Why We Use Credit Cards or Why Dave Ramsey Hates Our Guts


48 Comments
Dave Ramsey hates credit cards (and us)

I still remember clearly when Johnny and I first became apprised to Dave Ramsey. We were in our last semesters of college with just a few months left before our lovely school loans would come a’knocking. A friend of ours lent us Dave Ramsey’s The Total Money Makeover. Up until that point, Johnny and I had always been careful with our spending, but we’d never tracked specifically where every dollar went. But Dave Ramsey’s book gave us a plan.

This is also when the phrase “our freaking budget” was born. Initially, I HATED budgeting. Tracking our every expenditure was such a pain, and it was really cramping my style — literally. I could no longer buy a cute shirt or a fabulous necklace on a whim unless it was in our budget. Grrr. But then we got through our first month of spending, and the empowerment of sticking to a budget was priceless. The hate/hate relationship I had with our freaking budget turned into a love/hate relationship after that. And we owe our first serious take at budgeting to good ol’ Dave.

Anyone who has read any of Dave Ramsey’s books knows how he feels about credit cards. He thinks they’re a total sham and deserve a spot in Dante’s eighth circle of hell (fraud). Cut ‘em up, light ‘em on fire, and never touch one again. No exceptions. For some people this may be the best option, especially if credit cards have been a source of overspending problems in the past. Johnny and I have decided that for us our credit cards are worth keeping around. Here’s why:

No Interest

Firstly, Johnny and I don’t use credit cards the way that credit card companies intend them to be used. At the end of each month, we pay our entire balance. As a couple we’ve never paid a penny of interest on a credit card. If the money’s not in our budget or our bank account, it’s not on our credit card either. Mentally, we think of our credit card the same as our debit card.

Credit Score

Dave Ramsey argues that credit scores aren’t important. Perhaps we could both get by in life without a credit score, but having a good credit score has time and again made our lives much easier. Here are a few examples:

Renting: Without fail we have had a credit score run on each of us when we have rented apartments in Utah, NYC, Boston, and North Carolina. Especially in a location like NYC where a good apartment gets swiped up within hours, a solid credit score put us a notch above other applicants.

Utilities: When I switched the electric and water utilities to my name in North Carolina, the city ran a credit check on me to determine whether I was a reliable tenant. If I hadn’t had a good score, I would have had to put down a $100 deposit in order to sign up.

Mortgage: While Johnny and I are still saving up for our first house, it is on the horizon, and our credit scores will simplify the process immensely. We still plan on providing a hefty down payment, but our credit score will be considered just as much when a bank decides whether to lend us money.

Better Credit Cards: When we have shown credit card companies that we’re reliable, inevitably better credit cards become available to us, which leads me to my final reason: rewards.

Rewards

Our first credit card was Johnny’s MTVu Citi card. We had fun tallying up points on that card, even though the rewards were pretty miniscule. We got a few $50 gift cards to Macaroni Grill, which ended up being some of the only occasions we stepped into a sit-down restaurant. We also got our first set of pots and pans, and while they’re admittedly not very nice and very ready to be replaced, they were perfect for our newlywed days.

We’ve now moved on to airline rewards with the JetBlue American Express card and the Southwest Chase card. Those two cards combined have paid for at least half a dozen round-trip flights to visit family, vacation in Florida, and attend a college basketball tournament (Go Cougars!). We never go out of our way to spend extra with our credit cards, but when big expenses do come up, such as suddenly needing a new TV when our old one breaks (crisis!), we put it on our credit card. Not only do we rack up points, but AmEx also adds an additional year to the extended warranty.

So those are the main reasons we use credit cards — and why Dave Ramsey thinks we’re terrible, terrible people. They’re obviously not for everyone. And the reasons to not use them can be just as compelling. What is your take on credit cards? Do you use them? Does Dave Ramsey haunt your dreams at night?

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48 Comments

  • Reply Roo Ciambriello // NiceGirlNotes December 4, 2012 at 11:28 am

    Totally agree that not all credit card users should be set on fire.

