I just got $570 back on my card that I never carried a balance on. If you truly pay them off every single month then they are no different than a debit card.
I agree, if someone steals a cc number, the cc company calls you and shuts down the card. with a debit, you could be out of money for a week or so if someone get ahold of it.
The one area you are wrong Dave. I’m spending $2K every month and pay it off every month. I get a 2% CASH REBATE ! I get zero using a debit card/check. I have no other debt. Some people have discipline.
While it's great that you're disciplined with your credit card usage and can take advantage of the 2% cash rebate, it's important to note that not everyone may have the same level of financial discipline. Using credit cards can lead to overspending for many individuals, and the temptation to carry a balance can be high. The potential interest rates on credit cards are often much higher than any cash rebate, and for those who struggle with managing their finances, the risks may outweigh the rewards.
If youre stupid enough to spend more than what you make thats on you though. Responsible people should not be told to never use credit cards. Responsible people take advantage of every tool they have access to. @@cupcakebrown9836
When he says “you need to spend $1000 to get $20 off” is completely missing the point. I’m going to spend that $1000 regardless on bills, groceries, food, etc.. if I can get an extra $20 off then hey why not
I believe the point is that with a card, you're more apt to impulse buy and spend money on things you otherwise wouldn't if you had a limited amount of cash in your pocket or if you used a debit card that took money out of a limited account, thereby slowing, in bit pieces, day by day, your assumed goal of reaching financial independence and building wealth. It's about a mindset, a personal philosophy, and building wealth as fast as possible, as opposed to rewarding yourself with minor conveniences along the way. And, a philosophy of not WANTING to borrow someone else's money now, so you will never NEED to later.
What i think dave wont say... is that a very very small percentage of people can benefit from credit card incentives.... and its not worth him even saying it because the massive majority of people would end up in a worse place if they even tried. Its not that its impossible to get benefits from it, its just there are better and safer ways to build wealth than credir card incentives. It isnt necessary.
I think the point is most people are really bad with money like 95% of the people are and these credit cards companies understand this so they are banking on the mass majority and not the 5 % and the amount of money you spent to get 3k is a lot for the average person… but good job for you but that one family that pay check to paycheck should not acquire more debt
Dave has a lot of good advice but he is just mathematically wrong on this issue. Getting free money for purchases you were going to make anyways is smart and efficient.
Agree. If you use your card to buy necessities only and pay your card off each month/do not accrue interest... and get ANYTHING back.. be it cash, discounts, travel points (that may or may not end up being used)... not sure what the mathematical problem is with that.
He is not mathematically wrong depending on who he is giving the advice to. If he is talking to you or me he is wrong, but if he is talking to a REGULAR PERSON, he is mathematically correct, assuming the person makes mistakes at a frequency of %1-%12 of the time. Not everyone who considers themselves to be responsible is actually responsible. You would be surprised at how bad the caller could be with money long run.
@@EricSmyth2Christ What Dave SHOULD be doing is teaching people the correct way to be most efficient with their finances. He shouldn’t assume that people will not listen to him and then give bad advice to make up for them not listening.
@@joshzollinger5181 "the correct way" by what standard do you measure correctness? he's stated before it's his opinion, people are calling in on his channel for his advice. it's their life, if they disagree okay, they can do as they please. i mean youre seeking advice from a financial person. you don't have to agree with their advice, and i also don't see him changing his stance. i also think people don't realize the way he always answers the question. there's a certain way he's answering to show why he personally does not advice that. also why should he not assume that? perhaps you have more faith in people than most. it's usually wise to do risks vs benefits when giving advice/ teaching individuals of various backgrounds/ large audiences. you can't assume that people know to avoid the same things you avoid or that they will even do that to begin with. i mean i'm really curious if you would do that irl. i find that surprising that people have that much faith in others. it's not just something he does on his show, there are loads of scenarios where it is common practice to do this. i see the point he's making, i dont necessarily agree with ad hominems if he's calling ppl arrogant who are on the opposing stance as him
I think Dave disagrees with the strategy because the temptation to get into debt is so easy. But if you are disciplined and only charge what you would've charged on your debit card then it can make sense for some people: utilities, insurance, groceries, gas, etc. I actually take the 2% I accumulate and apply it to my balance every few months.
@@nihilisticsoup2919 Because a person that's into any subject is going to watch TONS of different sources no matter how much they know in that subject.
@@Spladoinkal That's irrelevant to the point I was making which is that Dave's channel is squarely aimed at the average American with a spending problem and or an ineptitude at budgeting and general lack of money smarts. Personal finance gurus can state their opinions or "what's true for THEM" on his videos all they like but it doesn't matter because his channel isn't aimed at them, it's aimed at those who need "baby steps". In the early stages as Dave points out it's NOT about maths or learning to play a system it's about emotions and building discipline. If you can't understand this you won't appreciate it from a perspective that isn't yours.
Booked a flight on air Berlin for the whole family years back with my cc. That year, air berlin declared bankruptcy, and I lost my tickets. Called my cc company, got refunded. If I paid with cash, that money would have been lost.
CRYPTO SCAM VICTIM ? As a Retired combat Marine I want to tell you that as what you are doing is just as important as any warrior on the battlefield. You are waging warfare against these criminals and terrorists on the digital battlefield. You are defending and protecting the most vulnerable of our society against these predators. Keep up the good work *TECH SAFE GUARDIAN*
I think he just doesn’t know how to articulate his wisdom and gets frustrated. He is fully aware of the predatory practices in the CC industry. He knows that there are healthy ways to use a CC but he knows that 90% of us will be tricked. The smart way is to get a CC that has no fee, no spending requirement, and % cash back that translates to cash that can be used to pay off the CC. Use it like a debit card and never sign up for promotions. Proceed with caution
@@anthonyiannozzi6777 Could be and he thinks everyone else does too. I've always been really smart with money and retired early. He didn't become a millionaire by just giving financial advice, it's the whole thing. Selling products, writing books, you tube, other podcasts, the whole bag. He didn't get rich by just following his own advice.
i mean he says at 7:51 it's your life, do what you wanna do. if what youre saying is true, than yeah i dont agree with arrogance. he also could just be trying to emphasize how in his perspective, it's absurd to think you will win because of the psycological manipulation these companies do. but hey, it's your life! do what you wanna do!
I love Dave. But the CC is one thing I don’t follow. I love my miles CC. I don’t think I’m beating it. I’m just getting miles for what I already spend. Only pay bills, groceries/anything in my budget and pay it off every month. I just see it as a bonus for already paying what I would normally pay. We are debt free and we went 1st class to Europe with our miles. Flights are the most expensive part.
They will end up making that money back from you when you decide to go to Europe again and book the tickets with the card, plus the hotel on the card, plus a few restaurants- then when you get back you are slow to pay it off or someone gets laid off or the car breaks down.
EXACTLY. really nice to see so many in here with working brain cells. NO ONE told them to go buy a fkn yacht with their credit cards for cash back...not even the bank wants you spending beyond your means because if you do they end up losing money when you default. lol.
100% They NEVER said they were in debt. They pretty much said the opposite. Also, I JUST flew to Nashville and Florida, both trip with points from my monthly bills. haha. YES, CC's are getting something out of the deal, nobody is saying otherwise. that doesn't mean you should never do it. I kept waiting for the REASON why that particular listener would regret doing this, they never answered. They invented a different scenario and discussed that.
I'm a little late to this, but, I'm 73yo on a fixed income, single income - SSA; I have no debt and live in affordable housing. I have two credit cards with cash back. I use the ccs for everything: groceries, utilities, rentals, everything...I may go weeks without spending actual paper money somewhere (I have no cash in my pocket now and haven't for more than a week). While 2% cash back may mean nothing to you all, I happily accept that $20-$30 each month.
Made $800 cash back this past year and paid 0 dollars in interest/fees. 99%of the purchases were essentials, gas ,food ect. Used the cash to pay the card bill. Where and what did I Lose? Nothing.
@@jim.h You're just supposed to follow Dave's advice uncritically. No need to think for yourself or put that financial discipline that he supposedly taught us to the test.
Exactly - Dave is completely wrong on this one. I use my CC with points to pay for everything I would be getting anyway. I pay zero interest and can use the points to buy some of the stuff I would have bought anyway. I'm not playing the credit card companies - they make their money on the fees they charge the merchants. The Credit card companies are not playing me. I pay ZERO to use their money for 15 to 45 days. I am very conscious of the closing date on my CC and will often wait a few days or even a week to buy something, so I have an extra month to pay for it. I have the money in my bank account to pay for anything I purchase. It's better sitting in my account earning a tiny bit of interest (something like 0.1% annually) a couple extra bucks per year may be almost nothing but it's still a couple extra bucks in my pocket. I have no debts, my mortgage is paid off, I have investments. I don't live only to save money. I live to enjoy the money I have accumulated. I do occasionally, (but rarely) spend money frivolously. I have taken three (what I would consider) expensive vacations in the last 25 years. I do take my dad out to breakfast every Sunday morning - yes, I am paying $25 for something I could make at home for probably $2.50. Once you've taken care of the needs, saved for retirement, emergencies and such, some of the rest can be used to buy the things you want rather than need. I never spend money I cannot afford. I never claim I will get rich off the points or tiny bit of interest I make, but it's still extra money. By not using your CC and collecting points you are leaving money on the table that you could use for those wants.
Their niche is steering very financially undisciplined/irrational people towards not being in debt. They wouldn't have this talking head job if everybody could handle using a cc responsibly.
@@OTBMedia It's true. But I don't want to be mindful of my spending. I spend 10 hours researching a $200 item and taking a risk with a used one when if I had just worked those hours I could make 3X that much money.
@@Wary_Of_Extremes I pay my cards off every month. I am not in debt. I use my points to travel. He still didn't tell me why not to do it. I'm not beating the system, I'm just picking up a little extra cash for my airline trip.
They didn't ignore the question. Dave responded to it directly and explained in-depth on why you are losing by playing a game you're convinced you can win at while you're designed to lose at it. You're not going to beat the system, no matter how special a person you think you are. Rich people do not covet rewards points. Only losers do.
There’s nothing wrong with what you’re doing AS LONG as you charge only things you’d normally buy. Dave assumes that you’re buying stuff you don’t need. He’s wrong on this subject.
He's absolutely wrong. Ive personally saved thousands churning cards with normal expenses. I also know they're normal because I budget for them. These companies make money off of the irresponsible users, not the responsible ones. That's why I get he says not to do it, but he doesn't acknowledge the reality of the perks and protections when used correctly.
The factor they're not taking into account is this. When you have enough disposal income at the end of the month, every single month, to pay off your card balances in full. In this scenario, you never pay any interest and the cash back that you get, albeit minimal, is simply free money. I have been doing this for over 15 years accumulating thousands of free dollars.
You will absolutely from time to time splurge more if you have a credit card, compared to not owning a credit card. this is normal human behavior. As much as people want to deny it, facts/research and numbers don't lie. It's just an extra temptation in your pocket that you absolutely do not need especially when u're trying to clear a better financial path for yourself. Maybe Credit cards can be convenient if you've made it in life but not before.
@@sc9433 I'm 66 and been dead broke at times. At no point did I charge something I could not pay for because I was splurging. Have I depended on them when I needed food or a necessity? Absolutely! Fortunately, I never thought of them as a treat.
@@sc9433 nah, the title is if you pay it off each month. Dave is just being dumb here by thinking people use credit cards as a way to get rich from their cash back. No one thinks that
The problem with the Chuck E Cheese analogy is that I don't HAVE to spend money there. However, I HAVE to buy groceries, I HAVE to pay utilities, I HAVE to pay for my phone and internet. If CC companies want to give me points for spending money on necessities I would've otherwise paid cash for, be my guest. That's money I don't have to spend later when redeeming for flights, hotels, and meals while sharing experiences with my family and friends. Additionally, what factual evidence did Dave actually provide against paying off CC other than calling his viewers "arrogant"? When you start name calling, you know you lost the argument.
Was hoping Dave would actually break down the math of why he thinks doing what the caller suggested was a bad idea. The blanket statements aren’t convincing.
@@stellarocquie7957 ad hominem attacks don’t replace math. Dave’s explanations are usually very great, but I found this one was a bit lacking. You’re welcome to break down the math for me if you’d like, or you can continue to hide to behind the cowardly insults.
He’s just being consistent for people who don’t have control or discipline with debt. So listen here-if you’re vigilant and focused, not in debt and love to travel, GO FOR IT:)
I’m literally on a vacation for two weeks, mostly using points. I still have 196k points left. I’m not in debt, and haven’t had a balance in 20 years. Sooooo if it works for you, then do it. It also builds credit, cash doesn’t.
@@samkitty5894 Bonus points? Are those better than regular points? I want them!! As for crap... not really my thing. Do I have nice taste, yes. Do I skimp on things, not really. Do I run a business and use the card to accumulate points, probably. Do you know anything about me.... no, but thanks for commenting.
I use a credit card every month and have never not paid it in full. Not once in 52 years. I get to use someone else's money for anywhere from 15-45 days. And yes, I get free airline miles. And being a 73 year old multi-millionaire, I can afford all the other costs of vacations. I have also used miles to book flights for friends and family especially when there is an emergency. So what is wrong with this? One size does not fit all. Your mileage may vary.
He's speaking for the general public I use them the same way I pay amount in full before the statement date arrives and pay 0 interest every month the average person makes minimum payments because they are buying things they can't afford so a balance rolls over and now they are paying interest I use mine like it's my debit card so if I don't have the money in the bank to cover it I don't buy it but understand this man there's probably less than 10% that use their credit card wisely the rest get swipe happy I only have one because shopping online is absolutely stupid to do off your debit card for those people who don't have a credit card use cash app for online shopping
Congrats on being a multi millionaire at 73 I'm 34 and started investing less than a year ago I got a late start but better now than never I guess best wishes to you good sir
You must be buying a lot of stuff, maybe even things you don't need in order to get the benefits. You are also paying more for some things because merchants will increase the cost knowing there are fees when credit card is used.
@STUPID TABLET Trust me on this, insurance companies are in no hurry to pay your claim. They wait you out or starve you out so you will settle for peanuts. Meanwhile your bills will pile up. And yes I have an attorney in my family.
@@alinatamashevich3354 don’t you worry about that. I’m fit and healthy I don’t need to worry about that and if it comes up I’m not worried cuz I can pay it. So no I won’t wait for that to come up
@@alinatamashevich3354 Most doctors offices if you communicate with them will just re-bill the insurance if the claim is denied. In general, let the bills pile up, pay the minimum they will accept and eventually the insurance will pay. I had a medical bill once where the insurance company kicked it back over something dumb, and the hospital sent the bill to our old address, and when we didn't pay it, sent it to collections. I called them, showed where i had already paid my part and insurance said they paid their part, and then they saw the reversal on it, and said that it was their(the hospital billing department) fault for not re-billing the insurance company within the time limit, and so they credited me as paid in full for my part, called the collections agency and told them to drop it. I didn't immediately have to send them a check for 900 dollars, i kept working it out between the insurance company and the doctors office and eventually it was resolved.
