jim in Washington is doing ok. The speech was fine for other listeners' information but no need to chastise Jim if he's the exception to the rule . He just asked why, since he's doing it and it's working fine for him.
Mike Nelson - Your question isn't even relevant. Of course my net worth isn't more than a credit company. It's possibly even less than everybody else that has commented, but again, what's your point?
His question is more than relevant, thanks for the answer...shows who is right, it is not you
So, according to you if a credit card company CEO has more net worth than Dave Ramsey, he is right and Dave Ramsey is wrong. If my net worth is more than yours, I am right and you are wrong. OK.
You're absolutely right. If you are disciplined, track your spending, and pay your card off monthly then you are fine. But if you have that kind of discipline you aren't part of Dave's target audience either. What's he talking about is called Churning, which is putting everything on the cards to take advantage of the miles and/or cash back programs. You don't get free airlines miles with a debit card which is somehow escaping people in the comments section.
Altair Ibn-La Ahad - Exactly! I'm the original poster. I only watched the video once but I distinctly remember Jim saying he's NEVER paid interest on his card(s). This technique may be risky for the majority of Dave's audience, but gosh-darnit, Jim's winning. I don't have a problem with Dave's initial response/speech but I don't understand why Dave had to go on the personal rant/attack on Jim at the end. And, to quote you, that also seems to be escaping the other commenters. They're too busy comparing my net worth to my intelligence, all the while completely missing MY point or not hearing the important part of Jim's situation - which is, he's debt-free, in control and has never paid interest on his cards. I'm pretty sure if Jim had a lapse in his income, he's otherwise well set financially to recoup one, single, month's credit card balance.
Can't agree with you this time Dave. Some of actually have self control and maturity.
Agreed 100% - If one is financially responsible and not an impulsive buyer, they can also enjoy the perks that come with a credit card - which a debit card or cash can never deliver.
Bet you a hundred bucks that you spend more using plastic than if you paid in cash. You will always think twice when you make a big purchase cause you will have to hit up the ATM or bank to pull out the money. I have done this a few times and changed my mind regarding the purchase because it was more of a want than need.
@@ketankshukla you lack self-awarness. There were studjes done that show using plastic makes you soend more and you think you are the exception.
Look it helps you feel smarter and superior so you lower your guard. By being aware that they can get you you dont drop your guard.
@@haris000000 stop whining like a two year old and take responsibility of your finances and you can enjoy as many credit cards as you want. THAT IS AWARENESS!
@priti d That's why you play with chips at a casino.
Dave would rather pay cash before he pays attention.
😂 good one
Better than millions of people who pays attention to the devil lol
Aren’t debit cards plastic too?
Yeah, but it's tied to your bank account so it's a whole different thing.
in another video he talked about how they act the same way i think.
@@neilparmar5705 Exactly. He said cash is associated with the most pain, then debit, then credit. Although interestingly enough I've always sort of considered the cash in my wallet "already spent" and the "real money" I own as the balance on my checking account. But I think that has more to do with growing up with online banking as the norm.
@@neilparmar5705 exactly
@@neilparmar5705 my credit card is linked directly to my bank account and it auto pays the entire balance every month though
I have had a discover card for 2 years. my phone bill, and my internet is automatically paid by my discover card every month and i pay it off every month to build my credit. I dont use it for anything else.
TheCodFather many people do and it's a good idea
I plan on doing this as well to build my credit score
Yea I started at 18 with a credit card. My mom told me to pick one type of thing to buy with it, but only buy it if you can pay it off. I chose online purchases to minimize risk of fraud. My credit score is 810 now after 8 years.
Now I just use it like you. My gym and cell phone bill go on there and that's it.
After i eventually buy a house I'll probably bever use one again haha
Dave: " Don't get a credit card"
Person: "but I need to build credit to mortgage a house in the future."
Dave: "you're stupid, if you can't pay cash for it you can't afford it".
Lol this guy sometimes....
Jose Arriaga He is out schooled about credit card and debt. The SFR in my area is around 1m. If my husband and I have to pay cash to buy a house we’ll never buy any house.
You can’t take anyone’s advice on everything
Churchill Mortgage doesn't require a credit score to mortgage a house!
Don't forget that he always says how having money in an investment account that yields an ~8% return is a great way to park extra cash. Well, guess what? I'll get that mortgage, pay a 4% interest charge, and then make 8% in the money I was able to keep in an investment account. I just started watching his videos but the fact he doesn't get this principle of good debt is the reason why none of his followers will be rich and he'll keep peddling his half baked notions.
I know. He’s dead wrong on this.
This didn't age well in 2020 when most businesses in my area stopped accepting cash due to the coin/currency shortages lol.
Nah but apparently dave ramesy is right and the dude is arrogant lolol. People in USA cant handle finances cause they dont have common sense
Use debit card then.
@@Nature.Shorts which gives u zero rewards and benefits?
@@mandarpatki8869 I use both, but have never heard about a creditcard giving any kind of reward ?
@@mandarpatki8869 you are an idiot if you think they can't handle finance.
Who has the best institution for learning about finance? it's them. They developed CFA institute.
I don't think Jim is the arrogant one, in this instance.
I want to know why Dave accepts plastic if he hates it so much. He sells
all kinds of merchandise online and at live shows and tells people to
cut up those cards, but not before they buy all his stuff with them.