    We have a decent rewards credit card that we keep tucked away (not in our wallet or handbag), and we have most of our monthly expenses go to that card (cell phone, electric bill, gas company), then we pay it off and use the points for gift cards. :)

    • Reply Joanna December 4, 2012 at 3:48 pm

      I say if getting free gift cards and flights is wrong, then douse me in lighter fluid and light me up! :)

    • Reply Stacy February 7, 2017 at 7:49 pm

      I also use credit cards . Oh my I m not going to miss out free rewards just out of fear . Especially since my husband travels a lot on his job, we get free miles and hotel points. I got a companion pass last year and it saved 600$ on our ticket. Otherwise our family has to pay full money for vacation . We also enjoy free cash backs . We have no credit card debt as we just use them as planned . They r paid off in full every month . We operate on a budget and decide where to Chanel our money into savings , investments spending before month starts.

  • Reply Aaron Wakling December 4, 2012 at 7:40 pm

    I found your site on Google and read a few of your other entires. Nice Stuff. I’m looking forward to reading more from you.

  • Reply Newlyweds on a Budget December 10, 2012 at 1:54 pm

    DO youhave to pay for the southwest chase card? We currently have the american express jetblue card, but it costs money and I’m thinking of switching to something else when it’s due again (in June). I’d like to use our cards to rack up airline points though. And I’m like you, every month we pay in full. There have been a couple of times where we moved our balance to a 0% interest rate card (like when my husband wasn’t working). But we’ve managed well since then.

    • Reply Joanna December 10, 2012 at 2:25 pm

      The Southwest card does have an annual fee. But the introductory points we got for signing up more than paid for our first two years of the annual fee. Because JetBlue doesn’t have many flights out of our airport now, we’ll be canceling that card soon so we only have one card with an annual fee.

  • Reply Ngoc February 27, 2013 at 10:41 am

    I personally love reward credit cards. I’ve only begun to realize how useful these reward points are. My boyfriend recently purchased our trip to Las Vegas in April on his reward points. We would never be able to afford the fancy hotels like the Palazzo or Encore without these points. I currently hold a chase freedom card (5% cash back ftw). He has the freedom card and a chase sapphire card. Chase allows us to transfer/pool our points together. Sweet! Of course we always pay our cards at the end of the month. We never spend more than what we need either. That’s how to do it IMO.

    • Reply Johnny March 1, 2013 at 12:32 am

      That’s really nice that you can pool points! Since Joanna’s working on building her credit score, we’re using different cards right now. And it’d be great to still be putting all of our points to the same goal. Thanks for the heads up.

  • Reply Crystal April 19, 2013 at 1:40 pm

    The reason I don’t participate in supporting credit card companies and other debtors is that many of their practices are nefarious. They target young college students (like I once was, and I did fall into that trap- it took me many years to get out of credit card debt after college). I think we should all be conscientious consumers and support companies that are in line with our values. While you may have the discipline to pay off your card monthly, many, many others do not. The credit card companies know this. Our consumer debt led to the recession. I think you should reconsider your use of the cards in support of many others in your community that don’t have the discipline that you do.

    • Reply Johnny April 20, 2013 at 12:43 pm

      I definitely respect that viewpoint, but I don’t know if I totally see eye-to-eye with you. I agree that their tactics and practices are nefarious. I agree that society’s general acceptance of carrying debt is the greatest threat to our nation’s economic wellbeing.

      But all consumers have a choice. This same argument could be used with alcoholic beverages. Just because some have a propensity to drink too much or choose to disregard moderation and discipline in their drinking shouldn’t mean a worldwide boycott of alcohol companies. They target youth, advertise raucous nights, etc. But at the end of the day, the burden of choosing to drink responsibly falls on the individual.

      Me not using credit cards would actually have the opposite effect. By weeding out their responsible cardholders, all they’d see is profit. So if anything, mooching the rewards off credit card companies is a way of attacking their business model.

      • Reply Pete April 1, 2015 at 6:28 pm

        You’re a little mistaken with your belief that you’re attacking their business model. They charge the retailer a percentage on all transactions (including when they do a refund onto your card). The card company is simply giving you a portion of that fee back, they are still making money off you using it. They are not in the business of losing money, even on those who use the cards like you do.

        The retailers of course are not in the business of losing money either and need to keep their profit margin up to make it worth their while to stay open. So they are passing the fees onto you anyway in the cost of the product/service you’re buying.

        Unfortunately those using cards are driving up their own costs as well as everyone who doesn’t (2.5%?). This is, except at certain places that discount their prices for cash or debit card users (which seems to becoming more common, but is still not heavily prevalent).

