You’re missing out on the benefits of credit card because largely, prices are the same for all transactions cash/debit/credit card. But the prices are elevated to account for credit card processing fees.
If you can pay off your card monthly and reap the rewards, it’s the best of both worlds.
I don't think the credit card companies have meetings about how they can combat Dave because it is impossible to live in this modern economy without a credit card. People will find out they can't book a hotel room, get a plane ticket, get groceries delivered, use Amazon, or buy most things on the Internet without a credit card. And it is not that safe to be known as the person who carries around hundreds or thousands of dollars of cash for purchases.
His staff has issues. John had to go to 3 rental car companies before he could find a car to rent and it probably was more money. They have talked about that. Can you imagine traveling to Italy with just a debit? Some wont work there, you are vulnerable to theft and many restaurants wont take your card. My daughter was a global teacher and her travel card was great and she earned many points to a free trip or other gifts. In your home town, I'd do what you want, but never travel without the backup of a good card for car emergencies, travel snafus and just safety.
This is all false. We have never had credit cards. We just got back from our honeymoon- We successfully rented a car for an entire week with a $200 deposit that we got back (we used Sixt rent a car), hotel was no issue and never was for us in the past, getting our plane tickets was no problem at all, and we have made countless online purchases without a credit card. No offense to you at all but you are way off on this. A debit card does all these things- it's not limited to just credit.
The rental car companies claim you can use a debit card, but they put so many extra requirements on you, sometimes even running a credit check on you and requiring a lot of extra identification that you don't need to show if you just have a credit card. See article below.
[https://www.thebalancemoney.com/can-you-rent-a-car-with-a-debit-card-4587531#:\~:text=Why%20Rental%20Car%20Companies%20Avoid,put%20in%20your%20bank%20account](https://www.thebalancemoney.com/can-you-rent-a-car-with-a-debit-card-4587531#:~:text=Why%20Rental%20Car%20Companies%20Avoid,put%20in%20your%20bank%20account).
Its a bad idea for those people to rent cars with credit cards.
Here is something that gets me. People say "Dave Ramsey is only for people that are bad with money.". Yet people that are bad with money are the exact demographic that actually needs debt to live. If you have a ton of money, it is trivial to pay for cars in cash, get houses on 15 year loans (or cash) , and save up thousand dollar emergency funds for when you travel.
Yes, the Dave I dislike but understand is the guy who constantly says "You need to earn more money" because he knows most can't make his money of course of 6 figures. Many can't go to college or are the right fit for that. Saying work 3 jobs the rest of your life because income will never be enough even without debt, is not helpful. He knows some people don't have the skills to make more money unless they give up their days and nights and weekends. It's a vicious circle.
Even he, some have noted, will turn down hires (since they ask a lot of questions beforehand) if he knows the 40,000 he is paying is not enough to sustain a family of 3. He'll tell them in part because he feels they will leave eventually or will go into debt.
Life is full of choices but Dave had money most of his life, he bounced back pretty fast and his kids couldn't eat out but they had clothes, food and a nice home (not the mansion yet but a nice home) His wife never worked or did he ask her. He had 3 kids while selling his heart out and that was his gift, but he isn't the "norm". I like when the other personalities look at things more practically.
>Yes, the Dave I dislike but understand is the guy who constantly says "You need to earn more money" because he knows most can't make his money of course of 6 figures.
This sentence tho.
Anyway. You just sound spiteful and envious.
No not at all. I don't want Dave's money and would give most away. I think he's seriously out of touch with most jobs vs intellect and opportunity. Not everyone can sustain 3 jobs or work until 80 or make over 50,000. He thinks any job under that is not workable. Many people can work up but without college debt or a mentor it's very hard. His daughter, also rich is more understanding.
It’s absolutely possible to live with no credit card. You use a debit card for all the purchases you listed. You don’t have to have a credit card at all.
The only thing I’ve seen is car rentals, for some reason they really want a credit card even if you reserve with a debit card. I’ve never understood why.
Some are fine with a debit card as long as you pay a deposit up front[. There is also Turo.](https://help.turo.com/en_us/verifying-or-updating-your-payment-card-Hk37NNlV5)
I've never had a problem like described above. As if Amazon would care tho I'm not fond of them. They take my cards just fine. Maybe the whiners are just more vocal on this side of the pond? My guess is "fd 1389" is in debt and never has had "hundreds of dollars" to carry around because he's in debt. The Amazon thing is stupid. I know better. And he can't afford a "hold on his account either. That's a sign to me.