There is no doubt that you will rise fast at the apex of your career *TECH SAFE GUARDIAN* . Because you are a very intelligent, smart, hard worker and your work ethic par excellence. Keep going People like you take the IM out of Impossible by becoming PRO at tackling Problems. You Rock!
Are you debt free? I doubt most people are. Your playing with debt because you’re making $20 when you don’t have payments on ANYTHING you keep all of your money. I think this guy who has a net worth of over 100 mill knows what he’s talking about
@@connorcoutant2059 I use my charge card this way and not only am I debt free but my rent is paid a year in advance. And I am retired and living mostly off of Social Security.
I disagree with Dave on this. I use my CC to pay everything that I would have paid for anyway and stay in budget. We pay the balance every month. The points earned is like earning interest on my bills. There isn't a bank anywhere that is going to give 3-5% on a savings account.
I agree with what you said. Dave is wrong on the cash back as long as one pays the bill in full every month. I only see his point if someone is saving them for travel points and is still in debt.
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
To each their own, Dave. I'm a self-employed IT consultant who used to do things your way. I have multiple credit cards that offer rewards, and most do not have annual fees. I just read my 2023 Amex report, and it shows that I earned $1,921 in rewards from purchasing fuel, groceries, and business expenses with the card. You always miss that neither I nor others carry balances and pay ridiculous interest amounts. The balance gets paid in full each month, and I reap the reward of this money. $1,921 may seem like a little money, but it covers my entire auto insurance bill for the year. Who in their right mind wouldn't take advantage of this free money when done correctly? Thankfully, I'm doing fine and won't be eating beans and rice, rice, and beans. :)
Their niche is steering very financially undisciplined/irrational people towards not being in debt. They wouldn't have this talking head job if everybody could handle using a cc responsibly.
Many people can't use a credit card responsibly, that's the problem. And if you're in a Dave Ramsay program doing the baby steps, chances are that you've failed in some way financially and having a credit card is a very bad idea.
If you're not in debt and you're going on vacation anyway, and never carry a cc balance, there's absolutely nothing wrong with using their cc for vacation points.
I agree. Dave says at the end "You are going in debt, but not paying it back by the end of the mind" which completely rules out the title of the video. If you're paying it all back at the end, then you're not in debt, and get those free points, cash back rewards. I worked for Capital One and offered the points back cards...and it's not a trap for people. Especially if you say "You're spending the money anyway, so why not get some back". I completely agree with your statement.
@@Robert-cu9bm and not paid it back by the grace period before your interest rate kicked in. If you pay it off before your statement gets sent, then you won't be paying extra. You have like a 5 day grace period when the money hits your balance before the interest rate kicks in. Worked for a credit card company...and have owned one for years. Had to watch this for my finance class in college. There are ways to pay it back and "BORROW" before interest.....
No one would claim to become rich with reward points. Plenty of people would claim they saved $2-3k per year with points between their business materials and personal bills being paid on time. This really comes down to self control.
@@Platinum-Ninja That's who he caters to. He's got very simple, basic rules for people who need to hear it. He has to treat them all like they're very undisciplined, because a lot of them are.
@@Wary_Of_Extremes again....davey doesnt just say 'THIS group of people" lmao....he blanketly asserts that NO ONE can win against the banks using CCs. I know he says it son...Ive heard it with my own ears. just stop posting in my direction...youre clearly not intelligent enough to discern the issue here.
@@Platinum-Ninja I still think he doesn't want to encourage the majority of people who listen, who might think they can handle it but can't. IDK. Maybe he himself is a compulsive spender and he's outright afraid of it and can't be reasonable about it.
The point is that rich people do not covet rewards points and marketing gimmicks. Credit cards aren't a tool for gaining wealth, they're a too for losing it. Instead of putting your greatest wealth building tool (ie your income) into debt you should put it into savings and smart investments. People who follow Dave's plan become millionaires. People who follow the bank's plan become losers with a free plane ticket.
Yes the psychology behind it makes sense. If you get an incentive for spending more, you will give yourself reasons to spend more. However if you pay off your balance every month, then nothing is wrong with that either.
Thank you, *TECH SAFE GUARDIAN* . Your presence has made this entire process much more comfortable, and I am truly grateful for it. Working alongside you is a pleasure, and your dedication to your role serves as an inspiration to me. I will always remember the help and support you’ve provided me with.
Never did they answer the question. They just immediately got offended that someone would ever question their program, proceeded to call everyone who uses credit cards stupid, and… nope that was it.
and then they wonder why they arent taken seriously by anyone who really matters. lol. Ramseys only good advice is 'get out of debt'...and a 6 year old child could have come up with that idea lmao.
He did answer in regards to rewards like flights... he did not bother to respond about the 2% cash back nonsense because inevitably 98% of people that try to do this will forget or be late paying the bill before the interest accruement date multiple times and wipe out any "cash back" they may have gotten. Though with all that being said Ramsey is being an arrogant know it all asshole in this video.
Yep. We never said we were trying to "beat" the CC companies. We increasing our personal convenience by using a CC that we pay off every month on things we needed to pay for anyway...and getting a cash bonus for doing so.
@Erati243 except me and others who somehow don't forget because we're not incompetent at life and we care about our money. Cc companies lose money on us and make money off of undisciplined people. They make more than they lose so it works out great for them. I'll keep taking 2 percent back free every month. Thanks for the advice, Dave. You are not good at math
They did. Banks don't make these offers for no reason. They have run a search across their userbase and saw that unexpected circumstances happen to a certain percentage of people. So say 5% of clients won't be able to make the monthly payment and will end up paying the exorbitant interest. In order for the bank to maximise their take, they want to incentivise as many people as possible to take on credit. This is not free money. Each month you join a pool of people who take on additional risk. Some of those people fail to deliver at the end of the month. The bank then takes the interest, and gives you a minor portion of it to keep taking on this risk. It's a numbers game. From your perspective , you make money. But in reality those who are dumber or less fortunate are the ones who pay those 10 extra $$.
At 1:55, This is a classic “straw man”argument. He constructs a bundle of nonsense, “oh so you are saying that if you spend 10,000 to get $200, then you will get rich.” That was nothing like what the caller said. He’s attacking a nonsensical argument, that he, himself, created.
I like a lot of Dave's ideas. This one I just don't get. If I need to spend $10,000, why wouldn't I use a vehicle that gives me $200 of it back? I either spend $10,000, or I spend $9,800. Any response, Dave?!?
As someone who was in deep do do debt and working 2 jobs for years to get debt free. I can see were Dave is right. I still have credit cards but I only spend on what I need and keep them basically for emergency as I have little savings. You spend 25% more when using a credit card because it is like play money unless you have a back bone of iron.
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
How can you book a plane ticket or a hotel when going on vacation without a credit card? We used to have travel agencies everywhere before. If Dave is going to give somewhere for business, how does his staff book his plane and hotel? I can’t reserve a hotel without a credit card locally. Hotels keep your credit card on file until you leave. You don’t have to use it to pay at the end, but you definitely need it. You also need a credit card to pay for parking meters.
Dave doesn't listen to anyone anymore who has mastered some basic skills. Using CC points that actually give cash back makes sense for people who have the self-discipline to pay off the balannce every month. He's more attuned to the beginners who don't have their act togethher with budgeting and self-restraint.
@@ImDahDude I agree! I use CC to buy things or services that I would buy anyway and then I pay it off every month. At least I get some cash back....I wouldn't get it by using my debit card or cash and I would have had those expenses anyway. I also have the feeling that he sounds more arrogant as time goes
I mostly agree. Either don't have a CC at all, and thus no CC fees, or use it for the things you have to buy anyway and pay it off every month. You are not beating the CC company by this 'trick' as Ramsey suggests here at all, they are happy if you do so as they still get to charge 1-3% transaction fee from the company that accepted the CC payment. Of course that transaction fee they charge back to you, but that is regardless if you pay by CC or not, and if you pay by CC you get some of that back with some cards.
And for those people they should absolutely listen to dave's advice. The problem of course is people being able to recognize whether they have the self discipline to not over spend or carry a balance. People's ability to recognize their flaws goes hand in hand with intelligence, those lacking intelligence overestimate their own abilities, which includes their ability to control themselves financially, so those most likely to need these kind of hardcore rules, are the least able to recognize that fact.
I think Dave’s approach works for people who are very lost and need some tough love to build financial discipline. For disciplined people who use the card but don’t carry a balance he’s not the right person.
Well put . to say accumulating points as being anti wealth building is a stretch. I love my …yes. “free” plane tickets and I dont pay a dime in interest.
But you're losing money with the merchant fee. It's always more than the amount of "cash back" or points you make. Look around and find merchants who give a cash discount. It's usually 3%. I eat at restaurants that have the cash discount and save 3% every time. We have gas stations with a cash discount of 3% also. So discipline doesn't matter, if you're wasting your money needlessly.
What are you talking about? He calls himself arrogant and stupid all the time. He simply says he learned from all his stupidness and arrogance and doesn't want all these people to make the same stupid mistakes he has.
6:30 my amex business gold card has no travel restrictions, the sign-up bonus alone paid $700 of my vacation that I'd be out of pocket otherwise. Every month I get an extra $200 based off of a 10k spend, end of the year that amounts to 2400 that I can use on literally whatever. Never paid interest and never will. I'll borrow from my own savings before paying interest on a card.
@@theoneonly5368 there are multiple ways to build wealth. There isn’t a one size fits all approach. Sure, you can do all the stuff Dave says and it’s a good way to become wealthy. But there are faster ways to become wealthy.
Paying of a house with an interest rate of 3-4% doesn’t make sense when the average return of an S and P 500 index fund averages over a 12% return. Mathematically it makes more sense to invest your money in the 12% returner rather than pay off your house at a 3-4% interest rate.
This is ridiculous. If I can pay my bills on time and use my cards for 2-3 years I rack up 400-800 cash back and that pays for my whole flight or hotel for the night and I save money instead of paying out of pocket on it. Absolutely ridiculous if your not in debt
But you paid for the "cash back" and points with the merchant fees. Pay cash at merchants who give the cash discount, and you'll save much more than that. I save 3% on meals, but the "cash back" would only be 2%. Can't you see how that loses you money?
You will absolutely from time to time splurge more if you have a credit card, compared to not owning a credit card. this is normal human behavior. As much as people want to deny it, facts/research and numbers don't lie. It's just an extra temptation in your pocket that you absolutely do not need especially when u're trying to clear a better financial path for yourself. Maybe Credit cards can be convenient if you've made it in life but not before.
@@sc9433 You're not wrong about splurging. I bought parts for and built a $1900 gaming computer just because I had about $1000 of cash back rewards saved up from a few years of spending. Probably would have never bought it if it weren't for those rewards. But I don't regret, nor did I go into debt to pay for the portion that the rewards didn't cover. Splurging isn't a bad thing UNLESS it is interfering with your financial goals. As long as you are still able to invest and put money away for an emergency fund, why does it even matter if you spend the remainder on some luxury that you've wanted every now and then?
Nobody said they get rich with points. Nice straw man, Dave. If you pay only essentials with your card and pay it off in full, there’s nothing wrong with it. Dave just won’t admit he’s wrong.
@ Roman - exactly. Using Dave's "logic", if you find a ten dollar bill on the footpath you would be stupid to pick it up because no millionaire said they became a millionaire by picking up a ten dollar bill on the footpath.
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
You are really an efficient, organized and results-oriented man. I haven't seen such quality work in a long time. Grate job, keep it up. And I will make sure the world knows more about you and the good did you have done for me. People like you *TECH SAFE GUARDIAN* are rare
Their niche is steering very financially undisciplined/irrational people towards not being in debt. They wouldn't have this talking head job if everybody could handle using a cc responsibly.
You aren’t the target audience. Dave is for the people who think they need a credit card balance to have a good credit score. For people who can’t budget and are impulsive with money. Responsible people can easily handle having credit cards. I use the Sam’s club credit card because it pays 5 percent back on gas and 3 percent on the groceries. As a family four, we spend a bunch on gas and groceries and the extra cash back is a nice bonus.
You are correct. I didn't get a credit card until I was 25. I couldn't rent a car without one, no matter if I had cash or money in the bank. I pay mine off each month, use my points to pay down monthly balance. I hadn't had to rent a car in about 10 years.
I’ve never understood the argument that you can simultaneously be disciplined enough to follow the Ramsey Baby Steps and pay off huge amounts of debts in a short time, yet not be disciplined enough to control your CC spending. It’s all a matter of, to quote Dave, being intentional.
You don’t have to buy his books. There’s plenty of videos for free where you can glean the same information. I’m not defending him I’m just saying that’s how I tackled my own debt. Learned bits and pieces from different people and I refused to pay someone (since ni can’t afford it anyway ) to help me get out of that hole. It would just seem to defeat the purpose. But good luck on everyone trying to get out of debt. It’s hard but totally doable:)
If you are following the Dave Ramsey approach with debt then that means you were not disciplined. Do people not understand the absurd nature of their arguments?
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
I agree to disagree, don't put me in the group I am to stupid to understand Credit card. Credit Card has protection, benefits etc You can beat them but get smart at it.
I don’t take financial advice from a person who has lost millions..when I lived on my own at 16 and never had credit card debt at 50. I made thousands and turned the points into silver.
You will absolutely from time to time splurge more if you have a credit card, compared to not owning a credit card. this is normal human behavior. As much as people want to deny it, facts/research and numbers don't lie. It's just an extra temptation in your pocket that you absolutely do not need especially when u're trying to clear a better financial path for yourself. Maybe Credit cards can be convenient if you've made it in life but not before.
I love Dave and follow all of his teachings other than this one. If you already have a written budget and follow it just like he recommends, but do it with a CC for rewards, you get something back. It's not millions, but it's something... More than you would have gotten from debit. The key is paying it off and still following your strict budget as usual. The problem with CCs is definitely that they are predatory to people who are already struggling, and for that, I would agree with him saying don't use them. Keep up the good work, Dave, but the logic doesn't fully make sense on this one for people who are careful.
Exactly, his real point is that MOST people will fall into the traps, but I guarantee that he understands there is some small benefits if you're careful.
Exactly. The point isn't to become a millionare with points. The point is to take my family on trips and experience things I would otherwise not be able to if it weren't for points/miles.
I only use credit cards that have no annual fee. I use the cards for protection and connivence. I pay them off every month. I use them for my living expenses, money I need to spend to live. The protection is a real issue for me especially with online purchases as I will never use a debit card that is tied to my bank.
I treat my credit card exactly like my debit card. I never care a balance and never spend more than I would with my debit card. I treat it EXACTLY like a debit card. The points and credit boost are just a plus.
I have a lot of respect for you Dave but I disagree with you on this one. I use my card for groceries and gas and pay it off every month , thats a few hundred bucks a year in cash back it’s kind of strange mr eat rice and beans and save every penny you got is against this if done properly.
