Can I Live a Debit Card Lifestyle with a Credit Card?
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I think, this is the only time I disagree with Dave. I am debt free. I budget and stick to it. I use the credit card for all the purchases planned in the budget for the week. I pay off the credit card on each Friday as I renew the budget.
I understand his viewpoint though: average Americans won't stick to the plan. They WILL overspend. Discipline is the key.
@@ALCAN52 and if you just paid cash and debit along the way you'd have saved enough money to buy those tix outright at least twice. the credit card companies and banks are tricking your reward portion of the brain. everyone wants to get something for nothing. even using credit cards properly (no such thing, but just for discussion sake) there is the potential to run into financial irresponsibility, much less potential when using cash and debit
@@ALCAN52 just because you buy things you would normally buy doesn't mean you don't overspend. i get your situation may be a little different because you can't physically shop, but it would still be more responsible to have a debit card for purchases and auto deduct for other expenses. i still use cash too, especially for purchases under $100. i hate seeing people swipe for $2. really? you don't have $2 on you?!
@@eatpigsnot You make a fair point here, but I'm against Dave on this one like @ALCAN52. I never use cash unless I absolutely have to. I have swiped by credit card for as little as 10 cents to avoid using cash. The reason? Free money. Every time I swipe my card, I get 1-3% cash back that I deposit directly into my savings account. It's like getting a discount on everything I purchase. If I paid cash, I'm paying full price for everything which makes no sense in my brain. Now, the caveat here is that I pay my bill in full and on time. I have never paid a penny in interest or annual fees to a credit card company and never plan to. Plus, credit cards have fantastic legal protections that cash, and even debit cards to an extent, don't have. Some years ago I had my wallet stolen. I had about 90 bucks in there I never saw again, but when that thief used my credit card at a Walmart in another state, I called the bank and had the transaction reversed and didn't pay anything. I won't claim that this strategy works for everyone or even the majority of people, but for those who are disciplined and able to pay their bills in full every month, a credit card is a great way to build credit and enjoy rewards that cash cannot provide.
@@Kory31691 banks are not in the business of giving away money. just because you pay in full on time doesn't mean you don't spend more overall in the long run. also there's the possibility of an emergency that prevents you from paying the bill. debit and credit cards offer the same legal protections.
@@eatpigsnot You don't seem to understand what ALCAN52 was saying, or even how this works. He spent the exact amount of money he would have spent anyway. The only reason he even is able to cover those flights is BECAUSE he used a credit card. If he had used a debit card, he would have actually saved less.
It's true that most people don't have the discipline to do it this way, but if you do, it saves you money overall.
I’m a multimillionaire and those cash back card have paid for many vacations during my life. I shop with a list and I don’t overspend. Credit cards are not the problem. People who go crazy with their credit cards are the problem
Holly B My husband and I are only a millionaire, but I've used one credit card and paid it off each month for decades. I've often used my rewards cash to give to someone in need. But we have some impulse control.
Lynda Brown That’s exactly what I do.
Riiiggghtt
But I’m sure you didn’t become a multimillionaire by using credit cards. If you’re a millionaire are a debt free, sure why not use the little perks. But most people are not.
National JudahGraphic All of the small things I did made me a millionaire. Like, automatically saving each month, pretending I didn’t get a raise when I did and putting that raise money on my mortgage, not overspending on cars, using credit cards wisely getting the cash back, etc...
I did it. I am 100 percent debt free. I made my final mortgage payment today. Twelve years early. On my way to a million dollars. Thank you Mr. Ramsey
Congratulations!
Congratulations
Way to go!
you cant pay your mortgage with credit cards
Congratulations! That’s amazing to hear
Rule #1: don’t talk to Dave about credit cards 😂😂
yea I agree if you have money use your credit card like a debit car meaning pay if off every month. treat it like money you have vs money you don't't have and you can rack up tons of credit card points quickly and fly to other countries with the regular things you spent on anyway.
Maxime Mobayen most people cannot handle this and puts you at risk of relaxing your spending. Discipline is important but if your safety should come from the confidence in your ability not to spend and not in that you have a safety. I am that disciplined but my wife is not. It is psychology that cc companies and banks understand well and make lots of money on.
For the average person he's 100% right. Most people can't use a credit card responsibly. Those that do were most likely penny pinchers naturally anyway. If your not the kind of person who buys nothing but necessities and gets excited to save 2% on those necessities don't mess with credit cards.
Yes!🤣
OMG....hilarious comment
Considering most of Dave’s callers are in Baby Step 2, it’s no wonder he’s so vehemently anti-credit card.
YellowBrickExpat bingo
Dave is also a recovering debt a holic. And just like a recovering alcoholic he has a zero tolerance for the thing that tempted him into despair. Some people cannot touch a drop of alcohol and some people cannot handle a single credit card. For me, cash is something I don't track and easily spend if in my wallet. But when I use my credit card total up my bill subtracting that from my income and my savings, that's when I feel pain. I will never use a debit card because of the security problems. It is too easy for someone to swipe your debit card and access all the funds in your bank account. I have heard way too many horror stories a people's entire savings being wiped out buy a fief. Yes you can't have your savings restored but it takes time and a lot of aggravation. If someone swipes your credit card number and racks up a debt, you immediately protest it and keep your money well the credit card company sorts it out.
@@broganmckoko thief* not fief
that's why they are begging to use credit cards too. those babystep 2 peeps are tied to those advertising of the credit card .
I've had credit card for years and always paid my balance each month. I've gotten thousands in rewards and it's allowed my credit score to be over 800. Dave needs to realize there are people out there with self control.
Yes but 90% of his audience does not. So he has to play to the majority...
It is like you are a waiter and 90% of your customers are allergic to mushrooms and ask you if they should get the mushroom swiss burger...
Edward Rhoads *underrated comment
@@edwardrhoads7283 This is not playing to the majority. A lot of the statements he makes on credit cards are straight out false. If he differentiated and explained the reasoning, then it would be better. However, Dave just spews generalities as if it applied to everyone, everywhere.
Im sure every person who ever got a credit card and ultimately had a credit problem said in the beginning that they were financially responsible and they would 't abuse it.
The study says you spend 18% more with a credit card. At that point a 2% cash back from the card company is a non issue.
I use my credit card and pay it off immediatly. And make 400 a year off the cash back. And I have never paid intrest and it's very hard to get me to spend money. It's takes real dicipline.
PahJammer
I’m the exact same. Dave says he is cool with a debit card.... it’s still a credit card because Visa/MC/etc. all back it.... look at your debit card, it has a Visa or MC logo. Plus, it’s just as easy to use as a traditional credit card. I pay my credit card off every single day. No joke. I make about $1K a year from cash back rewards. Why wouldn’t I do that? 🤨
I have 16 cards and am in the same boat.
