In this audio-remastered episode, Justin Vacula critiques self-proclaimed financial expert Dave Ramsey’s views on credit scores and debt.
Vacula argues that Ramsey’s negative perspective on credit is misleading and fails to acknowledge responsible credit usage. Justin explains how individuals can use credit cards wisely to build their credit scores, earn rewards, and save money without falling into debt paying interest.
Vacula emphasizes the benefits of leveraging credit for various expenses while debunking Ramsey’s claims about the necessity of avoiding credit entirely. The episode encourages listeners to utilize credit responsibly to enhance their financial well-being.
This episode is a response to The Ramsey Show Highlights’ video ‘How to Improve Your Credit Score Without Debt’ (https://www.youtube.com/watch?v=3k0ObI4OBbY&t=0s)
Timestamps:
00:00 Introduction to Travel Rewards
00:33 Critiquing Dave Ramsey’s Credit Advice
01:27 Understanding Credit Scores
02:42 Debunking Myths About Debt and Credit
05:38 Benefits of Responsible Credit Use
07:59 Dave Ramsey’s Misconceptions
09:54 Real-Life Examples and Counterarguments
14:39 The Value of Credit Card Rewards
31:17 Dave Ramsey’s Out-of-Touch Criticism
33:37 Leveraging Credit for Business Growth
34:56 Building Credit: Myths and Realities
35:41 Debunking Dave Ramsey’s Arguments
36:37 The Benefits of Responsible Credit Use
38:34 Real-Life Examples and Counterarguments
45:32 The Unrealistic Nature of Cash-Only Living
55:33 The Power of Credit Card Rewards
58:18 Conclusion and Final Thoughts
Show notes:
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Rough Transcript:
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I’m here once again for another live response to Dave Ramsey. Not scripted. I’ve listened to this video a few times and I’m gonna give my response to it. I hear this a lot: Dave Ramsey, he’s this great financial expert. He knows what he’s talking about when it comes to credit.
And when I criticize him saying, look, he’s missing the point. He’s not accurately representing credit. Many of his fans say, Oh, he’s only talking to people who can’t control their spending, who aren’t [00:01:00] responsible with their money, who can’t handle credit cards. But time and time again, I say, no, he’s just not even giving you an accurate picture of what’s going on with credit cards.
He’s using this word debt in the video, which we’ll get into that he’s really not defining that well. And he’s not giving you an accurate picture of what’s really going on when it’s coming to credit cards. He’s not even understanding the basics of a credit score, or as he says, a FICO score. So let’s go ahead and respond to this video.
How to improve your credit score without debt. By Dave Ramsey, I’ll give you a way to improve your credit score without debt as
we get through this video. Diana follows me at facebook. com slash Dave Ramsey. How can someone improve their credit score?
Okay, so just to note here, Diana on Facebook didn’t say anything about how Diana is in debt, about how Diana is paying interest, about how Diana is overspending, anything like this.
It’s just a simple question, how can someone improve their credit when there’s no debt? So, my [00:02:00] response would be, use credit responsibly. Charge things to credit cards, pay off in full before there’s any interest, and you will improve your credit. Your scores will be in the high 700s. You can even get over 800s.
I generally don’t advocate for credit scores in the high 800s because I find opportunity cost. Instead of trying to get this really high score that doesn’t even matter, you’ll be fine in the high 700s. 810, 820, whatever. It’s not going to give you much advantage over a score like 790, 780 FICO score, Transunion, Experian, Equifax, whatever.
The case might be, it’s a little bit of a side thing here, but you don’t have to go in debt. You don’t have to be paying interest to have a good credit score. Dave Ramsey doesn’t really define what it means by debt, but as we’ll hear later in the video, he says that if you have credit, you’re paying money to the bank, you’re paying interest, you’re paying hundreds of thousands of dollars, I believe is what he says, but he’s not giving you a picture of pay.
You can have good credit without paying [00:03:00] interest, without going into debt. Without making purchases that you can’t afford. He’s not going to tell you that. So let’s hear, you can’t, you can’t improve your credit score when there’s no
debt is what he’s saying here. And that’s a good thing. We need to understand what a FICO score is.
The FICO score has, according to FICO’s website, four elements to it. How much debt you have, the kind of debt you have, how you pay your debt. It’s all
about debt. Okay, but it’s not all about debt. We can pull up here from Investopedia anyway. I’ll resize for the screen for those that are watching the YouTube video.
Investopedia is saying here, FICO takes into account debt in five areas to determine a borrower’s credit worthiness. Payment history, so this isn’t going into debt. This isn’t debt, it’s not debt per se, if, okay, look, I use my credit card, I spent 300, I paid it off a week later, two weeks later, three weeks later, I [00:04:00] didn’t pay interest.
Payment history, it’s positive payment history, it’s not going into debt, it’s not debt. Here, the current level of indebtedness. Now, when they’re talking about indebtedness, it could be the case that your statement closes, say, you make purchases, your statement closes, you have to pay back 300, 400, whatever it is to the bank.
Okay, yes, that’s going to impact your score. It’s your credit utilization. How much credit are you using of the total credit? Now you could pay that back in full and not pay interest. So it’s not going into debt per se like Ramsey is talking about. The types of credit used, yes, if you have an auto loan, a mortgage, student loans, this is going to impact your FICO score.
Generally we’re looking for a good credit mix, but it’s not absolutely, it’s not absolutely necessary. We don’t need to take out a personal loan we don’t need. Just to have a score, there’s no need to pay interest on that if we’re paying, say eight, 10 percent interest on a personal loan or more that wouldn’t in most cases be wise to [00:05:00] do the length of credit history.
So this is not length of being in debt, it’s the length of your credit history. So maybe you’ve opened your first credit card at the age of 24, you got a small limit, you’re charging things to the card, you’re paying it off in time, you’re going to get bigger limits in time, you can get approved for more cards.
In time, your scores are going to go up because you’re showing you can be responsible with credit. It’s not going into debt. It’s not just paying interest. It doesn’t have to be that, but Dave Ramsey isn’t saying that. He’s not saying, look, you can use credit paid off in full. You’re not going into debt.
You’re not paying interest. He’s not telling you that. I’m here to tell you that you can manage credit responsibly and have good credit scores. And new credit accounts is another part of this FICO score here. So it’s saying here FICO credit scores are a method of quantifying and evaluating an individual’s credit worthiness.
It’s not how much are you in debt and how much interest have you paid. You can improve your FICO score by paying bills on [00:06:00] time. You’re paying in full. You can pay in full and improve your score using less than 30 percent of your available credit. So for instance, if they’re going to give you 10, 000 on one credit card, one credit card is all you have.
If you’re losing, using less than 3000 of that credit. Say you charge 2, 500 to a credit card, the statement closes, it shows you’re going to have to pay 2, 500, you pay it off in full, that’s going to be positive credit use, it’s going to be positive payments. And here it’s having a mix of different types of credit.
So we can move this off here and come back to Ramsey. Is Ramsey going to say, Okay, you can have a good score by managing credit responsibly, not going into debt, not paying interest.