You don’t go to Chuck E. Cheese to buy a 75 cent pack of gum for $10. You spend $10 for the enjoyment of playing games, laughing and having fun. The prize at the end is just a cherry on top
Very weird how the entertainment factor is completely ignored. Likely majority of all entertainment we pay for does not provide a physical gift in the end. Has he never gone to the movies, went bowling, rented a jet ski, paid for vacations, went to a theme park, ect. Plenty of arcades that do not give redeemable tickets.. would blow his mind it seems.
Yes I own a similar style arcade for a competing company. We get praised for how great of "an experience" we provide. Sure, the prizes are at a 10% cost ratio but the million dollars in games and development of the location for you to come have some entertainment for your kiddos wasnt free or cheap. Everything costs money. Every business has the right, and duty, to profit. If we dont profit, no one would want to work because we couldnt pay them. Then there would be no fun family entertainment. In this scenario, seems that Dave wants you to sit on your piles of cash at home and not do anything fun with your family.
Providing you clear your balance every month and have a no fee card, credit cards are a great way to manage and track your spending. If you put everything on one card, understanding your total spending each month/year is easy. When you start mixing in cash transactions that becomes more difficult. Of course you need to buy only what you need, not what you want.
I use my cc for monthly expenses and then pay them off. I don’t have a problem with it. People who have discipline problems need cash in envelopes and debit cards. It’s arcane and inconvenient.
Both creditcards and debit cards work just fine. Cash in envelopes is going to be increasingly difficult with a cashless society. 80% of the money you spend, gets taken out of your bank account automatically these days. You can't even use cash anymore to pay your mortgage, utilities, taxes etc. Heck here the maximum cash payment is now 3000 Euros where i live.
While I agree with you that cash in envelopes is arcane and inconvenient, I think Dave and his apostles have repeatedly claimed that that is the point. They want people who can't manage money to hurt when they spend. It definitely gives me a cultish vibe to hear him be so absolutist. Maybe that's what some of us need?
"I drink alcohol in moderation only once a month. I don’t have a problem with it. Only people who have addiction problems need to abstain from alcohol and drugs. It’s arcane and inconvenient."
@@ericsloan858 Your changing the example to something similar and using quotes make it sound like you're making fun of the premise, but the fact remains that everything that you put in quotes is 100% true and accurate. There is absolutely nothing wrong with non-addictive personalities drinking alcohol occasionally in a responsible manner.
My biggest gripe with this argument is that security of a credit card is completely thrown out the window. Regardless of benefits, I’m not using my money to buy something with a credit card. If I lose it, or somehow someone gets access to it, it’s not my money they’re spending.
this is the one thing i dont agree with. You are spending that money NO MATTER WHAT so might as well get something out of it. I get free movies. Lots of them. I pay off my card in full every month and it has my groceries on it that I NEED and will be buying no matter what.
I threw $1400 at my mortgage principal this month from buying 97k worth of materials for my business.. I’ve spent 500k on materials in the past two years and made 5k cash back I feel like they preach no credit cards because plenty of people probably can’t handle them but I’m not leaving money on the table.
Completely misguided, totally missing that people are splurging to spend the ten thousand dollars for two percent, it’s groceries and bills that I would be paying no matter what.
@@theoneonly5368 I think that the point he is trying to make is if I am going to be spending the money regardless, why not put it on a cc and get the cashback and rewards etc. I agree that it is dumb to spend more money to meet a threshold to get better rewards. I also agree that the vast majority of people, myself included, are not responsible enough to pay the cc back every month and not overspend. However if you are responsible and can make it work, its free money. These cc companies do not profit off of responsible people, they profit off of dumb people.
Yes, Dave, the people that pay off the card every month and pocket the rewards CAN beat the CC companies at their own game. It’s the ones that carry a balance and spend frivolously that are getting taken for a ride.
You realize the bank still gets paid every time you use a card right? They may not made as much by you paying it off every month, but merchants pay a percentage of the sale to merchant card processor, and those processors pay the banks for the privilege of the method, many stores that have their own store card usually have a deal where it costs less in those fees if you use their card, another reason they push them, besides the high interest.
@bobv5806: Yea but using a credit card for monthly expenses is gambling with your financial well being. All it takes is one hiccup and you're either not going to be able to pay the full balance or you're not going to 'Want' to pay the full balance. The banks know this and they know unexpected hiccups will inevitably happen. That's why they give you points to keep using it, so when you screw up they'll come cashing you out.
The problem with Dave Ramsey is he filed bankruptcy in his past and now he has PTSD about that so he's against using any credit cards, and having a mortgage. While that's for him, it's not always good advice for most normal people. Examples: you can come out ahead using credit cards for everything, paying it off each month and earning rewards, and if you currently have a low mortgage interest rate of say 3% it doesn't make sense to pay that off when you can be earning 5% in an FDIC insured high-yield savings account. Not everyone has the PTSD that Dave has it's his mistake to project that on everyone else.
Did I miss something here? How are you in debt if you pay your card off every month? If you have no annual fee for the card without any debt and what you are putting on the card is your monthly outgoings that you would have had to pay for from your debit account anyway. If you are disciplined then what's the problem?
Dave did not explained very well but if you pay in cash you feel the pain instantly so you tend to buy less. If you use cc is easier to go over you budget money. For instance if your bill is 53$ and you tend to take one unnecessary item out so you can spend less than 50$ (which may be your original budget) while with cc you just pay and don’t think much. So yes when you redeem your points you may get 20-30$ cash back every month,but you may have go over budget with 50-100$ simply because of the convenience of paying. My cc with my all expenses(groceries,phone,cable,gas,eating out and everything else) runs around 1500$/month,but when I used only cash for one month I spent 1350$. So yes I always off my cc and received 20-30$/month back,but is less than 150$ that I saved using only cash. I agree Dave did not explained this well.
@@mirix1515 Which makes sense for the spending portion, but if you ONLY use it for utilities and bills and then use cash for spending, you don't end up spending more because they are bills that have to be paid.
Your in debt every month because u must pay what u borrowed. That simple. U have a debt u must pay it. Use your money money and don’t have to worry about maying anything back.
Dave is for people who need to be told to write down their debts and minimum payments, then pay that plus extra on one of them. It's incredibly basic stuff.
He may not be talking to you. He’s trying to help people who lack discipline in their financial decisions. He’s trying to wake them up. He tells people they are doing stupid THINGS with their money. And they are. If they weren’t, this country wouldn’t be in RECORD high credit card debt.
a credit card is the beggining of digging yourself into debt its not a good idea at all to me. I think the whole point es making is try to prevent people from going into debt and credit card are one of the main avenues that sink people into serious debt. I watch his show pretty often and it seems like almost every caller has thousands of dollars in credit card debt . I think most people just like instant gratification and thats why they get credit cards . why not just wait save up for what you want then buy it when you have the money.
@@jgibson8092 Most of the people who need Dave's advice should definitely be kept away from credit cards. Other people , who are disciplined spenders, should have a good rewards card so they get something back just for putting their groceries, gas, and utility bills through it. There are some cards that give several percent back on groceries and recurring bills, and often at least 1% back on any purchase at all. I talked some older relatives who were totally against credit cards into getting a no annual fee rewards card, and they were surprised with how many hundreds of dollars they got a year just for using it for gas and groceries.
3k a month on groceries, diapers, gas, parking, household items (stuff I'd buy with a debit card regardless) I pay in full EVERY month and pay $0.00 interest and $0.00 annual fee. I get 2% cash back. Dave is TOTALLY WRONG about this one, and calling people stupid because of it shows he's been too rich for too long and no longer can relate to everyday Americans.
He has the numbers. It is great if it works for you and other people who have the mental capacity and restraint, but most don't. Why do you think they can afford to give $0.00 annual fee and 2% hand out. It takes one mistake and everything you made with the 2% evaporates when you have to pay interests. Your 2 % is paid by another customer.
@@mendelian8768 You can just set your credit card on autopay tho. Unless you're living paycheck to paycheck with risk of not affording your monthly bills, there's no way you can make a mistake lol. I've been in situations where I was paycheck to paycheck. Rented a bigger place and had barely enough income, and splurged on a new camera. Still never had to pay any interest because I don't spend more than I have. That was a situation where I spent almost exactly ALL I had, a hair away from entering actual debt... so definitely a mistake, but clearly not big enough to be charged any interest let alone "evaporate" the 2% cashback. Credit cards are easy to manage just don't be silly with it.
@@mendelian8768 absolutely, I agree with you fully. Why doesn't he explain things with a more nuanced approach then? In his view everyone would screw up, so no one should do it. That's not reality. Why does everything he say have to be so binary?
@@CC-vo7ds From his point of view and what I understand. The cashback and benefits make something with your brain. You are way happier with your spending. When I got my first cash back card, I was spending more then usual. Every time I bought something I was happy about the cashback I got, but I bought more unnecessary stuff then before and it did me cost more then what I got back with the cashback. I have a household account book for years now and saw it and got control over it. But I can see his view point, most people don’t and most people will get fucked over. The banks will also find new ways to control your behavior, so why risking it. I still use it, but with caution and I stopped recommending it to others or talk about the risks.
I’m a home builder. I spend millions on credit cards for my businesses and have never paid a dime in interest. Haven’t paid for a flight or a hotel in years and I travel very often.
Or this community can admit that THEY are wrong. The $20 you get at a high frequency is destroyed by the $2800 you pay at a low frequency. Would you be willing to bet that the caller is good with money? I wouldn't.
I have an Amtrak card that gives me one dollar toward travel for every dollar I spend. I use it as a debit card and pay it off as soon as there's a balance. I otherwise have zero debt, an emergency fund and investments. By using the card, yes, I do travel for free. Just got back yesterday from a round-trip first class journey for two on the Capitol Limited...for free. Dave and his boy are mathematically incorrect here.
@@ulysseslashley1245 I don't have a Capitol One card. And, no, we put everything on the Amtrak card and then paid it off as soon as we were back in town. Works beautifully.
I take it you have to get into a lot of debt to be able to travel for free. And you have to get into a lot of debt every month. And you have to take a huge chunk out of your paycheck to cover that debt... every single month. With that money, I wonder whether you could have funded at least part of your own travel.
I’ve had CCs since I was 18. Have zero debt, pay if off every month and get cash back / points. You can treat it like the money you already have. The companies charge fees to use cards at places so might as well get some of it back. Also, way easier to deal with fraud.
Had someone rip my account off and another close family member for using debit cards. I got lucky bc it was happening online but my family member had her debit card copied and someone withdrew $1200. Their bank said you're shit out of luck
@@deangelo8498 No, but they wouldn't be a millionaire by using a debit card either. Using a credit card responsibly vs using a debit card responsibly will have absolutely no meaningful impact on the issue of whether or not you become a millionaire. If you aren't carrying debt, you can follow every single one of Dave's plans, tips, and tricks to build wealth all while also enjoying the minor benefits of credit card rewards by treating it as a debit card.
Hey Dave I’ve used CC with cash back rewards since I was 18. I’ve never paid fees or interest on my CC. I’m a millionaire by your standards at age 46. So include me as one of your study millionaire that became one using CC with cash back!
@@alinatamashevich3354 I’m using logical standards when it comes to spending. Don’t spend what you don’t have and payoff your CC every month. I’ve only saved 10% of my pay into 401k since I was 21 as well. My income has gone up a lot since I was 21 but I never changed my 10% of pay to 401k.
Dave did not explained very well but if you pay in cash you feel the pain instantly so you tend to buy less. If you use cc is easier to go over you budget money. For instance if your bill is 53$ and you tend to take one unnecessary item out so you can spend less than 50$ (which may be your original budget) while with cc you just pay and don’t think much. So yes when you redeem your points you may get 20-30$ cash back every month,but you may have go over budget with 50-100$ simply because of the convenience of paying. My cc with my all expenses(groceries,phone,cable,gas,eating out and everything else) runs around 1500$/month,but when I used only cash for one month I spent 1350$. So yes I always off my cc and received 20-30$/month back,but is less than 150$ that I saved using only cash. I agree Dave did not explained this well.
I totally disagree. I use my Southwest card to pay for everything I purchase and yes, I pay it off every month. I use my points to fly my daughter and family to visit me! Can’t beat that, Dave!
@@robshell5367 Wrong Einstein - I use my card for everything I would normally write a check for, and collect a nice chunk of money every year without carrying a balance, so zero interest. And yes, my net worth is about $9m
@@robshell5367 he's not spending more than he would on a debit card...Jesus christ...what a sad existence to never enjoy life cause dave ramsay says so
Problem is most people don't actually pay off their cards. Dave will give advice to the masses, not the few (because trying to sell stuff to the few doesn't make as much money). There's nothing wrong with this advice, and if you're already a millionaire and get your points and whatnot, this advice obviously isn't for you. But for the people who are in debt and haven't been able to figure it out, this is a good message.
@@bobv5806 he's not the same to everyone. People already know his stance and call like "but what about me?" That's where he gets a little annoyed, obviously. People will literally call him and ask if it's ok to get a loan for a car because they have "a plan". Takes two minutes of research to know Dave doesn't recommend it. Why ask?
Dave and Co will never address this questions in good faith. If someone is paying their card off each month he would need to explain how it is hurting them financially to really answer the question.
@@Poomayne Why do we have to live in a cashless environment, though? It seems that yielding to a cashless environment is just bringing on more control for bankers and other institutions.
His rebuttal to your question is that people tend to spend more when it’s CC vs Debit - which makes sense. The question should be if you only spend the CC on things you HAVE to spend on anyway (rent, phone bill, mortgage), how does it hurt you financially?
Your point? He wants to sell that stuff to get it into more people's hands to help them. It is what he thinks works and there is nothing wrong with that. There is nothing wrong with what he teaches. It is not my way of life, but it has worked for him and others.
Everything goes on the card. Paid off monthly, get points, free 30day float, consumer protection, don’t have to carry cash, what’s the problem? Paying cash gets you none of the above.
I have used an AMEX blue cash card for over 15 years. I use it for pretty much everything and pay it off each month. I get about $1200.00 cash back annually. To me, it's a no brainer. Yes, if you cannot control your spending or don't have money to pay the card, than don't use it. Dave makes no differentiation between people who have control and funds vs those that don't. To me, I am taking the free money every time. My spending would not change with or without the CC, why not take the cash back? Plus I got wealthy during these years and retired at 56. I will take any advantage I can get even cash back no matter how big or small. Money is money.
Exactly! I do the same thing. I use my Amex for pretty much everything and pay it off in full each month. Last year I got about $800 cash back. That's a win for me. Sure, Amex sends me offers everyday trying to tempt me to take out low interest cash advances, low interest balance transfers, etc. but these offers do not tempt me so I don't fall in the trap of spending money on stuff I don't need. Is this going to make me rich -- no, but I'm not trying to use it as an investment strategy to build wealth.
He missing the point. The person is spending money THEY WOULD HAVE ALREADY SPENT. IE groceries, gas, etc etc. It's free money as long as they pay it off every month.
@@EricSmyth2Christ It's free as long as you pay it off every month. So if you pay it off every month, then it's free for you. You are correct in saying that not everyone will pay it off every month. That's true, and that's why they've got those big buildings. But as long as you're not one of those people, you're fine.
