Dave, I Disagree With Your Thoughts On Credit Cards

**Dave, I Disagree With Your Thoughts On Credit Cards**



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Dave, I Disagree With Your Thoughts On Credit Cards

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Ryan's with us in Sacramento hey Brian how are you hey how's it going better than I deserve what's up so I've been watching your show for a couple of days and I think you give really good advice but I do disagree with your thoughts on credit cards and that you know they're just bad overall the biggest is of course do we know the interest is that on it but you're on the premise that you'll spend more with a credit card than was past now that may be may be true but that's a general statement the general statistics and it doesn't apply to everyone there may be someone out there who can get a credit card and pay about the same price as if they would do with cash and then that would increase their credit score and you know such yeah my great grandmother died when she was 90 and she drank bourbon and smoked cigarettes every day and she used to say yeah these cigarettes won't kill me one of these days and cigarettes didn't kill her they didn't kill her she got away with it other stuff killed her when she was 90 anyone the Bourbon either okay does that make it okay for for me to say it sit here and say cigarettes are okay absolutely not ah so your logic flow doesn't even make sense how old are you 21 okay and well your logic flow is not what you're saying is it logical it's say it's like saying drunk drivers don't always kill someone so it's okay to drive drunk that's your logic flow and so it just it's not logical I doesn't work so here's the deal there's been multiple pieces of research done not just my opinion but multiple pieces of actual detailed in-depth research that shows that people spend more when there's a disconnect from the fact that they're spending money emotionally for instance when you spend cash there's one study that was done at MIP that says when you spend cash it activates the pain centers of the brain you feel it you have an ouch moment when you spend cash when you spend with a debit card it doesn't do it so much but does a little bit because you still connect that with the balance on your checking account emotionally they smell the credit card it doesn't activate it at all and consequently people spend more another example would be the basic friction on Amazon you bought stuff on Amazon I assume are you an Amazon Prime member yes ok and you realize you spend more because it's easier to spend right even spend that much on Amazon but when only time I would spend on it is if it's cheaper there than on a store yeah but you get the idea that the easier it is to buy something the more likely you are to spend over the course of your life now an individual transaction maybe maybe not ok I'm an Amazon Prime member actually my wife is I use her account but and so but so when I'm on there I do shop around like you're talking about I'm a fairly responsible guy with money I'm a multimillionaire the stuff I teach has worked for me and so but the bottom line is is that behavior in your in the way you handle payments does affect your spending patterns over the course of your life over the course of a year again an individual transaction maybe not and to your point some people are more disciplined than others but the concept is simply this the credit card is the cigarette of the financial world there's no upside to using it only downsides is it going to kill everyone no but it kills a bunch of people and financially speaking so why you know why handle snakes why you know rattlesnakes don't always kill you when you pick them up but most of them will or there's a good chance you know there's a better chance you're going to get bit if you fool with them then if you don't fool with them that kind of thing and so that's what it comes down to and really what it comes down to is not studying your feelings or your opinions it's say let's talk to wealthy people who have built wealth starting from nothing and ask them what they do with their payment structure and here's the stairs what we just finished the largest study of millionaires ever done and what we found in talking to the millionaires is they pay cash for everything some of them have a credit card and pay it off every month like you're talking about but none of them caring consumer debt of any kind ever they don't carry car debt they don't carry credit card debt I don't carry any debt of anything else and so I appreciate your opinion Brian but you're just wrong that's what it comes down to you're just wrong and the you know there's no possible way that we would ever tell anyone to use a credit card because it doesn't cause them to win it only has downside not upside I'm not gonna tell you to drive drunk you might get away with it but you might kill yourself or kill somebody else I'm not gonna tell you to smoke cigarettes you might be my great-grandmother and died of 90 of something else but it very likely will kill you it's a proven thing it's you know there's only downside there's no upside and so that's it I mean you know the downside is your breath stinks and when you smoke you smell like you lick the bottom of an ashtray and and everybody knows it you're something you're you know you smell your clothes smell like it anything else and credit card debt does the exact same thing to your financial world it stinks it up and you're just you're not gonna win screwing around with these things so again to your point can an individual from time to time do that yes a highly disciplined individual would be very unlikely to have major problems but there's no upside so why screw with the snakes they're cute you want to pet them I mean why screw with the snakes there's only one possibility screwing around the rattlesnakes get bet or not get bet I guess there's two possibilities maybe you're really good with snakes what does that prove nothing then proving anything at all so we stay away from them sir and I appreciate your call