He accepts plastic because he knows how to squeeze more money out of suckers. He doesn't use plastic because he wants to hold on to his own money. Same reason why he preaches for you not to use plastic.
ondfritz2 he doesn’t accept credit cards in his actual store in the building
ondfritz2 my friends and i use what are called debit cards, not credit cards.
Ondfritz2 he teaches things that everyone should do, but what others do is their choice, not his. He can’t control what they use to pay, and you can’t pay cash electronically.
I've used credit cards this way for years and actually agree with Dave here. I tried switching to only using my debit card as of 1-2 weeks ago and it really is a different mindset, at least for me. With credit cards, my mentality was "okay, by the time the balance is due, I'll have $x in the account to pay it off". When the bill comes in, the pain of the money leaving your account is no longer directly associated with the individual purchases. With a debit card, the money is leaving your account immediately. It's no longer "I owe $2k to Chase" which doesn't have much emotion attached to it, it's "is this purchase of this random item that I 'might need' really worth taking $200 out of my checking account?" More scrutiny goes into the purchase decision making process -- I've found myself making fewer impulse purchases with debit. Now, I think Dave was a little harsh on this guy, since it sounded like he was genuinely interested vs trying to be arrogant. I thought the same thing when I started watching Dave maybe a month or so ago, but after hours of his content, I started to see the logic in this mindset and now I'm a believer. To each their own -- there's definitely lots of wealthy people who use credit cards in this manner, but I'll be sticking to debit and cash. Also, even if you pay the balance every month, something could happen and you end up with more than you can pay. This has happened to me before and yes, I was able to transfer it to a 0% balance transfer (with 0% fee) and paid it down in time so that I had no interest, but with debit there's no worry at all of going into debt.
Dave didn't have to insult the questioner. The man was asking a reasonable, thoughtful question. He wasn't bragging, just relaying his information but Dave got nasty. Not cool.
He gets the question all the time. That’s why.
By calling him arrogant? He probably is to some extent thinking he’s somehow beat a billion dollar system. What’s your point?
Well it's the other way around, when I use my ”plastic” card I see the money go away from my account but when I give real money It feels like I'm getting it for free
Exactly this, I monitor the money in my account like a hawk. Any cash in my wallet feels meaningless until I deposit it
Stop saying “plastic.” I have a metal Apple Card now. Lol
LOLLLLLLLLLLLLL
Lol, me too!
Same😂
When I got my card I couldn’t believe it was metal
I completely disagree with Dave on this one and in my opinion Dave is the arrogant one here. The guy writing in was simply asking him a question about why it’s bad to use a credit card if you are responsible with it and he totally went off on a condescending rant. Dave is so consumed by his animosity towards credit cards and his own beliefs that he doesn’t think anyone can use them and benefit from them. I like a lot of Dave’s videos and what he has to say but this is extreme. And the fact is that cash is NOT easier to track than a card. Once you spend cash it’s gone and unless you keep all your receipts then the reality is you DON’T KNOW what you’re spending. I’ve known plenty of extremely wealthy people and plenty of them use credit cards and pay them off every month, but I’m SURE they don’t know what they’re doing because they don’t follow Dave’s methods to the tee.
Agreed. I think Dave have great advice most of the time, but I can tell you from my own personal experience his argument is complete garbage. In my household, we budget our expenses and track that closely. In fact, I've been doing that for almost two decades now. During that same time period, we paid nothing in interest on credit cards. We used the cards as a means for points, etc. Never did we justify our purchases because of the points. We spent the way we would have spent anyway, and used the CC because we got more than if we used cash. I understand the logic used by banks, etc. around CC usage. That logic works across a population, but not in every individual instance. I think sometimes you see people who go through a life change, as Dave has, and they go to extreme positions to refute their past. I think this is an example of that. In general, he is correct with most people, but outliers exist, and he does not accommodate for them. The caller is one such outlier, and was given bad advice.
@@jeffreymossdave ramsey knows what he is talking about people who are very smart with money not necessarily wasted it on credit cards you do raise a good point that there are people out there who are very wise using credit card and keep track of their expenses , using the credit card can get you good points but at the same time gives you temptation to spend more and credit card companies are like insurance companies they know the market they know the probability of a claim is not very likely in certain areas just like credit card companies know that 70 percent of people go overboard with their spending habits just like gambling my dad gambled for 20 years and he is still well off cause he controlled his gambling habits unlike other people I know they are on markers being indentured servants to casinos for life just like people who are indentured servants to credit card companies
I think he is referring mostly to the fact that people spend MORE on plastic than when using cash. So even if the card is paid in full each month, odds are that people are spending more than they intend to.
I think Dave also wants to be careful because the VAST majority of his listeners aren't great with money - or they wouldn't be buying his program in the first place. He doesn't want to add in a "yeah but" that might serve to trip up his disciples. For the rest of us, we should just take it as a much more advanced and nuanced thing.
Also, keep in mind that the more consumers use credit cards, the more businesses have to raise their prices to adjust for the transaction fees they are charged. You know they are going to pass that on to the consumer. Some businesses still give cash discounts for this reason. My bank gives deals on certain products and services too that crush credit cards in rewards - offering 10-15% cash back for using their debit card.
Point is I think that using credit cards like this require a lot of self discipline that most of Dave's viewers haven't mastered, so it would be dangerous if he starts advocating the yeah, buts.
@@MsAlain28 - also people can just as well track their expenses with their debut card
It's not arrogance, Chase is gambling that most people will not pay off monthly. And they are right.
True. They are also receiving a percentage of the purchase price for every transaction. Spending 12-18% more than I would normally spend is probably not worth it though.