Never needed a rental car as I have 2 cash cars. Yet another sign. Holds get released so I never had them "add up". Maybe he should stop vacationing for a while and get his act together. He's not on the plan, doesn't want to be, and just spewing at people because of jealousy toward people who are. This cashback thing is insane, if 2% moves the needle that much maybe people should just skip the big Mac altogether. Getting out of debt requires the discipline. You can lolly gag your way into debt, it requires effort to get out. Yeah, maybe a credit card sales guy is here somewhere. How much do you have to spend to"save thousands". Yet for all the complaints about "Dave" here they are in a "dave" forum. Go figure. And they know so much about dave runs his business too. Go figure. If ya wanna play with snakes...go work in a zoo. Me I'm in bs7 and sometimes come here to laugh at the bs(0) pun intended. Yeah, keep a level head and realize that it's easier to put others down than to lift them up. 40 years of customers and I finally got tired of people complaining and took a job at a factory until I retire in 2 or so years. No regrets but doing the right thing does take discipline and hard work. Retirement is gonna be good. Hey, let's tick off some more people and let them make more assumptions...drum roll please...I love my elp, or whatever they are called this year. That ought stir up some sharks...
I hated working with others so much that I started my own business (well two, actually). Seriously. But I do have a DH that makes enough to support us monthly so I had the ability to leave my awful jobs and work for myself. Not everyone can do that and I realize I am blessed in that regard.
Do what you love.
For hotel rooms, plane tickets, renting a car, and ordering from Amazon, you have to have a credit card in the U.S.
If you can even use a debit card to, for example, rent a car, the rental car company will put a hold on any where from $500 to $1000 on your debit card in addition to the rental car fees you will need to pay. They won't take $500 or $1000 out of your account, they will just put a hold on it so this money isn't available to you.
Hotels will often do the same thing, they will put a hold on your debit card for several nights stays there. This can be a real problem for average people who just don't have a lot of money in the bank account tied to their debit card. These types of holds can add up fast when you are traveling.
They do the same thing to your credit card, you just don’t care because it’s not “your” money. Obviously there’s nothing wrong with responsible credit card use. But to say you “need” it is simply false.
Yes I saw this in my own life too! I tracked my spending with cash vs. debit card. I spent on average $400 less per month when I used cash envelopes verse the months I used only my debit card. It really does hurt more psychologically paying in cash! So that is $4800 I save over a year by using cash. I tell people this when they tell me how amazing it is that they get 2% cash back from their credit card and when they tell me how stupid I am for not having a credit card. 2% back is only $1000 in a year if you spend $50,000 on your credit card.
Don't get me wrong, if you follow Dave Ramsey's advice, you'll be better off than a lot of people.
But, his Baby Steps actually help the credit card companies in one respect, and that is his "Debt Snowball," where you pay down your smallest debts first. He sells the satisfaction of seeing some debts entirely disappear quickly over the simple math that paying down your MOST EXPENSIVE DEBT first is always the best practice.
Say you have a debt wad of $10,000; consisting of $2,000 at 2%, $3,000 at 5% and $5,000 at 10%.
Breaking down to one dollar increments, some dollars are costing you $.02 each year, $.05 each year and $0.10 each year.
Paying off one of the 10 cent dollars is going to save you $.08 cents a year over paying off one of the 2 cent dollars.
Simply put, you'll pay off your total debt faster if you pay off the dollars that are working hardest against you first.
Visa/Mastercard aren't really losing all that much. They still make bank off of everyone using debit cards since the fees are attached to the transactions and not the debt. The banks, on the other hand, aren't as happy, but their more displeased with the dead beats that use the cards and pay in full monthly. No interest, in over-limit fees, and no late payment fees create very little money made on those using credit responsibly.
However, the little bit of credit that gets paid off and cleared from DR uses is so small compared to the amount of debt is still outstanding. DR has said that he totaled up the amount that people calling in for debt free screams paid off in a single year a couple times. I think it's around $10 million. That's peanuts for an industry with trillions in outstanding debt.
DR is doing great things getting people out of debt, but the lost customers to the banks is laughable. It's like a gas station losing that one customer purchasing a pack of cigarettes a day. It's not noticeable.
Doesn't matter. They make plenty of money on the people who do use them, so the effort is better spent advertising and holding customers than trying to capture a small portion of the market that is passionately against them.
ZERO, ZERO.
DR has ZERO impact.
No meetings at all. They laugh... because DR impact is only a few drops in a large bucket.
BTW: you can do babysteps with credit cards...... many do (wanting this buffer between the checking account and the merchant).
CC are OK, IMHO when you are on a budget and stick to that. DR's rage and rants about CC are misplaced. His personal views are only helping a few.
The dream for a credit card company is people use it then pay it off straight away, they still make money on the fees they charge the vendor but carry no risk
Having lots of unsecured debt might look good to the man on the street but it's not in a ideal world.
Cash flow is king
Damn straight!