        But, it’s unlikely to get enough people to stop using cards any time soon to not have that be the case. However, I’ve found times when it would have been very convenient to use a card for large purchases (an instance I bought a >$1k safe comes to mind)… I don’t have a credit card, but I do ask “is there any discount if I just pay cash?”… turns out, I get 5-10% “cash back” quite often, definitely beats those airline miles or 1% cash back cards.

        But regardless of anecdotal discounts/cash back stuff like that, your assertion that you’re attacking their business model is false.

        • Reply Johnny May 10, 2015 at 1:29 am

          I nodded my head through most of your comment. Maybe the correct wording of my statement should have been, “a way of attacking ONE of their business models.” If the retailer’s price is inflated because of credit card users (like me) but applies to cash payers (like you), I’m getting some of my money back in the form of cash-back rewards. You are not. And while I’d love to pay cash and get a discount when I shop, you’re going to get 10 or 20 or 30 no’s before you get a yes.

          Regardless, valid points, but I stand by my belief that my responsible use of credit costs them money. And if I were a betting man, I’d guess you’re going to stick by your beliefs, too. :)

    • Reply Lisa September 23, 2016 at 12:26 pm

      This still has me laughing! Let me get this right, because of the “poor little innocent millennials, the entitled generation, the poor struggling college students that can’t exercise self discipline, self control, right from wrong and accountability let alone being responsible, the rest of us should boycott credit card use in an effort to support and stand with them????????????? LOL Like I said, that’s got to be the most insane comment I have read! I will refrain from throwing out a political comment but I can only guess where this type of thinking comes from. Ugh ridiculous! Take Responsibility For Your Actions People!!!! Quit feeling sorry for the group of people that don’t make good choices! QUIT BLAMING everyone else! It is absolutely NOT the credit card companies fault that some spoiled college student decides to rack their credit up!

  • Reply Greg April 23, 2013 at 6:10 pm

    Debit card with rewards. Win, win!

    • Reply Johnny April 29, 2013 at 2:04 am

      That’s a great option, Greg. And now that my credit is established and my score is in good shape, that might actually be my best option at this point. I’ve never ever carried a balance on the cards, but it would be nice to just not worry about them for a while.

  • Reply Gordie August 3, 2013 at 8:05 pm

    I know many others have raised the good points you are raising, and I know Dave has had to answer those many, and still he sticks to his guns. I think the reasons why are as follows:

    1) Studies have shown that in general (meaning, this does not apply to EVERYONE, but likely most people), it is less painful/anxiety-causing to part with money via a plastic card that does not come directly off your balance, than to pay with a debit card or cash.

    2) Related to #1: At least subconsciously, since you like the points you are racking up, it is somewhat even MORE fun to spend money using a credit card that gives you points for purchases than it is to use a debit card or cash. How can you truly know you are not influenced by that “look at the points we’re racking up — how cool!” factor into spending more than you would had it been with cash or a debit card?

    3) If you even once forget to pay off the entire balance, or cannot (for some reason) do so, then interest is charged, and that interest negates some (or possibly all) of the points and benefits earned thus far.

    Now… is it possible to have such good self-control that you never forget, and have enough emergency funding so you CAN always pay it off? Sure. But many will fail at that.

    Is it possible that you can be totally unaffected by the “rewards points are cool” factor, and thus truly NOT spend any more with the rewards credit card than you would it had been cash? Hmm… maybe, and if you have outside help, i.e. accountability, someone to objectively and critically review your purchase plan and give you an honest opinion regarding whether you are spending wisely or not, then you have a better chance.

    Dave works with SO MANY who have really paid a lot of “stupid tax” and been very low due to getting into big debt. He knows that for many, being “gazelle intense” is truly the only way (with other factors such as gaining knoweldge, unity with spouse, and accountability) to becoming and staying debt-free. If he were to say “well, credit cards for most should be avoided, but for some they’re ok”, then many would likely find an excuse to be part of those “some”, and they’d lose their focus, get some debt racked up on the credit card that they were going to be so careful with, and have a smaller chance of successfully getting out of debt.

    So … one possibility is that, to be successful to most of those he counsels, Dave HAS to recommend that credit cards be completely avoided throughout one’s life.

    As a side note, as Greg stated, Dave DOES say that debit cards with reward points or money back (there are some) is a win-win for those seeking such benefits. That is a good point. I still do wonder, however, about the likelihood that one will spend more than he/she would have because points are attached, similar to how people tend to buy things they don’t really need just because a sale is TOO GOOD to pass up.

