Why I won’t stop using credit cards — A message to Dave Ramsey

So you might have heard this before: all debt is bad, credit cards are evil, and you should always use cash.

The most prominent influence in the financial literacy space has preached this theory thousands of times. In fact, over 513 million people have seen his content on YouTube and continue to digest this information. Yes, I’m talking about Mr. Dave Ramsey himself.

Now I have to say, there is a lot of validity to what Dave is saying. Afterall, finances is not just about money, it’s also about psychology. Psychology is a huge factor in financial success and most Americans don’t consider this. Dave uses data to come up with his conclusions, which I am all for:

Look at this 2019 average household credit card debt data from nerdwallet:

https://www.nerdwallet.com/blog/average-credit-card-debt-household/

It’s no surprise that most Americans carry debt. That’s the basis of Dave’s conclusion that all debt is bad.

So why would you not use credit cards? Let’s take a look at this article on why this person doesn’t use credit cards:

https://www.elevationfinancial.com/why-i-don-t-own-a-credit-card

I believe that all these reasons are valid reasons why you wouldn’t use a credit card. However, I can’t help but feel like Dave Ramsey is walking a thin line between fear mongering and financial optimization.

The reality is, once you educate yourself on responsible use there is no problem with credit cards. Why not teach people responsible use instead of belittling them into bias driven wealth creation? Maybe that’s part of his brand to attract a larger audience.

Dave Ramsey sells this idea that you should live on rice & beans, hoard cash, and become a millionaire over the course of many decades. This passive approach is excellent if you want to coast through life and have a surefire way to *almost* guarantee moderate success. For those personality types, I’d have to say I would agree with Dave 100%. But Dave doesn’t frame it that way, he frames it in way that makes debt look like hell for everyone.

What about everyone else on this planet who doesn’t want that? Debt can be an incredible catalyst to creating wealth when used correctly.

Credit cards have many benefits and are almost necessary if you’re trying to build wealth in America. The credit score system in America is greatly affected by credit cards in good or bad ways depending on how you use them. I’ve personally used credit cards since I was 17 years old and my philosophy was always that I NEVER borrow money if I don’t have the cash to pay it off immediately. Infact, every single time my credit card reaches a 10% utilization rate, which means $1000 if you have a $10,000 credit limit, I pay it off completely. When you get in this habit, your credit card company will never get a chance to tell the credit bureau that you are over leveraging debt.

Which then increases your credit score dramatically over time. What a high credit score does is that it allows you to then get loans and get loans at cheaper rates. This is extremely helpful when you are at the stage of purchasing a home, running a business, or even creating a real estate portfolio for wealth building. My credit score is nearly 800 after spending over a million dollars on credit cards over the last few years.

Let’s forget the credit score aspect for a second, perhaps some of you are not interested in leveraging credit. Most credit cards have cash back/reward benefits that can also be extremely lucrative. Let’s take a look at my personal situation:

I use credit cards for regular spending and business spending. This allows me to get some great benefits that add up to substantial amounts. You should be using credit cards by just spending money that you would be spending regardless. That’s a very important statement to highlight. Money that you would be spending regardless.

From a psychology standpoint, it makes sense that most people would use credit cards to spend money they don’t have to buy things they don’t need — just because they can and its easy. BUT isn’t the remedy to that becoming educated? Just because you own a credit card, doesn’t mean all of a sudden you’ll have a Lamborghini in your driveway. All I’m doing is buying groceries, paying bills, & business expenses like buying inventory, shipping costs, supplies, etc.

In doing so, I have been able to garner over 2.5 million credit card points in just a few years. This is equivalent to $25,000 in CASH that I could simply swap for cash if I wanted to. However, I choose not to. The reason is because of additional amazing benefits. I have a chase sapphire reserve credit card that gives you the benefit of getting 1.5 times your cash rewards on anything travel related. This means I have gotten an equivalent of $37,500 on flights, hotels, and rides so far. It’s very likely that I will never pay for a flight or hotel in my life ever again.

What an insane amount of money to just disregard because someone is telling you that credit cards are evil. Don’t you agree? I mean Imagine over the course of your life, especially if you run a business. You can earn the equivalent of hundreds of thousands of dollars by simply using this little piece of plastic, responsibly.

My question is: Is Dave Ramsey implying that you are too dumb to learn this?

Look, I have to make this very clear, I respect Dave Ramsey a lot and I admire his work. For the one thing I don’t agree with, I agree with the 99 other things in his philosophy. It’s very clear from the data that most Americans are in debt and credit card benefits should be the last thing on their agenda. However, here’s what I don’t understand. Why not go the route of educating the mass and helping people leverage some of these amazing benefits that America has? We all know that America is the greatest country on this planet when it comes to capitalism, yet we have some of the biggest debt issues in the world due to a lack of education.

In my eyes, the resolve is education. With the advent of technology I’ve noticed that the youth is becoming more & more pragmatic about their approach when it comes to finances.

Kids are becoming smarter, did you see that in your data Dave? I would like to be on the progressive end of financial literacy, and that’s why I started this YouTube channel in the first place. I don’t feel particularly intelligent or smart. Infact, I know that I’m not either. I know that I’m not much different than most of you watching. I’ve just been doing this for many years now. I will create a high level of wealth by leveraging every aspect of capitalism this country has to offer.

I will live like no one else so that later I can live & give like no one else.