@@jaehwan123 We're all aware... Let's say I go to a school and tell a bunch of kids not to play poker... is that good advice? Of course it is. "BUT I'M GOOD AT POKER" (facepalm)
Seems like it may be too subtle for some, but the fine print is "When used for stuff you would purchase anyway". If you wouldn't buy it with your checking account don't do it with your CC.
Its interesting how many people cannot comprehend true financial discipline. I guess people who defend the "NO CCS AT ALL" line of thinking simply just spend on their checking accounts and only stop when they run out of money? The same financial discipline that Dave seeks to bestow on his audience is the same discipline you can use to use a CC responsibly. If you track your spending, plan a budget and actually stick to that budget, the method you use to pay for your stuff should not have any meaningful effect on how you spend.
Dave wouldn't have a job as a finance talking head if everyone simply lived within their means and did simple math and reasoning well. I've seen people who needed to be sat down, made to write down the list of their debts with minimum payments, and told to pay the minimums plus X extra on the highest interest rate one until it was gone. The person was smart at other things, but their finances were just a nebulous mess in their head. I was amazed they didn't do this themselves.
I'm a budgeting counselor in Canada. If you pay the card off fully every single month youre fine. The problem is people don't take measures to ensure they do that. Use the card on a regular monthly essential expense you already have on your budget and don't use it for anything else. For example pay yout phone bill with it, then use the money from your chequing account that you normally use for the phone and out that back on the card. If you always pay your cars to zero monthly, youll raise your fico and pay no interest.
Dave did not explained very well but if you pay in cash you feel the pain instantly so you tend to buy less. If you use cc is easier to go over you budget money. For instance if your bill is 53$ and you tend to take one unnecessary item out so you can spend less than 50$ (which may be your original budget) while with cc you just pay and don’t think much. So yes when you redeem your points you may get 20-30$ cash back every month,but you may have go over budget with 50-100$ simply because of the convenience of paying. My cc with my all expenses(groceries,phone,cable,gas,eating out and everything else) runs around 1500$/month,but when I used only cash for one month I spent 1350$. So yes I always off my cc and received 20-30$/month back,but is less than 150$ that I saved using only cash. I agree Dave did not explained this well.
I'm sure some cc's are bad. But I agree with the question. We use the costco cc and use it for what bills can be paid with one and other monthly expenses we budget for etc. And we never pay interest (we always pay it off) and twice a year we get hundreds of dollars back from Costco and the cc. So . . . . Yeah . . . . It's called free money if you ask me.
They'd tear Dave up. I could tear him up. Especially on his lies, misinformation and bad advice he gives. Even more so if math is involved...his math skills are borderline pathetic.
if you claim to follow his plan why not listen to him? If you are dumb enough to fall into debt in the first place then he is likely more knowlegeable than you. Obv for those who are able to spend enough to go on vacation, they should not have any debt and this rule isn't for them so calm down.
Thank you Matty. So you're telling me it's okay to borrow other people's money to pay your bills and not use your own money? That's awesome idea STUPID 🤣
I like my financial freedom. Rather live in my car before I get to that point and preserve the money I have without getting in debt. Did exactly this in the 80s.
@@BiggSneaddd I "borrow" for 24 hours because I pay off my CC every day. I get cash rewards to use their money and pay ZERO interest. You should try to breathe more deeply because I don't think you're getting enough oxygen to your brain!
Use them for everything , reason being. Fraud is easier to clean up if it happens. Plus it’s not hooked to your bank. If you have no control then yeah obviously don’t use them.
We have 4 credit cards: - 5% cash back on all Amazon purchases (+15% off for subscribe and save) - 2 x 5% cash back cards on categories that rotate every quarter. Sometimes, this category is groceries. - 2% cash back on everything else Year to date, we've gotten ~$1,000 in cash back on everyday essentials.
You beat the system by doing exactly what you’re doing. I’ve done it for years and that, along with many other money saving things and investing, have made me a multi millionaire.
I use a debit card at a gas station that only takes that kind of card and charge $ 500 on groceries every month so my credit union will pay me 3 % on a saving account. After that it is a CC that pays cash back. Always pay at the end of the month. Do use the Amazon card for their cash back. .
I use my cc for groceries, utilities, and other necessities. However, they may be onto something here regarding the psychology of it. You may be more hesitant to pay certain things if you are using cash.
Pay off in full, dont get to crazy by putting alll ur bills on it, might not be able to pay it. Auto full payment dont always pay it in full if its a crazy high amount. Its a rip off
yup. It's a well studyed fact. We spend considerably more if we pay with CC. We think twice before paying if we carry money. But creditcard, not so much.
@@geovani20091 that applies to unplanned spending. If you have a budget that was well thought out in advance and stick to it, that psychological phenomenon won't apply to you.
@@areyouseriousholmes that's not true the direct debit worked perfectly so any time I pay with the cc it takes it from my bank I have never had an issue with it. But if you did you could email them they usually refu d the money
It took them 8 minutes to fumble through saying that rewards credit cards can tempt people to overspend by chasing points or rewards they wouldn’t have pursued otherwise. It’s like buying something on clearance that you don’t actually need, versus recognizing it’s a good deal but choosing not to buy it. The real danger they’re trying to point out is letting rewards influence your spending instead of sticking to your needs. That said, many people, myself included, see rewards as a way to get something extra on purchases we’d make anyway. Apple Pay for the win!! Also 5% off at Amazon, Lowe’s, Target, etc using store cards. Just be mindful.
I agree 100%. If I'm going to spend $100 at the grocery store, why not get 3% cashback on my purchase ? Using a credit card and paying the full balance at the end of the month, makes more sense than paying with a debit card. In this video they are using a bad example of why not to use credit with rewards vs debit. Travel vacations are not the thing to think about when you're in deep debt.
This kind of arrogance bothers me. They literally said in the beginning they use it to pay bills and groceries. If you get 2% cash back on these items you need to pay anyway, why wouldn't you? They assume the person writing is out buying new shoes and cars because they think they get free money. They also make it seem like these people expect to get rich this way. Not once did they address the issue of using credit cards and paying them off every month. They just went on a smug tangent calling everyone else idiots and relating them to chuck-e-cheese kids.
Spending $10k to get $200 won't get you rich, but you're spending $10k-$20k (or more depending on your lifestyle) on basic budget items like utilities, groceries, gas, etc anyways is $200-$300 better than zilch and is a months worth of utilities. We've become a mostly cashless society already so the psychological argument of spending less using cash isn't applicable anymore.
it’s not just about cash vs plastic but rather the psychology of incentivized spending. I get the argument of using it on utilities & other necessities but nonetheless providing an incentive for increased spending is not a good thing because for every 30 disciplined users who are frugal and don’t carry a balance, 70 over spend and carry a balance.
The idea that buying something you were already going to buy and getting a reward for it is bad, is one of the dumbest concepts Dave has ever thought of.
No matter how much you minimize costs there will always be something you need to pay for (rent, food, cookware) unless you plan to directly make cast iron skillets yourself, plant and harvest wheat and turn it into flour and grow your own cotton for sewing clothes @@Musicienne-DAB1995
I think I definitely have to disagree especially whenever these purchases are already ones that you were going to have to make, so getting free points and rewards out of it makes way more sense in the long run if I'm going to pay the card off every month anyway.
I don't agree on this ... I use a credit card that I pay off monthly to have protection! If you use a debit card, you lay yourself open to fraud (I had over $7k drained from my account in a matter of hours and was never even told how it happened - and incidentally, I was treated like the criminal until I was forced to get a lawyer involved). I'll admit you have to have restraint because you are actually "borrowing" the money, but in the 11 years since I was defrauded, I have yet to pay a single cent in interest and have not had a fraud issue either.
I just got $570 back on my card that I never carried a balance on. If you truly pay them off every single month then they are no different than a debit card.
So True.
The point is don't overspend just to get your miles. Spend on what you're already buying anyways, the essentials.
I agree, if someone steals a cc number, the cc company calls you and shuts down the card. with a debit, you could be out of money for a week or so if someone get ahold of it.
And they add a cut out between yourself cash and a thief
They are actually better than a debit card.
The one area you are wrong Dave. I’m spending $2K every month and pay it off every month. I get a 2% CASH REBATE ! I get zero using a debit card/check. I have no other debt. Some people have discipline.
I use Ebates too and on double point days buying presents I normally would, got paid back 50. Went to pay gas
What is your net worth?
While it's great that you're disciplined with your credit card usage and can take advantage of the 2% cash rebate, it's important to note that not everyone may have the same level of financial discipline. Using credit cards can lead to overspending for many individuals, and the temptation to carry a balance can be high. The potential interest rates on credit cards are often much higher than any cash rebate, and for those who struggle with managing their finances, the risks may outweigh the rewards.
If youre stupid enough to spend more than what you make thats on you though. Responsible people should not be told to never use credit cards. Responsible people take advantage of every tool they have access to. @@cupcakebrown9836
@@cupcakebrown9836 why does your comment feel written by chatgpt lol
When he says “you need to spend $1000 to get $20 off” is completely missing the point. I’m going to spend that $1000 regardless on bills, groceries, food, etc.. if I can get an extra $20 off then hey why not
Exactly. All Groceries, Gas, Utilities, etc. they literaly are giving you $250 for free, as long as you pay the whole balance at the end of the month.
Exactly. Cash is dead.
I believe the point is that with a card, you're more apt to impulse buy and spend money on things you otherwise wouldn't if you had a limited amount of cash in your pocket or if you used a debit card that took money out of a limited account, thereby slowing, in bit pieces, day by day, your assumed goal of reaching financial independence and building wealth. It's about a mindset, a personal philosophy, and building wealth as fast as possible, as opposed to rewarding yourself with minor conveniences along the way. And, a philosophy of not WANTING to borrow someone else's money now, so you will never NEED to later.
Then you have a bad month and you can’t pay the bill!
@@joevining2603 it's all about borrowing money. Cash is dead. It's about leverage . A CC is a great way to leverage and get more per dollar spent.
I got $3,000 cash back last year on my credit card and didn't spend a dime in interest. How am I stupid again?
Dave would argue you would buy less when using cash, but I call BS on that.
Your stupid because Dave can never be wrong.
What i think dave wont say... is that a very very small percentage of people can benefit from credit card incentives.... and its not worth him even saying it because the massive majority of people would end up in a worse place if they even tried. Its not that its impossible to get benefits from it, its just there are better and safer ways to build wealth than credir card incentives. It isnt necessary.
@@clintflippo917 Fair enough. But you can benefit if, and only IF you have the discipline.
I think the point is most people are really bad with money like 95% of the people are and these credit cards companies understand this so they are banking on the mass majority and not the 5 % and the amount of money you spent to get 3k is a lot for the average person… but good job for you but that one family that pay check to paycheck should not acquire more debt
Dave has a lot of good advice but he is just mathematically wrong on this issue. Getting free money for purchases you were going to make anyways is smart and efficient.
Agree.
If you use your card to buy necessities only and pay your card off each month/do not accrue interest... and get ANYTHING back.. be it cash, discounts, travel points (that may or may not end up being used)... not sure what the mathematical problem is with that.
He is not mathematically wrong depending on who he is giving the advice to. If he is talking to you or me he is wrong, but if he is talking to a REGULAR PERSON, he is mathematically correct, assuming the person makes mistakes at a frequency of %1-%12 of the time. Not everyone who considers themselves to be responsible is actually responsible. You would be surprised at how bad the caller could be with money long run.
@@EricSmyth2Christ but I wonder why he won’t just admit there’s a caveat for responsible people. He makes it seem one size fits all.
@@EricSmyth2Christ What Dave SHOULD be doing is teaching people the correct way to be most efficient with their finances. He shouldn’t assume that people will not listen to him and then give bad advice to make up for them not listening.
@@joshzollinger5181 "the correct way" by what standard do you measure correctness? he's stated before it's his opinion, people are calling in on his channel for his advice. it's their life, if they disagree okay, they can do as they please. i mean youre seeking advice from a financial person. you don't have to agree with their advice, and i also don't see him changing his stance. i also think people don't realize the way he always answers the question. there's a certain way he's answering to show why he personally does not advice that.
also why should he not assume that? perhaps you have more faith in people than most. it's usually wise to do risks vs benefits when giving advice/ teaching individuals of various backgrounds/ large audiences. you can't assume that people know to avoid the same things you avoid or that they will even do that to begin with. i mean i'm really curious if you would do that irl. i find that surprising that people have that much faith in others. it's not just something he does on his show, there are loads of scenarios where it is common practice to do this. i see the point he's making, i dont necessarily agree with ad hominems if he's calling ppl arrogant who are on the opposing stance as him
I think Dave disagrees with the strategy because the temptation to get into debt is so easy. But if you are disciplined and only charge what you would've charged on your debit card then it can make sense for some people: utilities, insurance, groceries, gas, etc. I actually take the 2% I accumulate and apply it to my balance every few months.
Exactly what I do. Works great!
Why would a disciplined money guru watch Dave? You see the stupidity in the argument trotted out by Dave's detractors?
@@nihilisticsoup2919 Because a person that's into any subject is going to watch TONS of different sources no matter how much they know in that subject.
@@Spladoinkal That's irrelevant to the point I was making which is that Dave's channel is squarely aimed at the average American with a spending problem and or an ineptitude at budgeting and general lack of money smarts. Personal finance gurus can state their opinions or "what's true for THEM" on his videos all they like but it doesn't matter because his channel isn't aimed at them, it's aimed at those who need "baby steps". In the early stages as Dave points out it's NOT about maths or learning to play a system it's about emotions and building discipline. If you can't understand this you won't appreciate it from a perspective that isn't yours.
@@nihilisticsoup2919 You literally asked why a finance guru would watch his channel and I answered that it's because they watch all kinds of channels.
Booked a flight on air Berlin for the whole family years back with my cc. That year, air berlin declared bankruptcy, and I lost my tickets. Called my cc company, got refunded. If I paid with cash, that money would have been lost.
Not sure why it would have been different if you paid with a MasterCard/Visa debit card. Wouldn't they have refunded the money?
Debit card you get refunded as well...
Dude, there’s a one in a million chance that the airline goes bankrupt before you take your seat. Bad example
@@Originalman144 I had the same experience with Jet Airways a couple of years back, got my money refunded, paid through CC.
Irrelevant.
CRYPTO SCAM VICTIM ? As a Retired combat Marine I want to tell you that as what you are doing is just as important as any warrior on the battlefield. You are waging warfare against these criminals and terrorists on the digital battlefield. You are defending and protecting the most vulnerable of our society against these predators. Keep up the good work *TECH SAFE GUARDIAN*
The tech safe guardian ceo touched me inappropriately
I would respect Dave WAY more if his attitude wasn’t “everyone who disagrees with me is stupid” have some humbleness sir
I think he just doesn’t know how to articulate his wisdom and gets frustrated. He is fully aware of the predatory practices in the CC industry. He knows that there are healthy ways to use a CC but he knows that 90% of us will be tricked. The smart way is to get a CC that has no fee, no spending requirement, and % cash back that translates to cash that can be used to pay off the CC. Use it like a debit card and never sign up for promotions. Proceed with caution
yes this right here !!!