34 thoughts on “**Dave, I Disagree With Your Thoughts On Credit Cards**

  1. MD3BE

    I also disagree with Dave on this. Here's an upside to having a credit card. No foreign fees. I also use my card very responsibly, never paid interest on it and always pay it off every month. I travel out of the country a lot for work. Buying stuff with my debit card outside of the country racks up a lot of foreign fees and international fees. With the type of credit card I have, I can use it international and incur no fees whatsoever. Even better than using cash because I don't lose money trying to exchange USD for foreign currency.

    Reply
  2. Danny Dan

    Dave, your great grandma's drinking and smoking habit example cannot possibly be compared to the credit cards. That's completely illogical. Drinking and smoking are always bad for your health even if they don't kill you directly, but using a credit card itself will not harm you in any way but actually get you some benefits if you are disciplined. (1) Buyer's Protection (2) Cashback Rewards (3) Improve Credit Scores for a lower interest Rate for Mortgage. In other words, even though the credit card companies come out as a winner in the majority cases, you can still win if you're disciplined minority.

    Reply
  3. david lindsey

    I love seeing all the broke people on here defend credit card usage. lol 😂 too funny! You guys let that multi millionaire know how wrong he is LoL 😆

    Reply
  4. Joe Garofalo II

    So Dave hasn't used a credit card or even used any type of credit in decades, because he pays cash so I'm just extremely curious what his credit score is

    Reply
  5. Azharul Chowdhury

    I love that you were respectful to the young caller, it would have been so easy to just insult him, but you quietly educated him.

    Reply
  6. Paul G68

    Actually for me spending cash was even more painful. I'd have to routinely go to the local ATM for withdrawals which became a real pain because if you were short at the supermarket it's not much fun having not enough funds to cover your purchase at the till. So, it basically made me spend less so I still had money in my wallet, and when I bought something I knew to the dollar how much it was going to cost before I purchased it.

    Reply
  7. Buttered Bread

    3:20 “I’m a multimillionaire, the stuff I teach has worked for me”. The problem with Dave is that he doesn’t really teach you how to make money, only how to dig yourself out of a hole. Unlike cigarettes credit cards aren’t the problem, it’s the people. Learn how to use them properly (no debt) and the upside is the cash back, free air miles, hotel points etc.

    Reply
  8. Harish Abraham

    Though Dev have some good advice, his objection regarding few things like credit card is too over simplified.

    Reply
  9. Technologic

    i enjoy the cash back rewards and pay the entire card off every month so i avoid interest, the credit card company loses money on me

    Reply
  10. Darby O'Hara

    Daves comparison to cigarettes is absurd. I’ve had a credit card for 10+ years and pay the balance off each month while accumulating points that are redeemable for cash. I’ve paid less than $50 in interest over the past 10 years while receiving $1000+ in cash back redemptions. I have been getting paid to have a credit card. Debit cards do not offer the same cash back redemptions programs. Be smart with a credit card, get paid to have one. Simple.

    Reply
  11. TotemoGaijin

    I only use my credit card to pay for gas and my phone bill, and pay it off every month. With the cash back, it doesn't make sense to pay with cash.

    Reply
  12. lvlikeyV

    There are upsides to credits cards when used properly (travel miles, cash back, etc) but it takes a really disciplined person (most are not) to not get caught up; the risk isn't worth the reward IMO. Bottom line though is credit card companies are not on your side and they don't care about your financial situation. Just look at how much revenue this industry brings in if you are skeptical. 20+% interest is absolutely outrageous and borderline robbery.