    Thanks for the good, thoughtful article! But I would like to encourage readers who may be more susceptible to spending more, or forgetting and paying interest: even though parts of life are more painful if you do not have a credit score or credit card, the freedom from that temptation to spend more and get into debt may be well worth it for you. Don’t let anyone talk you into getting some credit cards if staying away from them truly is best for you. Seek wise, objective counsel from someone who knows you well and will tell you the truth plainly to determine which way to go.

    That’s my two cents; you get what you pay for.

    And Levar Burton has MUCH more hair than I do, but I do like a good, friend SPAMwich made by a robot.
    :)

    • Reply Johnny August 6, 2013 at 5:22 pm

      Very, very well stated, Gordie. And I agree with all of your points. While I’d like to think I’m not susceptible to #2, there probably is some justification that goes on with some purchases because of the “rewards” we’re earning.

      I definitely don’t question Dave Ramsey’s solid position on the subject. He’s helped a whole lot of folks using the same tried and true philosophy, including yours truly. Your advice to other readers is definitely on point. Dave would be proud. :)

  • Reply sarah @makingitmyhome.blogspot.com August 26, 2013 at 7:38 am

    i use my credit card for nearly everything and pay off the amount i used it for immediately. i’m talking like seconds after i purchase something, i get on my phone and pay the bill directly from my bank of america app. not only do i rack up tons of points that way but i also have been chipping away at my credit card debt this way (ie. coffee cost 2.45, i pay 3.oo towards my bill) its slowly working.

  • Reply Melanie October 3, 2013 at 4:06 pm

    I’m so glad I came across this older blog in a newer entry! I have read a lot of Dave’s books, and am currently taking Financial Peace University class. The books and the class administrator are pushing the cutting up of credit cards, and I’m just not feeling it! I have an excellent credit score, pay off my card in full every month, and am living on a budget. Like you, I love the reward points! I use them towards gift cards for Christmas gifts each year. It saves a lot of money Christmas shopping! So it was nice to see your article with the similar mindset that I have.
    On another note, I never really agreed with the “Dont save for retirement” while getting out of debt view of Dave. I mean, I completely get why he encourages people to dump debt ASAP, but I think there’s also something to be said about saving for retirement from Day 1.
    The reason I brought that up is basically, I know you guys are conscientious, and I know I’m conscientious as well, so it shows that it’s good to read ideas, and learn from them (aka Dave Ramsey), but it’s okay to use your own judgment as well. Overall, I think his teachings are incredible.

    Thanks for the article—it was nice to see some other Ramsey fans with some similar thoughts on credit cards.

    • Reply Johnny October 7, 2013 at 3:22 am

      We definitely see eye to eye on both points. We definitely credit Dave Ramsey for putting us on a path toward financial independence. But once we had a little more confidence in our finances, we started forging our own path, which happens to include credit card rewards.

      Thanks for the comment, Melanie!

  • Reply Mike November 21, 2013 at 9:27 pm

    Dave says he has never heard of a millionaire who says they got to that point through their Discovery Rewards. In other words rewards/airline miles are not in the plan of action for success with those who win financially.

    • Reply Johnny November 22, 2013 at 1:04 am

      Dave, in this case, is probably right. But I guarantee you there are many a millionaire that game the credit card system to their advantage. And while I can only speak for myself, I know that we’ve personally saved thousands of dollars on flights thanks to credit card rewards, all the while never having carried a balance.

      Are credit cards the key to our future financial success? No way. But neither is coupon clipping, buying used cars, shopping around for the best deal, etc., etc. It’s just another tool in the ol’ toolbox.

  • Reply John Waine January 20, 2015 at 3:53 am

    Hi Johnny and family,

    Thanks for writing this post, I actually found you by looking information about “corporate credit cards”. As some one that follows Dave’s teachings loosely I would like to pitch in on a few comments.

    1. No Interest
    – In fact you may not be paying interests but you may be paying a yearly fee, not because you are not paying the interest that doesn’t mean that no one is paying it and just to think that some one else is paying for my interests keeps me away from CCs.
    – You mention that mentally the CC is the same as your DC, why not just use your DC instead? You know what Ramsey says “No millionaire made his/her money by racking up brownie points”. Altho that may not be your goal.