I think Dave is mad at himself becasue he once did stupid things with money.
@@anthonyiannozzi6777 Could be and he thinks everyone else does too. I've always been really smart with money and retired early. He didn't become a millionaire by just giving financial advice, it's the whole thing. Selling products, writing books, you tube, other podcasts, the whole bag. He didn't get rich by just following his own advice.
i mean he says at 7:51 it's your life, do what you wanna do. if what youre saying is true, than yeah i dont agree with arrogance. he also could just be trying to emphasize how in his perspective, it's absurd to think you will win because of the psycological manipulation these companies do. but hey, it's your life! do what you wanna do!
I love Dave. But the CC is one thing I don’t follow. I love my miles CC. I don’t think I’m beating it. I’m just getting miles for what I already spend. Only pay bills, groceries/anything in my budget and pay it off every month. I just see it as a bonus for already paying what I would normally pay. We are debt free and we went 1st class to Europe with our miles. Flights are the most expensive part.
Exactly, if you don’t keep a lingering balance and consistently pay off your cards, why not benefit from it?
Same. I pay off every week.
I get the .05 percent cash back it’s not gonna make me rich but I make more off them then they make off me so that’s a win in my book.
The ticket to Europe was from the bonus miles for signing up - not because of the points or miles earned on purchases - they are not worth all that.
They will end up making that money back from you when you decide to go to Europe again and book the tickets with the card, plus the hotel on the card, plus a few restaurants- then when you get back you are slow to pay it off or someone gets laid off or the car breaks down.
This is hilarious.. They created a fake argument and then called you stupid.
Dave loves the strawman
EXACTLY.
really nice to see so many in here with working brain cells.
NO ONE told them to go buy a fkn yacht with their credit cards for cash back...not even the bank wants you spending beyond your means because if you do they end up losing money when you default. lol.
This exchange convinced me to write this channel off completely.
@@gcc8584I don't think you should completely write off this channel as he can still give good advice, but yeah this was stupid
100% They NEVER said they were in debt. They pretty much said the opposite. Also, I JUST flew to Nashville and Florida, both trip with points from my monthly bills. haha. YES, CC's are getting something out of the deal, nobody is saying otherwise. that doesn't mean you should never do it. I kept waiting for the REASON why that particular listener would regret doing this, they never answered. They invented a different scenario and discussed that.
I'm a little late to this, but, I'm 73yo on a fixed income, single income - SSA; I have no debt and live in affordable housing. I have two credit cards with cash back. I use the ccs for everything: groceries, utilities, rentals, everything...I may go weeks without spending actual paper money somewhere (I have no cash in my pocket now and haven't for more than a week). While 2% cash back may mean nothing to you all, I happily accept that $20-$30 each month.
Made $800 cash back this past year and paid 0 dollars in interest/fees. 99%of the purchases were essentials, gas ,food ect. Used the cash to pay the card bill. Where and what did I Lose? Nothing.
But you're not doing what Dave says, so you MUST be wrong!!
@@jim.h You're just supposed to follow Dave's advice uncritically. No need to think for yourself or put that financial discipline that he supposedly taught us to the test.
Hey could you share your budget here. Based on the budget we could see how well you did
Exactly - Dave is completely wrong on this one. I use my CC with points to pay for everything I would be getting anyway. I pay zero interest and can use the points to buy some of the stuff I would have bought anyway. I'm not playing the credit card companies - they make their money on the fees they charge the merchants. The Credit card companies are not playing me. I pay ZERO to use their money for 15 to 45 days. I am very conscious of the closing date on my CC and will often wait a few days or even a week to buy something, so I have an extra month to pay for it. I have the money in my bank account to pay for anything I purchase. It's better sitting in my account earning a tiny bit of interest (something like 0.1% annually) a couple extra bucks per year may be almost nothing but it's still a couple extra bucks in my pocket. I have no debts, my mortgage is paid off, I have investments. I don't live only to save money. I live to enjoy the money I have accumulated. I do occasionally, (but rarely) spend money frivolously. I have taken three (what I would consider) expensive vacations in the last 25 years. I do take my dad out to breakfast every Sunday morning - yes, I am paying $25 for something I could make at home for probably $2.50. Once you've taken care of the needs, saved for retirement, emergencies and such, some of the rest can be used to buy the things you want rather than need. I never spend money I cannot afford.
I never claim I will get rich off the points or tiny bit of interest I make, but it's still extra money. By not using your CC and collecting points you are leaving money on the table that you could use for those wants.
Bad credit 😂🤣😂
I love how they completely ignored the question...there is no problem doing this
Their niche is steering very financially undisciplined/irrational people towards not being in debt. They wouldn't have this talking head job if everybody could handle using a cc responsibly.
The argument is that people spend more mindlessly when they can charge it than when they pay cash or write a check.
@@OTBMedia It's true. But I don't want to be mindful of my spending. I spend 10 hours researching a $200 item and taking a risk with a used one when if I had just worked those hours I could make 3X that much money.
@@Wary_Of_Extremes I pay my cards off every month. I am not in debt. I use my points to travel. He still didn't tell me why not to do it. I'm not beating the system, I'm just picking up a little extra cash for my airline trip.
They didn't ignore the question. Dave responded to it directly and explained in-depth on why you are losing by playing a game you're convinced you can win at while you're designed to lose at it. You're not going to beat the system, no matter how special a person you think you are. Rich people do not covet rewards points. Only losers do.
There’s nothing wrong with what you’re doing AS LONG as you charge only things you’d normally buy. Dave assumes that you’re buying stuff you don’t need. He’s wrong on this subject.
He's absolutely wrong. Ive personally saved thousands churning cards with normal expenses. I also know they're normal because I budget for them. These companies make money off of the irresponsible users, not the responsible ones. That's why I get he says not to do it, but he doesn't acknowledge the reality of the perks and protections when used correctly.
Very wrong
Well acording to Papa Dave you are all "so arrogant!" 🤣
He is probably only wrong 20% of the time. … it’s the other 80% he is talking to!
@@Helthurian Prove it? How much did you spend to save thousands? And, if you're such a financial guru why are you watching Dave?
The factor they're not taking into account is this. When you have enough disposal income at the end of the month, every single month, to pay off your card balances in full. In this scenario, you never pay any interest and the cash back that you get, albeit minimal, is simply free money. I have been doing this for over 15 years accumulating thousands of free dollars.
Getting $20 from spending $1000 with credit cards is better than getting $0 from spending $1000 in cash or debit cards
And if somehow your number gets stolen the money is not out of your bank account.
You will absolutely from time to time splurge more if you have a credit card, compared to not owning a credit card. this is normal human behavior.
As much as people want to deny it, facts/research and numbers don't lie.
It's just an extra temptation in your pocket that you absolutely do not need especially when u're trying to clear a better financial path for yourself.
Maybe Credit cards can be convenient if you've made it in life but not before.
@@sc9433 No, you won't. Don't project your failures disciplining yourself with spending on everyone else.
@@sc9433 I'm 66 and been dead broke at times. At no point did I charge something I could not pay for because I was splurging. Have I depended on them when I needed food or a necessity? Absolutely! Fortunately, I never thought of them as a treat.
@@sc9433 nah, the title is if you pay it off each month. Dave is just being dumb here by thinking people use credit cards as a way to get rich from their cash back. No one thinks that
The problem with the Chuck E Cheese analogy is that I don't HAVE to spend money there. However, I HAVE to buy groceries, I HAVE to pay utilities, I HAVE to pay for my phone and internet. If CC companies want to give me points for spending money on necessities I would've otherwise paid cash for, be my guest. That's money I don't have to spend later when redeeming for flights, hotels, and meals while sharing experiences with my family and friends. Additionally, what factual evidence did Dave actually provide against paying off CC other than calling his viewers "arrogant"? When you start name calling, you know you lost the argument.
You have critical thinking ability. That's not allowed here...
This is my thought EXACTLY
@@koreypaul6698 🤣🤣🤣
So...just buy with cash. You don't NEED a CC.
@@sharonfuller4391 you're clearly missing the point of this entire debate. Enjoy not earning benefits and paying more because you missed out.
Was hoping Dave would actually break down the math of why he thinks doing what the caller suggested was a bad idea. The blanket statements aren’t convincing.
If you don't understand Dave's explanation, you should be watching Sesame Street.
@@stellarocquie7957 We understand Dave's explanation ... we just don't agree with it.
@@stellarocquie7957 Was really hoping for something more than an insult to make your point Stella...
@@stellarocquie7957 ad hominem attacks don’t replace math. Dave’s explanations are usually very great, but I found this one was a bit lacking. You’re welcome to break down the math for me if you’d like, or you can continue to hide to behind the cowardly insults.
He’s just being consistent for people who don’t have control or discipline with debt. So listen here-if you’re vigilant and focused, not in debt and love to travel, GO FOR IT:)
I’m literally on a vacation for two weeks, mostly using points. I still have 196k points left. I’m not in debt, and haven’t had a balance in 20 years. Sooooo if it works for you, then do it. It also builds credit, cash doesn’t.
They’re cavemen they won’t understand
You must buy lots of crap you don't really need to accumulate so many bonus points.
@@samkitty5894 Bonus points? Are those better than regular points? I want them!!
As for crap... not really my thing. Do I have nice taste, yes. Do I skimp on things, not really. Do I run a business and use the card to accumulate points, probably. Do you know anything about me.... no, but thanks for commenting.
I use a credit card every month and have never not paid it in full. Not once in 52 years. I get to use someone else's money for anywhere from 15-45 days. And yes, I get free airline miles. And being a 73 year old multi-millionaire, I can afford all the other costs of vacations. I have also used miles to book flights for friends and family especially when there is an emergency.
So what is wrong with this? One size does not fit all. Your mileage may vary.
He's speaking for the general public I use them the same way I pay amount in full before the statement date arrives and pay 0 interest every month the average person makes minimum payments because they are buying things they can't afford so a balance rolls over and now they are paying interest I use mine like it's my debit card so if I don't have the money in the bank to cover it I don't buy it but understand this man there's probably less than 10% that use their credit card wisely the rest get swipe happy I only have one because shopping online is absolutely stupid to do off your debit card for those people who don't have a credit card use cash app for online shopping
Congrats on being a multi millionaire at 73 I'm 34 and started investing less than a year ago I got a late start but better now than never I guess best wishes to you good sir
You must be buying a lot of stuff, maybe even things you don't need in order to get the benefits. You are also paying more for some things because merchants will increase the cost knowing there are fees when credit card is used.
I waited the whole video for them to make a point and then the video ended
They are against “points”.😉
Same here.
It takes great discipline to not overspend. But if you pay it off every month there’s no penalty. Take the points disagree with you Dave.
Exactly gotta pay it one way or another at least get something too.
Have a sudden medical issue, see how well that works out for you.
@STUPID TABLET Trust me on this, insurance companies are in no hurry to pay your claim. They wait you out or starve you out so you will settle for peanuts. Meanwhile your bills will pile up. And yes I have an attorney in my family.
@@alinatamashevich3354 don’t you worry about that. I’m fit and healthy I don’t need to worry about that and if it comes up I’m not worried cuz I can pay it. So no I won’t wait for that to come up
@@alinatamashevich3354 Most doctors offices if you communicate with them will just re-bill the insurance if the claim is denied. In general, let the bills pile up, pay the minimum they will accept and eventually the insurance will pay. I had a medical bill once where the insurance company kicked it back over something dumb, and the hospital sent the bill to our old address, and when we didn't pay it, sent it to collections. I called them, showed where i had already paid my part and insurance said they paid their part, and then they saw the reversal on it, and said that it was their(the hospital billing department) fault for not re-billing the insurance company within the time limit, and so they credited me as paid in full for my part, called the collections agency and told them to drop it. I didn't immediately have to send them a check for 900 dollars, i kept working it out between the insurance company and the doctors office and eventually it was resolved.
There is no doubt that you will rise fast at the apex of your career *TECH SAFE GUARDIAN* . Because you are a very intelligent, smart, hard worker and your work ethic par excellence. Keep going People like you take the IM out of Impossible by becoming PRO at tackling Problems. You Rock!
The tech safe guardian ceo touched me inappropriately
“You spent 1,000 to get $20”
How much did you get off of paying it on your debit card. $0…
For real
Not to mention, I will often get $50 on that $1000. Then I can usually get an additional 20% value when I actually use the perks.
An extra $20 here and there means a lot more to many of us than it does to millionaire Dave. :)
Are you debt free?
I doubt most people are.
Your playing with debt because you’re making $20 when you don’t have payments on ANYTHING you keep all of your money. I think this guy who has a net worth of over 100 mill knows what he’s talking about
@@connorcoutant2059 I use my charge card this way and not only am I debt free but my rent is paid a year in advance. And I am retired and living mostly off of Social Security.
I disagree with Dave on this. I use my CC to pay everything that I would have paid for anyway and stay in budget. We pay the balance every month. The points earned is like earning interest on my bills. There isn't a bank anywhere that is going to give 3-5% on a savings account.
I agree with what you said. Dave is wrong on the cash back as long as one pays the bill in full every month. I only see his point if someone is saving them for travel points and is still in debt.
Or a checking account.
Excellent perspective, thank you.
There Definitely Is A Bank
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
To each their own, Dave. I'm a self-employed IT consultant who used to do things your way. I have multiple credit cards that offer rewards, and most do not have annual fees. I just read my 2023 Amex report, and it shows that I earned $1,921 in rewards from purchasing fuel, groceries, and business expenses with the card. You always miss that neither I nor others carry balances and pay ridiculous interest amounts. The balance gets paid in full each month, and I reap the reward of this money. $1,921 may seem like a little money, but it covers my entire auto insurance bill for the year. Who in their right mind wouldn't take advantage of this free money when done correctly? Thankfully, I'm doing fine and won't be eating beans and rice, rice, and beans. :)
Their niche is steering very financially undisciplined/irrational people towards not being in debt. They wouldn't have this talking head job if everybody could handle using a cc responsibly.
if you don't mind me asking, how did you start your business?
Many people can't use a credit card responsibly, that's the problem. And if you're in a Dave Ramsay program doing the baby steps, chances are that you've failed in some way financially and having a credit card is a very bad idea.
There are two areas I disagree with Dave, credit cards, and carrying debt with lower interest rates than the APY on investments.
If you're not in debt and you're going on vacation anyway, and never carry a cc balance, there's absolutely nothing wrong with using their cc for vacation points.
I agree. Dave says at the end "You are going in debt, but not paying it back by the end of the mind" which completely rules out the title of the video. If you're paying it all back at the end, then you're not in debt, and get those free points, cash back rewards. I worked for Capital One and offered the points back cards...and it's not a trap for people. Especially if you say "You're spending the money anyway, so why not get some back". I completely agree with your statement.