    Reply
  13. Javier R

    I cannot imagine Bill Gates show up at SEA with his coin purse and say: how much is it for a round trip to LAX?

    Reply
  14. John Lester

    Ramsey doesn't say all credit cards are evil. He says it's like smoking or messing with a snake. You won't always get lung cancer and you won't always get bitten. But why take the chance?

    Reply
  15. Brian Garland

    I use a credit card on utility bills and gas only. Those bills are on auto pay, and the credit card bill is on auto pay. Keeps my credit afloat and I get cash back.

    Reply
  16. Socrates92

    4:40 to 4:45 – Dave rebutting his own rebuttal of this guy. The guy's point was specifically that credit cards are useful provided you are sufficiently disciplined. The cigarette analogy doesn't stick as there are no health advantages to smoking. There are specific, financial (not emotional – so Dave's quip about the guy's "feelings" was a red herring), advantages to having a credit card. Credit score is not irrelevant – better credit score = cheaper mortgage. If Dave's viewpoint is that that advantage is immaterial, then fine, he could have argued that. But in fact, he didn't even address the point, instead relying on his caller's youth (another red herring) to shut him down before even finishing his point. Therefore, Dave is the one who was "just wrong" here. Embarrassing performance from Mr. Ramsey. Alrighty, Imma get roasted now. 😀

    Reply
  17. Slack Tide

    As a general statement I agree that credit cards are bad, especially for the financially undisciplined. I use my credit card for everything but pay off the balance constantly so I don’t pay any interest and get the rewards.

    Reply
  18. Joseph Bentley

    New to the channel and I find Ramsey’s content to be extremely informative, practical, and no nonsense, which I love.

    However, I take the callers view and think he unfortunately did a poor job in trying to explain (or lack of). Which alas, suggests he may not have had a real reason then to just simply disagree with Ramsey in the first instance.

    What I take personally take fault at in Ramsey’s remarks is the comment about CC’s having no upsides which is completely wrong and to me shows that Ramsey is set in his ways (which has worked for him, no denying that) and worryingly shows to me that he isn’t willing to open his mind at the potential benefits .(again just from this video) You can see his immediate disagreement in regards to caller view of CC’s before the caller even finished his points. This to me me shower that no matter what the caller might have said, Ramsey would have used his usual commentary on them, regardless.

    Now before I get any hate, yes CC’s aren’t for everyone and I admire Ramsey, his success, and what he does for countless people. And he makes valid points about the negatives which I am not debating.

    But at the end of the day if you’re disciplined or working towards being disciplined financially,
    which if I understand this channel and his work,Is the basis for the viewership and listeners, then in fact you can benefit from having a CC in various circumstances.

    Benefit 1 – Firstly, in the US, CC’s are great at boosting your credit score. If you start early you can build this up in order to get better (lower)!interest rates on any future loans that may arise (mortgage etc).
    Most self-made millionaires first property wasn’t paid for in cash, so having a mortgage at the lowest interest rate available by the bank is one way to save money in the long run in terms of saved interest payments and paying that mortgage off faster.

    Benefit 2 – CC’s are highly lucrative for banks (sounds like a con, but wait)
    Anything in the financial world that makes money means an abundance of competition wanting to get in on the action. This means in order to outdo their competitors, banks have multiple incentives in the forms of offering “bonuses/schemes/rewards” to win customers. As we all know, competition is good for the consumers, and if used smartly, this can be highly beneficial to the savvy CC holders. For those that think “yeah good point but you’ll end up spending more on things in the first instance” that is a misconception and in terms of being disciplined, CC holders and some
    Good old fashioned common sense would dictate you only use the CC for regular transactions which you have the money in your accounts to pay off such as groceries, utility bills, gas and so on. At the end of the month you’d simply transfer your money and pay off the CC owing balance, thus avoiding the interest payments (that can AND do trip people up), and you’ll reap the “added” benefits.