They are not even gambling. It costs them nothing to loan him the money. They use a "legal or lawful" system called "fractional reserve lending", where if they have $1 Billion USD in deposits, they can loan up to $9 Billion more (and it's money created from nothing digitally causing greater inflation in the overall economy every time a loan is issued), and increasing the overall money supply (i.e. total amount of physical or digital money in circulation).
They loan money they don't have, and recieve actual money in return, to loan even more on the money returned. So the more money they have the more money they can loan, and thus expand there operations. Maybe 90% people will pay there card at the end of the month, and very little is made on CC's, but now they have enough money to get into businesses that have guaranteed interest.
Not with this caller. He pays it off monthly and never pays interest. Dave's point is fine if this caller is overspending, but if he is paying his utility bills (no impulse splurging) with a card, and not suffering interest payments then its no problem.
Business pay 1-3% of there income per transaction to credit companies for the instant cash flow
I get the concept here (of spending more "recklessly" when you use a card), but I think if you are completely out of debt, you've kinda already won that battle.
I'm at the point where I use the card because if something goes wrong they cover it. I don't use debit, I buy stuff with the card or use cash. Once you're a responsible adult, the payment method makes little difference.
No. I was out of debt and yet still spent tons more on cards over a few years than I have without them.
The problem is with savings... You would have no interest at the end of the month but no savings at all... Lol
I do the same thing as this caller. My impression of the question was that it was referring more to regularly recurring monthly expenses like cell phone, utilities, dry cleaning, cable bill, car insurance, etc. I have all that on auto pay with my credit card, and the credit card itself is on auto pay. There's no emotion or psychology to it. The bills just get paid on time and I don't have to fret about it. I put it on credit card instead of direct check payment because I don't want to give out my bank account number to all those people. If there's a problem with the credit card the bank's fraud department will alert me, and I'm only liable for a small amount. If a Russian hacker steals my credit card number, the blast radius of the damage is limited and I can get most of my money back. But if a Russian hacker hacks into my dry cleaner and steals my actual checking account number, maybe he can steal money directly out of my checking account which will be much harder for me to get it back, if I get it back at all. And there are some credit card benefits too, but not much. No I'm not arrogant to think I can outsmart my bank. Of course they are making money off of me. They are making a nice transaction fee off of all these transactions. Before I put this system in place, my wife managed paying our bills and it was complete chaos. Bills would get paid late, we'd get overdrawn on one of our accounts, we'd have late fees and overdraft fees, and all kinds of stress and chaos. This system just makes it much less stressful, my wife and I don't need to argue about money as much, everything gets paid, it works.
I like Dave but I disagree with his view of credit cards. The reason reward cards exist is because Dave is right, the majority of people use credit cards exactly like he says they do. They overspend because the pain centers of their brain don't light up when they charge something. They're the ones funding the rewards program with the interest the credit cards companies collect.
For the rest of us, who pay their balances in full each month, we're taking our rewards and taking cash back, getting gift cards, and taking trips around the world. I have an American Express Blue Cash Everyday card. I redeemed $25 yesterday. That's free money and I ONLY charge groceries on that card. It doesn't matter who you are, you need food, and I got $25 for free simply for buying something my family needs. The reason I get $25 for free every 2 months is because other people charge things on their card and only pay the minimum payments. To them I say thanks, chumps!
gimpinmypants
I see your point but maybe your missing his. By using plastic, people tend to overspend because the emotion of losing physical cash isn't there. Even if you pay it off each month, you're spending more than you should.
I am definitely guilty of this exact thing in the past. The credit card companies are still coming out on top even if you pay in full each month.
The are exceptions for everything but if you've listened to Dave long enough he's never going to tell someone to use a credit card or borrow money that isn't a 15 year fixed that's no more that 25% of your monthly take home. :)
gimpinmypants exactly I'm with you
We do the same thing. We only use the card for groceries, I still plan my shopping trip like I'm cramming for the SAT's, shop sales, use coupons and I know what I'm going to spend. As soon as I leave the store, I text my husband the amount and he immediately makes the payment. Credit cards are only a problem if you abuse them, and it IS possible to use them responsibly
Ryan Manzi I think Dave misunderstood the question. He answered a totally different question. The caller was asking what was wrong with what HE (specifically) was doing, which was responsibly paying in full every month and reaping the free rewards. He wasn't asking about the psychology of how credit cards affect irresponsible users. There is absolutely nothing wrong with what that caller was doing. As long as your cognizant and responsible why not collect free money?
Tha_Champ exactly.
I usually agree with Dave, but he's flat out wrong on this one.
100%.
To an extent it's true. With varying degrees for each user; there will always be a difference even if it is minute.
Pretty arrogant of Dave to start calling someone arrogant for using a credit card without knowing any transaction details. "Go to Disney, stay on property" - did he say he was doing that? What basis does Dave have to start lecturing the caller for using a credit card or claiming he was overspending for simply having the card? A better, more rationale argument might be that Dave himself is in fact the idiot for not taking advantage of the free 1-3% that is available to credit card users. Don't get me wrong, if you can't manage your money a credit card can be hazardous, but the overwhelming arrogance in this instance is spewing from Dave's mouth.
Yup! The idea is that you use it to pay bills and then pay off the card each month. You aren't gonna spend 15% more that way, they're bills.
Yea Dave, when I'm at the gas station with a gas card I find myself overfilling and spilling 12-18% worth of gas on the floor as opposed to using cash and just filling it to full.