So your FICO score. I ran into a guy this weekend, he said, Oh Dave, I don’t really need your information, I have an 850 POF FICO score, I’m doing fine.
And it wasn’t a situation where I, it was a social situation where I couldn’t really laugh at him. So,
he wants to laugh at a person because they have a good [00:07:00] credit score. But there was no mention of this guy saying, Okay, I’m in debt, okay, I’m paying interest. Nothing like that. The guy just said, I have a good credit score.
So as you see, Dave Ramsey is just assuming if you have a good credit score, that you’re in debt, you’re paying interest, you owe all this extra money to the bank. Now, if you’re to use cash and debit, you pay off things immediately. But as I say, in other response videos at Dave Ramsey and in my podcast episodes, why use cash and credit?
Because you can use credit. Just buy the things you’re going to buy anyway, and you’re earning rewards from the purchase. Even if you’re earning something like 2 percent cash back, it’s still better than using cash or debit and getting nothing. Many cards will give you sign up bonuses. The Chase Sapphire Preferred at the time of recording is 5, 223 80, 000 points for signing up for the Chase Sapphire Preferred and spending 4, 000 in 90 days.
Okay, you have auto insurance, dental work, you have a big, you have some big expenses coming up. Maybe you’re a business owner and you’re going to be buying inventory for your business. You can put that on a personal card. [00:08:00] And you can get an extra 80, 000 points, which are worth at least 800 cashed out and more than 2000 when it’s used for travel, but Dave Ramsey is not telling people that Dave Ramsey is not saying, okay, look, you can manage credit responsibly, save money and make money travel for next to nothing using credit card rewards.
He’s of this opinion that all credit is bad. No matter what FICO score is bad. It’s bad that you have an 850 FICO score, not even asking the guy like, okay, do you owe money, are you paying interest?
So I just nodded and said, okay, and walked away because there was no I didn’t have time, nor did I have the footing in this conversation to completely expose the ridiculous thinking that represents.
Let me, so what is the ridiculous
thinking? All the guy said was I have an 850 score. So what is the ridiculous thinking? What’s so bad about that? If he has an 850 score, he’s paying his accounts in full. He’s spending responsibly. He’s embracing the frugal life. Dave Ramsey saying, okay, Hey, don’t go out and [00:09:00] buy a brand new car.
Don’t go out and buy all this luxury stuff. It’s all a scam. I embrace the frugal life, but I’m using credit. I’m not going out and buying all this random stuff and paying interest just because I can spend. Now, if you can’t manage credit responsibly, you shouldn’t play the game, but Ranzi’s not telling you there’s a way you can win with credit.
He’s just saying it’s all ruin. You’re going to be in a bad shape. It’s terrible to have a high score. He’ll go in later and saying, okay, cancel everything. Don’t even have a credit score. Just
really bizarre. Let me help you with that. An 850 FICO score does not mean you have money.
Okay, yeah, an 850 FICO score doesn’t mean you have a lot of money, but obviously you have to have some money in order to get approved.
You’re reporting income to the bank unless you’re just lying about it. It’s like the Steel Manning Ramsey’s thing here. Oh, just because you have a high credit score doesn’t mean that you have any money. I guess you can lie to banks. I don’t advocate that. But, yeah, if you have these cards, I would think that most people having credit are able [00:10:00] to manage it well if they have an 850 score, because look, if you have an 850 score and you’re not managing credit responsibly, I mean, you’re missing payments and your score would go down, you’re having high utilization because your statements are closing and you’re reporting high balances, so If you’re getting, say, 10, 000 in credit limit, and you’re just running it up, you’re not paying the max, you’re just making minimum payments, there’s no way you’re going to have an 850 score.
So it actually does seem to be the case that you’re managing money not always now, but if you’re just maxing out cards, you’re spending on useless stuff that you can’t afford, you’re not going to have an 850 score. It does not mean you have an income. You have to tell the banks that you have an income, unless, again, you’re lying to the banks.
It does not mean you have wealth. Yeah. What does it mean? Wealth? You can be a middle class person. You could be say making. Just under six figures a year, maybe making 000 a year. And you can actually have a high score and be doing well because you’re paying things on time. You’re [00:11:00] paying off balances in full.
You’re not just maxing out all the cards and paying interest. It could mean this, but he’s saying, okay, it doesn’t always, it doesn’t. I’ll say, yeah, it doesn’t always, I’ll give him a fair shake on this one. I would think more likely than not, if you have an 850 score that you’re managing your credit and your money pretty well.
All it means is you have paid hundreds of thousands of dollars in interest to the bank. Okay, that’s just factually false. Because you have 850 score does not mean you’ve paid hundreds of thousands of dollars in interest to the bank. If I paid off all my cards today and for some reason never used cards and just paid cash for everything, let all the statements close at zero, my score would shoot up to the high 800s.
But personally it’s usually in the high 700s because I’m closing with the balance but then I’m paying it off. But this business of, okay, if you have high scores, then you must be paying hundreds of thousands in interest. It’s just absurd. It’s just not true.
It’s the only possible way to get an [00:12:00] 850 FICO score.
Yeah. So he says the only possible way. So Dave Ramsey fans. Oh, Justin, you’re misrepresenting Ramsey. He’s just talking about people who are in debt. He’s saying here, it’s the only possible way. He’s saying you paid a hundreds out hundreds of thousands of dollars in interest. He’s just wrong here. He’s just totally off base.
You have to have a lot of debt, have had it a long time, and have paid it perfectly. Okay, what does it mean, paid it perfectly? Now, if you pay in full, you’re not paying interest. And stayed in debt, religiously. No, you’re not staying in debt religiously if you have an 850 score, because if you were in debt, you’re running up all the cards, you’re paying interest.
Your statements are going to close, your utilization is going to be impacted, and your score is going to go down. You’re not going to have an 850 credit score if you’re using high credit utilization. Dave Renz is just wrong here. He’s just misunderstanding very basic things about credit. [00:13:00] As a matter of fact, you borrowed money just to keep your FICO score up.
No, that’s not necessarily the case. You’re not borrowing money to keep your score up. And it’s even weird to say that you’re borrowing money because the credit card companies are issuing you a line of credit, you’re charging things to that. And then you’re later paying it off. It’s not, okay, they’re giving me this cash and now I can go out and spend this cash.
I’m using a line of credit. Later on, I’m paying the line of credit off. So I guess, okay, you’re borrowing money. Eh, not quite the same thing as a personal loan. And even if, okay, I have an auto loan for maybe 10, 000. The bank is saying, okay, Hey, look, we’re charging you this interest rate. Make these minimum payments every month.
Now, if they’re charging a very low interest rate, I’m happy to pay a very low interest rate to have a 10, 000 auto loan, because then instead of paying 10, 000 upfront in cash, I can invest that 10, 000 in other things and out earn the interest rate, taking [00:14:00] low interest debt. Make sense now with credit cards, it’s going to be like 20, 25 percent interest.