@@pandafox12 why do you watch Dave then
@@Dr.C_Stag because it's likely you are spending more than it's worth to get the cash back. It's not spending and having the discipline to pay it off that's the problem, lots of people do what you do. It's the psychology behind it. This whole conversation was about how people tend to spend more because there is no pain point triggered when using a credit card. Even the most disciplined individual could fall prey to this and get two candy bars instead of one just because you know you'll pay it off plus get the points from it. That's what he's saying the problem is. Even if it's only an extra $20 a year, it's $20 more than you would've spent had you been using cash or a debit card instead because of the mild pain associated with it.
I have four rewards cards with their corresponding apps on my phone. I use my credit cards like a debit card because I know that I will immediately go to the app and pay that card once the transaction clears. I do feel pain when I spend because I feel it's coming straight out of my account.
Discover gives me 5% back in
groceries, cvs and walgreens
from Jan to March. I don't overuse
the card. I have to buy groceries anyway
and I get 5% back
I just got a Discover Visa a couple of months ago. It's cool to see the amount of cash back with every single purchase. I pay it off monthly and my limit is not too much.
All right: but you're never getting out of debt, and you will always be paying for your groceries twice.
@@Musicienne-DAB1995 and who said
I was on debt🤔
Honestly, I feel like I spend more money when I have cash. Since I track my chequing and credit card balances so often, I feel like when I withdraw money at an ATM, it's already spent. Psychologically, I regard cash as "free money" which won't affect my balances.
greenlime1234 Same here! If I withdraw $80 in cash but only need $70 of it, I will find a way to spend the extra $10. If I use my debit card, I’m only spending the $70, and $10 stays right where it is in my account. I rarely carry cash these days, I mainly lean on my debit card.
ditto, i don't have a paper trail with cash. With debit card I have to answer to momma when I get home. :)
100%! Me too! And I do use my credit card sometimes to make purchases but never carried a balance because I pay it off each month. No issue there
Exactly, I hate holding cash.
Agree 100% especially with my kids. Since they ask for money constantly for random stuff, if I don't have it on hand I just tell them no. Had my wallet been full of $10 and $20 bills I'd easily have spent way more. Same goes for people panhandling - "no sir, don't have anything to give you"
All of the creative ways callers ask Dave for permission to use a credit card..
Yeah, like they actually need his permission to do so.
I mean credit cards aren't evil. It's the user that can't control their habits. Some people are absolutely better off not having one at all. It's like asking an addict to only have an ounce of their addiction. It's not going to work out.
I know😄😄
Mary Takahashi and that’s just it: they act like they need his permission. DR honestly doesn’t care if anyone takes or doesn’t take his advice. Millions of people have taken his advice and they’ve succeeded.
@@mikenelson8377 and even more have never heard of him and succeded too
Dave "No millionaires brag about credit cards"
*Graham has entered the chat*
I'm entering the chat now too
Still spends under 1% of his income with all those credit cards. Discipline is the key. People with no credit are still broke because they are not disciplined
@grahamstephan
And meet Kevin!
Truuuu.
Plus at 2:20 Dave talks about the psychology of how the ease of credit cards can cause the average person to feel less guilt in spending and spend more but anybody who watches graham knows if he buys anything that costs more then 20 cents he starts hyperventilating and seizing so I think graham, and not just him, are exceptions here
Wow the first minute was hard to watch. Come on Dave, you’re a smart guy. You know exactly what he was saying. He obviously meant using a credit card as if it were a debit card.
Hahaha 🤣
...and dave is lying when he flat out says,;; you can't use your credit card like a debit card''.
my CC has been linked to my CA for over 5 years...
“I have never met a single millionaire that said they make their money from rewards programs.”
*Graham Stephan has entered the chat*
@Tyler he was a millionaire before UA-cam.
Point is Graham teaches you how to maximize rewards on his channel...
I use my credit card exactly like a debit. I’ve never paid any interest in all the years I’ve owned one. If you’re a disciplined person and understand a CC is not free money, you’ll be just fine. I feel the same spending cash as I do using my CC.
Yes, the credit card issuer makes money by offering rewards to the user. However, that doesn't mean that the user can't also make money by using the card. If you're on the edge of your finances and might abuse the card then DO NOT get one. But there is plenty of value to be had with credit cards. I took a trip to Florida and the hotel + flight was all on points for five days. Only thing I paid for out of pocket was food and entertainment.
Sean Pullman young adults should not not have credit cards. they don’t spend enough money to rack up the points to make it worth the likely hold they over spend and get in debt
jr smith there’s plenty of young people who can handle using a cc responsibly and plenty of middle aged people with several cards maxed out. It’s a discipline issue, not an age issue.
You absolutely can but for the target audience of Dave's show the answer is most likely they can't. There are those of us who have a credit card and literally clear the balance within seconds of making the credit card purchase (online transfer) or people who pay it at the end of every month because both are using the card like a debit card and only spending money they know they have and then there are people with no self control who shouldn't even attempt to do so. For me personally I have a credit card which I use like a debit card and the only reason I have it not be a debit card is the fact that there's no fee whereas at my bank there is a fee for debit cards. Once a month I get an email saying my credit card statement is available but there is no payment due. You can be responsible with credit, some people just aren't.
@James Marquis I've never carried debt in my life but watch Dave for the entertainment and experience of other people's lives. Not every single person is bad with money or self control but that's not the audience Dave talks to so of course he's not going to promote something that's dangerous to people who are bad with money.
@@WinterWind
Same here. Use credit card but never had a balance due at end of the month because I always clear what I spend before the amount is due. ( Automatic Online Transfer)
Also, I don't over spend simply because it's a swiped method vs cash method. It's called disciple and only buying what is necessary.
Also, I've never had debts in my life. I just watched Dave Ramsey to hear people call in for entertainment purposes.
When my parents was sick with Cancer, I paid for all their Alternative Treatments (which is not covered by insurance) it's pretty much cash or credit only. No insurance accepted.
So if I have the money to cover my parents cancer treatments, guess what, I don't worry about over spending on a credit cards. Lol
Again, never had debts in my life. Even my house is paid for as well as my two apartments (which I rent out).
Not everyone who tune in to listen to Dave is bad with money.
I do the same... Using real money in public is a bad idea. "but if they steal my debit card I will get it all back." Okay, so while you are waiting to get your money back your mortgage comes thorough, or your overseas and having to deal with real monies being lost. The bank sees your cash the same way you do; a real loss, they are going to deal with as such. We all handle our money the way we chose to. Dave offers one of many ways to do so... Find your path and follow it.... But have a plan, money without a plan is a recipe for disaster.