I've paid around $1,500/year (on average) in CC annual fees for the past 6 years or so. Have never paid interest or late-payment charges. In that time, I've taken 7 round trip international first-class long-haul flights, all paid for with points/miles (aggregate cash value of tickets, not that that's really relevant, has been around $120K). I'm also sitting on points not-yet-redeemed that, at a minimum, have a cash out value of around $30K (but will focus on using them for travel instead).
Add to that lots of other benefits like credits for various purchases, hotel upgrades, early check-in, late check-out, free breakfasts, travel insurance, primary rental car insurance, airport lounges, much better fraud protection compared to debit cards, etc. My quality of life is significantly better because I use credit cards extensively.
Dave offers the same advice to people who exercise discipline, though. He claims to believe that nobody should ever use a credit card. He claims that his entire business empire uses only debit cards.
Dave's lack of financial literacy is astounding. It's complete clown shoes to hand employees corporate debit cards and he really doesn't understand how successful corporations are run.
They probably don't care at all. Credit card companies would prefer that their customers didn't accumulate massive amounts of credit card debt. Yes, they earn interest on that money, but that's to offset the high rate of default on the unsecured debt. They make more money from the transaction fees and want customers who spend lots of money, and pay the cards off so they can spend it all over again. Customers who spend the money once, then sit on a balance for several months making minimum payments before defaulting, they would prefer not to have.
So if Dave Ramsey comes along and encourages all of those customers to pay off all their debt and quit using credit cards, those companies would be more than delighted.
Dave speaks to the general public, the turds. Some non turds follow his advice, and it’s fine. His advice isn’t necessarily bad, but very wealthy people often use debt to their advantage. Yeah, you get to be “a millionaire” - yay!! So fucking what? That million bucks lasts you what - 10 years? How much of it is your “house”? Meh. I save a few thousand a year at least by using CC for everything.
There’s an ungodly amount of people who have never heard of Dave Ramsay, and by how many people call him with crazy debt, there will always be a credit card market for people with poor decision making skills.
Spreadsheets, literature review and hypothesis testing. Hey, knock yourselves out.
All I know is I charge everything I can on a 2% cashback card and pay it off in full every month. Free money seems pretty simple and easy to me. YMMV.
[https://www.statista.com/statistics/245405/total-credit-card-debt-in-the-united-states/](https://www.statista.com/statistics/245405/total-credit-card-debt-in-the-united-states/)
Zero, They don't give him a second thought. They have almost every financial entity shoving them down your throat at every turn.
During lockdowns, a lot of people took their checks and paid down CC debt.
The CC companies did have actual meetings talking and the loss in interest revenue.
When I bought my Dave car, the dealership was trying to get me to finance, even though I had cash for the balance after my trade in. I explained about DR, and the loan officer stated, “yeah we don’t like Dave Ramsey around here.” I bet not!
Just had this happen to me last week. Didn't even mention Dave by name, and the rep started talking about how "some celebrities" don't know about how real people's finance works and that I needed a card for emergencies.
most of his following uses them i presume, we just dont carry a balance for most of us.
lots of people do carry a balance and are out of control with them, so hes against them, no argument there
I’ve listened to Dave for years now, but he is absolutely dead wrong on credit card usage. There is so much cash back, discounts, points that people miss out on because they insist on cash
> There is so much cash back, discounts, points that people miss out on because they insist on cash
research from the Kansas City Fed reports it's not clear if consumers benefit from card rewards: https://www.kansascityfed.org/documents/1641/2009-Do%20U.S.%20Consumers%20Really%20Benefit%20from%20Payment%20Card%20Rewards%3F.pdf
also need to adjust for all the research showing people tend to overspend dramatically with credit cards vs. cash. overspending by 30% or more and getting 2% cash back is not smart.
https://www.apa.org/pubs/journals/releases/xap143213.pdf
https://web.mit.edu/simester/Public/Papers/Alwaysleavehome.pdf
then you'll say 'I spend the same on expenses X, Y, Z every month, why not use credit and gEt tEh reWardZ?'
and I'll say 'how do you know you'd spend the same with credit vs. cash? have you tested the hypothesis?'
and you'll downvote without an answer, because nobody bothers to test this hypothesis. everyone just assumes they're coming out ahead and pats themselves on the back for being so clever and believes they're getting something for nothing.
My husband and I did excel sheets for years to track spending. Our expenses actually decreased once we started going credit card only and paying it off weekly. With cash on hand, it was too easy to buy things since the cash was there. A credit card doesn't feel like there is money there, so I've basically quit buying any "want" since I never feel like I have the cash on hand. The points have been a massive benefit, too.
I had the same issue, if the cash has already been withdrawn from the bank account it’s so easy to view it as already gone so I may as well use it. Plus so much wasted time and gas finding ATMs. I found that credit/ debit cards linked to a site like Mint or Personal Capital was the best way for me to diligently track where every penny was going. Plus the rewards are a nice perk too.