So we’re not going to do that. I advocate all the time. Do not pay interest, pay your balances in full. If you can’t do that, don’t play the game. But Ramsey here is just misunderstanding. You’re in debt. You’re paying interest. There’s no way you can possibly have an eight 50 score unless you’re paying out interest.
It’s just laughable.
How does that make sense? Let’s think about it. The number one key to building wealth is having. Your income to invest instead of having committed it to other people. Okay.
That’s not necessarily the other case because many people are using OPM, other people’s money that, okay, look, I have an Amazon reselling business, for example, and I’m using credit to buy products.
I can run up charges on the cards. If I can flip the things within say 25 to depending on when the charges are on the card, 25 [00:15:00] to 55 ish days. In many cases, I can flip items for profit. I’m using the lines of credit, OPM, in a way here to make money. I can build wealth. You can build wealth and use credit at the same time.
Hey, look, I got a new credit card. They gave me a 500 cash bonus. Now I can put that cash bonus into an investment account. I can put it into a Roth IRA. I’m investing. I’m building wealth. I just got a mailer from U. S. Bank. Sign up for the U. S. Bank Business Leverage Card. We’ll give you 750 bonus money for spending.
I’m going to put expenses on the card I’m going to use for my business anyway. I’m going to spend this money one way or another. So why not put it on credit? Why not take the 750 they’re giving me? If I can pay in full and be responsible with my spending. I’m building wealth and using credit at the same time, but he’s making it seem like you can’t build wealth if you’re using credit, it’s [00:16:00] one or the other.
And he says, if you use credit, you’re going into debt and you’re paying hundreds of thousands of dollars in interest. If you have a 850 FICO score, he’s just not understanding here. He’s not giving you an alternate perspective and saying, look, you can be responsible with credit and build wealth. That means gotten into debt.
No, it doesn’t mean getting into debt. If we’re paying it off and being responsible. When you don’t have any payments, you have money to invest and to be generous with. Actually, when we’re able to utilize credit, we have more spending power and we could use that spending power to make more money. We have more cash.
We have cash flow. We have more options. We have purchase protections on our credit cards. We have travel protections on our credit cards. We have offers. For instance, For instance, I’m seeing Chase offers that, oh, spend 200 at Lowe’s and we will give you 20 cash back. I can activate this offer on my card and okay, you could say, oh, it’s only 20, but it’s basically found money because I’m going to Lowe’s and buying things [00:17:00] anyway.
I’m happy to make that purchase with cash. You’re not going to get that at all. You’re not going to have, oh, use cash today and get a bonus. Now there might be some kind of promotion or discount in the store, but with credit, you can stack and you can do more. You have more options, you’re getting bonuses, you’re getting travel, you’re getting travel protections, you’re getting purchase protections, and so much more that you’re not going to get with cash.
So look, I’m going to spend that 200 at Lowe’s, I’m going to get a free 20, and I can go ahead and invest that 20. Now, the 20 isn’t going to make me a millionaire, Dave Ramsey, oh, credit’s not going to make you a millionaire, but it’s going to help. You got people who are listening to Dave Ramsey’s show.
That are working jobs that are like 15 an hour or less. They’re working as cashiers after taxes. Maybe they’re getting like 10 an hour. And here’s something I can do. That’s really simple. I activate an offer on a card. I already have, I go in the store that I’m going to anyway. And it took me, what, just seconds to click on that card.
And I saw that offer when I was logging into my accounts [00:18:00] anyway. So maybe a minute or two of my time, maybe, is going to grant me 20. This 20 is going to be very valuable to his audience that are saying, Oh, I’m living paycheck to paycheck. I’m having a hard time with money. I don’t have all this extra money.
Why not take the 20? I’m getting dining credits from American Express. I’m getting so many things. Maybe little things, but you know what? They add up over time. It’s very easy money. And all the data points tell us that is the fastest way to build wealth. All the data points really don’t tell you that because many people are using credit and building wealth.
They’re not getting into debt. They’re not paying interest. Some people might be paying interest. Some people might be getting into debt. But it’s not all of them. He’s making it seem like it’s all of them. He said, if you have an 850 credit score, the only way you can have that is if you paid hundreds of thousands in interest.
But research gives us that. Plus common sense
tells.
Yeah, so he’s saying, oh, the research gives us that, but we have no explanation. We have no citation in the show. He’s just saying, oh, the research [00:19:00] says that. Common sense says that. What do you mean common sense says that? All people are going to claim that common sense says things.
But what’s the argument? What’s the reason? We don’t get any evidence for that whatsoever. We have all these papers on the desk if you’re watching the video, but we’re not seeing, Oh, according to this research, blah, blah, blah, we’re not getting that. We’re not getting anything. Now, to be fair, it’s like a nine minute clip from him.
So maybe he’s not going to go into it, but he said this many times. Oh, this study, that study, blah, blah, blah. But we really haven’t seen the studies. That the fastest way to become wealthy is to be out of debt. Using credit isn’t necessarily going into debt. If we’re using credit, we’re paying everything off.
We’re not paying interest. We can use credit and work
towards wealth. Understand secondarily that the FICO score is 100 percent built off of your relationship with debt.
Not really. If we’re paying things off in full, we’re not in debt, we’re not going into debt. We might temporarily owe money, but guess what?
We could just pay it off. Many people say, look, I treat my credit card like a debit card. I log in. [00:20:00] Okay. I pay off using my checking account. So instead of just directly using my checking account to pay off, I’m using credit, I’m earning the rewards. I’m enjoying the benefits. I’m getting bonuses. I’m getting offers.
US bank has given me 750. Chase has given me 80, 000 points. And I just log in maybe once a week, once every two weeks, whatever. Some people even put on auto pay, they just put it on auto pay, and the money is just taken care of, paid in full every month. So why not just add the little extra step to make hundreds of dollars and get all the protections?
And that’s just one signup bonus of $750. But what if you can get, say, a handful of credit cards a year and your average signup bonus, even to be fair, is like $500 worth of value. So why not take an extra 6,000 or so every year? America loves math. Um, an extra 10, 000, an extra 20, 000, depending on what you’re doing.
You can make this out to be a full time thing. There are people who do more than me. There are a lot of people who do less than me, but currently I’ve been doing this hobby. 2018, it’s now [00:21:00] 2023 and it’s constantly been winning all kinds of offers. I’m going on a cruise next week because of credit, because I was able to get casino status through matching statuses that I got from credit cards.
I went around Atlantic City and said, look, here’s my Caesars card that I got from my Wyndham business card, and I have Caesars diamond status. I can go to Borgata. I can go to Ardrock and then go to Ocean Atlantic City. And I say, look, here are my cards. Here’s my statuses. And they said, yeah, as part of matching status, you can get a free cruise for you and a guest.
No taxes, no fees. Going on that cruise this weekend. It’s going to be great. But with Dave Ramsey, just pay cash for everything. Don’t have any credit. You’re not going to be able
to get that. Do you have a high FICO score? It means you’ve been playing kissy face with the bank. No, it really
doesn’t. Are we really playing kissy face with the bank if we’re just paying everything in full?
What kind of kissy face is that? What?