    2. Credit Score
    – We currently pay monthly for a house so that is what is “keeping” our high score, I believe utilities and such play on the score now a days but I am not sure.
    – I will be happy to put a $100 deposit if that means I don’t have to have a CC, at the end of the day it will be money that I will get back when we move away.
    3. Rewards
    – We used to do the rewards thing about 10 years ago, but personally I am not excited about spending a few hours trying to meet the requirements (throughout the year) in addition to the time spent submitting the request for the $50 – $100 gift card when I could make that amount and maybe more doing freelance work.

    I may have not explored all the benefits of CCs but I sure don’t miss them since we ditched them several years ago, we were only about 15k in debt but felt like forever, growing up without owning a CC and not having one until I got married made the transition easier to move away from them since I never really “taste” their benefits. All I knew was that the money was there until one day I woke up and I had to pay 15k (college? I had to pay it with cash by working while I was attending school since I didn’t qualify for any type of school loan).

    I hope you don’t feel like I am trolling your blog. In fact I am here because my company is offering a company credit card for traveling and I was looking for more information about the subject specifically on what Dave Ramsey has to say about it :). Altho I think I already know the answer.

    BTW beautiful pictures!

    • Reply Joanna January 22, 2015 at 10:42 pm

      Thanks for your thoughts, John! You make some great points on why people should avoid credit cards. We don’t think credit cards are for everyone, and if people want to avoid them, that’s a perfectly reasonable and rational approach to avoiding debt. Currently, our main credit cards are just airline rewards cards, which we have used to pay for all of our airline tickets for the past two years. And we have enough points to pay for all of our airlines for this year, too. That combined with the good credit history it’s provided us (since we’re not yet homeowners) has made them a beneficial decision for us. I would take a good look at what your company is offering… I have friends and family who have been able to save a ton on personal airline tickets and hotels thanks to their company travel credit cards. Good luck, and the most important thing is that you feel good about the decision!

    • Reply JamieJ October 5, 2015 at 12:58 pm

      John Waine – For what it’s worth… I don’t know what sort of reward system you were using (where it takes “hours” to figure out how to “meet the requirements”, and then a time-consuming submission process each time you want to benefit), but it sounds like a bad one. My card’s program requires no effort whatsoever. I get the same percentage of cashback on any and all purchases, and when my balance reaches $25, the money is automatically applied to my card. There is literally NOTHING to it except the two minutes it took to set up the auto-credit option. I simply buy the things I would buy anyway (and pay my bill off in full each month), and occasionally notice that I got 25 bucks.

  • Reply CG February 9, 2015 at 1:11 am

    Great post! We started using our credit card several years back when living overseas. Lots of online purchases had to be made so cash wasn’t an option. After researching having your information (debit card or credit card) stolen, we came to the conclusion that we would much rather have someone rack up money on our credit card than clean out our bank account. Plus, it could take days/weeks to get money back in that situation so being without a credit card sounded like the lesser of two evils. After using points for some flights, we decided to put everything on our credit card to up our rewards. We weren’t spending more money, just keeping all of our spending on one card versus two or three forms of payment(credit/debit/cash). We still have a zero balance budget and everything spent on the card is immediately added to the budget. No extra spending just for points. Card is paid every two weeks so no interest is paid and our card does not have an annual fee. If we have a big purchase to make, we still save for it as normal. We put the charge on the card but it’s paid as soon as it hits the card, rather than waiting for payday. Our card also has several different rewards you can get such as cash back, gift cards, flights, cruises. We’re back overseas again and our card doesn’t have an international transaction fee when used but our debit card does. Just another reason for us to use the credit card. Not all cards are the devil just like not all credit users are suckers. I know plenty of people who absolutely should never use or even have a credit card. This is what works best for us. I’m really glad to have found your blog!

    • Reply Joanna February 9, 2015 at 10:49 am

      Glad you found us, too! It sounds like we see eye to eye on credit cards. We don’t spend on them any differently than we would with cash or a debit card, and they offer all kinds of perks that we’re able to reap the benefits of!

  • Reply Bill March 19, 2015 at 12:30 pm

    Joanna have you seen Dave Ramsey’s mansion?

    http://www.coolsprings.com/news/dave-ramseys-house/

    • Reply Joanna March 22, 2015 at 6:38 pm

      Haha, I had not seen that! Wow… that’s quite the place. To each his own, I guess!

      • Reply ikomrad April 19, 2015 at 2:11 pm

        That’s what happens when you are smart with money. Don’t criticize success, be more concerned with your lack of it and change how you do things so that you can build wealth and live like no one else.