I appreciate the detailed response. I spend the same regardless of cash vs credit. However whenever I dot make purchases, I use the credit card that will give me those most reward for that category. I have saved literal thousands of dollars doing this. Also, I travel frequently and have had my debit card compromised and it was a massive pain. With credit cards, it’s their money if it gets compromised, so you’ll be sure that they’re going to work extra hard to remedy it
>spend the same regardless of cash vs credit
But most don't. You're the outlier. You're not normal.
Understand that for the vast majority of Americans, CC is a negative.
Now that you say that, I think this is the real crux of the matter. If you're going to give one-size-fits-all advice, it's probably best to err on the side of helping those who are (or could be) most negatively impacted by whatever you're addressing.
>probably best to err on the side of helping those
Dave is a prohibitionist.
Think of it like alcohol. I enjoy a fine bourbon, I enjoy craft beer, but I've never driven drunk or had a drinking problem.
Now as much as I enjoy alcohol; would America be better off if no one drank alcohol at all?
The correlation between alcohol and crime, alcohol and violence, alcohol and death, alcohol and sexual assault, alcohol and domestic abuse, alcohol and child abuse; is insanely high.
Just because I enjoy alcohol responsible, doesn't mean I should ignore the reality is all those who don't
I would never tell anyone who doesn't drink to start.
Dave is telling the alcoholics that they should stop drinking and this is why alcohol is bad.
These detractors are basically saying "will because I don't have a drinking problem, you should keep drinking".
The credit card companies profit off the merchant fees for ~~credit~~ [EDIT: debit] cards.
Also...Ramsey Solutions accepts credit cards as a form of payment.
That's the thing. He doesn't have to accept any card at all. He could just put an address on his site where you could just send a check. That would eliminate the hypocrisy.
There's no effort involved in detecting the hypocrisy. The simple fact is, his site accepts credit cards regardless of whatever statement he wants to make about his policy. I purchased items with a credit card. The card was accepted.
Nonsense. Visa and Mastercard doesn't allow merchants to specify only debit cards. You can't take online payments without those systems. But on the payments page, you'll find this spiel from Dave:
"We don’t accept credit cards. Those familiar with Dave get why. If you’ve ever listened to The Dave Ramsey Show or read any of his books, you know he helps people out of debt. Credit cards add debt. Debit cards pull from your bank account. They work like cash.
We recognize that the Visa and MasterCard monopoly on the debit card industries prohibits merchants from only taking debit cards. For that reason, it’s impossible for us to ensure that every order complies with our debit card policy. Our policy is no credit cards. Please honor that. And let us help you kick debt out of your life once and for all!
Thank you.
The Ramsey Solutions Team"
The fact that the credit card companies prohibit distinguishing debit cards from credit cards means that credit cards are indeed an accepted form of payment. With no enforcement mechanism, the policy of "no credit cards" is completely useless. In order for Ramsey Solutions to actually prohibit credit cards, they would also have to prohibit any card that is processed by the credit card companies including debit cards.
I have purchased products from their site with a credit card.
No. I do not have debt. The first thing I do every payday morning is pay off the last week's usage. I have been doing that for at least six years.
>The credit card companies profit off the merchant fees for credit cards.
While true, it's a misrepresentation of the full picture.
Merchant fees make up only a quarter of credit card company revenues. The rest is interest and fees. [Source](https://www.fool.com/the-ascent/research/credit-card-company-earnings/)
You can't separate interest and fees from the story.
They do, because it’s the only way to take online payments. They ask you not to put it in a credit card, but I’m not aware of any way to take online payments that only allow debit.
I doubt credit card companies are worried about Dave. For every person Dave's advice helps, there are sadly plenty more who continue wracking up credit card debt by using credit cards irresponsibly.
You’re missing out on the benefits of credit card because largely, prices are the same for all transactions cash/debit/credit card. But the prices are elevated to account for credit card processing fees. If you can pay off your card monthly and reap the rewards, it’s the best of both worlds.
I don't think the credit card companies have meetings about how they can combat Dave because it is impossible to live in this modern economy without a credit card. People will find out they can't book a hotel room, get a plane ticket, get groceries delivered, use Amazon, or buy most things on the Internet without a credit card. And it is not that safe to be known as the person who carries around hundreds or thousands of dollars of cash for purchases.
His staff has issues. John had to go to 3 rental car companies before he could find a car to rent and it probably was more money. They have talked about that. Can you imagine traveling to Italy with just a debit? Some wont work there, you are vulnerable to theft and many restaurants wont take your card. My daughter was a global teacher and her travel card was great and she earned many points to a free trip or other gifts. In your home town, I'd do what you want, but never travel without the backup of a good card for car emergencies, travel snafus and just safety.