When gas is 4.00 a gallon in California id rather use other peoples money
maybe not but I bet you go inside and get a drink, chips, candy ect with that card.
@@Thenbafan45 no unfortunately im diabetic and not that stupid 😂😁😀🙈
@@Thenbafan45 If anything, paying with a card saves you from having to go inside at all. Just get back in your car and drive away. If you pay cash and get change, thats twice you need to go to the register and avoid impulse purchases.
fulgore nope! Never
Totally disagreed with this one. Plastic or cash, I'm still mindful of my expenses. Only difference is I don't have to burden myself with having to withdraw cash every time.
Oh, but that is only half of it. The psychological effects are even worse with the convenience of purchasing most things online now.
No it's not..
Yeah I agree, online shopping has gotten me, but cards still hurt.
Buying local has helped me spend so much less. We attempt to buy everything we can from local shops owned by local people. Meat markets, farmers market, etc. We use amazon so much less now, we skip the full cart at walmart... It works to buy local even if you pay more per pound/item.
But you also get better deals online on things you might want. By being able to import directly from countries, you no longer have to spend excessive amounts from local importers.
In the end, I think it all evens out.
Dave left those frequent flyer miles out of his equation, which I've used to travel all over the world for nearly nothing. Dave's calling his caller "arrogant" is the height of hypocrisy, furthermore, if you're eating fast food, you're overpaying for your nutritional content regardless of the method of payment.
Lol airlines have made much money out of you and you think you're good lol!!! Height of ignorance
Dave, as much as I respect you and like your very candid style of presentation I believe you're wrong with this individual.
Nobody is disputing these banks know what they're doing and they profit more times than not.
If this guy is getting 1% cashback on every purchase, gets discounts on travel and never misses a payment - most importantly doesn't pay a cent of interest then he is winning.
You call him arrogant, you are just as arrogant. What you do works for you.
This guy isn't racking up debt or interest - he is playing the system and winning.
I agree the vast majority of credit cards are a false economy but this guy knows what's up. It's not the cards, it's just the behaviour.
You stepped out of line Dave and showed your arrogance and it was an interesting insight to how narrow minded you are on the subject.
(In before "I don't care I'm rich, you're stupid").
S C Have to agree with Dave, the same reasons he says to not use a credit card are the same reasons the credit card companies trust that they will make money off you. Do you really think that you’re ripping off the CC companies and they’re just gifting you these rewards cost free?
@@heyzeus6149 Yes, if you do it right. Someone else paying interest funds your rewards. The "rewards" are given in the hope that you will overspend and not be able to pay it off each month. Live with it.
@@heyzeus6149 go watch some Graham Stephan videos about credit cards. The dude gets thousands of dollars in cashback and entry prizes and has never to my knowledge paid a single dollar of interest at all. It's all about mindset, and the credit card companies know the behavior of the many will more than pay for the 1% or less that are playing the system to get the rewards without paying interest.
For me personally, I don't play credit cards because my expenses are so low that it's not worth the hassle of remembering to pay off a bill at the right time every month to get 1-3% cashback, but if you are an individual that spends 10 000 usd or more a year that can be put on a card, you could possibly see some good returns if you are disciplined enough.
dizzywow just to clear something up, that’s not how the rewards are paid for. They actually come out of the processing fees that the merchants pay for to accept cards. Rewards are not paid for by other customers, they are paid for by the merchants you shop at.
@@polyesterhat correct! I deal with merchant accounts and their statements are 1k+ a month
Really? What studies are these? My credit cards are paid for in full each month. If I buy something using a credit card, I will feel the pain next billing period. If you have no self-control, sure, cut up your credit cards. I haven't paid a dime of interest in decades. My credit score is 800 +.
Good for you. Yeah credit cards are a not bad thing and this guy gives a good example of their benefit, free airline miles. Credit cards can a great thing. It's all about discipline / responsibility.
jvolstad exactly!
I live in the UK so maybe it's different here but I have a couple of credit cards that I rarely use and I have a credit score of 999 so doesn't really affect my score to have them and use them all the time. Only benefit is transactions over £100 there is joint liability between the bank and credit card so you have consumer protection in case the service/goods provider goes bust and you can claim a refund.
From what I'm gathering, the ultimate goal is to become independently wealthy to purchase what you need with cash so things such as a credit score won't be quite as important in your life.
snickterp. the point is to be responsible and self provident. if a person uses a credit card to achieve that good for them. only a fool would decline free money
When I used cash at McDonald’s I ordered a #1 with a coke.
When I used my card at McDonald’s I ordered a #1 with a coke.
When I use Apple Pay at McDonald’s, I ordered a #1 with a coke.
Don’t think this was any 78% more
Carrie Anne Nope. I don’t let these things change my behaviors. Also I don’t care for McDonald’s much anyway.
I will keep using my Chase card to rack up points and fly for free. I pay my balance off every month to avoid interest. I like that my transactions are tracked AND I have more protections than a debit card.
Way more protection
If anything ever deserved an “Ok, boomer” response, it’s this.
Do you take credit cards on your website?
Why wouldn’t he? Taking credit cards means more money for him 😎
Nope! They do not.
They only take Paypal or debit cards. Kinda the same thing though.
CC processing is a lot more expensive. For him.
@@maxt3590 debit card processing costs too... it's about principles.
Dave to me seems like a smart guy, financially. In this case, I think he's stuck in his old ways and lumping disciplined people with undisciplined people and saying it's the card that's at fault.