@@terriesmith8219 Absolutely
@@tdmorgenthaler8384 I don't know a whole lot about fraud or theft reimbursement as I've luckily never had to file for reimbursement however I live in a country where almost no one uses cash and everyone uses EFTPOS cards (literally comes out of your account... like a debit card, but no online payments, hence the credit card for online payment). Anyway, I don't know about other people but cash just annoys me, it doesn't cause more pain from spending it, it's more the anxiety of shoving the coins back into my wallet before the next customer or counting the change given causes me to swipe the card for $1 purchases. I don't spend more or less either way though and even if I did, it's all within my own means, a concept I gather from listening here some people can't understand.
The biggest problem with debit cards is that if the card or the number is stolen then the money comes directly out of your account and you have to fight to get it back. If your credit card or number is stolen they have to fight you to get the money. I have had a credit card number stolen twice and never had an issue getting the fraudulent charges dropped. I have a friend who only uses a debit card and when his number was stolen it took months to get roughly 95% of his money back. When it comes to fighting fraudulent charges I'd rather be the one in control.
Creditcard & college debt is out of control...
Great educational benefits in the military.
My son is about to graduate with 2 degrees physics and math then he is joining the military for 5 years -they will pay all his debt! Great plan for him
That quote about the millionaires is always so confusing.
They will never tell you that because they never intent to become millionaires by using a credit card.
kalek sts Dave has travelled the world speaking to thousands of millionaires. None of them got to where they are by cashing on on credit card rewards and miles. Ditch the stupid cards man.
@@costco_pizza This is a misunderstanding because what you said is my point. They will never tell Dave they become millionaires by using credit cards because if they did used them at any moment it was for some minor stuff and not for rewards or miles so for them credit cards are non existent and that's why they don't talk about them.
I only have debit cards. While I grew up my mother either had the money to buy it or not. And not living in the US helped too. Around here most people have debit cards or pay cash it is very uncommon to see credit cards at least where I spent my time. I did have student loans but following Dave's plan I paid that out quickly. Finished the emergency fund and just started with baby step 4 a few months ago.
@James Marquis As I said to ACR my comment was misunderstood. I have never use credit cards and after finding Dave I'm glad I haven't. But let's say that in 10 years I'm already a wealthy person, I will never talk about how credit cards helped accomplished that because I never used them. I'm with you guys, last year I graduated from university and in one year thanks to Dave's teaching I paid my student loans, completed baby step 3 and 3 months ago started baby step 4.
People never got rich picking up 100 dollars they found on the street.
ACR I want to hear millionaires answer the question "do you have and use a credit card?". Bill Gates has a CC. Get real and stop being willfully ignorant.
I definitely see where Dave is coming from. I used my debit card to purchase a new Laptop and during the transaction my hands were weak and I felt light headed lol. I have two credit cards and when I use them the feeling is not as strong even though my credit cards are consistently paid off when used. I don't believe that credit cards are evil but when you look at people as a whole, there are more people than not that have issues with getting into debt with credit cards. Dave's structure might seem a little "too much" for some but as a whole it's a sure way of staying out of bad debt and creating a host of problems that can take a while to get out of.
This guy is 100% going to keep the card.
As most do
And he will 100% never get out of debt.
The answer is yes, if you are disciplined and pay you bill every month. Here's the thing though, think about how stupid the average person is...now realize that half of everyone else is stupider than that person. My wife and I each have a credit card with a fairly low limit and all expenses are put on them. Dave's stance on credit cards isn't really meant to apply to everyone, it's more of a blanket statement so dumb people won't overspend.
@James Marquis I sure did. Been following Dave for a long time now. Using a credit card doesnt cause me to spend more to try to get "points". I use a credit card because it is safer and more convenient. Dumb people allow a credit card to influence them, so my original point still stands.
@@MMA-mh9uv
Agreed. You're 100% correct. ✔💯💯💯💯💯💯
@JESSICA BRYANT thats what the emergency fund is for...
while plenty of irresponsible morons get into trouble with debt and credit cards, plenty of responsible people do as well. think i'm kidding? watch IOUSA, Maxed Out, and In Debt We Trust. Dave is in one of those for a minute, but none are by him or about him. also watch BBC special The Men Who Made Us Spend and PBS Frontline episodes The Secret History of the Credit Card and The Card Game
@JESSICA BRYANT that's what a fully funded emergency fund of 3-6 months of expenses is for
Using credit cards is a little bit like playing with fire. It can be fun, but if you're not extremely careful you can end up getting burned.
Always good stuff on the, Ramsey Show. Never gets old, it's also interesting to hear people's stories in life.
The two holy rules of credit card ownership:
1) If you can pay off your credit card you don't need one.
2) If you can't pay off your credit card you shouldn't have one.
Conclusion: credit cards are pointless.
I like that theory
A few days ago i tried to purchase a large 65 inch TV for a 1000$,i had the money in my debit card and a lot more but the pain was too big.Paying cash was very painful so i left the store,went home and some time later i was happy i didn't make the purchase cause i didn't need it.A credit card would have certainly done the damage.
@T Hambone By that logic, we all should definitely be using a credit card then, to offset the extra cost with rewards points.
@T Hambone Nice deflection, but no. You'd be a fool to think that.
I was in the same situation, but with a $129 purse, around Cyber Monday. I ended up not spending money :)
This mantalityis the reason people get into cc debt. You should never spend money you don't have no matter if it's cash, debit, or credit. People that use cc wisely would save that 1k up in cash or in savings and then purchase on cc2 pay it off and receive the benefits of the cash back feature.
That’s seems more like a discipline issue than a credit card issue to me
I use a credit card for all my bills except my mortgage , including fuel. I earn points every time I use it and auto pay it every month. Works fine for me because I know that I owe that money each month. Yes its not a path to wealth but every little bit helps , even if its only $1.50 for every $100 I spend. And I pay no annual fee which is a rip off. I still believe this method is fine for most people who aren't stupid with money.
Todd D. Annual fees are a good thing
They are by far the best cards
Dave's a hoot. He will tell you to sell a kidney for $1.50, but will pass on the cash back. He is just spouting nonsense on this one.
You are paying utilities anyways.
If you have a balance of $100, you have to repay $100. If you didn't have that balance, you could have kept the $100, which would help you a lot more than $1.50.
@@Musicienne-DAB1995 yeah just simply never spend money ever. Food? Diapers? Not necessary
An ad trying to get me to finance a new vehicle before a Dave Ramsey video?? NOT IN MY HOUSE!
I got rid of my credit card. Best decision I ever made in my life.
Jonathan Atkinson
Do what you got to do.
Most don't have the discipline.
I personally have been using my credit card like a debit card for over 30 years with no issues.
@@blackworldtraveler3711 if it doesn't come out of you account automatically it's not using it like a debit card. even paying the bill in full every month you've obviously spent tens of thousands of dollars more in the last thirty years than if you paid cash/check/debit
Jonathan Atkinson well done man. Same here. You nor I are going to become millionaires off of airline miles and cashback. Ditch the stupid cards everyone!