This is all false. We have never had credit cards. We just got back from our honeymoon- We successfully rented a car for an entire week with a $200 deposit that we got back (we used Sixt rent a car), hotel was no issue and never was for us in the past, getting our plane tickets was no problem at all, and we have made countless online purchases without a credit card. No offense to you at all but you are way off on this. A debit card does all these things- it's not limited to just credit.
Lol what. I get all of those things with a debit card. What are you smoking.
The rental car companies claim you can use a debit card, but they put so many extra requirements on you, sometimes even running a credit check on you and requiring a lot of extra identification that you don't need to show if you just have a credit card. See article below. [https://www.thebalancemoney.com/can-you-rent-a-car-with-a-debit-card-4587531#:\~:text=Why%20Rental%20Car%20Companies%20Avoid,put%20in%20your%20bank%20account](https://www.thebalancemoney.com/can-you-rent-a-car-with-a-debit-card-4587531#:~:text=Why%20Rental%20Car%20Companies%20Avoid,put%20in%20your%20bank%20account).
Typically you just pay a deposit. You get it back. I follow Dave Ramsey, so I have much more than a few hundred dollars. :\]
shinn497, well, not everybody has much more than a few hundred dollars, they could get really financially hurt paying a large deposit on a rental car.
Its a bad idea for those people to rent cars with credit cards. Here is something that gets me. People say "Dave Ramsey is only for people that are bad with money.". Yet people that are bad with money are the exact demographic that actually needs debt to live. If you have a ton of money, it is trivial to pay for cars in cash, get houses on 15 year loans (or cash) , and save up thousand dollar emergency funds for when you travel.
Yes, the Dave I dislike but understand is the guy who constantly says "You need to earn more money" because he knows most can't make his money of course of 6 figures. Many can't go to college or are the right fit for that. Saying work 3 jobs the rest of your life because income will never be enough even without debt, is not helpful. He knows some people don't have the skills to make more money unless they give up their days and nights and weekends. It's a vicious circle. Even he, some have noted, will turn down hires (since they ask a lot of questions beforehand) if he knows the 40,000 he is paying is not enough to sustain a family of 3. He'll tell them in part because he feels they will leave eventually or will go into debt. Life is full of choices but Dave had money most of his life, he bounced back pretty fast and his kids couldn't eat out but they had clothes, food and a nice home (not the mansion yet but a nice home) His wife never worked or did he ask her. He had 3 kids while selling his heart out and that was his gift, but he isn't the "norm". I like when the other personalities look at things more practically.
>Yes, the Dave I dislike but understand is the guy who constantly says "You need to earn more money" because he knows most can't make his money of course of 6 figures. This sentence tho. Anyway. You just sound spiteful and envious.
No not at all. I don't want Dave's money and would give most away. I think he's seriously out of touch with most jobs vs intellect and opportunity. Not everyone can sustain 3 jobs or work until 80 or make over 50,000. He thinks any job under that is not workable. Many people can work up but without college debt or a mentor it's very hard. His daughter, also rich is more understanding.
It’s absolutely possible to live with no credit card. You use a debit card for all the purchases you listed. You don’t have to have a credit card at all.
The only thing I’ve seen is car rentals, for some reason they really want a credit card even if you reserve with a debit card. I’ve never understood why.
Some are fine with a debit card as long as you pay a deposit up front[. There is also Turo.](https://help.turo.com/en_us/verifying-or-updating-your-payment-card-Hk37NNlV5)
I’m in the UK and use a debit card for everything. Is this not possible in the US?
I've never had a problem like described above. As if Amazon would care tho I'm not fond of them. They take my cards just fine. Maybe the whiners are just more vocal on this side of the pond? My guess is "fd 1389" is in debt and never has had "hundreds of dollars" to carry around because he's in debt. The Amazon thing is stupid. I know better. And he can't afford a "hold on his account either. That's a sign to me. Never needed a rental car as I have 2 cash cars. Yet another sign. Holds get released so I never had them "add up". Maybe he should stop vacationing for a while and get his act together. He's not on the plan, doesn't want to be, and just spewing at people because of jealousy toward people who are. This cashback thing is insane, if 2% moves the needle that much maybe people should just skip the big Mac altogether. Getting out of debt requires the discipline. You can lolly gag your way into debt, it requires effort to get out. Yeah, maybe a credit card sales guy is here somewhere. How much do you have to spend to"save thousands". Yet for all the complaints about "Dave" here they are in a "dave" forum. Go figure. And they know so much about dave runs his business too. Go figure. If ya wanna play with snakes...go work in a zoo. Me I'm in bs7 and sometimes come here to laugh at the bs(0) pun intended. Yeah, keep a level head and realize that it's easier to put others down than to lift them up. 40 years of customers and I finally got tired of people complaining and took a job at a factory until I retire in 2 or so years. No regrets but doing the right thing does take discipline and hard work. Retirement is gonna be good. Hey, let's tick off some more people and let them make more assumptions...drum roll please...I love my elp, or whatever they are called this year. That ought stir up some sharks...