Well, once you understand that the FICO score is not an I’m good with money [00:22:00] score. It’s not an I’m wealthy score.
But why isn’t it an I’m good with money score? Because if you have an 850 FICO score, that means you’re not carrying a large balance. It means that if. If you close a statement with a very high balance, we’ll say it again.
You’re not going to have any 50 scores. That’s not how credit works. If you have 10 K in extended credit and your statement closes 9, 000, and you’re only making minimum payments, your score is going to shoot down. There’s no way it’s going to be 850. High utilization is going to negatively impact your score.
It’s an, I love debt score. No, I really don’t think that any of my listeners are going to say, Hey, you know what, I love debt. I’m only making the minimum payments. I’m paying interest. I love it. It’s a great thing. No, I’m encouraging listeners once again, to. Pay off their cards in full and be responsible with their spending.
We’re not going into debt. Now we might temporarily owe money, but guess what? We’re just paying it off and we’re reaping the rewards. We’re enjoying the benefits. It’s very easy. And on the business side, it’s even more interesting because the business cards have 0 [00:23:00] percent intro APR offers in many cases.
US bank, I mentioned, I got a credit card with them. The US bank, triple cash. That was a 500 sign on bonus. It was 0 percent APR for something like 15 months. They gave me a credit line with 16, 000 and I eventually made purchases, ran up to 14, 500 getting pretty close to the credit line. And that’s free money to play with.
I’ve been playing kissy face with the bank for over a year. And even if you were to put, say, 13, 000, 14, 000 into a high APY savings account that’s giving you like 3, 4%, that’s extra money. Why not do that? Dave Ramsey, all pay in cash, never use credit, never do this, never have any debt whatsoever. You’re just totally missing out on that.
If you own a business, why would you not use credit for your purchases, leverage 0 percent APR, and have so much more cash flow and agility?
And I’m really good at borrowing and paying back [00:24:00] a lot of debt over a long period of time score.
I don’t really know if we’re paying debt over a long period of time.
Because if we’re paying the debt in full, it’s not a long time. It’s not a really long time. And it’s certainly not any interest. We’re not paying interest.
Which is a stupid way to score whether you’re winning with money.
Yeah, so this is again, Dave Ramsey, a caller asked a question. The Facebook page asked a question.
Someone asked a question on Facebook. Oh, it’s stupid. You’re arrogant. You’re dumb. Okay. Can we get an explanation here? Why is it a stupid way to play with money? If we’re just paying things off a fool and not paying interest, he’s saying, Oh, if you have the high score, you’re paying interest, but it’s just not true.
So when the guy goes, I’m doing it, okay, I’ve got an 850 credit score. What he really meant was, I’m pretty stupid.
So if you have a high credit score, you’re stupid. Even if you’re paying everything off in full, like there was another video of the Ramsey show, someone called in and said, okay, why can’t I just use credit if I pay everything off in full every month?
And they were even lamenting the caller. There was a [00:25:00] previous response video podcast episode that I had here. So they’re not even, they’re not even acknowledging that. Okay. You can just pay it in full and get the rewards. They’re like lamenting, Oh, it’s not worth it because it’s like going to Chuck E.
Cheese and you spent 20 and you got a sticky hand at the end. Like again, misunderstanding the basics here that if it’s money we spend anyway, why not just put our regular expenses on credit rather than using debt or cash and just rack up the rewards, the benefits, the protections. Zero APR leveraging is so much
more.
I’m giving the bank a lot of money and I don’t have any likely.
Yeah, this is false. You can’t have the 850 score if you don’t have money. If you’re carrying the balance, again, your 850 score is going to tank. If you’re using that full credit limit or most of it, carrying a balance, paying interest. That, yeah, you’re just not going to have the 850 score here.
And yes, we can have money and use credit. Okay. There are so many Americans who pay in full, who have money, they’re building wealth and building [00:26:00] credit at the same time. They’re not going into debt, they’re not paying hundreds of thousands of dollars. It doesn’t have to be that way. Dave Ramsey, can you talk about mindfulness?
Can you talk about, hey, here’s a way to use credit responsibly. Only engage if you can pay off in full. But he’s not going to tell you that. He’s going to say, don’t use it at all, you’re stupid if you do. And you’re paying interest in all cases if you have an 850 score. That’s what he said.
Because the shortest distance between two points is a straight line, that straight line is debt free.
I have my in Yeah, I don’t even know what that
means. Okay, the shortest distance between two points? Okay, maybe if you’re not in debt, you get to wealth quicker. Of course, if you’re paying interest, then it’s going to be hard to get ahead if you’re paying 20, 25 percent credit card interest. But again, he’s not explaining that you can build wealth, build credit at the same time, be responsible, credit, pay everything in full.
We don’t have to go in debt. We’re not going in debt. If that means we’re [00:27:00] carrying balances and paying interest, it’s not the case. Income, I can put it into investments. Yes, we can use credit and invest
at the same time. So, my point being, my credit score, very proudly, is indeterminable.
It’s America’s voice on money here, who claims that he’s this financial expert, and you would think that he would be responsible with credit.
He would understand that you get benefits. But he’s saying, Oh, my credit score is indeterminable. I would think indeterminate, but maybe that’s nitpicking here. I did speak with some people about this. And so is it possible to just have no score or zero scores? He’s talked about that. And I’ve heard maybe NA would show up if you’ve absolutely canceled everything you’ve gotten off somehow.
Uh, maybe that could be the case, but that’s not something to be proud of at all. Maybe for Dave Ramsey, who has towers of cash from a show, from whatever, okay, fine. But what about the average American who’s trying to get an apartment, to [00:28:00] get a cell phone, who’s trying to get a car, who’s trying to get a car loan, that don’t have all this cash?
Maybe, okay, you’re just out of high school, you’ve just been working some part time jobs, or maybe you’ve been helping family at home. There could be all these reasons that people just don’t have all this cash up front. Whether they’re young, whether they’re maybe working a job that’s not paying much. It makes sense to use credit well and use credit to get into other things.
It’s not only the rewards. It’s okay. Look, I’m looking to get a mortgage. Hey, look, I’m looking to put a credit card for a hotel room. There are all these like little things where credit comes up and rather than, Oh, you know what, sir, if you don’t have 300 as an incidental deposit here. And, uh, come back and get your cash later.
Like that, that sounds really lame. You know, why not just use the credit card and book the hotel, many places that will only accept cards, contactless payments, all these kinds of things. And I was listening to something from NBC that a lot of these businesses that just deal in cash, [00:29:00] there is a problem that people can steal money, that there’s more accounting.
There’s more money to have in the registers, to count at the end of the night, there’s money in safes, like, all these are things going on with money that actually has a cost, which was an interesting perspective that they brought up, and how many times of, oh, I had money on me and I lost the cash, or I just saw this the other day at Wawa, I was at Wawa because I had a freebie from their app that was free food, no purchase necessary, nothing, so I went in, And got it is in the same parking lot as a gym.