        • Reply Johnny May 10, 2015 at 1:31 am

          Thank you, Ramsey-robot 4000. Joanna wasn’t criticizing his success or his mansion. He deserves every square foot of what he purchased. But no need to get personal behind an anonymous Internet username regarding people you know nothing about — Dave included.

      • Reply Bill Bennett February 8, 2016 at 10:33 am

        You know what? I don’t give one little bit of thought to a home like Dave’s “mansion” (dungan) in the weeds, next to Lee Ann Rimes’ home. That does not impress me much (as Shania sings). We are financially secure and use our credit cards for most of our bills, including many of the standard everyday expenses. We pay bills promptly and collect the rewards. And they do add up, as many of the readers here can attest to.

        If you want to buy a home, are you likely to pay cash for it? Will you save up for 20-30 years and finally get into your first one? If you don’t have a decent credit history, how are you going EVEN buy a home, especially at a favorable interest rate? You may be able to rent a “shack” or mobile home on a month-to-month basis. Then, what will you have after 10-15 years? I’ll tell you what…NOTHING!

        We bought our home when we were very young, and paid it off in less than 20 years. We bought used cars for several years, and got along fine, but there may come a time when you need a later model, or a new one. How many people will save the money to actually pay cash for that newer car? I would be willing to bet it’s less than 10%.

        The financial system is structured around a credit-based world. You can use cash for many things, and you can also learn how to use credit to your advantage.

  • Reply Dandy March 27, 2015 at 3:17 pm

    It’s amazing how many people fall for the credit card psychology trap.

    1. Those rewards are not free. You are paying for them in higher prices. Stores are charged fees and turn around and raise their prices. Look at any products that are sold on credit and you will see explosive price increases over the years.

    2. Identity theft. If you pay cash you can’t lose more than that. If a store gets hacked, I don’t worry about my information getting stolen. And how do you think credit card companies pay for fraudulent purchases? They charge their customers behind the scenes.

    3. More risk. You are essentially giving another company control of your money. They tease you with tidbits, like free flights in exchange for that control over you. Plus they are probably selling your information to who knows.

    • Reply ikomrad April 19, 2015 at 2:08 pm

      1. They come out of profits. If credit cards did not provide a convenient payment system, the store would have to pay to create and manage their own. Even if they did that, people would probably go to stores with nationally accepted cards instead of having to have to maintain a separate card just for a single store. Cash has to be counted, stored, protected, verified against counterfeit, and transported securely ( or you’ll get robbed!) which is not free. Checks have to verified,stored, and transported just like cash, and get fraudulent checks and bounced checks as well.

      It’s not my money, it’s their money. If my credit card account gets hacked, my money is still sitting safely in the bank for me to use.

      No payment system is free.

      2. Stores write losses off at the end of the year.

      3. Credit cards provide free rental car insurance, often price protection, have an information disclosure/sharing form that you have to approve before they can share your information. Its your fault if you don’t read or act on the privacy policy the company sends you at least once a year. I get them several times a year and have opted out of them sharing my info with business partners.

    • Reply Johnny May 10, 2015 at 1:37 am

      Thanks for your comment, Dandy. We appreciate your take on the subject. Here are a few responses to your points.

      1. This affects all consumers whether you’re paying with a credit card or not. But if you use cash, you’re not getting anything back from the credit surcharge.
      2. Fair point. But if I drop my wallet in an alley, that $100 in cash is gone forever. On the other hand, whatever money is stolen on credit I can recoup. And so long I’m not paying an annual fee for my card, that feature comes with zero cost. Zilch.
      3. How is this different than putting money in a bank?

    • Reply Ken June 5, 2015 at 10:16 pm

      Dandy, I have yet to see a store charge me more for an item, because I used a credit card. Yes, I know what your real point is, but I’m sure stores are glad to not have to deal with cash all the time either. Who is slower at the checkout counter….a person pulling out and paying with several bills and then having to get bills and coin counted back to them…a person writing a check…..or a person swiping a card? The line goes a whole lot faster for those swiping the card. Faster lines can mean fewer registers needing to be manned. Can you pay for an item online with Cash? No you cannot. You can use Paypal, but someone is likely getting charged for that transaction. Even Dave Ramsey promotes Debit Cards. Those can be hacked too, so take it up with Dave. Personally, I use a mix of Credit Card, Debit Card, Paypal, and Cash. Sometimes it’s easier to use one over the other. Credit Cards aren’t a trap…being irresponsible with them is the problem. Just like fire, Credit Cards can be useful or they can be harmful. It’s how they are handled.