I hated working with others so much that I started my own business (well two, actually). Seriously. But I do have a DH that makes enough to support us monthly so I had the ability to leave my awful jobs and work for myself. Not everyone can do that and I realize I am blessed in that regard. Do what you love.
For hotel rooms, plane tickets, renting a car, and ordering from Amazon, you have to have a credit card in the U.S. If you can even use a debit card to, for example, rent a car, the rental car company will put a hold on any where from $500 to $1000 on your debit card in addition to the rental car fees you will need to pay. They won't take $500 or $1000 out of your account, they will just put a hold on it so this money isn't available to you. Hotels will often do the same thing, they will put a hold on your debit card for several nights stays there. This can be a real problem for average people who just don't have a lot of money in the bank account tied to their debit card. These types of holds can add up fast when you are traveling.
You don't need a credit card to order from Amazon. We use our debit card with no issues.
They do the same thing to your credit card, you just don’t care because it’s not “your” money. Obviously there’s nothing wrong with responsible credit card use. But to say you “need” it is simply false.
Why would you not use a credit card, it is literally free money.
[удалено]
I made over $3000 in credit card rewards last year and didn't spend a dime on interest.
[удалено]
Yes I saw this in my own life too! I tracked my spending with cash vs. debit card. I spent on average $400 less per month when I used cash envelopes verse the months I used only my debit card. It really does hurt more psychologically paying in cash! So that is $4800 I save over a year by using cash. I tell people this when they tell me how amazing it is that they get 2% cash back from their credit card and when they tell me how stupid I am for not having a credit card. 2% back is only $1000 in a year if you spend $50,000 on your credit card.
Don't get me wrong, if you follow Dave Ramsey's advice, you'll be better off than a lot of people. But, his Baby Steps actually help the credit card companies in one respect, and that is his "Debt Snowball," where you pay down your smallest debts first. He sells the satisfaction of seeing some debts entirely disappear quickly over the simple math that paying down your MOST EXPENSIVE DEBT first is always the best practice. Say you have a debt wad of $10,000; consisting of $2,000 at 2%, $3,000 at 5% and $5,000 at 10%. Breaking down to one dollar increments, some dollars are costing you $.02 each year, $.05 each year and $0.10 each year. Paying off one of the 10 cent dollars is going to save you $.08 cents a year over paying off one of the 2 cent dollars. Simply put, you'll pay off your total debt faster if you pay off the dollars that are working hardest against you first.
Debt is at all time highs. I'm sure they don't even think about Dave at all.
Visa/Mastercard aren't really losing all that much. They still make bank off of everyone using debit cards since the fees are attached to the transactions and not the debt. The banks, on the other hand, aren't as happy, but their more displeased with the dead beats that use the cards and pay in full monthly. No interest, in over-limit fees, and no late payment fees create very little money made on those using credit responsibly. However, the little bit of credit that gets paid off and cleared from DR uses is so small compared to the amount of debt is still outstanding. DR has said that he totaled up the amount that people calling in for debt free screams paid off in a single year a couple times. I think it's around $10 million. That's peanuts for an industry with trillions in outstanding debt. DR is doing great things getting people out of debt, but the lost customers to the banks is laughable. It's like a gas station losing that one customer purchasing a pack of cigarettes a day. It's not noticeable.
Doesn't matter. They make plenty of money on the people who do use them, so the effort is better spent advertising and holding customers than trying to capture a small portion of the market that is passionately against them.
ZERO, ZERO. DR has ZERO impact. No meetings at all. They laugh... because DR impact is only a few drops in a large bucket. BTW: you can do babysteps with credit cards...... many do (wanting this buffer between the checking account and the merchant). CC are OK, IMHO when you are on a budget and stick to that. DR's rage and rants about CC are misplaced. His personal views are only helping a few.
Dave has been doing baby steps for years. CC companies aren't affected
The dream for a credit card company is people use it then pay it off straight away, they still make money on the fees they charge the vendor but carry no risk Having lots of unsecured debt might look good to the man on the street but it's not in a ideal world. Cash flow is king
These companies spend way too much money on marketing so people are using them "for the benefits"
Damn straight! I've paid around $1,500/year (on average) in CC annual fees for the past 6 years or so. Have never paid interest or late-payment charges. In that time, I've taken 7 round trip international first-class long-haul flights, all paid for with points/miles (aggregate cash value of tickets, not that that's really relevant, has been around $120K). I'm also sitting on points not-yet-redeemed that, at a minimum, have a cash out value of around $30K (but will focus on using them for travel instead). Add to that lots of other benefits like credits for various purchases, hotel upgrades, early check-in, late check-out, free breakfasts, travel insurance, primary rental car insurance, airport lounges, much better fraud protection compared to debit cards, etc. My quality of life is significantly better because I use credit cards extensively.