ACR Just like Dave said, all those rewards incentives only get you to spend more money. No wealthy person ever spent more of their money unless it created more income. Credit Cards don’t produce income.
Jonathan Atkinson
Already said most don't have the discipline and you have to do what you got to do.
I know many that can't control themselves with credit cards or debit cards.
Credit cards are tools for me and profit.
Those points used to annoy me because I've had AmexBlue and Platinum Visa long before credit card awards thing started. Didn't care either way until I realized I had $7k worth.
Figured out how to use them now and have been paying my monthly Audible and Netflix subscriptions with them since 2012. Amazon made it convenient for me to use them as well with online purchases.
Think I will buy myself the large iPad Pro with a few points for a Christmas present.😃
And mileage awards are useless in my case.
I use my credit card to pay my annual auto/home insurance and personal property tax.
I pay my annual $1700 person property taxes in two weeks and already have $3k cash in my AmexBlue to cover it.
My credit card is my debit card. My dad taught me how to do this long before there were debit cards.
I was also saving since 4th grade and investing with a Schwab account since 10th grade.
You do realize debit card holders paid over 40 billion in overdraft fees last year right?.....and growing each year.
....mostly with the Visa/MasterCard logo so you know what that means?
Dave Ramsey mentioned that last year in one of the videos but said much else about it from what I remember.
That's why I own several thousand shares of of MasterCard and Visa years ago. I bought them around $4 a share....with compounding dividends through the years.....look it up.....do the math.
I watch adults buy pet rocks at the mall in the 70s and never forgot how stupid that was.....had an epiphany realizing people will buy anything even with money they don't have.
Used my credit cards in over 50 countries with no issues,no interest,no penalties,etc..
I make $135k-$160k a year and always lived on less than $50k.
Finished contributing $18k to 401k last month and the extra $1200 biweekly for the the rest of the year will go complete my Roth IRA for 2019 on New Year's Day.
Minimum of $3k a month and dividend spillover goes to savings,investments,emergency fund,etc.
I have a $400k emergency fund.
Started my nieces and nephews at 14 on Roth IRA and give "uncle match" to motivate them.
Currently doing fine on less with $1k biweekly budget because I have no debt.
Have around $5k in cash at home for years. Don't carry cash anymore because wallet damage it after a few months.
I give myself $200 a week allowance to do what I want regardless of whether I use cash or not.
Already have around $25k cash to buy my next used car in a few years and still growing.
Just come back from a week in Hong Kong. Cost me nothing to fly round trip business class because I have free lifetime global flight benefits and and 90% discount on most foreign airlines. I stayed with friends. Spent maybe $300 on my $30k travel budget.
I'm disciplined with finances including everyone in my investment club of 30 years.
Anyway Ramsey already said I was in the upper 2-5% that don't apply in this matter.
That's why I say to everyone in your case to do what you got to do.
Sorry Dave, I love your program but I do not see the difference between the two. A debit card is not a $100 bill either. I've never met a millionaire that got rich because he used his debit card either. I use my credit card like it is a debit card and pay it off every month without fail. I don't use machines at hotels at all because they are way over priced.
Well said Dave! You Shine !
Dave never has a logical response to this question. Just always a long rant to avoid saying, "yes, maybe you can but most people can't so I will never recommend it".
He's given that answer before - acknowledging that the asker is probably a disciplined person who will probably continue using their card without getting into trouble.
The reason he generally doesn't give a more nuanced answer is because people generally aren't wired to accept that they are anything but totally capable of managing their finances and keeping their credit card. If his anti-credit card message allowed for the possibility that one could be disciplined and use credit cards, most of his listeners would reflexively assume that they could do that. When the truth is, they can't.
ASimoneau, So receiving a CC bill that you can't pay is not enough for you to understand, and you need Dave to tell you???? Good gravy! It's been my experience that people who can't handle CCs can not handle a check book or cash in their pocket. If they really need for someone to explain it, I have to question how they two nickels together in the first place.
@@jamie49868 You seem both to understand the reality of the situation and be confused by it, simultaneously.
I kind of understand Dave's position. You have to understand that he is mostly helping people who come out of a financial wreckage in their lifes because of a lack of discipline so he is not gonna say that it's OK to use a credit card.
Very wealthy people, millionaires and billionires, Bill Gates, Warren Buffett should all use credit cards!
Extremely important video! Thank you Dave!
I used to have problems with credit card spending. I opened 7 cards and still have them open. Once I paid off the $4,000 debt I got myself into with the cards, I never got into debt again, lesson learned. I still use a credit card for travel and one for work expenses but I have zero debt on all of my cards (I responsibly pay off the cards every month). I guess I learned my lesson over time but some of Dave’s callers scare me with their $100,000 credit card debt.
It's all about how good you are with money and how disciplined you are. If you're bad with money, credit cards will make your financial life exponentially worse, in fact they are designed to do exactly that. If you're good with money and disciplined, credit cards are free money, and no personal finance guru likes to leave free money on the table. The reason the rewards exist is because of all the Americans who are bad with money making the CC companies tons of dough. For the disciplined users, they can take advantage of this.
100% CREDIT CARDS FOR DECADES...paid in full every month...$1,000's in rewards that CASH fails to pay
If you're using a budget though, Dave's argument is not relevant.
Erik Rohr preach it!!! Agree 💯
Be smart with your money, live by your budget, and pay off the cards to simply leverage your money for points, miles, and cash back. That’s all! Haha! I don’t get why no one understands this.
Caller: I want to use a CC to get the reward points for my 250k student loan, 456k mortgage and 47k sailboat.
Dave: Sell the car.
Lol
Yeah, I went shoe shopping with cash yesterday (All my shoes are run down) and I was maaaaaaad letting go of that cash, lol.
I knew Dave was going to mention yet again his "never met a millionaire who" story. Those same millionaires didn't get rich using coupons but I bet they still use them. No one ever makes the argument that people get rich off credit cards. Give it a rest Dave lol
Yeah I'm so tired of this argument too. It's not even a good one.
But it's fine. Dave's audience are people who can't -- for the life of them -- know how to control a credit card or maintain a budget. And once they get out of debt, he doesn't want his viewers to go back to credit card cards -- even responsibly -- since they're already associated with everything negative they just went through them. And worse they could rebound into debt again. He doesn't want anything to do with it. Which I think is great even though it's flawed.
I understand what Dave is saying. Logistically it makes sense to use credit cards if you are going to use it on things you would have purchased ANYWAY and didn't purchase something more expensive just for the points.
CARLOS GUTIERREZ you guys just don’t seem to get it. What millionaire on earth has gotten to where they are through airline miles and cashback? No, ditch the stupid credit cards and start getting yourselves out of debt!