@@thepurplecheshire2211
You are in debt if you have bought stuff with a credit card
@@Robert-cu9bm and not paid it back by the grace period before your interest rate kicked in. If you pay it off before your statement gets sent, then you won't be paying extra. You have like a 5 day grace period when the money hits your balance before the interest rate kicks in. Worked for a credit card company...and have owned one for years. Had to watch this for my finance class in college. There are ways to pay it back and "BORROW" before interest.....
@@thepurplecheshire2211
No, as soon as you spend someone else's money YOU'RE in DEBT.
Doesn't matter when they say you need to pay it back by.
This fucker will surely try to twist ur mind to justify his point..
No one would claim to become rich with reward points. Plenty of people would claim they saved $2-3k per year with points between their business materials and personal bills being paid on time. This really comes down to self control.
clearly 99% of Ramseys audience has no impulse control.
They dont need a financial advisor in here...they need a therapist.
@@Platinum-Ninja That's who he caters to. He's got very simple, basic rules for people who need to hear it. He has to treat them all like they're very undisciplined, because a lot of them are.
@@Wary_Of_Extremes again....davey doesnt just say 'THIS group of people" lmao....he blanketly asserts that NO ONE can win against the banks using CCs. I know he says it son...Ive heard it with my own ears.
just stop posting in my direction...youre clearly not intelligent enough to discern the issue here.
@@Platinum-Ninja I still think he doesn't want to encourage the majority of people who listen, who might think they can handle it but can't. IDK. Maybe he himself is a compulsive spender and he's outright afraid of it and can't be reasonable about it.
The point is that rich people do not covet rewards points and marketing gimmicks. Credit cards aren't a tool for gaining wealth, they're a too for losing it. Instead of putting your greatest wealth building tool (ie your income) into debt you should put it into savings and smart investments.
People who follow Dave's plan become millionaires. People who follow the bank's plan become losers with a free plane ticket.
Simple answer to the question, if you do as the questioner said, there's nothing wrong it.
I agree
Yes, if you have no other debt.
Yes.
You've COMPLETELY missed the point.
Yes the psychology behind it makes sense. If you get an incentive for spending more, you will give yourself reasons to spend more. However if you pay off your balance every month, then nothing is wrong with that either.
Thank you, *TECH SAFE GUARDIAN* . Your presence has made this entire process much more comfortable, and I am truly grateful for it. Working alongside you is a pleasure, and your dedication to your role serves as an inspiration to me. I will always remember the help and support you’ve provided me with.
Never did they answer the question. They just immediately got offended that someone would ever question their program, proceeded to call everyone who uses credit cards stupid, and… nope that was it.
and then they wonder why they arent taken seriously by anyone who really matters. lol.
Ramseys only good advice is 'get out of debt'...and a 6 year old child could have come up with that idea lmao.
He did answer in regards to rewards like flights... he did not bother to respond about the 2% cash back nonsense because inevitably 98% of people that try to do this will forget or be late paying the bill before the interest accruement date multiple times and wipe out any "cash back" they may have gotten. Though with all that being said Ramsey is being an arrogant know it all asshole in this video.
Yep. We never said we were trying to "beat" the CC companies. We increasing our personal convenience by using a CC that we pay off every month on things we needed to pay for anyway...and getting a cash bonus for doing so.
@Erati243 except me and others who somehow don't forget because we're not incompetent at life and we care about our money. Cc companies lose money on us and make money off of undisciplined people. They make more than they lose so it works out great for them. I'll keep taking 2 percent back free every month.
Thanks for the advice, Dave. You are not good at math
They did. Banks don't make these offers for no reason.
They have run a search across their userbase and saw that unexpected circumstances happen to a certain percentage of people.
So say 5% of clients won't be able to make the monthly payment and will end up paying the exorbitant interest.
In order for the bank to maximise their take, they want to incentivise as many people as possible to take on credit.
This is not free money. Each month you join a pool of people who take on additional risk.
Some of those people fail to deliver at the end of the month.
The bank then takes the interest, and gives you a minor portion of it to keep taking on this risk.
It's a numbers game. From your perspective , you make money. But in reality those who are dumber or less fortunate are the ones who pay those 10 extra $$.
At 1:55, This is a classic “straw man”argument. He constructs a bundle of nonsense, “oh so you are saying that if you spend 10,000 to get $200, then you will get rich.”
That was nothing like what the caller said. He’s attacking a nonsensical argument, that he, himself, created.
Agree
😂😂😂facts
I like a lot of Dave's ideas. This one I just don't get. If I need to spend $10,000, why wouldn't I use a vehicle that gives me $200 of it back? I either spend $10,000, or I spend $9,800. Any response, Dave?!?
@matt2s He doesn't actually believe this
As someone who was in deep do do debt and working 2 jobs for years to get debt free. I can see were Dave is right. I still have credit cards but I only spend on what I need and keep them basically for emergency as I have little savings. You spend 25% more when using a credit card because it is like play money unless you have a back bone of iron.
I disagree with Dave, I spend 30-40k on a month on my business and Pay off every month and make 50-60K points a month… been doing it for years
Dave doesn't support debt generally. However, what he is speaking about is personal finance, not business.
"I disagree with Dave, I drink 30-40 beers a month in my business and have no problems functioning… been doing it for years"
@@ericsloan858 Unfortunately, when you translate this reasoning to other areas, it quickly becomes fallacious.
@@ericsloan858 That's not a very good analogy
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
How can you book a plane ticket or a hotel when going on vacation without a credit card? We used to have travel agencies everywhere before. If Dave is going to give somewhere for business, how does his staff book his plane and hotel? I can’t reserve a hotel without a credit card locally. Hotels keep your credit card on file until you leave. You don’t have to use it to pay at the end, but you definitely need it. You also need a credit card to pay for parking meters.
Dave doesn't listen to anyone anymore who has mastered some basic skills. Using CC points that actually give cash back makes sense for people who have the self-discipline to pay off the balannce every month. He's more attuned to the beginners who don't have their act togethher with budgeting and self-restraint.
Exactly. He’s a silly individual. The more i hear him the arrogant he sounds.
@@ImDahDude I agree! I use CC to buy things or services that I would buy anyway and then I pay it off every month. At least I get some cash back....I wouldn't get it by using my debit card or cash and I would have had those expenses anyway. I also have the feeling that he sounds more arrogant as time goes
I wish he would say that instead of generalizing his outdated advice to everyone.
I mostly agree. Either don't have a CC at all, and thus no CC fees, or use it for the things you have to buy anyway and pay it off every month. You are not beating the CC company by this 'trick' as Ramsey suggests here at all, they are happy if you do so as they still get to charge 1-3% transaction fee from the company that accepted the CC payment. Of course that transaction fee they charge back to you, but that is regardless if you pay by CC or not, and if you pay by CC you get some of that back with some cards.
And for those people they should absolutely listen to dave's advice. The problem of course is people being able to recognize whether they have the self discipline to not over spend or carry a balance. People's ability to recognize their flaws goes hand in hand with intelligence, those lacking intelligence overestimate their own abilities, which includes their ability to control themselves financially, so those most likely to need these kind of hardcore rules, are the least able to recognize that fact.
I think Dave’s approach works for people who are very lost and need some tough love to build financial discipline. For disciplined people who use the card but don’t carry a balance he’s not the right person.
“Disciplined” and “using a credit card” is a contradiction in terms in Dave’s world.
Well put .
to say
accumulating points
as being anti wealth building is a stretch.
I love my …yes. “free” plane tickets and I dont pay a dime in interest.
Agreed!
But you're losing money with the merchant fee. It's always more than the amount of "cash back" or points you make. Look around and find merchants who give a cash discount. It's usually 3%. I eat at restaurants that have the cash discount and save 3% every time. We have gas stations with a cash discount of 3% also.
So discipline doesn't matter, if you're wasting your money needlessly.
@@tdiler12 But you're paying more than all that in merchant fees for using the plastic. You are losing money, and are too ignorant to realize it.
It's hilarious that Dave has the balls to call anyone other then himself "arrogant".
I was just thinkn that..lol
I've learned that many "religious people" are arrogant and hypocritical.
Stone crazy
@@DrWho-jy7lo welp, that's what heaven will be filled with, arrogant people and hypocrites. lol
What are you talking about? He calls himself arrogant and stupid all the time. He simply says he learned from all his stupidness and arrogance and doesn't want all these people to make the same stupid mistakes he has.
6:30 my amex business gold card has no travel restrictions, the sign-up bonus alone paid $700 of my vacation that I'd be out of pocket otherwise. Every month I get an extra $200 based off of a 10k spend, end of the year that amounts to 2400 that I can use on literally whatever. Never paid interest and never will. I'll borrow from my own savings before paying interest on a card.
One of the few instances where I disagree with Dave.
I disagree a lot with Dave. His audience is for people in debt. If you’re out of debt and building wealth, most of his advice is garbage.
Same here
@@theoneonly5368 there are multiple ways to build wealth. There isn’t a one size fits all approach. Sure, you can do all the stuff Dave says and it’s a good way to become wealthy. But there are faster ways to become wealthy.
Paying of a house with an interest rate of 3-4% doesn’t make sense when the average return of an S and P 500 index fund averages over a 12% return. Mathematically it makes more sense to invest your money in the 12% returner rather than pay off your house at a 3-4% interest rate.
@Anonymous User in a recent video he said that debt is a good reason to have babies. Yeah, that's garbage advice.
This is ridiculous. If I can pay my bills on time and use my cards for 2-3 years I rack up 400-800 cash back and that pays for my whole flight or hotel for the night and I save money instead of paying out of pocket on it. Absolutely ridiculous if your not in debt
Dave want's you to stay broke so that you come crying/paying to him to tell you how to fix it.
But you paid for the "cash back" and points with the merchant fees. Pay cash at merchants who give the cash discount, and you'll save much more than that. I save 3% on meals, but the "cash back" would only be 2%. Can't you see how that loses you money?
You will absolutely from time to time splurge more if you have a credit card, compared to not owning a credit card. this is normal human behavior.
As much as people want to deny it, facts/research and numbers don't lie.
It's just an extra temptation in your pocket that you absolutely do not need especially when u're trying to clear a better financial path for yourself.
Maybe Credit cards can be convenient if you've made it in life but not before.
I mean sure, if you only shop at the 0.05% of places that offer a cash discount.@@bite-sizedshorts9635
@@sc9433 You're not wrong about splurging. I bought parts for and built a $1900 gaming computer just because I had about $1000 of cash back rewards saved up from a few years of spending. Probably would have never bought it if it weren't for those rewards. But I don't regret, nor did I go into debt to pay for the portion that the rewards didn't cover. Splurging isn't a bad thing UNLESS it is interfering with your financial goals. As long as you are still able to invest and put money away for an emergency fund, why does it even matter if you spend the remainder on some luxury that you've wanted every now and then?
Nobody said they get rich with points. Nice straw man, Dave. If you pay only essentials with your card and pay it off in full, there’s nothing wrong with it. Dave just won’t admit he’s wrong.
**NO LIES DETECTED**
Right he is using arguments that NO ONE is saying 🤣🤣
This is just one of Dave's many "Ok Boomer" moments.
@ Roman - exactly. Using Dave's "logic", if you find a ten dollar bill on the footpath you would be stupid to pick it up because no millionaire said they became a millionaire by picking up a ten dollar bill on the footpath.
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
You are really an efficient, organized and results-oriented man. I haven't seen such quality work in a long time. Grate job, keep it up. And I will make sure the world knows more about you and the good did you have done for me. People like you *TECH SAFE GUARDIAN* are rare
If we use $6000 in 6 months on our credit card we get $750 in credits. We’re going to spend over $6k anyways, and always pay it off… why not?!
Their niche is steering very financially undisciplined/irrational people towards not being in debt. They wouldn't have this talking head job if everybody could handle using a cc responsibly.
You aren’t the target audience. Dave is for the people who think they need a credit card balance to have a good credit score. For people who can’t budget and are impulsive with money. Responsible people can easily handle having credit cards. I use the Sam’s club credit card because it pays 5 percent back on gas and 3 percent on the groceries. As a family four, we spend a bunch on gas and groceries and the extra cash back is a nice bonus.
You are correct. I didn't get a credit card until I was 25. I couldn't rent a car without one, no matter if I had cash or money in the bank. I pay mine off each month, use my points to pay down monthly balance. I hadn't had to rent a car in about 10 years.
I’ve never understood the argument that you can simultaneously be disciplined enough to follow the Ramsey Baby Steps and pay off huge amounts of debts in a short time, yet not be disciplined enough to control your CC spending. It’s all a matter of, to quote Dave, being intentional.
good point
People tend to forgot that Dave Ramsey has a hidden agenda of his own. “Don’t do that, just buy my books”
You don’t have to buy his books. There’s plenty of videos for free where you can glean the same information. I’m not defending him I’m just saying that’s how I tackled my own debt. Learned bits and pieces from different people and I refused to pay someone (since ni can’t afford it anyway ) to help me get out of that hole. It would just seem to defeat the purpose. But good luck on everyone trying to get out of debt. It’s hard but totally doable:)
If you are following the Dave Ramsey approach with debt then that means you were not disciplined. Do people not understand the absurd nature of their arguments?
🔥🔥🔥🔥💯💯💯💯
It’s almost amazing seeing how this mans rationality falls apart when he’s wrong
When he starting calling people arrogant, he lost me
I like Dave.....but if you pay on time CC s are a good deal......I just got 50 bucks in cash back a few days ago....free money...I do always pay on time....
@@irl8796 They call him 4K because he's always projecting.
@@US_ARMY_25_INF._DIV. its nice getting rewards back every year even if it is 50 to 100$. i put that money in my cats vet savings account.
Sure he said it rough but what he said was true . When your in debt you shouldn't be focused on making your 20 bucks back after spending 1000
I agree to disagree, don't put me in the group I am to stupid to understand Credit card. Credit Card has protection, benefits etc You can beat them but get smart at it.
I don’t take financial advice from a person who has lost millions..when I lived on my own at 16 and never had credit card debt at 50. I made thousands and turned the points into silver.
not using CC's is literally just leaving 2-5% discount on the table. just use it correctly and you will literally profit from them
You will absolutely from time to time splurge more if you have a credit card, compared to not owning a credit card. this is normal human behavior.
As much as people want to deny it, facts/research and numbers don't lie.
It's just an extra temptation in your pocket that you absolutely do not need especially when u're trying to clear a better financial path for yourself.
Maybe Credit cards can be convenient if you've made it in life but not before.
@@sc9433 Do you just keep copying and pasting your dumb answer? lol
I'm glad I made it in life 😎 I spend less when using credit cards. I guess it's all about self-control.
If you think you are getting 5%, you are the mark Dave is referring to.
You people do realize that there is a transparent fee for using credit cards? You pay more when you pay with a credit card, "points" aside.