@@jcj6892 that's interesting, and gives a new perspective.
Still though, if merchants add on the service charge into their goods and services, those who don't get any cash back are the ones getting the short stick.
@@jcj6892 So in other words, you'd be stupid to pay cash because you pay the fee either way, you might as well get some money out of the deal!
Would love to see the study of this for the younger generations - internet generations - the ones who have never walked into a bank, wrote a check, etc. I am much more motivated by seeing the dollar amount in my account than I am by holding paper money. Keeping my balance growing is what I want.
The overwhelming arrogance in this video, is you Dave....
n7hevn fact!
"Stop using your credit card so that you have to pay for all of your airline trips out of pocket. Because money."
-Dave Ramsey
David Eagin 😂😂😂
David Eagin I’m doing Dave’s baby steps but I’m not going to go back to not getting air miles (saving me $2,000+ a year). I get what he’s saying about behavior but some of us have control 😝
David Eagin Uhhh......You have to buy lots of things with that credit card before you get air miles. They don't just give you air miles because you possess convenient wallet-sized Visa emblems
what card do you have?
@@cristelahopkins447 True. But if I spent 1500 in 3 months that I was going to spend anyway, and then got about 2000 dollars of free travel... I think I won.
Dave is calling Jim arrogant for using credit cards, when in reality he is the arrogant one..
So true!
And you're NOT arrogant as you judge Dave, one of the most successful financial helpers for common people in history????? Dave has earned the right to judge people who are idiots with money. He's not only very experienced, he's also formally educated in finance. Some nerve you have to call him arrogant.
JW Words you're totally right if someone is successful and educated they can do no wrong and are always right. They can't be judged by "idiots" who don't agree with them on everything. While we're at it lets just call them gods because of how perfect and unjudgeable they are.
Aj Stiles i
Why?
I use my credit card for everything too, but I definitely think that Dave's got a really good point on that... Next time I purchase something on my credit card I'll make sure to lay the dollar bills in front of me mentally. Best of both worlds haha
For one year I used only cash and saw no difference in my annual spending than when I used only a credit card for the next year. Plus my AMEX gives me 6% cash back on grocery purchases, 3% cash back on gas purchases, and 1% cash back on everything else, its too good not to use. Simply exercise constraint and self control, you'll be fine.
This. All these people who can't possibly imagine someone being disciplined with their "credit card spending" (spoiler: it's just "spending") probably don't have good spending habits themselves whether it's cash or card. I do NOT spend more with my card than I would with cash. I have a HARD number I don't exceed per day on spending. In my case, it's $60. I'm disciplined enough and aware of my finances that I don't need some archaic paper bills reminding me to not spend more than I've budgeted for. I don't get emotional over cash like Dave Ramsey seems to think. Then again, I'm not his age either. He grew up in a cash society.
Joe Malone Blah blah blah then if you are such a financial expert who has it all down to a science then go make your own financial radio show but you won't because you already know that he knows better than you!
notafanboy The fact that you refer to cash as archaic just serves as further evidence that you are ridiculous more like then again I am not a influential multimillionaire like Dave!
You get charged more at certain gas stations for using credit compared to cash and there is even a card minimum in a lot of places I am in my twenties and see it for what it is, you are delusional about money keep blaming it on your age and living in the fast lane and you will be a cart boy in your elderly years regretting not listening to Dave!
Jasmine Bell so the only way you can be smart with your finances is if you have your own show? This guy can’t possibly be an expert on his own finances if he doesn’t have an audience? Wth? I would hope we all become experts on our finances at some point.
Dave, you're the one paying Chase. Chase charges merchants. If I never carry a balance, Chase still gets their money from the merchants, who in turn raise their prices. That price increase is offset by my rewards, but cash users have to pay the higher price without that benefit. In other words, Chase is taking money from you and other cash users, and paying me to help!
Yes the price is the same whether you pay cash or by credit card. There are some places like gas stations, who would give you a discount if you pay cash.
Thats you and congrats. Thats why Dave is talking to millions of people with different situations.
To build credit you need to have something on your credit, that's just the way of the world. I don't see nothing wrong with Jim situation, paying things off with his Visa credit card and paying his credit card off immediately. The issue comes in when people use their credit card and max them or overuse them (over 40%) and don't pay them off right away or within that same month. I like Dave Ramsey a lot but I don't agree with his statement. And calling somebody arrogant when all he's doing is building his credit and not maxing out credit cards, come on man.
Anthony Menzie on the contrary, you don’t have to have credit unless you’re trying to buy something you can’t afford.
Actually if you're speaking about a credit score, the higher your credit score the more economical Things become such as car insurance, house insurance, liability insurance
That's because Dave deals mostly with people with little discipline. My dad did this for 4 years. Never paid interest in his life. Only bought what he needed and was already scheduled in his budget. He racked up serious mileage points and traveled well. Plus all of his expenses were itemized on his monthly bill. He never overspent because he planned every purchase for years.
Dave, I'm 30 years old. Every time I make a transaction using my debit card I get a notification on my phone with the amount spent and the amount left in my checking account.
I barely ever use physical cash. I spend what I can. I don't see a difference between $43 in cash and $43 on my debit or credit card.
It's all money to me. I disagree, Dave. I really do.
It's a behavioral thing, like Dave says. It sounds like you have the reality check and discipline in personal finances which is a lot of people do not have.