YES Carlos!!!!! This is my feeling too!
@James Marquis You didn't listen to a word Dave said. Carlos brought up a point Dave didn't mention. Maybe you should re-watch Dave's video, because you obviously didn't understand what Dave was saying.
But he did the biggest study of millionaires EVER, and he has DATA POINTS. And, most important, he has books to sell
Dave did have a millionaire call in from South Carolina worth 4.3 million...he used credit cards and paid them off every month....but Dave glossed right over it....I receive all my income in cash...it wasn't til deposit it all first and then used a debit card was I able to get control of my spending....cash always spends easier.
The issue I have with this advice is that if your debt card info is stolen your money is gone and you have to fight to get it back. There are legal protections credit cards have that debt cards don't have. The bank may say that they extend those protections to debt cards too but it's still your money that you have to fight over. Keep control of yourself and pay it off. Oh, as a side note you get rewards too. If you have no control then don't get a cc card until you learn to control yourself.
"That's enough to send you and twenty thousand of your friends to Pluto and back" 🤣
I make a payment with every credit card purchase. I spend $4 for a gallon of milk at the grocery store, I make a $4 payment immediately to that credit card. For 2% cash back, by the time December comes around, I have Christmas paid for with the cash back I have earned. I see no harm in that when I pay the credit card directly after a purchase and deduct it from my checkbook.
You can still swipe you debit card even If you don’t have money in your account. The bank will allow that and just charge a fee
I’m going to Kenya next month using reward miles on my credit card. I pay it off every month. You have to be responsible.
Exactly. Dave just assumes that everyone is stupid with money.
Me too. Long as you pay it off every month and collect the miles off of it. But I'm still on step 2 so... Maybe I'm wrong lol
cumminsdieselable yes you are lol. Hate to break to you , but continuously going into debt every month and paying it off right away does not build wealth. The opposite actually. You tend to spend more than you typically would or need to. People get motivated by the little bones credit card companies throw at you they call “rewards”. They aren’t free, you had to spend money to get there. You could’ve just saved the money and put it towards wealth or paying off debt
But I bet you spent extra $$$ here and there over the budget using the credit card.
always charge business expenses to a line of credit with the highest cash back percentage possible. I agree with the benefits of using exclusively debit if you're saving every extra dollar in save, but if you're building or expanding a business to create your income, the cash back adds up and keeps expense reports and taxes simple.
Funny, I knew all of this info that Dave is telling us but I kept finding a way to justify it. So glad I found this channel
I get what he's saying but that's why you set a budget and if you were buying the stuff anyways why not get cash back. This is one of the only things I disagree with Davon. I think if your discipline and you have a plan in place it can only work in your benefit to use the credit cards money. I have been doing this for over 10 years and have not paid a single dime of Interest. The cashback on credit cards far exceeds any interest I would make of keeping money in the bank and living off money or debit cards
DJSHARK9000 preach it!!!! I agree 💯
As long as you have self control and are responsible with your money and are able to budget yourself. Then you can easily use your money for just a little bit of leverage for travel points, miles or cash back!
i still disagree with this answer. As a financially responsible individual, i have not increased my spending habits since getting a credit card and now i travel for virtually free soo...
You are the exception rather than the rule .
@@WISHBONEL7 dave Ramsey is not god hes wrong on this one
@@DSNCB919 The advice that Mr. Ramsey gives will work for most of the people , most of the time . If it did not , then the credit card company's would probably go out of business !! . What part of that do you not understand ?? .
@@WISHBONEL7 what evidence do you have other than him just saying so? It clearly makes more sense to use credit and pay off before the balance gains interest
@@DSNCB919 What percentage of people actually do that ?? . Do credit card companies go out of business , or have to get bailed out by the government ? .
I take my hat off to you if you are one of the ones that actually pay your balance off each month , yet just keep in mind that many people don't , and the calls that are on Ramsey's show , are a microcosm of USA society .
I disagree with dave here. I pay off my credit card daily and only use it on things i would pay any way, like groceries and gas ir anything else i will need to pay. I dont see a downside. The cash rewards has really built up and i will invest it. I dont buy things i dont need.
Exactly- cash back card and pay it off each month.
This is so true Dave, i just took all my CC reward points now, exchange it for an item and I close my CC at the same time. no more CC! Debit and Cash now.. In my country i never used any CC only cash but when i came here in Canada they introduce me into using CC. i really regret falling into using it, but i learned alot from it. Experience is really an expensive teacher to have. lol. I'm really glad we have people like Dave. helps me renew my mindset and a heart to help people in there finances.
He hasn’t met Graham Stephan :P
Yes, there is a difference between becoming a millionaire from credit card rewards and how many millionaires that do use credit cards. Especially for business, if you are spending 100,000s why would you not want 2%?
Heck, I want 2% if I'm spending $1. Dave advising people to blow off free money is irresponsible.
@@jamie49868 it is not free money. You buy more stuff with a credit card
@@nsbioy No. You may buy more stuff, I don't. If you don't have discipline, it doesn't matter the method of payment you choose. If you can't walk into a store and only purchase the items you went into to get, you will be broke and have trouble paying the electric bill. I have never walked in to buy underwear and walked out with a bike. Credit is extended on all sorts of things you don't think about. So if you can't control yourself, you will always have problems when those bills come due.
@@jamie49868 nothing personal, but you sound like a person who started using an addictive substance and says that he can quit at any time. Guess what? You are right, some people can and do. Look where people end up on average, though. A credit card is a financial cigarette, plain and simple.
@@nsbioy No offense, but you sound like a person who can not resist temptation. If you lack the discipline to use a card properly and are constantly in financial trouble as a result, then by all means, you shouldn't have one. I'll give you an example of my usage - I recently purchased new kitchen counters and granite tops. Total cost about $14,000. I put it on my card, went to the bank the next day and paid it in full. Cash back was about $210 (my card is 1.5%). My card has $0 fees for good customers, so there is no back end charges. I guess you don't want to save that extra money. I do. Peace.
I just starting listening to dave ramsey. I found his show by accident and only 1 person I know of all the folks I asked had heard of him, smh. Anyway, I agree with him on this point. I was excellent with paying my 1 and only cc off monthly, so no fees ever. This week, I convinced my husband to put the cc away and start using the envelope method. I am 100% sure prior to this week, using our credit card for groceries, we always went over our monthly budgeted allotment. Using cash only, no way that will happen and even better, I do have a more visceral response to laying down cash.
Dave is right. I always used to pay my c/c off at the end of the month, usually £600-700. I paid no interest and i thought that was ok. I got on a budget. Every penny is decided in advance and now i have 5k saved up since i began in feb/march. When you cut up your card and implement a budget you spend less. Never going back.