This guy made a purchase and he just threw his change into this random bin. That was a donation for an alleged charity. Like I see these donation bins or tip bins everywhere. People use cash. They just throw the money in. They’re getting zero rewards and then they’re just giving up their change. So many casinos, all the vouchers, just all over the floor.
People are using cash. They’re just like throwing away change. All kinds of things where using cash isn’t necessarily the best thing to do. So let’s listen some more here.
Which is the FICO score [00:30:00] people way of saying, I have a zero score. Why do I have a zero score? I have had no debt, no accounts open of any kind for a very long time.
Yeah.
So, so why? You’re, you’re America’s voice on money. You could be responsible with money. So why not even just have one card? Even if you add one card that just gave you 2 percent cash back on everything, that just is an automatic statement credit. You’re saving money, life’s easier. So what’s this, I don’t have any cards.
Are you trying to be a role model? Oh, look, I’m going to say, I don’t have any credit. I don’t have it. I’m not on the books, whatever, because some of my listeners can’t handle it. So I’m just not going to have it. And I’m going to say, it’s all bad. Why not even just use one card? Yeah. Okay. Maybe you don’t want to be in the hobby and have 40 plus cards like I do.
Of course, I recommend having multiple cards for multiple reasons. I’ve gone into describing why with welcome bonus benefits, offers, category bonuses, and so much more. It’s very easy money to me and many of my listeners, of course, again, your level of participation is up to you, [00:31:00] but this business of, Oh, I just don’t even have any credit cards whatsoever.
I’m just going to use debit for everything. I’m going to use cash for everything. You’re just missing out a tremendous amount.
If you only will do business with me or loan me money based on my FICO score, we can’t do business. So Dave
Ramsey has the optionality. Let’s say he has the option to say, okay, look, I’m just not going to deal You won’t have me because of my lack of credit score or zero or NA or whatever.
But there are many Americans who are looking for an apartment and the landlord says, okay, look, we have to do a credit check to have you in. What if you’re in a particular area? You maybe went to five to 10 different places. Or some of them were really bad. Maybe the landlord didn’t show up or it’s too expensive.
And now you find this one apartment and they say, you know what? Okay, this looks like great fit. We have your pay stubs and everything, but we just need to run a credit check just to be sure. If you’re on Dave Ramsey’s team here, never have credit, never deal with you’re going into debt, whatever. Yeah, [00:32:00] the American isn’t gonna be able to do that.
Now Dave Ramsey, it’s like, oh, I just have cash. I’m just gonna buy stuff. So it’s out of touch criticism. I think he’s gonna make fun of the critics later in the video on this as unrealistic. There are many times that credit comes up. So maybe Dave Ramsey, you have the option to be very choosy in who you’re dealing with, but Not everyone does.
Many people can just have one credit card, be responsible, treat it as a debit card, but we’re not even going to hear that perspective. He’s just assuming that everybody’s going into debt. He says that you must be paying interest in order to have an 850 score, it’s just not the case. I don’t have a FICO score.
He’s like pointing and laughing at the guy who has 850 by pointing and laughing. It’s wow. You’re just missing out on so much here and maybe the extra few hundred dollars, thousand dollars aren’t going to matter for Dave because he has more money, but again, many people who are making some like modest income, they’re not ultra wealthy, they could really benefit from thousands, tens of thousands of dollars per year for very [00:33:00] easy wins with credit cards and credit card
rewards.
Because I don’t borrow money was not being in debt is the fastest way to become wealthy.
Yeah, but you can become wealthy using credit and not being in debt. And you can borrow money and still work towards wealth. You don’t have to be paying an absurd amount of interest and you can still borrow money.
You’re just suggesting you are borrowing money from the bank because you’re using lines of credit. Yeah, fine. But I’m just paying it off. So I’m borrowing money and growing my wealth at the same time. So your goal should not be, How can I keep my credit score up? Oh, just to mention, to remind you anyway, I said earlier in the video, many people can leverage credit for their business.
So if you’re starting a business, you only have 5, 000 in cash that you can dedicate to it. And you’re going to engage in some like retail arbitrage, some online arbitrage where you’re buying products and selling them. You know what? That could be an easy way to make money. And many of the businesses you’re going to be buying from have return policies [00:34:00] within 30 days.
So maybe you don’t have the cash available right now to try to do this. Now it might be a little bit risky since you don’t have so much capital to work with, but for those who can use credit, utilize credit for their business, they know the money’s coming in or maybe, okay, look, I’ve had this business for a while.
I expect this amount of. Customers every month, it’s been going really well and Hey, now we can renovate the restaurant. So we can use credit to help renovate the restaurant to get more people in. Because look, we’ve been very busy. We’ve been at capacity. This is a great restaurant. So we could deploy the capital dollars.
We can use credit and grow this restaurant. There can be all kinds of things where we can work toward wealth and use credit. We’re not going into debt. We might temporarily owe money. There might be some risk involved with it. I don’t recommend taking on incredible risk, of course, but there can be a lot of sensible ways to use credit.
You’re not gonna be able to do these things
with just cash. How can I build my credit because building your credit is I’m going to borrow [00:35:00] money. Why? So that I can borrow more money. Why?
Well, we can use other people’s money to make money. We can have more options with credit. We’re not paying interest.
Like it, it’s really difficult here to keep a straight face. I’m just laughing every so often. He’s just like with these imitations and impressions, just making people look dumb rather than just like dealing with the strongest arguments of, okay, Dave, look, I can just pay everything off, not pay interest.
Yeah. Not go into debt, not be carrying this big balance. He’s just not even considering that. It’s like this, this weird straw man here.
So I can stay in debt and make those towers in the skyline be owned by somebody else.
Yeah, so we’re not staying in debt. That’s not what’s happening if we’re paying balances in full.
The original Facebook question was talking about using credit. And they’re not saying they’re paying interest. They’re not saying they’re in debt. It’s just not the case. And then, and then he brings up this thing. Oh, the towers in the sky. I addressed this in a previous video. Just because the banks have big buildings doesn’t mean that nobody can win with credit.[00:36:00]
Again, Dave Ramsey, look at all the things. If you’re watching the video, he’s this big, like TV screen, the computer on the desk, the table, the Ramsey headquarters, those memorabilia in the back. Whatever is the case. So Dave, if you’re going to say you can’t trust the banks because the banks have these big buildings, they have money, they’re making money.
So therefore it’s corrupt. Would we apply the same argument to Dave Ramsey? Dave Ramsey has money because he’s selling services and he’s making money. Look at the building. He employs all these people. Oh, it must be corrupt. Like I wouldn’t make that argument. I don’t think that’s a fair argument. But Dave is doing that to the banks.
The banks are making money. So therefore the banks are corrupt. You can’t trust the banks. You can’t win. You’re always going to lose. It’s just not the case. There can be a relationship where the consumer uses credit, gets the rewards. The bank makes money because you’re swiping the card. The interchange fees are going on.
They’re charging merchants a certain percentage to have these card readers and to take the payment processing. So the banks are making money. You’re making money when you’re being responsible with credit. That’s how the banks are getting money. Now, there are some people, unfortunately, [00:37:00] who are paying high interest and they’re in debt, but that’s not the case for everyone.