Dave is okay with debit cards not credit cards
These studies have found that more often than not, people do not connect spending with plastic vs spending with paper. It all comes down to individual behavioral dispositions and if you feel like you have a good handle on your money emotionally than do what's right for you.
Obviously he financially okay and he's doing something right so I don't see using a credit card any problem 💪🏾
Dave's arrogance on this one is striking.
Tell me this, do you know any millionaires that say credit card rewards are the reason they’re so successful?
Do you really believe you’re cheating the credit card company out of money?
No, you’ve fallen into their trap and you’re too arrogant to see what’s going on.
I don't necessarily disagree, but i also think you'd be surprised at who the millionaries are. Simply saying for dave to paint everyone with a broad brush does a disservice.
@@BrokenKeyboard14
1. No one becomes a millionaire by diving uber, but it can certainly be a contributing factor to fiscal wellness. Exploiting rewards cards can have the same relationship to wealth attainment.
2. We arent getting one over on the credit card companies. Theyre 100% aware and plan for people to just get that 3% for mothing. They don't care about me, because tgey make so much on the people who pay interest.
If i buy beef jerky at the checkout because my credit card abstracts money to a point where i feel more comfortable spending frivolously, that doesnt help tge credit card company in any way.
If you dont pay interest, youre not "falling for the lies of the credit card". Youre just overhead
You missed an important behavioral point: People spend 10-12% more on average with plastic. It's simple math.
So that means you can paint everyone with a broad brush?
I just came across this. Who in their right mind carries around a couple hundred bucks around with them??
I do. After all cash is king and my wallet no longer leaves me for a richer man.
weirdos
lol right? Certainly not I, as a petite woman living in a dumpster fire of a city. (new york. diblasio is the worst.)
I do
@@houseslippers7732 don’t cry when you get robbed
I’m the same as Jim. I have self control and follow my grocery list and am not a shopaholic at all. I love my cash back
I have been using credit cards for over 12 years. I haven’t paid one single dime in interest. Arrogant Lol.
Dave's point was not about interest; it was that we tend to overspend with cards.
Philip Tran cool you want a cookie
You are a liar...and arrogant!
Joe the rag man dude It’s the same as a debit card
@@tajneeley Actually, they're not. A debit card requires YOUR funds on hand to use it. A credit card, on the other hand, is *someone else's* money that you're BORROWING and you have to pay it back. If you don't have the money in your account to pay for whatever you're buying or doing, the debit card will be declined. The credit card will go through whether or not you have the money unless you've maxed it out.
It also needs to be pointed out that when you walk into a store with cash and only cash, you have a set amount of dollars in your wallet that's usually less than what is in the bank. With a debit card, you have your whole bank account in your pocket at all times, and with a credit card, same thing except the card company gives you a loan for the amount. For me, the convenience of not having to pay with cash is why i use a debit card.
Its not a loan unless you carry a balance. Pay it off every month and you will not pay interest.
+usnftc It's a loan the instant you use it.
I hate using cash. When I do I’m literally happy it’s gone so I don’t have to deal with it anymore, but when I use a card it hurts. It hurts twice, once when I use it and once again when I go through my expenses and pay it off (which I do in full weekly). When I pay in cash there is nothing reminding me it was there in the first place, but with a card there is that big red mark that stays there forever.
I respectfully disagree. He over generalizes on this point. Yes, statistically people on average spend more. That do not mean the individual will. I do 98% of my spending on my DEBIT, or an account I maintain to have a relevant CREDIT SCORE. In my mind I have "the balance" and or "the debt/bill". In my mind every swipe to me is the same as spending cash, in fact to me it is more real because it is my bank balance going poof. Every swipe on the card has a PAY X on the bank account ledger. Electronic spending is also far more easy to back audit for spending and budgeting than CASH which tends to be undocumented and so end up in the OTHER category.
The point is not what the average guy will do, it is what you will do. Sorry but Dave is being the argent one here assuming the guy who asked the question has zero impulse control because statistically speaking the average person do not.
Here is the REAL TEST:
Spend on the plastic, and spend with the cash. Do like to like and keep track of the data. If you are disciplined enough to do like spending regardless then your fine to do what the person asked what was wrong with it. If you find your self spending more on the plastic then you know how much more you would. What Dave leaves out here is there are also anomalies who would spend more using CASH.
You either default to thrift, or to wanting to spend: know which you are and act accordingly.
He does over generalize. But in doing so he is helping more people than hurting them. The majority will benefit more from not using a card than using one. you make very good points!
+Josh Endress, it may surprise you to learn that is not factually true.
Only about 40% are the ones use credit like he says. So actually the data shows his advice helps a minority on this point. Oh, they are his core customers and listeners, but they are the minority, not majority. We do not have hard data yet, but some things infer it may be a declining percent so even less of a minority now.
Basically fewer young people think in terms of CASH like he implies so as his generation ages out the point he makes is becoming even less relevant and factually untrue on many fronts. IMO that is the big problem with Dave. He has a good core, but it desperately needs to be updated for current trends and data. A lot of the things he claims are no longer true or become no longer true, that is a problem if you are young enough, and it can cause a lot of financial harm.
TheShowThatSUX For my business transactions, i always use debit and receipts for tax and accountability. For personal, it is cash and receipts.
We have no credit cards, and my wife and i gave only one debit card for our personal finances. Our personal checking account is only used for bills and online purchases, but for online purchases, we make sure there is enough money after expenses and usually deposit cash to cover the purchase.
You can abuse credit cards if you do not have one.
