There’s nothing I hate more in this world than people who sit on a soapbox and preach gospel (not literal gospel) to innocent people like you. This is actually funny because it’s exactly what I’m about to do 😀

One of these people is Dave Ramsey, “personal finance guru”.

Look, I think Dave Ramsey is knowledgeable about personal finance and I have actually found some of his videos to be helpful. Unfortunately, Dave is not an expert when it comes to travel rewards credit cards:

On the surface, I don’t think Dave Ramsey has ever met Brian Kelly of The Points Guy, who literally made millions on airline miles.

But anyway, I dug a bit deeper into this tweet and came across this “Ask Dave” piece. A reader calls into Dave and asks the following:

Jackie in Cincinnati just read The Total Money Makeover, and she agrees with everything except giving up her credit card debt—especially since she’s never had credit card debt. She uses it for airline miles to give away tickets to family and friends. Should she keep the credit cards?

I must say, Dave’s response is riveting and full of bullshit. Let’s fact check:

“The debit card will do everything the credit card will do and if you think these airline tickets are changing your net worth, then you’re getting caught up in a game.”

Last I checked, my debit card does not give me 3x points on Eating Out, Travel, and Gas, through which I am able to redeem directly for cash back. Just by using my Wells Fargo Propel card this year, I have been able to redeem $1,000 in statement credits — FREE MONEY.

And who thinks airline tickets will change net worth? Huh? I’d even argue using credit cards wisely to redeem for tickets will have a positive effect on net worth by reducing discretionary spending…but what do I know.

“A person can spend up to 60% more using plastic than with cash. The extra you spend to gather up enough brownie points and airline miles is enough to buy the airline tickets.”

Says who? What a ridiculous generalization. He’s literally telling you that you aren’t disciplined and that you are reckless and can’t be trusted with money.

I’m not spending money just to buy airline points. Why would I spend $1,000 to get enough points to redeem for a $300 airline ticket? The cost/benefit is idiotic and I haven’t met anyone that does this.

I’m sure there are people that do it, but to sit there and grossly generalize the population is an insult to mine and your intelligence.

“I’ve met with thousands of millionaires, and I’ve never met one who said they made all their money with their airline miles. Your life is what will cause you to win, not a credit card. The credit card company has done a great job of making you think you’re actually winning.”

Your life will cause you to win!

What the flying f***? Oh right, how about you pick up this glorified notebook to make all of your goals be accomplished in 2019:

Did I mention it’s $49-f*****-dollars? And that isn’t a waste of money?! You’re right, Dave, making all of your money with airline miles isn’t realistic, but when I spend on average $2,000 a month in discretionary spending on groceries, eating out, gas, and other every day expenses and am able to earn airline tickets every couple of months — I’m winning.

“But at the end of the day, if you are not spending more and they are not collecting more fees on you than you cost them in airline tickets, they aren’t going to keep you. You are what the credit card industry calls a freeloader.”

They aren’t going to keep you?! I thought it couldn’t get worse…but here we are.

Dude, credit cards are not passes to a frat house, where if you don’t beat up the freshmen you’ll get kicked out. I’ve never met anyone who has had a credit card taken away because they didn’t spend enough. Just stop.

Final Word

What I think Dave Ramsey is TRYING to say, but in true Dave Ramsey fashion literally can’t express himself without sounding like an aggressive a-hole, is that people who are in debt might want to put the credit cards down and only spend what they have.

Unfortunately, caught up in all of this valuable teaching is just a whole lot of over-generalization, far-reaching “research”, and just flat out lies.

My advice? Be smart, don’t overextend yourself, and always weigh costs/benefits.

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Jim F.
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Jim F.