Like you said you implemented a budget. Isn’t the reduction due to the budget?
nemo Keep the budget AND the CC. It’s really simple
Amen
@@butteredbread1756 Why?
@@Musicienne-DAB1995 Because the CC wasn’t the issue. It was the lack of budget
Using a credit card is perfectly okay and overall is actually smarter if you pay it off every month. Credit cards have extra protections that debit cards do not have. If a company screws you over or someone steals your information it's a lot easier to deal with those situations through a credit card. Unfortunately there's just a lot more legal protection with a credit card.
My number one concern is your financial health and well-being. Protecting yourself with a credit card and also trying to have a excellent credit score in case you do need to borrow money, because a major disaster happens in your life is smart.
Yes omg yes. How does Dave not understand this. I use for my business and get 3% cash back on every purchase with no annual fee and usually get around 10K cash back at end of the year. Not saying Dave is stupid but I trust the guy in real life who the movie “Catch me if you can” is based on. He said exactly the same thing you did about the theft of a card.
Vlad Xavier yes it has same insurance but now you have to fight to get your own money back not simply make a phone call and get a new credit card 2 days later. It’s much more complicated to get money back from a bank than it is for a credit card when fraud happens. I’ll send you a link to show you this from an expert. So no I’m not wrong
Question: if i use the card but pay it within my app on my phone each day (not every month but each day) is it worth it? I think yes. In 4 years I've payed 0 in fees but gotten 3% cash back on every purchase I've made and I put everything through my cards. It's like a 3% raise in my salary.
A lot of people seem to be missing the point. He's not saying millionaires never use credit cards. Rather you will never become rich using them. Statistically, when you eat out with friends, you tend to eat more food than if you stayed home. Similarly, people who use credit cards often spend more freely than cash/debit users. It's behavioral. If you pay 100% of your bill every month, it doesn't apply to you
Best explanation yet Dave. Thanks for not just going on another rant (as entertaining as they are...) ;)
The statement “No millionaires have made their money by credit card points” is true, but also irrelevant. If you are diligent in paying your CC statement every month, and wise with your purchases, you can certainly win with a credit card. I use my CC for all regular monthly expenses that are required to be paid, but are largely non/variable (utilities, cable, cell phone, internet, etc.). I use my points every 1-2 years for airline flights for our family vacation.
I’m in BabyStep 7, and I love Ramsey, but I disagree with this one.
It’s so stupid. Obviously no one has gotten rich from coupons but that doesn’t mean you shouldn’t use them.
I wonder how many people in this comment section that disagree with Dave are real millionaires?
Multimillionaire here. I put everything on a cash back card.
In 33 years, I've never paid a penny in interest or fees.
Almost all of us who are "Everyday Millionaires" use credit cards.
Liberal Defendant well I would expect that ratio as most people who are broke come to him for advice. I’d think that most millionaires would spend their time doing other things rather than watching Dave Ramsey’s show constantly.
And as of 2017 not including 2018 American’s have racked up over 1 trillion in credit card debt, so I can see why he argues against anyone using it, especially since it does not seem to be working for the majority of his callers. Yes, there will be a few millionaires that use credit cards, but we all know his show is tailored towards people who are in debt, so the average millionaire probably wouldn’t spend time watching his show to begin with.
libertarian4323 I can see that. I am not saying anyone is wrong, but I will say I can see why he tells the average caller not to fool with them considering American’s have racked up over 1 trillion in credit card debt. As you can see based on those numbers it does not seem to work out for the majority of Americans. I can see where it does work out for everyday millionaires, but I also understand his point about millionaires don’t use it as a form to build wealth. It’s really a silly argument from both sides, but I do understand both sides.
Mr. Wick that’s great. Sounds like you are good at budgeting, saving and investing money which is what he wants everyone to do. The average caller does not understand the latter which is why he is against using a credit card.
Dave Ramsey is right about this because most people nowadays don't have any discipline. I myself though have made thousands of dollars in cash back from only using a credit card for all of my purchases. I didn't fall into the Trap of buying things I don't need because I used an app for my bank account and every time I purchase anything with the credit card I pay the credit card bill immediately from my checking account. Thus, I always know exactly how much money I have so I never overspend and I never have a credit card balance but I'm averaging about $77 a month on cash back. Each year I use the cash back dollars to help pay my property tax.
I look at Dave's philosophy on finance like level one- ground level financial education. Great for the general public. You can stay here and be okay with next to no risk, but going beyond this level of financial education is an individual choice and requires immense responsibility. Choose wisely (based on knowledge of self).
Strongly disagree with you Dave. Use the credit card and pay it off. You get rewards and really good credit score. I started my rewards card it's going well and I will be cashing out in 2 months. I still feel pain using my crediy card, that friction makes me remember to stick to my budget.
would you then agree that not everyone have the same self control/discipline like you do? if so, then that's exactly what Dave is talking about.
Millionaires also didn't get all their money by clipping coupons, comparison shopping, choosing a savings account with a higher interest rate, and all the other little things we do that boost our finances. That doesn't mean we shouldn't do the little things. I agree that the average mindless consumer spends more with credit cards, but disciplined people like me who use a strict budget and have self-control spend exactly the same with a credit card as a debit card. It's only 2% cash back, but that's 2% more that i can put toward investments.
BMO, Dave would be the first person to tell you to use a coupon for the rice and beans. He is wrong about this. The question should be do millionaires have credit cards they use properly. Dave would get a totally different answer, but it wouldn't support his argument. It all adds up. Dave should know better.
@@jamie49868 "The question should be do millionaires have credit cards they use properly." Exactly, perhaps some cause vs effect "mistakes" in the data analysis.
I bet 99% of the millionaires out their use credit cards to buy stuffs, except that fool Floyd Mayweather Jr. lol
He knew the answer lol he wants permission.
I use a credit card to pay all my expenses and pay the balance off every month. I did not have a problem, because I'm financially disciplined and can control my spending. Probably, the compulsive spenders and shopaholics should not have credit card
But you're not financially disciplined enough to get completely out of debt, and to stop losing your income just to repay debt every single month, only to start the whole cycle again next month.
He didn't answer the question. He was asking to use a credit card as his debt card. To get the cash back and or point. You have the same spending habit with credit card and debt card. Why not get the protect that a credit card has over debt card. Plus most people don't carry cash anymore.
Richard Feinburg he did answer the question but just jumped straight to the psychology of spending. The concept of friction that Dave explained is true and has an effect to most people over time. Meaning, initially one that uses the credit card like a debit card will be diligent and buy things they only would have brought anyway and no more. But over time, most people ( and I stress “most people”) will loose that discipline and the psychology of friction will take hold and lead us to spend more. Only those who are super diligent about their spend over a long time can benefit.
