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A better approach would be to teach people how to use a credit card properly. I've setup my credit card to be paid off in full on the due date each month so I
by tjmc 18y ago
A better approach would be to teach people how to use a credit card properly.
I've setup my credit card to be paid off in full on the due date each month so I pay no interest. My savings account is offset against my mortgage, so it's generally better to pay by credit card as that defers savings account withdrawals (thus saving mortgage interest) by up to 45 days.
The card fee is paid by reward points on the card and there's enough extra points per year for between $200 & $400 in store vouchers.
So combining the mortgage interest savings, the rewards payouts and the fact I pay no interest or annual fees, I'd guess the card saves me ~$1000 a year.
As a debit card is just as easy to use as a credit card, the argument that I'm likely to spend more with a credit card is bogus as well.
I suspect the fees Dave Ramsey would have to pay on credit card transactions may be higher than on debit cards though...
- neilk 18y agoAs a debit card is just as easy to use as a credit card, the argument that I'm likely to spend more with a credit card is bogus as well. Except for the credit card continuing to work even if you don't have the funds right now?
- Psyonic 18y agoUnfortunately, so will be the debit card (til all the charges go through, at least). Then you get the wonderful luxury of paying multiple $35 overdraft fees on top of your bills, which is exactly what you need when you're hurting. Cash only is probably the best policy for these people.
- jimbokun 18y agoYou are not Dave Ramsey's target market.
- jcl 18y agoI suppose a good middle ground might be to request a card with a very low credit limit. Most card companies will lower your limit if requested, and it's presumably easier to resist requesting a credit increase than it is to resist spending a little more on a higher-limit card.