There are some people who can lose, but you can win. I mentioned casinos before the online sports books and casinos in Pennsylvania have really lucrative offers. Bet Rivers, for instance, is a one X play through at the moment that you deposit play through 250 once, and you get 250 bonus. That’s really easy money.
You can play through 1x, you can withdraw, be done with it, never log on to the site again. But some people, unfortunately, are just going to keep playing and lose all the money. And then they’re going to use money they can’t afford and keep gambling and do all this degenerate stuff. But I’m not advocating that.
Just because some people lose at gambling and they’re not smart about it, It doesn’t mean that all gambling is bad. Just because some people drink alcohol and have problems with it doesn’t mean that all alcohol is bad. But Dave is like, all credit’s bad. If you have a high score, you’re in debt. There are all these issues.
You’re paying out hundreds of thousands in interest, he said. But it’s just not the case. You can be responsible. I gave [00:38:00] them my working life’s income. Okay, yeah, we’re not giving the bank our working life’s income if we are paying balances in full. Another mischaracterization. You’re being ruled over by banks.
No, we’re not being ruled over by banks. We’re treating credit like a debit account in many ways. We’re paying the balances in full. I’m going to sound like a broken record here. We’re not ruled over. They’re telling you what to do. They’re managing your life. They’re not telling
us what to do. They’re not managing our life.
They’ve built it into the culture to the point that people actually walk around bragging about their I Love Debt score.
So just because something is built into the culture doesn’t mean that it’s bad. We all have smartphones. Are smartphones bad because they’re built into the culture? And because, oh, look, email is built into the culture.
And when I apply for a job, they say, go online and use the internet. Oh, no, the internet is built into the culture. Oh, no, email is [00:39:00] built into the culture. Ooh, it’s so corrupt. Don’t use the internet. Don’t use phones. What is this argument? It’s built into the culture. So therefore, it’s bad. It’s corrupt. It’s corrupt.
Like, they’ve sold it, so it must be a bad thing.
What a great job the painting industry has done, teaching you to be in debt and stay in debt, which is where they make all their money.
But we don’t have to be in debt and stay in debt and pay them our life’s income or hundreds of thousands of dollars. It doesn’t have to be that way, Dave.
The credit card is the most marketed product in the
history of the world.
Yeah, I’m not really sure that’s the case because the credit card is actually relatively new. So go back to like ancient Greece and Rome, maybe Mesopotamia. I think there’s been a lot more marketing since then. Credit cards are relatively new.
This is a weird argument, even if it is the most marketed product in the world. So what, who
cares? More money has been spent selling you credit cards, marketing you credit cards than [00:40:00] any other product in the history of the world.
Yeah, I don’t think that’s true. If we can get some, uh, fact check around, that’d be great.
Water has been marketed for a long time. A lot of money is made like electric companies make money. Oh, electric is bad. They’re marketing. Oh, we saw an advertisement for the electric company. So therefore it’s all fraud. The electric company is bad. We shouldn’t use electric because it’s marketed. What is this argument?
It’s so weird
and
it
worked
you
all have one or two.
I have a 40 at this point, 40 plus. Yeah. 22. If you have 22, that’s pretty good, but I hope you can level up and get more. Maybe you’ve just recently started. So yeah, absolutely. More credit cards, Darren Remsburg fast past guests on the podcast. The answer to everything is more credit cards.
Milenomics podcast will tell you similar things too. So for using credit responsibly, there’s a world of rewards to be had. It’s excellent. We want the high scores. It’s good. [00:41:00]
It worked. Don’t you feel stupid?
Yeah. So again, Oh, you’re stupid. You’re dumb. It’s like lack of argument here. It’s just name calling.
It’s all it is. You feel manipulated. Don’t you? No, I don’t feel manipulated at all because I knew what I was getting into. I gave my consent, Dave. I know. Okay, look, if I’m irresponsible, I’m going to be paying interest. So therefore, I’ve thought about this an incredible amount and I’m very intentional with my spending.
I don’t just go wail away and buy things that I can’t afford. I embrace the frugal life, Dave. And even some people who have some luxury once in a while. Not necessarily a fan of that. Look, they can afford it. So it’s okay. As long as you’re not paying interest, you’re living within your means. You’re budgeting a little bit of entertainment here and there.
Use that word budget. That could be accurate. I would think Dave says, okay, you have some sort of budget. Know where your money’s coming. Know what your expenses are. Be sensible about it. You feel used. You should. You’re a slave. Yeah, we’re [00:42:00] slaves now. We’re slaves if we’re using credit. We’re manipulated.
It’s all this weird stuff. Although we’ll report. Hey, we’re using credit responsibly. It’s great. We’re winning even though this gaslighting argument from Dave. I’m not really a fan of the term, but it works here that even though you’ve paid zero interest, even though you’ve taken all this next to no cash travel, even though you’ve all these benefits, you’re a slave, you’re manipulated.
It’s just all or nothing here with date. That he, he really can’t acknowledge that you can win with credit. He really can’t do that. Why can’t he do that? Why won’t he tell you, you can be responsible and win, but he’s saying, oh, you’re paying interest, you’re a slave, you’re manipulated, your life’s income, hundreds of thousands of dollars in interest, not understanding the basics about FICO score here, thinking that you can have an eight 50 FICO score.
If you’re carrying balances and maxing out, Hey, it’s really bad here. America’s voice on money is getting it wrong. The borrower is slave to
the lender.
Okay, but it doesn’t have to be that way. If we’re borrowing money, it doesn’t mean that [00:43:00] we’re a slave. It can be a mutually beneficial relationship. Again, the bank is saying, Hey, use this line of credit.
We’re going to give you rewards for doing it. Okay, we paid off in full. We’re not slavish. We’re not owned by the banks, as he’s saying. They’re not telling us what to do. We’re entering into a contract. We’re using a line of credit. The bank is making some money when we swipe our card, we’re getting rewards back, it’s great.
So don’t improve your credits. Having everything paid off and every account closed. Oh my gosh. Not even the 15 year olds out there who can be authorized user on their parents accounts and start with a great credit score saying, oh, don’t even do that, don’t have any credit. Parents cancel everything, everyone cancel everything, you can’t have any credit, all credit’s bad.
It’s just all or nothing here with Dave. He’s just not understanding that we can be responsible with it and there can be some benefits.
And then somewhere around six months later, your credit score will be fabulously indeterminable.
Yeah, we don’t want that. I want high scores. I want [00:44:00] the rewards. I want the travel.
I want the cashback. I want the benefits. It’s an incredible boon to my life. It’s a fun hobby. Why would we not do it if we can be responsible? Zero. How would we get a
house?
Yes. When I get a house. Yes. Many people are going to need to have good credit to get a house because they can’t front all the cash.
There may be in their early twenties, mid twenties, they’re working modest jobs, I say. It’s not realistic to say front all the money to
get a house. Two possibilities there. You’d have to get a mortgage with someone that doesn’t use a credit score to issue a mortgage. Okay, how are you going to do that if you don’t have all the cash to front?