I love Dave and follow all of his teachings other than this one. If you already have a written budget and follow it just like he recommends, but do it with a CC for rewards, you get something back. It's not millions, but it's something... More than you would have gotten from debit. The key is paying it off and still following your strict budget as usual. The problem with CCs is definitely that they are predatory to people who are already struggling, and for that, I would agree with him saying don't use them. Keep up the good work, Dave, but the logic doesn't fully make sense on this one for people who are careful.
Exactly, his real point is that MOST people will fall into the traps, but I guarantee that he understands there is some small benefits if you're careful.
I use a 1% cash back debit card.
If
Though using cash (more often than not) nets better pricing.
@@RearviewMirror-ij2pr does it? If a place offers a cash discount I will skip using my cash back debit card. But I dont see the difference otherwise.
This has to be an example of straw man argument. No one ever said you will become a millionaire from cc.
Exactly. The point isn't to become a millionare with points. The point is to take my family on trips and experience things I would otherwise not be able to if it weren't for points/miles.
I should have read more comments before I basically posted this same thing about it being a straw man argument.
He's being SARCASTIC!
@@stellarocquie7957
Really doesn’t matter if it’s sarcasm or not.
Just plain stupid.
He says that and the million man interview rant every time.
@@stellarocquie7957 No he's not
I only use credit cards that have no annual fee. I use the cards for protection and connivence. I pay them off every month. I use them for my living expenses, money I need to spend to live. The protection is a real issue for me especially with online purchases as I will never use a debit card that is tied to my bank.
With all the scammers, scanners..it’s best to use a credit card..The bank will not refund your money if it’s stolen
I treat my credit card exactly like my debit card. I never care a balance and never spend more than I would with my debit card. I treat it EXACTLY like a debit card. The points and credit boost are just a plus.
A debit card and credit card are 2 different animals
@@cliffcorson4000 I use my CREDIT CARD like my debit card. It’s a credit card.
I have a lot of respect for you Dave but I disagree with you on this one. I use my card for groceries and gas and pay it off every month , thats a few hundred bucks a year in cash back it’s kind of strange mr eat rice and beans and save every penny you got is against this if done properly.
and you spend more on a cc than you would if you used cash.
A couple hundred dollars a year is not going build wealth. a couple hundred of dollars a day might.
@@starwreck really? Because I don’t. I have a weekly budget for gas and groceries every month and I always stay well below it.
But I get it , Dave’s audience is geared towards adult children who do not understand money , a lot of us are past that
@@Rashaadthegr8 don’t change the subject of the comment
You don’t go to Chuck E. Cheese to buy a 75 cent pack of gum for $10. You spend $10 for the enjoyment of playing games, laughing and having fun. The prize at the end is just a cherry on top
Nope. Can't have fun even if you can afford it.
How dare you? Don’t you know that Dave Ramsey is infallible (/s)
Very weird how the entertainment factor is completely ignored. Likely majority of all entertainment we pay for does not provide a physical gift in the end. Has he never gone to the movies, went bowling, rented a jet ski, paid for vacations, went to a theme park, ect. Plenty of arcades that do not give redeemable tickets.. would blow his mind it seems.
“You should not be going to Chuck-E-Cheese if you are in debt.”
Yes I own a similar style arcade for a competing company. We get praised for how great of "an experience" we provide. Sure, the prizes are at a 10% cost ratio but the million dollars in games and development of the location for you to come have some entertainment for your kiddos wasnt free or cheap. Everything costs money. Every business has the right, and duty, to profit. If we dont profit, no one would want to work because we couldnt pay them. Then there would be no fun family entertainment. In this scenario, seems that Dave wants you to sit on your piles of cash at home and not do anything fun with your family.
Providing you clear your balance every month and have a no fee card, credit cards are a great way to manage and track your spending. If you put everything on one card, understanding your total spending each month/year is easy. When you start mixing in cash transactions that becomes more difficult. Of course you need to buy only what you need, not what you want.
I use my cc for monthly expenses and then pay them off. I don’t have a problem with it. People who have discipline problems need cash in envelopes and debit cards. It’s arcane and inconvenient.
Both creditcards and debit cards work just fine. Cash in envelopes is going to be increasingly difficult with a cashless society. 80% of the money you spend, gets taken out of your bank account automatically these days. You can't even use cash anymore to pay your mortgage, utilities, taxes etc. Heck here the maximum cash payment is now 3000 Euros where i live.
While I agree with you that cash in envelopes is arcane and inconvenient, I think Dave and his apostles have repeatedly claimed that that is the point. They want people who can't manage money to hurt when they spend. It definitely gives me a cultish vibe to hear him be so absolutist. Maybe that's what some of us need?
"I drink alcohol in moderation only once a month. I don’t have a problem with it. Only people who have addiction problems need to abstain from alcohol and drugs. It’s arcane and inconvenient."
So you're paying for your monthly expenses twice. You may not have a problem with it, but the pain of parting with cash makes you want to spend less.
@@ericsloan858 Your changing the example to something similar and using quotes make it sound like you're making fun of the premise, but the fact remains that everything that you put in quotes is 100% true and accurate. There is absolutely nothing wrong with non-addictive personalities drinking alcohol occasionally in a responsible manner.
My biggest gripe with this argument is that security of a credit card is completely thrown out the window. Regardless of benefits, I’m not using my money to buy something with a credit card. If I lose it, or somehow someone gets access to it, it’s not my money they’re spending.
this is the one thing i dont agree with. You are spending that money NO MATTER WHAT so might as well get something out of it. I get free movies. Lots of them. I pay off my card in full every month and it has my groceries on it that I NEED and will be buying no matter what.
I threw $1400 at my mortgage principal this month from buying 97k worth of materials for my business..
I’ve spent 500k on materials in the past two years and made 5k cash back
I feel like they preach no credit cards because plenty of people probably can’t handle them but I’m not leaving money on the table.
Completely misguided, totally missing that people are splurging to spend the ten thousand dollars for two percent, it’s groceries and bills that I would be paying no matter what.
@@theoneonly5368 I think that the point he is trying to make is if I am going to be spending the money regardless, why not put it on a cc and get the cashback and rewards etc. I agree that it is dumb to spend more money to meet a threshold to get better rewards. I also agree that the vast majority of people, myself included, are not responsible enough to pay the cc back every month and not overspend. However if you are responsible and can make it work, its free money. These cc companies do not profit off of responsible people, they profit off of dumb people.
@@theoneonly5368 so go ahead and use your cash for the essentials and get $0 for every $8k you spend.
@@theoneonly5368 Bingo!
@@theoneonly5368 Hahaha have you never taken 1st grade math? $350 is more than $0. So the answer to your question is "in THIS WORLD (reality)".
@@theoneonly5368
Think about it this way. Your annual expenses are $8000. Would you rather get $350 from it by using CC or $0 from it by using cash ?
Yes, Dave, the people that pay off the card every month and pocket the rewards CAN beat the CC companies at their own game. It’s the ones that carry a balance and spend frivolously that are getting taken for a ride.
I've been doing exactly that for years
I paid interest on balances for years before discovering that I could get them to pay me instead. Completely changed how I view and use credit cards.
You realize the bank still gets paid every time you use a card right? They may not made as much by you paying it off every month, but merchants pay a percentage of the sale to merchant card processor, and those processors pay the banks for the privilege of the method, many stores that have their own store card usually have a deal where it costs less in those fees if you use their card, another reason they push them, besides the high interest.
@@nukedogger86 Yes, that's how cards like the traditional American Express charge cards (Green, Gold, and Platinum) make most of their money.
@bobv5806: Yea but using a credit card for monthly expenses is gambling with your financial well being. All it takes is one hiccup and you're either not going to be able to pay the full balance or you're not going to 'Want' to pay the full balance. The banks know this and they know unexpected hiccups will inevitably happen. That's why they give you points to keep using it, so when you screw up they'll come cashing you out.
You don’t spend $10 at the arcade for the prizes. You spend $10 at the arcade to have fun. The prizes are just fluff.
The problem with Dave Ramsey is he filed bankruptcy in his past and now he has PTSD about that so he's against using any credit cards, and having a mortgage. While that's for him, it's not always good advice for most normal people. Examples: you can come out ahead using credit cards for everything, paying it off each month and earning rewards, and if you currently have a low mortgage interest rate of say 3% it doesn't make sense to pay that off when you can be earning 5% in an FDIC insured high-yield savings account. Not everyone has the PTSD that Dave has it's his mistake to project that on everyone else.
Did I miss something here? How are you in debt if you pay your card off every month? If you have no annual fee for the card without any debt and what you are putting on the card is your monthly outgoings that you would have had to pay for from your debit account anyway. If you are disciplined then what's the problem?
"IF you are disciplined."
Dave did not explained very well but if you pay in cash you feel the pain instantly so you tend to buy less.
If you use cc is easier to go over you budget money.
For instance if your bill is 53$ and you tend to take one unnecessary item out so you can spend less than 50$ (which may be your original budget) while with cc you just pay and don’t think much.
So yes when you redeem your points you may get 20-30$ cash back every month,but you may have go over budget with 50-100$ simply because of the convenience of paying.
My cc with my all expenses(groceries,phone,cable,gas,eating out and everything else) runs around 1500$/month,but when I used only cash for one month I spent 1350$.
So yes I always off my cc and received 20-30$/month back,but is less than 150$ that I saved using only cash.
I agree Dave did not explained this well.
The problem is they know you more than you know yourself.
@@mirix1515 Which makes sense for the spending portion, but if you ONLY use it for utilities and bills and then use cash for spending, you don't end up spending more because they are bills that have to be paid.
Your in debt every month because u must pay what u borrowed. That simple. U have a debt u must pay it. Use your money money and don’t have to worry about maying anything back.
I use my credit card all the time. I'm a real estate guy so it makes sense for me. My problem is that Dave talks down to people like we're stupid.
why are you watching Dave?
Dave is for people who need to be told to write down their debts and minimum payments, then pay that plus extra on one of them. It's incredibly basic stuff.
He may not be talking to you. He’s trying to help people who lack discipline in their financial decisions. He’s trying to wake them up. He tells people they are doing stupid THINGS with their money. And they are. If they weren’t, this country wouldn’t be in RECORD high credit card debt.
a credit card is the beggining of digging yourself into debt its not a good idea at all to me. I think the whole point es making is try to prevent people from going into debt and credit card are one of the main avenues that sink people into serious debt. I watch his show pretty often and it seems like almost every caller has thousands of dollars in credit card debt . I think most people just like instant gratification and thats why they get credit cards . why not just wait save up for what you want then buy it when you have the money.
@@jgibson8092 Most of the people who need Dave's advice should definitely be kept away from credit cards.
Other people , who are disciplined spenders, should have a good rewards card so they get something back just for putting their groceries, gas, and utility bills through it. There are some cards that give several percent back on groceries and recurring bills, and often at least 1% back on any purchase at all. I talked some older relatives who were totally against credit cards into getting a no annual fee rewards card, and they were surprised with how many hundreds of dollars they got a year just for using it for gas and groceries.
3k a month on groceries, diapers, gas, parking, household items (stuff I'd buy with a debit card regardless) I pay in full EVERY month and pay $0.00 interest and $0.00 annual fee. I get 2% cash back. Dave is TOTALLY WRONG about this one, and calling people stupid because of it shows he's been too rich for too long and no longer can relate to everyday Americans.
He has the numbers. It is great if it works for you and other people who have the mental capacity and restraint, but most don't. Why do you think they can afford to give $0.00 annual fee and 2% hand out. It takes one mistake and everything you made with the 2% evaporates when you have to pay interests. Your 2 % is paid by another customer.
@@mendelian8768 You can just set your credit card on autopay tho. Unless you're living paycheck to paycheck with risk of not affording your monthly bills, there's no way you can make a mistake lol.
I've been in situations where I was paycheck to paycheck. Rented a bigger place and had barely enough income, and splurged on a new camera. Still never had to pay any interest because I don't spend more than I have. That was a situation where I spent almost exactly ALL I had, a hair away from entering actual debt... so definitely a mistake, but clearly not big enough to be charged any interest let alone "evaporate" the 2% cashback. Credit cards are easy to manage just don't be silly with it.
@@mendelian8768 absolutely, I agree with you fully. Why doesn't he explain things with a more nuanced approach then? In his view everyone would screw up, so no one should do it. That's not reality. Why does everything he say have to be so binary?
@@CC-vo7ds From his point of view and what I understand. The cashback and benefits make something with your brain. You are way happier with your spending. When I got my first cash back card, I was spending more then usual. Every time I bought something I was happy about the cashback I got, but I bought more unnecessary stuff then before and it did me cost more then what I got back with the cashback. I have a household account book for years now and saw it and got control over it. But I can see his view point, most people don’t and most people will get fucked over. The banks will also find new ways to control your behavior, so why risking it. I still use it, but with caution and I stopped recommending it to others or talk about the risks.
I’m a home builder. I spend millions on credit cards for my businesses and have never paid a dime in interest. Haven’t paid for a flight or a hotel in years and I travel very often.
And you get $0 back when you pay $1000 using a debit card or cash. I wish these guys would just admit that they're wrong on this.
Basically destroyed their whole argument in one sentence
yup and there card that offer 3-6 percent like they need to updated their stuff cuz this was made years ago
Or this community can admit that THEY are wrong. The $20 you get at a high frequency is destroyed by the $2800 you pay at a low frequency. Would you be willing to bet that the caller is good with money? I wouldn't.
@@EricSmyth2Christ you seem to have missed the point that the person who wrote in is using a CC on stuff she would have bought anyway.
@@esonon5210 That's completely irrelevant. I am talking about paying interest.
I have an Amtrak card that gives me one dollar toward travel for every dollar I spend. I use it as a debit card and pay it off as soon as there's a balance. I otherwise have zero debt, an emergency fund and investments. By using the card, yes, I do travel for free. Just got back yesterday from a round-trip first class journey for two on the Capitol Limited...for free. Dave and his boy are mathematically incorrect here.
What is this magical card?
But you spent on the trip probably using the capital one card.
@@ulysseslashley1245 I don't have a Capitol One card. And, no, we put everything on the Amtrak card and then paid it off as soon as we were back in town. Works beautifully.
Spending money he reserved for the trip he use to pay the card. The money going to be used for bills, and spending money anyway why not get perks
I take it you have to get into a lot of debt to be able to travel for free. And you have to get into a lot of debt every month. And you have to take a huge chunk out of your paycheck to cover that debt... every single month. With that money, I wonder whether you could have funded at least part of your own travel.
I’ve had CCs since I was 18. Have zero debt, pay if off every month and get cash back / points. You can treat it like the money you already have. The companies charge fees to use cards at places so might as well get some of it back. Also, way easier to deal with fraud.
Are you a millionaire?
you're brown@@deangelo8498
Had someone rip my account off and another close family member for using debit cards. I got lucky bc it was happening online but my family member had her debit card copied and someone withdrew $1200. Their bank said you're shit out of luck
@@deangelo8498lick those boots
@@deangelo8498 No, but they wouldn't be a millionaire by using a debit card either. Using a credit card responsibly vs using a debit card responsibly will have absolutely no meaningful impact on the issue of whether or not you become a millionaire. If you aren't carrying debt, you can follow every single one of Dave's plans, tips, and tricks to build wealth all while also enjoying the minor benefits of credit card rewards by treating it as a debit card.
