Dave Ramsey has plenty of opinions: some good, some not so good. Possibly his most controversial belief is that credit cards are unconditionally nefarious. His reason? The potential positives of credit cards — rewards, cash back and credit-score building — don’t outweigh the potential negative of credit card debt. And no one can be trusted to use them responsibly.
“Responsible credit card use just doesn’t exist, no matter what the famous actors tell you in commercials,” Ramsey says on his website. “There’s not a single good reason to keep a credit card around — not even for points and miles and all that baloney.”
Ramsey isn’t wrong about credit card debt being a major problem in America. The average American has a credit card balance of $6,200, according to credit bureau Experian. But when it comes to credit cards, financial experts think he’s wrong about everything else. We asked 23 certified financial planners if credit cards were completely bad. They all said no.
Q: Dave Ramsey says "There's no good reason at all to have a credit card." Is he right?
Why experts say Ramsey is wrong
“There can be several benefits to having a credit card when used carefully. There are many credit card programs that provide great rewards such as cash back, airline miles, and/or free hotel stays. Pay attention to the card's annual percentage rate and annual fee(s) before selecting one and pay your credit card bills each month on time to avoid any late fees, interest, and damaging your credit score.”
— Haley Tolitsky, certified financial planner at Cooke Capital
“This is not only wrong, but addresses people as perpetual children. Dave deals with people who have difficulty controlling their spending, and the result is extraordinary revolving balances. While this can cause significant finance damage, it is better to learn to control the spending.”
— Vince Clanton, certified financial planner at Chancellor Wealth
“Dave Ramsey appeals to the general public as an entertainer. Credit cards can provide great benefits for their users, if used responsibly. Forget the interest rate — if you pay them off on time you don't owe interest. Think about the benefits, such as extended warranties or cash back. Also, if your debit card is compromised someone could have access to your entire savings or checking account.”
— Michael Whitman, certified financial planner at Millennium Planning Group
“Ramsey is wrong. For responsible credit card users this can mean leaving significant money on the table since most credit cards offer rewards and savings on their purchases. It's also a way to start building your credit, making it easier to apply for loans in the future such as a car or home.”
— Carl Holubowich, certified financial planner at Armstrong Fleming & Moore, Inc
How to responsibly have a credit card
If you want a credit card for the rewards and security but worry about debt, here’s some tips for responsible use:
- Track your spending. Use a spreadsheet or app to monitor your purchases, and set a maximum amount you’ll put on your card.
- Automate your payments. Pay your credit card bill in full each month with a recurring payment, so you’ll never forget.
- Set up roadblocks. Curb impulsive spending by creating some friction: For example, don’t save your credit card information online.
Ready to apply for a card? Make sure you avoid this innocent mistake.
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Image: Nastia Kobzarenko