    Yes, I admit CC’s are lucrative in nature due to the spreads and from the interest paid from people being wreck less and undisciplined, but using it smartly can result in the rewards and benefits adding up significantly.

    Benefit 3 – Protection. Credit cards offer superior protection against fraudulent translations, refunds, and other disputes which the bank will take care of. Debit Cards don’t have this level of protection, period. One aspect of the CC and why they became popular in corporations early on was due to the ease of use and protection in transactions as businesses don’t want to lose unnecessary money due to fraud or misspending!

    Benefits 4 – ease of transactions. In some countries I have been to, there were situations in which vendors did not accept Debt Cards and only allowed Hotel bookings/ Hire car bookings and so on via CC. For those thinking just pay cash then, I was traveling in risky locations where you would be a fool to carry cash with you.

    And again, booking via credit card would activate the previous benefits if available as some credit cards are specifically targeted for travel, thus benefits can be fantastic in these scenarios.

    So as you see there are many benefits as well as the negatives that Ramsey rightly points out. Just like with every other financial instrument/ tool available out there. I admire Ramsey for his strong beliefs and I respect his opinion. But he was wrong to flatly call the caller misinformed or wrong.

    What I also found annoying is the typical “you’re too young to know better” remark or rather implying this from asking the caller his age. It’s rather a simple and idiotic statement to use in defending ones argument as you can be intelligent and disciplined at any age and on the other hand just as irresponsible and silly. Yes I believe age does grant respect and invaluable experience, but in terms of financial instruments and tools, which are adapting and evolving continuously, you cannot in my opinion, fall into the trap of placing any financial tool/strategy/ instrument in one basket.

    CC’s have a place in a diversified financial tool box and when used smartly, which let’s be honest, in the land of the internet, isn’t too hard to find out how to maximise these benefits and learn to be disciplined, then CC can be beneficial.

    CC cards aren’t for everyone but just because there are large instances of people that cannot control their spending isn’t enough to rile them out and the logic that Ramsey was pointing out that the CC’s are at fault as he mentioned the smoking example, is busy wrong. It isn’t a compatible example as a CC is a tool, and it cannot harm you physically. Their are outliers in everything, both good and the bad, just like mutual funds aren’t all successful, Real Estate investments don’t always work out, options can lose you money, and the list goes on. Would Ramsey be making the same argument here? I don’t think so.

    Being financially disciplined and savvy involves being educated and I don’t just mean college educated. Educating yourself about the risks and rewards, examining your financial situation, and a taking a big dose of reality and stopping the need to try to keep up with the Jones’, coupled with the advice from people like Ramsey, and you’ll be successful not only financially but in life in general.

    Here’s to a successful 2020 and beyond!

    Disclaimer: No I do not hold a Credit Card, as for my situation I do not need one. I have no need as the nation I am living in there really aren’t the benefits/reward schemes associated with CC’s and there is no Credit Score system like in the States and so on. But the principles about the benefits for others are relevant and should be looked at if indeed it would aid in your financial success.

    Reply
  19. Evan McGough

    we use the extra income from paying off all our bills to snowball into the next debt. we never pay interest on our credit card. it helps with our credit as does holding the credit card for a long period of time. all wins. plus we are disciplined so we dont spent any extra than what we need or would have bought if we used cash

    Reply
  20. Weldnasty

    Daves view on credit cards is BS. Ive had credit cards since i was 18 and now im 27 and i have never paid 1 penny of interest. Use it like cash and pay your balance in full every month and in result i have a 762 credit score and can get approved for pretty much anything i want! If you use a cc responsibly it is actually very beneficial.

    Reply
  21. CorruptVisionz

    I think around 54% of people pay off their credit cards on time are responsible, the other 47% rack up interest and have debt.

    Reply

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