Which is a mortgage company who actually knows how to write mortgages the old fashioned way. It’s called manual underwriting, like Yeah, that’s not going to be an option for everyone. Churchill Mortgage does. Or, you’d have to save up and pay cash.
Yeah, so he’s like making fun of people again, making fun of the critics.
It’s not an argument. This manual underwriting, I really can’t suggest that to anyone. It’s [00:45:00] Again, manage credit responsibly. And if you can’t manage credit responsibly, you’re not going to be able to manage your money responsibly in many cases. So how would you be able to do the manual underwriting? So it’s this idea that credit is not a good or a bad thing in itself.
It’s how you’re using it. And money could be the same way. Are you going to say, Oh, don’t have any money? Because every time you have money, you just blow the money on useless stuff. It’s just a really bizarre take here. The internet is used for illicit purposes. So therefore don’t use the internet. There could be some bad things that come out of it, but it doesn’t mean that it’s a bad thing in itself.
Yeah. Not, not realistic saying, Oh, save up the money and pay for the house. That’s not going to be an option for many people, especially there are cases of medical problems. There are cases where you thought you met a great person and then they ended up just running up all the money and they had this like big crisis and.
Now your scores went way down and look, now you’re having to pay this money or someone just ran out on the mortgage or you, you didn’t agree to have a kid and now you’re having to pay child support for 18 [00:46:00] years, but Oh, front the money and buy that house. Like it’s just not realistic in so many cases.
Now, maybe these are extreme examples, but they do exist. Not everyone’s just going to have all this spare money to front for house for the manual underwriting.
We were about to buy a house, it’s unrealistic.
Yes, absolutely. Dave Ramsey is unrealistic. Yeah. Yeah, I am that way. Yeah. So he’s looking, he’s like admitting, yes, it is unrealistic.
And I live that way. Okay. Dave, maybe you have all this extra money, but not everyone does. It’s just, yeah, to front maybe what 75K, a hundred K for a house. It’s just not going to be a thing for many people now. Okay. Yeah. You maybe 10, 15 years from now, but maybe you don’t have that flexibility of time in order to get in that situation.
It’s just not a great idea here. Maybe you can rent and save up the money, but. Maybe you’ll need that credit score to even rent. Oh, go look for the landlord that doesn’t have anything with credit and just takes the pay stubs. [00:47:00] But, you know, what if you’re a non traditional worker that you’re getting money in some other way, and you don’t have the pay stubs to submit.
Maybe you don’t have the score. There could be, there can be, or the, the funds upfront to present, and they’ll say, oh, we need pay stubs of a very specific amount, and you need to be employed, like they’re independent contractors, freelancers. So much more. I could just imagine a lot of situations where people don’t have the pay stubs, they can’t get into this manual underwriting, and maybe they can maintain good credit.
Now, maybe they don’t have tons of money. As you said, oh, it’s not a guarantee of wealth. Agreed. It’s not a guarantee of wealth, but it’s usually a signal that you’re managing your money responsibly. I live in an unrealistic world where I’ve become unrealistically wealthy. Hey, yeah, you’ve become wealthy, so you have the money, but not everybody has the cash to front for everything.
Everybody wants to front the cash. And there are people who have the cash who just don’t want to. Look, if I can pay a low rate for a mortgage, then maybe I can rent half of that property to someone else. And instead of putting up like a hundred K for a house, maybe [00:48:00] I can put a small down payment and maybe I can get a mortgage for a low percentage.
Maybe there’s some government benefits. Maybe there are some tax credits. There can be a lot of reasons to have the mortgage. And then maybe you can rent half the house out to someone else and they’re basically paying your mortgage or a good port, a good portion of it. And then that money that you didn’t front and fool, you could invest in something else.
Maybe you bought I bonds from the government, maybe you’re putting money in a Roth IRA. There’s a lot that can be going on. There are a lot of reasons we don’t want to front money for everything. Managing money God’s ways. It works every time. Yeah, I don’t know why it really has to be a religious thing here.
Oh, we’re managing money God’s ways. There are a lot of religious and non religious people who can manage money. And not all religious people are managing money well. So I’m not really sure where this is going. Managing money God’s way is just like bringing religion into it. Just don’t really understand that.
It’s weird.
Anyway. You have to be like that young couple I ran into. He was an engineer and she was a teacher. [00:49:00] Just talk to him the other day, okay? They’re young, they’re making a lot of money for a young couple, so they’re unusual, granted. But they’re making right around
a
hundred.
Yeah, so he’s saying, okay, there’s a young couple making a lot of money.
Okay, maybe they have the money to front, but not everyone does.
And they’re 24 years old when they started. They had no dad. And they decided they were not gonna borrow money for a house. So they lived in an apartment, a garage apartment, out back of a rich old lady’s house. He cut the rich old lady’s grass and kept her gutters cleaned out, and the rent was almost free.
Yeah. So that’s a really extreme situation. Like how many times are you just going to meet an old lady, agree to cut the grass, and they’re going to just let you live there and live in a garage. And I don’t know who really wants to live in a garage. You listen, or do you want to just live in a garage? I would think that you’d want a bigger place.
A lot of reasons for that. Maybe safety reasons. You have things. Like, I don’t know. Are you just going to share the house with them? That could be awkward. That can be [00:50:00] odd. There are a lot of reasons you wouldn’t want to live in a garage. There could be some ways to not, um, live in such squalor conditions just to save.
I can’t see that always making sense. It’s like this idea of, Oh, I just don’t want to spend any money at all and save the money. I’m not in that camp. I remember speaking with someone who’s like, Oh, why go to a restaurant when you could just go to a store and buy like a head of lettuce and make yourself a salad.
I’m not going to be that extreme. I look at many ways to save money, of course, but yeah, I agree that like some spending could be good, but I don’t see living in a garage as a really viable path for
many people. Because of that, their friends made fun of them. Their parents thought they needed counseling.
But they made a hundred and their rent was 250 a month in a nice city in a nice neighborhood. But it’s a garage apartment
out. Yeah, it’s a garage apartment, so nice city, nice neighborhood, like, eh, maybe not great accommodations here. Top of the, over the top of a garage out back of a lady’s house. It was not fat.
So what, it’s like in a garage? No, it’s like on [00:51:00] top of a garage? Like, I’m, I’m not really sure. Is this a real story? And you know what they did?
They saved. Almost. I think they saved around 50,
000 a year. Okay, so you can use credit and save money, and you’re not going into debt. You’re not paying interest. So what’s the point of the story here?
Okay, look, they didn’t spend as much on rent. They didn’t have to get a mortgage. They lived in a garage. They didn’t use credit. They saved money, and then they Pay for a house. Okay, but I can use credit, save money, and then pay for a house as well. And then I can get a mortgage with a low rate and then leverage the save money to do other things and make money.
You’re for four years and they paid cash for a 200, 000 house when they were 28. Yeah, I can’t ever see funding 200, 000 for a house when instead I can just take a low rate, leverage money, and make more money from that, have more flexibility. 200, 000 is a lot of money for people to front 28 during their late twenties.
