Dave Ramsey is a smart guy. But it’s one of his advice that I’ll never listen to

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It’s not reasonable for me.


Key points

  • Dave Ramsey is not a fan of consumer debt.
  • I think he takes that concept a bit too far when it comes to credit cards.
  • Credit cards are useful for establishing credit, earning money and dealing with financial emergencies.

Even if you don’t tend to spend your time reading personal finance blogs, you’ve probably at least heard of Dave Ramsey. He is a well-known personality who not only has his own blog, but has also made countless media appearances where he has offered a wealth of personal finance advice.

One thing Ramsey is known for is his anti-debt stance. Simply put, Ramsey doesn’t like to see consumers burdened with heavy interest payments that limit their ability to save, invest and achieve other financial goals.

I happen to agree with Ramsey on this. I’m not a fan of debt either, which is why I make it a point to always pay off my credit cards in full each month. I have also, in the past, tried to limit the non-credit card debt I have accumulated.

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When I needed to buy a new car a few years ago, I made sure to buy one that came with affordable auto loan payments. And when I bought my house about 13 years ago, I made sure I only got a mortgage that easily fit my budget.

But while I applaud Ramsey for encouraging consumers to avoid debt, there is one piece of advice I disagree with. And that may not work for you either.

Avoid credit cards altogether

If you asked Ramsey how many credit cards the average consumer should have, he would say “zero”. But I completely disagree with this line of thinking.

There is a big difference between credit card usage and credit card debt. The latter is something consumers should try to avoid to the best of their ability. (Sometimes credit card debt is unavoidable, such as when an emergency or illness strikes.) But it’s more than possible to use credit cards and benefit from them without getting into a bad financial situation.

Because I stick to a tight budget and regularly monitor my credit card usage, I can avoid carrying over a balance from one month to the next. This way, I can avoid paying interest on my purchases.

At the same time, I enjoy the benefits of having credit cards. I frequently earn money on my purchases, and in the past I’ve gotten some pretty great sign-up bonuses for spending a certain amount within months of opening new credit card accounts.

And that’s why I don’t follow Ramsey’s “don’t have a credit card” advice. I think people who can admit they lack self-control on the spending front should consider cutting their cards. But if you’re not one of those people, there’s no reason not to be.

Moreover, the reality is that sometimes emergencies do strike, and not everyone has savings money to tap into. Having a credit card could serve as a lifeline for situations like this beyond your control.

Advice taken with a grain of salt

While Ramsey may mean well when he advises consumers to avoid credit cards, that advice doesn’t work for me. And it may not work for you either, and that’s okay.

Credit cards can be a very useful financial tool that benefits you financially. And there’s no reason to assume that having them will automatically put you in debt.

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