He also touched on how its often not worth the reward. Most cash back or point rewards are worth 1-3% so in order to earn enough points book a $1000 round trip airfare entirely with points, you would have to spend ~$50,000 on the card (2 points per dollar rewards card, 1 redeem point is worth 1 cent, which is also equivalent to 2% cash back) in above example you need 100,000 points to pay for the $1,000 plane txt. So you have to spend $50,000 on the card to earn the 100,000 points at 2points per dollar aka 2x point rewards cards.
Dave Ramsay's work which is deeply rooted in reality and eternal principles instead of in financial theory is really ground breaking.
When he says: your income is your most powerful wealth building tool- is really something. Forget about credit card miles, the spread on your investments, etc just focus on these simple, sequencial, and sound steps and you'll get ahead -amazing!
This is GOLD!!
Credit cards: It’s the objects fault
Guns: it’s the owners fault
Whoa people still use logic in 2019? 😭
Keep my guns out of this conversation
Exactly
My wife and I use a credit card for everything that gets paid off every month early. We haven't even paid one cent in interest, it keeps our credit active and in good standing, and so far we have over 1200$ in cash back rewards. We aren't getting rich off of it but we do have an extra 1200 that we wouldn't have had otherwise. We have had the card about a year.
311allmixedup stupid decisions
You should look at point based cards a lot of time you can get way more points on everything compared to cash back cards
Downside is though you’re more limited with your options and cash is king
You would have saved double what you earned in "rewards" if you'd use a debit card.
Ashley Dawson how stupid are you?
If you were already going to make the purchase anyway
If you use a credit card you get something back
When you use debt you get no purchase protection and no rewards back or extended warranty
Extended returns
Bunch of things
Ashley I just purchased new kitchen cabinetry. I saved up to do so. I put the whole $8,437 on the CC. I paid the card in full the next day. Either way I was going to take out 8437, but since my CC is 2%, I got to put back $168...how stupid of me. Ash, I can't wait to make the same mistake when I pick out my granite tops. Good gravy you are dumb!
jamie t what a beautiful comment
God Bless You
@7:45 lol... the cash buyers did not spend 178% less... that's impossible (100% less=zero spent)
The credit card buyers spent 178% more (8:00), so that means the cash buyers spent 64% less.
Dave is always calling people stupid. Someone has to call him out.
If I spent 40 one month then the next month I spent 80, that's a 100% increase.
If a cc buyer spent 8 at a vending machine and the cash buyer reduced by 178% its 4.49. I work in business and this is done all the time.... likewise take 4.49 and multiply it by 178% and you get 8.
Dave, all it takes is discipline. I log all credit card transactions within a couple of days and adjust my bank balance for the next payment accordingly, so I treat it as cash. Also, I just submitted my expense report with $10,000 of business expenses and already have the money in the bank to pay the next Invoice.
I cancel and/or resist corporate credit cards wherever I go because people are not accountable and rarely provide the proper docmentation.
I started using simple bank which lets you set “Goals.” They are basically like digital envelopes inside one checking account. I find that using my debit card from that bank I immediately see how much I have left to spend and to me it seems I spend less than with credit cards or cash.
Honestly is think simple bank is the best for tool to do the envelope system digitally. Just go to simple dot come /friends/CFGDT5K
Just Got APPROVED For The Chase Freedom Less Than An Hour Ago
I just got my AMEX blue cash 👍🏾🤣
I just cash flowed a trip to Disneyland and earned rewards points because my bank offers a debit card with rewards points on every debit card transaction I make.
You guys didn't get the memo ehh?
Lol freedom yeah 😂
Now spend all the credit limit and never pay back 😂😂😂
Discover card can give up to 5% back and if it your 1st year they match u at the end of year basically getting 10% back I’m not trying to get rich with my card but if I’m gonna buy something that $300 why not get some money back
@Liberal Defendant they reel you in.... correction please. No one forces you to use that cc. You reel yourself in, not the cc company. End of the day.... if you have cc debt. You did it to yourself. Not "they".
It's just the group of people Dave caters his show to. COULD you use a CC and pay it off monthly? Yes. Does a credit card cause you to spend more? Yeah...if you aren't sticking to a budget. I use my CC for my recurring expenses like car ins, electric, etc and pay it all off monthly. I've paid off 70k in debt in 18 months. Dave has his concrete plan because of the majority of people he gears his show to. These people are not responsible after starting his plan if theyre still allowed to use CC. That being said, my fiance is on the Dave plan and because I understand her previous spending habits, she is NOT allowed to use CC. She does cash or debit with everything.
kenz200g I just purchased new cabinetry for my kitchen. I saved up to do so. I put the $8,437 on my card, went to my bank the next day and paid it off. My card is 2%, so I got $168 back. Either way I was taking $8437 out, now I get to put $168 back in. Yep, that sure was a dumb move on my part...can't wait to charge the granite counter tops and make that same mistake again.
Watch this video dummie.
@James Marquis you can listen to what he said and still disagree with him. It's his opinion. I feel the pain with credit just as much as I would a debit card. I log in my online account and check my balance daily.
I believe wholeheartedly what dave is saying... however spending cash feels better for me because my my bank account didn't go down. Spending cash is still painful
Dave always uses awesome analogies! Hes a very smart man.
?
I use my credit car for all my purchases and pay it off in full. Never a problem. I have a lot of cash back rewards
Same. 😁
he is trying to make the point that you always spend more when using credit cards. even if you pay it off at the end of the month and pay no interest....you still are spending more money or people tend to be loose with the money if it’s not cash. I have witnessed people in my payment line with cash in one hand and a credit card or debit card in the other hand and they always seem to have a easier time forking the card over for payment verses handing me the cash. It’s like they deem the cash more valuable then the card........the two thought processes are completely different. I see this behavior over and over again as a cashier.
I agree with Dave but honestly if you know this information and still wanna use a credit card then do you. Idc. I don’t use credit cards because I don’t support that industry.
Hey Dave. I use my rewards from business travel for my vacation each year. Money that I’m required to spend regardless and get reimbursed for allows me to enjoy myself each year for near free. I’ve saved about 10k on vacations in the last 4 years. I also have more security around the card. I don’t have time to explain that to you as the intricacies of digital security will always be past you.
I tried doing just using debit card after paying my credit cards off and it’s almost impossible to budget when you have young kids. We blow the budget every single month so I said F it and just starting using my bank credit card. Less stress for me, just have to pay it off every month and I can get points. I suggest using a credit card from your bank so that you can transfer payments directly from your checking account as soon as you get paid. I get Dave’s reasoning but you just have discipline with this method.
Um we have 2 very young kids and we do not blow the budget every month, seems like you have a problem. Do not blame your spending habits on your kids!
I always find it humorous when people comment and say “I am the exception with my credit card, I pay it off every month, and I collect the points, therefore Dave is wrong and I am right”
Ok? Cool story, you do you but the rest of us aren’t going to do it. Either way, do what works for YOU.