In general, I agree that Dave is overstating an otherwise sound position: “Don’t live beyond your means and if credit cards tempt you to do so, abandon them ASAP.” However, you made the following statement, “I’ve never met anyone who has had a credit card taken away because they didn’t spend enough.” Well, now you have. Capital One unilaterally cancelled a credit card I had held for years because I hadn’t put enough spend on it. My attempt to appeal my cancellation, despite my promise to put blow the dust off my card (which I had personalize with a photo… Read more »

UnitedEF
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UnitedEF

I’ve had cards canceled and credit line reduced because I didn’t spend enough. I think I read somewhere the card companies have to have enough to cover your line so if you don’t spend they are better off allocating the line elsewhere. You have to keep in mind his audience it is usually made up of people who have real trouble with their spending so cutting up the credit cards is the first step to reducing their debt load. I’ve listened to his show mainly to hear about people who are $500k in student loan debt only to take a… Read more »

Eric
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Eric

Brian Kelly is THE world a*hole product pusher. His options are far from honest.

John L
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John L

Geez.. what anger you have – or really thin skin. What is not BS is that America in general spends way beyond their means, starting from the fed gov’t to the individual. Big deal if he thinks that no one can control their spending on a CC. America would be better off reducing the amount of credit available to everyone. Congrats to you if you can keep your financial house in order with your credit cards, but the fact is CCs are designed to make you spend more just like a casino is set up to make you gamble more.… Read more »

Billy Bob
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Billy Bob

Remember: Dave’s audience are those that truly “aren’t disciplined and that … are reckless and can’t be trusted with money.”
He’s probably right to tell those folks to stay away; their track records are poor!
I was pretty wealthy in my very early 20s and bought a high-end sports car.
I hit a tree in it – totaled it. I couldn’t handle the power at that age. Of course my insurance saved me, but I sure learned my lesson.

Steve
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Steve

Dave’s advice is sound for those starting out. I would modify his advice to allow for cash back cards and cards that allow for statement credits with the caveat that the money saved by using credit cards should be used to pay down debt, then invest. Once you are comfortable, then you should use points and miles to take vacations that you could otherwise pay for with cash.

Shawn
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Shawn

You do realize Dave Ramsey filed bankruptcy himself. Not sure what now all of a sudden caused him to be some personal financial guru. He’s a typical bible humper idiot who takes advantage of people but it’s different….because you know….it’s him doing it and not someone else. Not really sure how live within your means is some unknown advice only a select few can give. Why anyone gives this dipwad the time of day is beyond me. Go hump your bible elsewhere. He also tells those barely able to live to put money aside for god. Thank god for Fox… Read more »

John
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John

Dave’s teaching are for the financially irresponsible. He advocates paying off a house faster versus investing in the market and taking the interest costs as tax deductions. Is not good advise for people who are good with their money, but that’s not his target audience. His message can’t be full of caveats, or else it becomes confusing.

Some stray suboptimal advice is needed to keep the message simple for the masses he helps.

Kevin
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Kevin

Dave Ramsey’s assumes his audience is either not financially savvy or the financial equivalent of an alcoholic. Why else would they be asking for his advice? When an alcoholic asks if he should have a beer to celebrate his birthday, the prudent advice is to say no. You can’t get drunk if you never take a drink.

Every credit card in my wallet is either a cashback or mileage card. I’ve never paid one cent in interest on a credit card. But I think Dave Ramsey’s advice is good for most people.

Anthony
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Anthony

Me and my wife follow Dave Ramsey methods and are about to be debt free by January. Started off at 15,000 in debt and down to less than 2,000. Overall I do believe his methods and they have worked overall but we have altered some of his methods at times. I do agree that as long as your responsible with your credit card spend and pay of off each month you’ll be fine. I also agree with the other poster that Dave is more so for really irresponsible spenders who don’t have money control. Miles for credit cards do help… Read more »

Rup
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Rup

I have been listening and following Dave Ramsey for a year and I like what he teaches. I agree with everything except his views on credit cards. I know that using credit cards won’t make me rich. I use them to save me money. I have used points and miles to fly first and business class products around the world on flights that would have cost me tens of thousands of dollars. I have used many hotel points and free night certificates to save thousands of dollars. I agree that most people have no self control when it comes to… Read more »