  • Reply OneBlueUmp April 29, 2015 at 10:41 am

    This article is why Dave Ramsey advises to not take money advice from broke people. SMH

    • Reply Johnny May 10, 2015 at 1:45 am

      Cool story. You don’t know us, we don’t know you, but we do know that it’s okay to have differing opinions and not feel a need to get personal.

  • Reply Ken June 5, 2015 at 7:18 am

    I generally agree with most of Dave Ramsey’s common sense advice. Well..what should be common sense. But, he attacks ALL people who use credit cards. I’ve had a CC for 20+ years and pay it off in full every month. Instead of my paying interest, the card pays me interest in the form of points. Plus, I just make one full payment at the end of the month…not deductions from my bank account for each separate purchase. His repeatedly calling anyone who has a credit card for any reason “stupid” is overly harsh and a little arrogant. I agree that paying high interest and late fees to a credit card company doesn’t make sense; but he’s foolish to assume his entire listening audience does that.

  • Reply Aaron June 25, 2015 at 12:46 pm

    When my wife and I first started dating in college, she had a credit card and I did not. She had a 750 credit score and my score didnt exist. Her parents paid for her rent and gave her $300 a month for groceries, and I was completely on my own. She was pretty much living paycheck to pay check, and I had $15000 in savings. She read Dave Ramsey’s book and we decided that we should cut up her credit card. Within 8 months she had over $5000 in savings.

    As much as I oppose debt, a credit card has its laurels. For starters, the credit score is a powerful tool. If I can buy a candy bar once a month and pay it off right away to avoid having to convince a landlord Im a worthy tenant, it’s probably worth it.

    car rental insurance. If you pay for the rental car with the credit card, you’re automatically covered with collision insurace. We rent cars 3 or 4 times a year. It makes our trips a lot cheaper.

    credit monitoring. I recently got a Discover card for the sole purpose of their free credit score monitoring. If somebody is using my id fraudently, I want to know about it right away. It doesn’t cost me anything for Discover to monitor my credit and send me a monthly report, so why not. I only had to use the card once to get this feature, and I don’t plan on ever using again.
    Safety and fraud protection is the final reason. If I’m shopping online and its not a major retail, I really have no idea the security protocal of the website. I feel like using the card is better than throwing my debit out there.

    In conclusion, by paying cash for everything, you’re probably going to spend less and save more. But a card has its benefits. If you can exercise discipline, the benefits are worth it.

  • Reply ItalianGuy78 July 12, 2015 at 10:05 am

    Unless you pay down your debt 100% every month, you are in debt. Is getting 100000 airline miles you’ll never be able to cash in worth racking up a bill you will never pay off? Not if you have a brain!

    • Reply Adam July 17, 2015 at 1:11 pm

      If you actually read their post, they mentioned they do not carry a balance on the card…ever. It’s paid off in full each month.

  • Reply Andrew July 15, 2015 at 4:06 pm

    While I definitely disagree with Dave about credit cards for the reasons you’ve stated (100%, agree with you), I do want to hear Dave’s opinion on charge cards, such as my American Express Gold Card. With charge cards, you cannot carry a balance – if you spend $4,000, your minimum payment will be $4,000, so you can’t go in debt – and, you get all of the benefits of a credit card, such as the payment history on your credit report, rewards, etc. I use mine for every single purchase and watch those rewards add up while also finding myself disciplined enough to only purchase what I can pay cash for, as I know I’ll have to pay the entire balance at the end of the month. What’s your opinion on charge cards?