Everyone's the exception to the rule until they are not
Church collection now takes credit card and apple pay....takes away some of the pain going to church
🤣
I just skip church altogether, saves me 10% of my income every month.
I use my credit card to pay my bills before they're due, typically on the 1st of every month, while having my bill notebook showing that the bill isn't paid. When payday come around I pay the bills that are due, which is money put on my credit card, then cross that bill off my list showing that I have paid it. I gain points by this and use them to get so called discounts on everyday items i.e. diapers, wipes, baby food or household items.
You could have gotten the same discounts by paying for everything just once with a debit card and getting coupons.
Excellent video👍👍👍👍👍👍👍👍👍👍👍👍
Yes, you can. You got to have will power. You can’t be weak.
I’ve been doing it and I now have a free flight to Germany for my study abroad trip this summer. Just be responsible about it and you’ll be fine but the moment you become irresponsible cut up the credit cards and pay in cash.
its not really free. you paid
@James Marquis Do you get paid by the hour to copy/paste, "Wow, apparently you didn't listen to a word Dave said. SMH!" replies for every comment that disagrees with Dave Ramsey? Or is it a flat-rate?
rosen380, that idiot probably pays to post with his credit card. Peace Bro.
how I do it is, I check my checking account before I use my CC and if I can't afford to buy that items multiple times over, I don't use my CC
To me, the rewards are just a way to do extra, not the way to accumulate wealth.
Also, in my brain when I pull out a credit card - it is painful because I mentally deduct that amount from my checking account. When I get home I set up a payment for that amount in my bank's bill-payer program & assign the purchase to a category in my budget. I don't wait until the end of the month. I haven't paid a fee to my credit card company in decades. Credit card can be a tool as long as a person is mature & disciplined in their use.
Trying that is difficult and stupid. When you use a debit card, you can only use money you have. When you have a credit card, you’re using someone else’s money. Money you probably don’t have. If you feel less pain from a debit card since it doesn’t feel like you’re losing money, using a credit card causes even less pain because your bank balance doesn’t even go down. Imagine being halfway through a paycheck and you’ve already done your spending on groceries and bills and supplies on your credit card and you lose your job and it’s not enough to pay off the credit card. OOPS.
TRYING TO USE A CREDIT CARD AND PAY IT OFF AT THE END OF THE MONTH IS STUPID. You CANNOT argue that you don’t spend more with credit cards, YOU DO, you just justify it as responsible spending.
Credit card is stupid. It’s a debt card. And credit companies are working to make it so that paying it off every month will hurt your credit instead of help it. They want the FICO score to keep you in debt so your $100 grocery run costs you $112, so that your $1,000 laptop costs you $1,300.
Using a credit card is STUPID.
The argument that humans dont have the mental capacity to not spend money they dont have unless they literally hold it in their hands is ridiculous. You have to hold yourself to a higher standard. Youve put yourself in a frame of weakness that you will never succeed from.
Gambling with gaming tokens is a lot easier to go "all in" rather then using cash
I pay my bills electric, car insurance, groceries etc... Also my business purchases are made with credit cards like a debit card payed off as soon as a purchase has posted. No toys, nothing unnecessary. I have to disagree with with Dave on the credit cards. My annual cash back is around 10k. Here’s another thing, if my credit card gets stolen no big deal I call and get a new one and let them sort it out no problem I’ll have a new card in 2 days. If a debit card is stolen now you have to fight to get your money back and I’ve had both happen. This is the best about the cash back, IT’S TAX FREE. It’s a rebate. I agree with Mr. Ramsey on everything except the credit cards. If I don’t have the cash on hand to make a purchase I DO NOT BUY IT. It’s really that simple.
That makes so much sense.
Dave is treating credit card with unplanned purchases only. What if you plan 50$ a month for personal purchases and you buy 50$ worth items online? There was no “impulse”. You pay back your credit card after.
Credit cards can be used as a tool, unlike what Dave says
It's a good point. I think being on a budget is probably the most important thing
no one is saying you don't buy things on a credit card you wouldn't normally buy anyway, but everyone spends more using a credit card than if they used cash or debit
@@eatpigsnot Well, Dave says that lol. I don't know what you have been watching.
No judas, not everyone spends more. Sorry that you lack the self control and discipline required to act responsibly with a CC. Not everyone is so afflicted. Want some advice...take financial advice from those who can manage a CC properly, not from those who can't. Peace!
@@jamie49868 everyone overeats at the buffet, everyone spends more using a credit card. not on every single transaction, but in the long run overall. stop thinking you're above it all. you are not
Completely disagree with Dave here. If all a credit card did was provide 1% cash back on purchases, I might agree with him. But it does so much more:
-Sign-up bonus: my most recent card paid for my trip to Hawaii with its sign-up bonus.
-Rotating categories: up to 5% to 10%+ cash back on certain purchases.
-Credit score: paying it off each month builds credit.
-Travel protection: travel insurance built-in to the card.
-Reduces risk: credit cards carry the least amount of risk in the event of them being lost/stolen vs. cash and debit.
Dave advocates to not have a credit score as if you're financially set you pay everything in cash
@@sarasarah3404 That's an even more ridiculous ideology though. Pay for your house in cash? Uh, no thank you, when I can get a low-interest (thanks to my high credit score) 30 year fixed rate mortgage and invest all that money for much higher returns.
Even for cars, my brother got a 2.35% loan for his Tesla. Could he have purchased the car in cash? Of course, but that would have been stupid. Why have money tied up in a depreciating asset when it can be invested instead?
Dave's only counter-argument to this is "I have never seen someone become a multi-millionaire because they borrow money at low-interest and invest it." That's a stupid oversimplification of what's going on.
@@airops423 I agree wth you. I think most ppl pay off their mortgage during the debt snowball then just heavily invest remaining income. And only use cash for everything.
@@sarasarah3404 Paying off your mortgage early often doesn't make sense though, especially with today's low interest rates. Much higher returns elsewhere. The only advantage of paying off your mortgage early is if you have like a zero risk tolerance and need a guaranteed return (albeit a small return since it's low risk, low reward). Maybe if you're retiring soon this is a good idea. If you're in your 20s or 30s and bought a house, it's generally a much better idea to take on a bit of risk and invest the money in a diversified index.
@@airops423 agreed.
Adding insult to injury, when you buy anything from a vending machine you pay at least a 75% mark up on the item.
The Carnegie Mellon studies Dave refers to how spending cash triggers pain in the brain analyzed through MRI and spending on credit cards lessens this effect is nearly 30 years old. Times have changed Dave! Most people today view digital currency as just that - currency. I would be quite surprised if the same set of studies was performed today that they would yield the same results.