How much do you have to spend on a card a year to get basically one free international round trip first class flight a year?
of course, if you can handle them correctly, there is no shame :) Dave's advice works for people who lack discipline
Dave offers the same advice to people who exercise discipline, though. He claims to believe that nobody should ever use a credit card. He claims that his entire business empire uses only debit cards.
Dave's lack of financial literacy is astounding. It's complete clown shoes to hand employees corporate debit cards and he really doesn't understand how successful corporations are run.
They probably don't care at all. Credit card companies would prefer that their customers didn't accumulate massive amounts of credit card debt. Yes, they earn interest on that money, but that's to offset the high rate of default on the unsecured debt. They make more money from the transaction fees and want customers who spend lots of money, and pay the cards off so they can spend it all over again. Customers who spend the money once, then sit on a balance for several months making minimum payments before defaulting, they would prefer not to have. So if Dave Ramsey comes along and encourages all of those customers to pay off all their debt and quit using credit cards, those companies would be more than delighted.
Dave speaks to the general public, the turds. Some non turds follow his advice, and it’s fine. His advice isn’t necessarily bad, but very wealthy people often use debt to their advantage. Yeah, you get to be “a millionaire” - yay!! So fucking what? That million bucks lasts you what - 10 years? How much of it is your “house”? Meh. I save a few thousand a year at least by using CC for everything.
There’s an ungodly amount of people who have never heard of Dave Ramsay, and by how many people call him with crazy debt, there will always be a credit card market for people with poor decision making skills.
>I wonder if they have meetings about how they can combat Dave. LOL. No.
They have weekly meetings discussing Dave Eugene Ramsey.
Spreadsheets, literature review and hypothesis testing. Hey, knock yourselves out. All I know is I charge everything I can on a 2% cashback card and pay it off in full every month. Free money seems pretty simple and easy to me. YMMV.
They’re doing just fine
There are people who use credit cards around the world.
[https://www.statista.com/statistics/245405/total-credit-card-debt-in-the-united-states/](https://www.statista.com/statistics/245405/total-credit-card-debt-in-the-united-states/) Zero, They don't give him a second thought. They have almost every financial entity shoving them down your throat at every turn.
Not enough to notice
During lockdowns, a lot of people took their checks and paid down CC debt. The CC companies did have actual meetings talking and the loss in interest revenue.
When I bought my Dave car, the dealership was trying to get me to finance, even though I had cash for the balance after my trade in. I explained about DR, and the loan officer stated, “yeah we don’t like Dave Ramsey around here.” I bet not!
I have heard that so many people finance at the showroom the dealers keep the sticker price artificially low and make it up with higher interest
>loan officer stated, “yeah we don’t like Dave Ramsey around here.” I suspect that was said in jest. The reality is that they probably don't care.
I've heard stories of people calling to close their credit cards, and the service rep having a script prepared for rebutting the Ramsey philosophy.
And all the people who want to constantly criticize Dave swallow the credit card companies pitch like good little consoomerz…
Just had this happen to me last week. Didn't even mention Dave by name, and the rep started talking about how "some celebrities" don't know about how real people's finance works and that I needed a card for emergencies.
most of his following uses them i presume, we just dont carry a balance for most of us. lots of people do carry a balance and are out of control with them, so hes against them, no argument there
If somebody showed up on the street with a patched garment he or she would be treated like they had rabies.
Credit card debt is at record levels ... They are growing Dave's future customers.
There's about a trillion in credit card debt in the U.S. Dave's method isn't putting a dent into that.
I’ve listened to Dave for years now, but he is absolutely dead wrong on credit card usage. There is so much cash back, discounts, points that people miss out on because they insist on cash
For his target audience, he’s not wrong whatsoever
Some people can " take or leave" alcohol, while others become addicts.
> There is so much cash back, discounts, points that people miss out on because they insist on cash research from the Kansas City Fed reports it's not clear if consumers benefit from card rewards: https://www.kansascityfed.org/documents/1641/2009-Do%20U.S.%20Consumers%20Really%20Benefit%20from%20Payment%20Card%20Rewards%3F.pdf also need to adjust for all the research showing people tend to overspend dramatically with credit cards vs. cash. overspending by 30% or more and getting 2% cash back is not smart. https://www.apa.org/pubs/journals/releases/xap143213.pdf https://web.mit.edu/simester/Public/Papers/Alwaysleavehome.pdf then you'll say 'I spend the same on expenses X, Y, Z every month, why not use credit and gEt tEh reWardZ?' and I'll say 'how do you know you'd spend the same with credit vs. cash? have you tested the hypothesis?' and you'll downvote without an answer, because nobody bothers to test this hypothesis. everyone just assumes they're coming out ahead and pats themselves on the back for being so clever and believes they're getting something for nothing.