He already said it was like an extraordinary [00:52:00] situation. They made good money as a couple, not everybody’s going to have a partner. So it’s just not everyone’s situation here. It’s Oh, look, there’s one situation of this one couple and they found this old lady’s garage. So therefore you can find an old lady’s garage and have a reliable partner.
Someone’s going to stay with you. Someone’s going to be loyal, someone who’s going to be a good fit, someone you like to spend time with. It was like this idea that, oh, you could just go out and find this great person to s s s share your life with. That’s more unrealistic things from Ramsey here. But
everybody made fun of him.
Now, if you’re making, by then, 125, 000 a year, and you’re 28 or 30 years old, and you never have a house payment the rest of your life, do you know how rich you’re gonna be?
Yeah, but we can have a house payment and grow wealth.
See why you don’t need a FICO score? Hello, are you starting to catch on to the zip code?
Yeah, but you can still have the FICO score, still pay off the house, And invest and grow wealth. So it’s like, you either pay in cash [00:53:00] and then become wealthy or you go into debt. Like it, it’s a really weird scenario that he sets up here. This is real. Yes. It’s real that we can use credit responsibly, save money, make money and travel at low cost.
So don’t improve your financial
score.
Yeah. So what was the point of the story then? Okay. They paid in cash. They lived in a garage. They paid a small amount of rent. And they saved money and then they paid on full. They didn’t use credit. So don’t have a FICO score. Even if I lived in the garage for some reason, and I paid cash to the old lady every month in motor lawn, the garage or on top of the garage or on top of the house or in the basement of the old lady’s basement or wherever this dimension happens to be, I could still build credit, build wealth, use credit, not get into debt, not pay interest.
And then maybe later I decide to front the money or maybe later I decide to pay it off. Like I can still. Become wealthy and use credit at the [00:54:00] same time. Set out to destroy it as quickly as possible. Destroy your credit as quickly as possible. Don’t have credit as quickly as possible. This is like information for everyone.
He’s not just, he’s not saying, he’s definitely not saying, Don’t use credit if you can’t be responsible. He’s just saying, Don’t use credit at all. Don’t have credit. Destroy your credit. Have a zero credit score.
By being 100 percent debt free with all accounts closed.
But I can be debt free, paying everything in full.
There could be a scenario where I charge everything to cards, never let a statement close, pay it off. So is it really in debt? Say, okay look, I have 30, 000 in credit limit, and I charge 10, 000, and I pay everything off. Say all the statements close at the end of the month, and I pay everything off on the 25th.
So how’s this going into debt? And I’m building wealth because I’m getting the rewards, and I’m saving money, and I’m making money. That, okay, look, once a year I’m going to travel and if I can [00:55:00] use the rewards to offset the travel down to nothing or close to it, then how is this getting into debt? What is he talking about?
As soon as you possibly can. As soon as you possibly can. So yeah, he’s even so extreme as don’t pay the little bit of interest on the auto loan. Don’t pay the little bit of interest on anything. Don’t have any debt. It’s this super extreme perspective. Can’t understand or admit that it can make sense to have low interest debt.
And to leverage things, to have credit, to use it for your benefit, it doesn’t have to be ruin. And you know what? It’s not just one trip a year. I hear from all these people like, Oh, travel’s expensive, so I go on one trip a year, or every few years, or this is my dream trip, or it’s a once in a lifetime trip, but I’m traveling on the regular.
I mentioned I’m going on a cruise this weekend. I booked a flight to Vegas. I booked a flight to Tahoe. I’m going to be going to Memphis. And this is all, I don’t have to stress at all about this. Because I have the points, I have the miles, I’m getting the cash back, and I’m traveling, I don’t have to worry about the expenses.
[00:56:00] It’s made life so much better. It’s not, oh, I have to budget for this travel, or I got back, and then, oh, I’m broke. It’s never the case, Dave. You can teach people how to use credit responsibly. To help them towards the path of growing wealth, but you’re not doing that kind of countercultural, isn’t it? Yeah, I think my way is countercultural.
I think most people think oh, I just have one credit card I put everything on the card I pay it off or some people will say things like I only use credit in case of emergency Or they have this idea of oh, you’re gonna ruin your credit score by applying for many cards So most people I think only have one or two maybe a handful of cards But I was saying, let’s be counter cultural and have more than 40 cards.
More than 50 if you can. I’m going to keep going. I don’t see stopping. This is great. I’ve cancelled many cards too. To date, I’ve probably applied for more than 60 cards. Actually, I’d have to look back at some notes and find out what that number is. So yeah, be counter cultural. Use credit to your advantage.
Most people aren’t thinking about this. I wish I knew about this stuff earlier in life. But as I said, 2018 [00:57:00] is when I started with this 2023 now. I wish I’d started 10 years earlier. Where was the memo when I was 18? It’s 16. I never got it. I wish I did. The Bible says that. It says be not
conformed to this world.
Don’t be like everybody else. Yeah, don’t be like everybody
else. Have lots of credit cards. Use credit
responsibly. But be transformed. How are you transformed? Miles and points are very transformative. The renewing of your mind. You need ideas that are different than everybody else’s ideas.
Yeah, so it’s just like a little sermon towards the end.
He’s bringing religion into it for some reason, like he’s religious guy. Okay. But yeah, a lot of religious people will use credit to their advantage. A lot of non religious people will, I’m sure we can find some pastors. I’m sure we could find people who are saying, Hey, look, it’s not slavery. It’s not this terrible thing.
You can use credit responsibly. You’re not sleevish to the lender or whatever he was talking about here. So yeah, Ramsey just getting it wrong. We can improve our credit score without debt, but he’s not going to tell us how to do that. He’s not going to tell us the [00:58:00] state. Out of debt by using credit. He’s just going to say, Oh, or he did say, don’t use credit.
All cancel everything, cut it all up, have a zero score. And he’s just depriving people of travel. He’s depriving people of cash back for the people who can use credit responsibly, but he’s saying, don’t use it at all. It’s all waste. You’re going into debt. It’s all ruined. So I’m saying no, be counter cultural, have lots of credit cards.
If you can manage them responsibly, pay everything off in full. Reap the benefits and stop telling yourself things like travels expensive. Stop saying, Oh, I can’t travel because of this and that expenses or, Oh, I’d have to take off all this time and I’d have to work all this overtime. It’s not really. You get one card to get 80, 000 points of the Chase Sapphire Preferred.
It’s easily going to get you a round trip flight and then some. That’s just one thing. Add lots of cards. Get hotel nights. You’re getting cash back that you can use to offset some of those travel costs. There’s a world of rewards to be had with credit. It’s going to make your life better if you manage it responsibly.
Forsake the way of Dave Ramsey and what people will say about credit, thinking [00:59:00] credit’s a bad thing. Use credit for good. And thank you for tuning in to this episode. you You can find me at hurdygurdytravel. com. Find me on social media, YouTube, podcast episodes. And so much more. Thanks for listening. Have a great day.
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