Hey Dave I’ve used CC with cash back rewards since I was 18. I’ve never paid fees or interest on my CC. I’m a millionaire by your standards at age 46. So include me as one of your study millionaire that became one using CC with cash back!
Exactly what "standards" are you using?
@@alinatamashevich3354 I’m using logical standards when it comes to spending. Don’t spend what you don’t have and payoff your CC every month. I’ve only saved 10% of my pay into 401k since I was 21 as well. My income has gone up a lot since I was 21 but I never changed my 10% of pay to 401k.
Dave did not explained very well but if you pay in cash you feel the pain instantly so you tend to buy less.
If you use cc is easier to go over you budget money.
For instance if your bill is 53$ and you tend to take one unnecessary item out so you can spend less than 50$ (which may be your original budget) while with cc you just pay and don’t think much.
So yes when you redeem your points you may get 20-30$ cash back every month,but you may have go over budget with 50-100$ simply because of the convenience of paying.
My cc with my all expenses(groceries,phone,cable,gas,eating out and everything else) runs around 1500$/month,but when I used only cash for one month I spent 1350$.
So yes I always off my cc and received 20-30$/month back,but is less than 150$ that I saved using only cash.
I agree Dave did not explained this well.
Me too
@@alinatamashevich3354 The millionare standard is: Assets - Liabilities = 1m+ Aka your net worth.
I totally disagree. I use my Southwest card to pay for everything I purchase and yes, I pay it off every month. I use my points to fly my daughter and family to visit me! Can’t beat that, Dave!
Maybe so, but you will never build wealth and become a millionaire. So quit it.
@@robshell5367 Wrong Einstein - I use my card for everything I would normally write a check for, and collect a nice chunk of money every year without carrying a balance, so zero interest. And yes, my net worth is about $9m
@@robshell5367 lol
@@993mike with a net worth like that why you on RUclips arguing with someone slow?
@@robshell5367 he's not spending more than he would on a debit card...Jesus christ...what a sad existence to never enjoy life cause dave ramsay says so
Problem is most people don't actually pay off their cards. Dave will give advice to the masses, not the few (because trying to sell stuff to the few doesn't make as much money). There's nothing wrong with this advice, and if you're already a millionaire and get your points and whatnot, this advice obviously isn't for you. But for the people who are in debt and haven't been able to figure it out, this is a good message.
Yeah, but his attitude towards those responsible enough to benefit from credit card use is repulsive.
@@bobv5806 he's not the same to everyone. People already know his stance and call like "but what about me?" That's where he gets a little annoyed, obviously.
People will literally call him and ask if it's ok to get a loan for a car because they have "a plan". Takes two minutes of research to know Dave doesn't recommend it. Why ask?
Dave and Co will never address this questions in good faith. If someone is paying their card off each month he would need to explain how it is hurting them financially to really answer the question.
He won’t answer it truthfully because he knows he can’t give a legitimate answer
His answer is and has always been that people tend to buy more when using a card because they don’t FEEL it the same way as when you use cash.
He says it's not worth taking the risk. Basically, debtor beware
@@Poomayne Why do we have to live in a cashless environment, though? It seems that yielding to a cashless environment is just bringing on more control for bankers and other institutions.
His rebuttal to your question is that people tend to spend more when it’s CC vs Debit - which makes sense.
The question should be if you only spend the CC on things you HAVE to spend on anyway (rent, phone bill, mortgage), how does it hurt you financially?
Always remember Dave is trying to sell you a product. Either his books or his classes. Don’t forget.
And discussing controversial topics to generate ad revenue from these videos.
The sad part you missed is, he gives all of his information away for free. Some people are to ignorant to grasp that. Does your employer do that?
@@user-tu6ty2ui1u Yes! Next we shall take a look at Amazon and their products for sale.
@@user-tu6ty2ui1u oh please stop with the dramatics, you know exactly what I’m talking about.
Your point? He wants to sell that stuff to get it into more people's hands to help them. It is what he thinks works and there is nothing wrong with that. There is nothing wrong with what he teaches. It is not my way of life, but it has worked for him and others.
Everything goes on the card. Paid off monthly, get points, free 30day float, consumer protection, don’t have to carry cash, what’s the problem? Paying cash gets you none of the above.
I have used an AMEX blue cash card for over 15 years. I use it for pretty much everything and pay it off each month. I get about $1200.00 cash back annually. To me, it's a no brainer. Yes, if you cannot control your spending or don't have money to pay the card, than don't use it. Dave makes no differentiation between people who have control and funds vs those that don't. To me, I am taking the free money every time. My spending would not change with or without the CC, why not take the cash back? Plus I got wealthy during these years and retired at 56. I will take any advantage I can get even cash back no matter how big or small. Money is money.
Exactly! I do the same thing. I use my Amex for pretty much everything and pay it off in full each month. Last year I got about $800 cash back. That's a win for me. Sure, Amex sends me offers everyday trying to tempt me to take out low interest cash advances, low interest balance transfers, etc. but these offers do not tempt me so I don't fall in the trap of spending money on stuff I don't need. Is this going to make me rich -- no, but I'm not trying to use it as an investment strategy to build wealth.
He missing the point. The person is spending money THEY WOULD HAVE ALREADY SPENT. IE groceries, gas, etc etc. It's free money as long as they pay it off every month.
it's free money "AS LONG AS YOU PAY IT OFF EVERY MONTH."
So it's NOT free...
Not everyone will pay it off every month, you have to factor that in.
@@EricSmyth2Christ It's free as long as you pay it off every month. So if you pay it off every month, then it's free for you.
You are correct in saying that not everyone will pay it off every month. That's true, and that's why they've got those big buildings. But as long as you're not one of those people, you're fine.
@@jaehwan123 We're all aware...
Let's say I go to a school and tell a bunch of kids not to play poker...
is that good advice?
Of course it is.
"BUT I'M GOOD AT POKER"
(facepalm)
@@EricSmyth2Christ ??? Why would you tell kids not to play poker? I play poker myself, so this wouldn't be advice coming from me.
@@jaehwan123 I also play poker. I have been playing professionally for years
Do you want to play sometime?
Seems like it may be too subtle for some, but the fine print is "When used for stuff you would purchase anyway".
If you wouldn't buy it with your checking account don't do it with your CC.
Its interesting how many people cannot comprehend true financial discipline. I guess people who defend the "NO CCS AT ALL" line of thinking simply just spend on their checking accounts and only stop when they run out of money? The same financial discipline that Dave seeks to bestow on his audience is the same discipline you can use to use a CC responsibly. If you track your spending, plan a budget and actually stick to that budget, the method you use to pay for your stuff should not have any meaningful effect on how you spend.
Dave wouldn't have a job as a finance talking head if everyone simply lived within their means and did simple math and reasoning well.
I've seen people who needed to be sat down, made to write down the list of their debts with minimum payments, and told to pay the minimums plus X extra on the highest interest rate one until it was gone.
The person was smart at other things, but their finances were just a nebulous mess in their head. I was amazed they didn't do this themselves.
I'm a budgeting counselor in Canada. If you pay the card off fully every single month youre fine. The problem is people don't take measures to ensure they do that. Use the card on a regular monthly essential expense you already have on your budget and don't use it for anything else. For example pay yout phone bill with it, then use the money from your chequing account that you normally use for the phone and out that back on the card. If you always pay your cars to zero monthly, youll raise your fico and pay no interest.
We know we can only buy a sandwich and a little gas with the points, it was never a plot to get rich
I see it as wen I save my coins, eventually it will build up, better than nothing.
You know you’ve lost an argument when you start name calling. “Small people talk about people, big people talk about ideas”
Dave did not explained very well but if you pay in cash you feel the pain instantly so you tend to buy less.
If you use cc is easier to go over you budget money.
For instance if your bill is 53$ and you tend to take one unnecessary item out so you can spend less than 50$ (which may be your original budget) while with cc you just pay and don’t think much.
So yes when you redeem your points you may get 20-30$ cash back every month,but you may have go over budget with 50-100$ simply because of the convenience of paying.
My cc with my all expenses(groceries,phone,cable,gas,eating out and everything else) runs around 1500$/month,but when I used only cash for one month I spent 1350$.
So yes I always off my cc and received 20-30$/month back,but is less than 150$ that I saved using only cash.
I agree Dave did not explained this well.
I'm sure some cc's are bad. But I agree with the question. We use the costco cc and use it for what bills can be paid with one and other monthly expenses we budget for etc. And we never pay interest (we always pay it off) and twice a year we get hundreds of dollars back from Costco and the cc.
So . . . . Yeah . . . . It's called free money if you ask me.
I’d love to see Dave debate someone who knows how CCs actually work/make money/create value for the consumer without the power of the mute button 😂
Take Graham Stephan to the show
It's the fact that they claim to be on the ramsey plan that ticks him off
Ita just a slippery slope,,you definitely spend more on plastic
They'd tear Dave up.
I could tear him up. Especially on his lies, misinformation and bad advice he gives. Even more so if math is involved...his math skills are borderline pathetic.
if you claim to follow his plan why not listen to him? If you are dumb enough to fall into debt in the first place then he is likely more knowlegeable than you. Obv for those who are able to spend enough to go on vacation, they should not have any debt and this rule isn't for them so calm down.
So, if you have bills YOU HAVE TO PAY, NO MATTER WHAT, then its okay to use the CC, youre wrong on this one Dave
What's the name of your book that outlines a better plan?
Thank you Matty. So you're telling me it's okay to borrow other people's money to pay your bills and not use your own money? That's awesome idea STUPID 🤣
@@BiggSneaddd Bingo!
I like my financial freedom.
Rather live in my car before I get to that point and preserve the money I have without getting in debt.
Did exactly this in the 80s.
@@BiggSneaddd I "borrow" for 24 hours because I pay off my CC every day. I get cash rewards to use their money and pay ZERO interest. You should try to breathe more deeply because I don't think you're getting enough oxygen to your brain!
Use them for everything , reason being. Fraud is easier to clean up if it happens. Plus it’s not hooked to your bank. If you have no control then yeah obviously don’t use them.
We have 4 credit cards:
- 5% cash back on all Amazon purchases (+15% off for subscribe and save)
- 2 x 5% cash back cards on categories that rotate every quarter. Sometimes, this category is groceries.
- 2% cash back on everything else
Year to date, we've gotten ~$1,000 in cash back on everyday essentials.
You beat the system by doing exactly what you’re doing. I’ve done it for years and that, along with many other money saving things and investing, have made me a multi millionaire.
Using a debit card is about the absolute stupidest thing you can do
No, it's the next stupidest thing; thinking you're a normal human being is the stupidest thing one can do.
I use a debit card at a gas station that only takes that kind of card and charge $ 500 on groceries every month so my credit union will pay me 3 % on a saving account. After that it is a CC that pays cash back. Always pay at the end of the month. Do use the Amazon card for their cash back. .
Hardly, Credit IS dumb, Cash Is King
I use my cc for groceries, utilities, and other necessities. However, they may be onto something here regarding the psychology of it. You may be more hesitant to pay certain things if you are using cash.
Pay off in full, dont get to crazy by putting alll ur bills on it, might not be able to pay it. Auto full payment dont always pay it in full if its a crazy high amount. Its a rip off
If youre using cc, youre probably not a millionare
yup. It's a well studyed fact. We spend considerably more if we pay with CC. We think twice before paying if we carry money. But creditcard, not so much.
@@geovani20091 that applies to unplanned spending. If you have a budget that was well thought out in advance and stick to it, that psychological phenomenon won't apply to you.
@@areyouseriousholmes that's not true the direct debit worked perfectly so any time I pay with the cc it takes it from my bank I have never had an issue with it. But if you did you could email them they usually refu d the money
It took them 8 minutes to fumble through saying that rewards credit cards can tempt people to overspend by chasing points or rewards they wouldn’t have pursued otherwise. It’s like buying something on clearance that you don’t actually need, versus recognizing it’s a good deal but choosing not to buy it. The real danger they’re trying to point out is letting rewards influence your spending instead of sticking to your needs.
That said, many people, myself included, see rewards as a way to get something extra on purchases we’d make anyway. Apple Pay for the win!! Also 5% off at Amazon, Lowe’s, Target, etc using store cards. Just be mindful.
I agree 100%. If I'm going to spend $100 at the grocery store, why not get 3% cashback on my purchase ? Using a credit card and paying the full balance at the end of the month, makes more sense than paying with a debit card. In this video they are using a bad example of why not to use credit with rewards vs debit. Travel vacations are not the thing to think about when you're in deep debt.
And if there's one thing Dave knows all about, it's ARROGANCE 😂😂
They aren’t answering the question. No one is saying you are going to get rich from points. It’s just a nice little bonus.
This kind of arrogance bothers me. They literally said in the beginning they use it to pay bills and groceries. If you get 2% cash back on these items you need to pay anyway, why wouldn't you? They assume the person writing is out buying new shoes and cars because they think they get free money. They also make it seem like these people expect to get rich this way.
Not once did they address the issue of using credit cards and paying them off every month. They just went on a smug tangent calling everyone else idiots and relating them to chuck-e-cheese kids.
Spending $10k to get $200 won't get you rich, but you're spending $10k-$20k (or more depending on your lifestyle) on basic budget items like utilities, groceries, gas, etc anyways is $200-$300 better than zilch and is a months worth of utilities. We've become a mostly cashless society already so the psychological argument of spending less using cash isn't applicable anymore.
Unless the card charges and annual fee.
it’s not just about cash vs plastic but rather the psychology of incentivized spending. I get the argument of using it on utilities & other necessities but nonetheless providing an incentive for increased spending is not a good thing because for every 30 disciplined users who are frugal and don’t carry a balance, 70 over spend and carry a balance.
It is, if you don't want to be controlled by banks, which is what the points system engenders.
Would you be willing to pay $2800 1/10 of the time? You don't know the person who is calling in... it's not you.
The idea that buying something you were already going to buy and getting a reward for it is bad, is one of the dumbest concepts Dave has ever thought of.
You are getting a reward for constantly getting into debt.
No matter how much you minimize costs there will always be something you need to pay for (rent, food, cookware) unless you plan to directly make cast iron skillets yourself, plant and harvest wheat and turn it into flour and grow your own cotton for sewing clothes @@Musicienne-DAB1995
I think I definitely have to disagree especially whenever these purchases are already ones that you were going to have to make, so getting free points and rewards out of it makes way more sense in the long run if I'm going to pay the card off every month anyway.
I don't agree on this ... I use a credit card that I pay off monthly to have protection! If you use a debit card, you lay yourself open to fraud (I had over $7k drained from my account in a matter of hours and was never even told how it happened - and incidentally, I was treated like the criminal until I was forced to get a lawyer involved). I'll admit you have to have restraint because you are actually "borrowing" the money, but in the 11 years since I was defrauded, I have yet to pay a single cent in interest and have not had a fraud issue either.