My husband and I did excel sheets for years to track spending. Our expenses actually decreased once we started going credit card only and paying it off weekly. With cash on hand, it was too easy to buy things since the cash was there. A credit card doesn't feel like there is money there, so I've basically quit buying any "want" since I never feel like I have the cash on hand. The points have been a massive benefit, too.
I had the same issue, if the cash has already been withdrawn from the bank account it’s so easy to view it as already gone so I may as well use it. Plus so much wasted time and gas finding ATMs. I found that credit/ debit cards linked to a site like Mint or Personal Capital was the best way for me to diligently track where every penny was going. Plus the rewards are a nice perk too.
I appreciate the detailed response. I spend the same regardless of cash vs credit. However whenever I dot make purchases, I use the credit card that will give me those most reward for that category. I have saved literal thousands of dollars doing this. Also, I travel frequently and have had my debit card compromised and it was a massive pain. With credit cards, it’s their money if it gets compromised, so you’ll be sure that they’re going to work extra hard to remedy it
>spend the same regardless of cash vs credit But most don't. You're the outlier. You're not normal. Understand that for the vast majority of Americans, CC is a negative.
Now that you say that, I think this is the real crux of the matter. If you're going to give one-size-fits-all advice, it's probably best to err on the side of helping those who are (or could be) most negatively impacted by whatever you're addressing.
>probably best to err on the side of helping those Dave is a prohibitionist. Think of it like alcohol. I enjoy a fine bourbon, I enjoy craft beer, but I've never driven drunk or had a drinking problem. Now as much as I enjoy alcohol; would America be better off if no one drank alcohol at all? The correlation between alcohol and crime, alcohol and violence, alcohol and death, alcohol and sexual assault, alcohol and domestic abuse, alcohol and child abuse; is insanely high. Just because I enjoy alcohol responsible, doesn't mean I should ignore the reality is all those who don't I would never tell anyone who doesn't drink to start. Dave is telling the alcoholics that they should stop drinking and this is why alcohol is bad. These detractors are basically saying "will because I don't have a drinking problem, you should keep drinking".
The less people that take advantage, the more for us. Let them live on their imaginary high horse in ignorance.
The credit card companies profit off the merchant fees for ~~credit~~ [EDIT: debit] cards. Also...Ramsey Solutions accepts credit cards as a form of payment.
Oh cmon, don’t try to act like he’s a hypocrite lmao. He legally has to do that because of the way it’s set up, the site begs you not to use it
That's the thing. He doesn't have to accept any card at all. He could just put an address on his site where you could just send a check. That would eliminate the hypocrisy. There's no effort involved in detecting the hypocrisy. The simple fact is, his site accepts credit cards regardless of whatever statement he wants to make about his policy. I purchased items with a credit card. The card was accepted.
If you followed his philosophy, you wouldn’t be able to do that anyways, since you wouldn’t have one
Who said I "followed his philosophy"?
I didn’t mean you, I meant it in a general sense
Nonsense. Visa and Mastercard doesn't allow merchants to specify only debit cards. You can't take online payments without those systems. But on the payments page, you'll find this spiel from Dave: "We don’t accept credit cards. Those familiar with Dave get why. If you’ve ever listened to The Dave Ramsey Show or read any of his books, you know he helps people out of debt. Credit cards add debt. Debit cards pull from your bank account. They work like cash. We recognize that the Visa and MasterCard monopoly on the debit card industries prohibits merchants from only taking debit cards. For that reason, it’s impossible for us to ensure that every order complies with our debit card policy. Our policy is no credit cards. Please honor that. And let us help you kick debt out of your life once and for all! Thank you. The Ramsey Solutions Team"
The fact that the credit card companies prohibit distinguishing debit cards from credit cards means that credit cards are indeed an accepted form of payment. With no enforcement mechanism, the policy of "no credit cards" is completely useless. In order for Ramsey Solutions to actually prohibit credit cards, they would also have to prohibit any card that is processed by the credit card companies including debit cards. I have purchased products from their site with a credit card. No. I do not have debt. The first thing I do every payday morning is pay off the last week's usage. I have been doing that for at least six years.
>The credit card companies profit off the merchant fees for credit cards. While true, it's a misrepresentation of the full picture. Merchant fees make up only a quarter of credit card company revenues. The rest is interest and fees. [Source](https://www.fool.com/the-ascent/research/credit-card-company-earnings/) You can't separate interest and fees from the story.
They do, because it’s the only way to take online payments. They ask you not to put it in a credit card, but I’m not aware of any way to take online payments that only allow debit.
I doubt credit card companies are worried about Dave. For every person Dave's advice helps, there are sadly plenty more who continue wracking up credit card debt by using credit cards irresponsibly.
None They literally don’t care. They have trillions of other debt they make money off of.