Douglas KI7LIK imagine getting back 2% cash back on all of those purchases placed on your debit card. You would save money when you treat that 2% back CC like a debit card by paying the balance in full.
Dave has said in prior videos that he uses a debit card. I understand that credit cards present the possibility for debt, but his whole argument in this video was for "plastic" and not just charging with a credit card.
dave has said that in his earlier days he and Sharon only used cash. Now he's got 30 years practise behind him he's responsible enough to handle a debit card. So for all new beginners he still recommends cash only until spending habits are ingrained.
He pays the credit off every month, so no debt.
I tried to get away from using a CC at the gas pump, etc., so I was using my debit card. That info got stolen and someone tried to charge on it. Fortunately, my credit union caught the charges. Now that poses a different risk. If I have no cash, but I have my debit card... and all my money gets emptied out of my account, where am I? In a worse place. My goal is to make sure that I have ONE credit card that can be used for certain transactions and ONE debit card, with the goal of using cash, if doable and to have that CC paid off, monthly. I'm working to sell my house to get everything paid off and I will have a plan in place for every dollar of the money I have from the sale, so as not to repeat the mistakes of the past.
You can't shop online with cash. I can hear Dave now, "Exactly!"
Yet it says “Visit the Dave Ramsey store today ***link***” in the description. Guess no one is buying that since there’s not a cash option💀
This advice makes sense if you’re still saving up, paying off debt, etc.
If you have money to spend… little impulse won’t hurt. Life is meant to be lived.
Poor example, this is all case by case scenario. For many people the opposite is true. They fly through cash because its conveniently there to get rid of with no transaction history to remember what we spent on and why. At least with a card you can see how much you spent and where you spent it. 90-95% I agree with Dave but I just can't agree with this "logic". I do agree personal finance is mostly behavioral and that would take effect regardless if you use cash or credit. If someone can maintain a credit card and pay 0% interest while living within their means then I see no problem that caller or people like the caller to continue what they're doing. It just seems wrong to call someone arrogant without seeing how looking at what the caller spends on his card now and what he would buy normally buy without cash. I'm not ignoring the fact that many people are less responsible with credit cards but he's ignoring the fact that others are just as responsible or even more responsible with credit cards than with cash.
Totally agree with you, Tigerkem! I've heard people talk about their cash envelopes saying "If I know I have it in my wallet, I'll spend it!" which shows no self control whatsoever. So they need to physically limit themselves to taking out a certain amount of cash each month to put in their wallets. Those people shouldn't have credit cards, obviously. But if you have self control and can afford to pay off each month's charges on the credit card, then that person is capable of using a credit card wisely and kudos to them for getting free airline miles from the card!
I don't dispute the study that says pain centers in the brain light up when you pay with cash vs. no pain when you pay with credit cards. I'm such a conscientious spender though that ANY spending hurts, lol. If I'm paying with cash, credit or debit I'm cringing inwardly. I don't do cash envelopes for each month, I just keep track of what I spend (cash, debit, credit) in a spreadsheet and I've never carried a balance on a credit card, ever. You just need to know yourself and use appropriate financial tools to your best advantage.
That would be a very small foolish percentage that do that. Sounds like that persons life would be over in a few months if they lived within 20 miles of a casino, . Poor example
Tigerkem Exactly my thoughts. Dave lost me as soon as he made it personal by calling him arrogant. No need for that. The advice is good for most people, but there are always exceptions.
Rebecka A You should try EveryDollar app from Dave Ramsey. It is amazing. Great way to track expenses and balance your budget.
Why would i support someone who thinks it's a good idea to insult his viewers and scold them like children? I'll pass.
I make over 100k. No car payment. And use credit cards and pay them off immediately. Why use cash when i can get points???
Because Dave is still living in the 90s
I’ve already clocked up $153 this year cash back on my Discover and it will be matched in April. Can’t get that with cash
@@jcj6892 um, no. Just no. You dont pay 2.5% less for something by paying with cash.
@@jcj6892 no, but you are.
Appreciate Dave's key point - am I the only one? - that YOU END UP SPENDING MORE!
And that's the point.
You're the only one.
Clearly the dude is doing something right to make Dave really mad
Yeah, this makes no sense to me. I 100% spend more with cash than my card. When i use my card, it's all budgeted out properly. When i use cash, i don't keep track of it as well.
Get that free credit card money boo boo
I kind of get that to. When I take money out at the ATM I already imagine the cash in my hands as already being spent. If it's not in the bank it doesn't exist.
The number one reason credit cards are not for everyone is there are lots of people who managed their credit card payments just fine when they were employed. Then those people lost their jobs. Those newly unemployed people had to deplete their savings after their income decreased. Who wants to be dealing with credit card payments when you only have money for bare bones expenses or after you've have had to take work making less money?
Also, credit cards make more money off of you than you make off of reward points and such. You cannot outsmart these banks. You just can't.
And if you want a credit card so bad, just go get one and stop waiting for Dave Ramsey to bless the credit card, applaud, dance and skip for your status as a credit cardholder. Leave other people who want to be credit card debt-free alone and ask a better more pressing question. Same question over and over!
The listener didn't ask Dave IF it is right or wrong. He didn't ask for Dave's advice. He asked why Dave thinks it is wrong. That is what Dave did. He told us why he thinks that way.
I disagree. I get cash back for Utility bills, phone bill, internet cable, food (I gotta eat), and on and on Christmas gifts, birthday gifts, gloves for work during winter. Credit Cards give CASH BACK, free money so you're way too close-minded Ramsey. Only have one credit card though.
