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https://www.youtube.com/watch?v=Bwl4jyl1hLs
After watching this video, I think he has some interesting points, though I don't agree with everything he says. Maybe I'm opening a can of worms here, but I was wondering if any of you guys have read or listened to his stuff and wonder what you think.
I watched the clip and tried to make sense of what he has said. For one thing this man is rich and has made a name for himself. Of course he does not have a problem obtaining things because they are all in his business name. A normal guy like me would not get very far if I did not have a credit card.
If I gave my opinion of Dave Ramsey without filter then I'd likely get banned here.
That said, there is populance that use his methods (and outlook) to their advantages.
He's a bit of a shock jock. Part of his living is saying wild over the top stuff -- e.g. preposterous stuff like EVERY person should cancel all of their credit cards.
That said, there's certainly something to be said for the end of the spectrum he's on. It's easy for people who are "pro" credit cards to be unable to see the hidden costs of CC use. And this is not the obvious one: i.e. carrying balances and paying interest, or cards with big annual fees. The fact is that credit cards induce people to spend money that they would not spend if they had to physically pull the money out of their wallet. There is something about the swipe of the card that hides the "hit", and there is something about having to part with a $20 bill (by way of contrast) that is actually painful. This has been proven in studies.
And "rewards" cards treble or quadpule the effect. They induce people to believe that they are benefitting by going out to eat, going on vacations, etc. This can be quite clearly demonstrated mathematically to be untrue (the 2% you get back from a resturant meal paid for with your Citi DC, for example, is vastly less than the extra cost compared with groceries) and yet we FEEL as though the card is rewarding us, and we spend accordingly.
So the advice of the Ramseys of the world -- that you will ultimately save far more money if you cut up your cards -- has some basis.
That said, I obviously land on the side of being pro credit. It's just that it's easy to underestimate the need for credit users to focus on being extremely cold and deliberate and INTENTIONAL about keeping their spending low. Not their "utilization" but the actual dollars spent -- intentionally monitoring every purchase and asking themselves if they actually need it.
1) He makes his living by helping people who find themselves unable to use credit cards smartly and responsibly.
2) He takes it a step further by painting it as black/white: either you use credit cards irresponsibly by paying interest and sinking in debt, OR you don't ever use credit. According to him folks like us probably don't even exist, or the percentage is considered too miniscule to matter.
I don't have any problem at all with #1. Some people do genuinely need to cut up their credit cards and never look back, similar to how alcoholics, smokers, and druggies tend to need to quit and stay far away from the subject of their addiction for the rest of their lives. I fully applaud and support any individual who's identified any *thing* they need to stay away from, as well as any key people or programs that assist them in that endeavor. I haven't paid a whole lot of attention to Dave Ramsey but I've never heard anyting to indicate his budgeting advice is anything less than solid. You're going to help people who suffer a problem I don't have? Fantastic!
...just don't insist that I have that problem too, please. This is why I take issue with #2. Quite frankly, I have no room for black-and-white worldviews in my life. It reminds me of my family who were conviced I was on the slippery slope to alcoholism when I began drinking 1/4th shot of vodka each night to help me sleep. True story. "Moderation in all things" is wise advice to live by, and when someone finds they lack the self-control for it they're quick to assume "everyone is like that' because it reduces the guilt factor.
So, I just ignore Dave Ramsey and I'm supportive of anyone who finds help through him. And when my circles share what they've learned and gained from his methods, I share what I've learned and gained from my methods.
Sometimes a newcomer says it best. Nice going!
Sounds like some reasonable thoughts about the guy. I take it that the people who seek out his advice are the kind who've really hit a roadblock with debt. Those are the people who really don't need to use credit cards since they don't have self-control.
I agree that spending with plastic will cause you to spend more, and I agree that rewards points really aren't worth chasing ($2,000 in spending to get a $20 gift card. lol). But I thought it was a little extreme when he suggested that credit cards are 100% bad. I know from experience that I was given a hard time by Alamo when I needed to rent a car while on a vacation in Florida. I had just gotten my bankruptcy discharge two weeks prior, and I didn't have a credit card on me. When I got to the airport, they demanded a credit card and would only take my debit card if they saw my itenerary. I spent a couple minutes holding up the line digging into my email on my phone to prove to them that I had a return flight.
Just annoying. I got a First Premier card (a necessary evil considering my recent discharge) just so I wouldn't have to go through that again. (I've since gotten better cards and cancelled the First Premier).
Dave Ramsey is like an AA program for people in debt. It is a tough love approach that some people need. It works for some and so more power to them.
Something I personally find troubling about Dave Ramsey is how he has woven his advice with all kinds of biblical quotes and passes his advice as being based in a higher power. I have no issues with religion or religious people (at all), but Dave Ramsey has gotten very, very rich off of his programs. He reminds me of the preachers who fly around in private jets and live in mansions.
Dave Ramsey's program is heavily marketed through church congregations and the churches get a cut of what their members bring in.
It is easy to live with just your debit card, and I absolutely believe he does, when your net worth is $55 million --
http://www.therichest.com/celebnetworth/celeb/tv-personality/dave-ramsey-net-worth/
His house is worth $9 - $10 million, though he (wisely) bought it for $1.5 million during the 2008 crash.
http://www.coolsprings.com/news/dave-ramseys-house/
And I will bet you his wife carries a credit card for when they travel!