  • Reply Budget Credit Card Hold | Our Best Credit Cards August 31, 2015 at 1:09 pm

    […] Why We Disagree with Dave Ramsey on Credit Cards | … – Anyone who has read any of Dave Ramsey’s books knows how he feels about credit cards. We respectfully disagree. And here are our reasons why. […]

  • Reply JC January 7, 2016 at 6:11 pm

    Well, all that sounds pretty nice and dandy, I suppose in the first world it is worth the risk having a credit card as long as you don’t go nuts with it.
    But at least in my country credit cards work (or rather, don’t) much different for a variety of reasons; first of all, it is ridiculously easy to get a credit card, any kind, they only make credit checks when you ask the bank for a loan, try to get a job in certain places or sign up at an insurance company, etc. Going on -and this is something they don’t tell you until you’ve already run out of savings- they tax you just for having a credit account (about 10 times as much what they give you in interest on your savings account, where they pull the money from, without asking, if it’s managed by the same bank), they also tax you for every movement of money you make, whether it is with your savings or you credit card (just remember where do they get the money from); and, even if you do pay on time, there’s always interest over your credit card spending, so no matter what you buy, where you buy it or when; you will be paying more for it than if you do it with cash.
    So yeah, at least in my third world shithole, even if you manage to get one of those fancy cards that get you free air travels, by the time you get to use them the bank has already sucked up all that money (and even more) from you. But hey, it’s still much easier to just use a credit card than actually saving up money to buy the things you need/want, innit?

  • Reply Bill Bennett February 8, 2016 at 10:45 am

    I think Dave Ramsey has some good information to impart to his fans and “clients” (The ones making him rich). I disagree with so much of his advice about credit card use, that I cannot in good faith even take the course “Financial Peace University” myself. I teach basic computers to seniors at our local Seniors Enrichment Center, and was considering proctoring this course to a group of seniors and anyone else wishing to participate. But I cannot teach something I don’t professionally believe is the correct course of action for my own financial dealings.

    Part of my reasoning about cash vs. credit payment is as follows. One can pay for most everything with cash, checks or debit transactions. But online, you have to use credit or debit cards (and sometimes checks). But I prefer to USE the system to your advantage, if you have credit cards with zero-interest for 12 to 21 months. I know…you won’t always have those zero-interest cards, so use them while you can.

    Let me give you a couple of examples. I have 2 (two) cards with ZERO interest for 15 months. In just 8 months I have made almost $500.00 in Cash-Back funds and Cash Rewards rebates! I still have seven months to go before interest kicks in. In the meantime, I have a new 21-month interest free card that takes me all the way out to a total of 28 months before I have to even deal with interest. No one can tell me, Including DR. that’s not a wise use of credit cards!

    Another saving treat is being offered by Discover card. I bought a new Dell 2 in 1 notebook just before Christmas for a little over eleven-hundred dollars. I needed this for my computer consulting and training with my clients. Using a debit card (cash) that’s what my final total would have been. Using Discover I received a TEN-PERCENT (10%) REBATE on my January statement! That’s over $110.00 I would not have had by paying cash. And…no interest on the card…yet.

    Even with the use of these cards, with interest being charged, and getting between 1-5% rebates back on the next statement, makes plenty of sense to me. All you have to do is pay the balance in “Dave Ramsey cash (debit)” during the grace period after the billing comes out….and guess what? No interest!

    We all know the above concept does not work well until you get your overloaded credit debt problems taken care of first. Even then, I would prefer to pay down the HIGHER INTEREST-LARGER DEBTS first. Once you have your debt problems solved, and credit rating back into the good-excellent range, you can do the same things I did, unless you’ve been convinced to never use credit again.

  • Reply Mark LeGear March 20, 2016 at 6:55 pm

    Great post! Like yourselves I use credit cards for all my spending. I only use cash back cards with no yearly fees. I live in Canada so our cards arent quite as nice as down South but still have 2% on gas and grocery. I don’t find the rewards exciting at all and prefer to keep it this way. I pay my cards of with each pay check and carefully go over what I have spent. It keeps me accountable and makes sure I have not made any mistakes or have been over spending. I live very simply and have regular spending so this takes me a whole 2 minutes every two weeks.

    I tried the whole cash thing for a while but actually found it very tedious to carry the cash and have to pull it out of the bank every month. In the end I actually found it easier to spend. I personally find zero difference between a debit and credit card in my life. I just get a few cents off everything I buy with the credit card. To me it is like finding a dime or two every-time I get my groceries. Just exciting enough to pick up a dime off the floor, but barely :)

  • Reply Jonathan June 30, 2016 at 4:29 am

    CC card haters are ridiculous and that Dave Ramsey guy opinion on CCs is pure, undiluted dumb.

    They really think just because they themselves or some doesn’t have financial discipline to use a CC means the rest of us are the same kind of people.

    Please excuse us while we responsible CC users get free money by gaming the system in our favor while they find themselves paying cold hard cash gaining no perks in return.

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