+blockaderunner is is not wrong that on average people spend more... and honestly given how much he always hates using credit my guess would be he is not good with it him self, so what he preaches is probably a good rule for him. But like you say closed minded. And like you say the utility bill is the utility bill. IF you have the self control to only use it like that then ya, just most do not. The real rule should be to be honest with your self about what type you are
TheShowThatSUX
yeah I inherited it from my granddad who didn't buy a new shirt or pair of pants since the 70s when he was living in the 21st century
He had to be Given clothes for Christmas, birthday and so on. I'm almost the same because my work does not require a suit or dress to impress. Haven't bought "clothes" in 3 years at least. I shop for food at a discount grocery store, where you have to look hard for an expiration date so as not to get sick. My truck is a very reliable NAPA-type autoparts truck, been paid off since 2004.I don't get these people who think a car only lasts 10 years with little to no maintenance (which I get from a friend who is a former dealership technician). Must be the new cars that only last 10 years. There's so many things I forgo, but I buy kinda "Big" on Gifts to people/my parents for their birthday/christmas etc. I buy big on them because I can. I also buy QUALITY if I ever do buy something durable like weaponry. Amazon can get you into trouble though, I've found. You must just not even Go to that site unless absolutely necessary.
Also cable company has pretty much a monopoly so I can't really avoid the ridiculous monthly cost there, same with cellphone (I get more data when I am able to get a lunch break at work - not very often these days - and then forget to change back to less data when I know I will not be getting many breaks at work throughout the month(s) ahead -- you forget when you are signed up for a monthly payment so monthly payments are BAD but you can't avoid some).
Utilities, I am #1 or #2 in my neighborhood EVERY period they send you the results of how well you're doing with respect to your neighbors. It's mainly cause I work 60 hours a week. Don't have an expensive (to me) house pet. My hobbies are not that expensive (except shooting which can be $200 per outing). I'm a big buy once cry once type of person. Back to the Quality thing. My fridge is very nice. When I bought my house I had them throw in all the appliances (which the fridge failed within 5 years, everything else still runnin). When I bought my bikes (in case fuel got astronomical in the future as it had looked like it would at one time), I bought Very Quality. ALL this using the credit card and getting cash back. Freeze dried food which lasts 25 years, credit card, a tent, survival knives, fire starters, water filters, and on and on, credit card). Once set, you spend NOTHING for months/years except the basic necessities of food utilities fuel (I live close to everything I go to especially work -- I do not understand people who live an hour away from work). Home Owners Association sucks but it's not that bad and I guess it keeps/forces everyone clean yard house/appearance.
blockaderunner Well on the cars, I think it depends. Mine is 10 years old, and I only now had to replace the clutch for the first time. It probably has another 100K to 200K miles on it. The problem is less the car and more at the time I needed a sedan, and now I am becoming a family man and we will need an SUV or VAN, but it more or less runs like the day I got it still. Some seals will probably go over the next year or so, but that is not the end of the world.
TheShowThatSUX
all mine has is rust on the front bumper, it's been wrecked (no cars involved) too
blockaderunner there's no such thing as free money, and if you believe that, you've succumbed to their marketing. Cash changes the way you spend so you save more in the end. Trust me you'll spend less on those gifts that you seem to think you're cleaning up on.
I'm in the younger generation which is brainwashed the other way. When I pull out the card, the transaction seems more "serious" to me. But when I hand over some dollars, it just flows through my fingers like water and I lose track of how much has gone... (and I tend to put the coins in tip jars anyway). Having said that, I've never used Ben Franklins. I mostly carry 20s, and I'm sure that if I did pay for groceries in Franklins then it WOULD hurt, so now I'm going to experiment!
When you do your experiment use hundreds, fifties, and 20s in your wallet, for me I stop spending so I don't have to break the fifties and the hundreds
Yeah 20s will disappear really fast, I've found.
I went into this car product store to buy some windshield wipers and the guy at the counter received the money in cash about 10 USD or so the equivalent. He stood there counting it and seriously had trouble counting it in his mind he had basically ONLY dealt with credit cards most of his life and therefore could not even count coins as small amount as that.
That's interesting i've always been the opposite, 5.71 on my debit card is something i don't think about but having to break a 10 to do that same transaction makes i have to see exactly how much i'm left with after the fact.
Hmmm I’m 21 and it feels more serious when I hand over crisp cash than a plastic card connected to my account that most of the time I don’t even know exactly how much is in it
I’d say that may be more true with older generations. My generation has always used plastic so it’s not any different to me. The key is to budget, use credit cards for points and protection on items bought and then pay them off with that budgeted money. That’s how I use them.🤷🏻♀️
What is weird is not recognizing two equivalent situations and not admitting that adults could police themselves.
Yes... that’s why he has so many broke callers and made a net worth out of trying to teach people to stop being broke... it’s common sense.
Exactly
I'm laughing on the way to Hawaii with my travel rewards miles that I got spending the money I had bugeted to spend with your techniques that you give out free online. Thanks Dave!
"Personal finance is 20% head knowledge & 80% behavior.".
--Dave Ramsey.
That statistic is what he wants his views to be like so he can fill their brain with b.s. and make them stay instead of seeking true fininacial advice that's benificial .
This is the only aspect of Dave Ramsey I respectfully disagree with
Same here
Me too. Followed everything else through baby step 7. Debt and mortgage free and use credit card for everything as much as I possibly can, and take the tons of cash back every year.