Dave Ramsey Plan

[niebloomj]

But if you’re stating that for anyone and everyone that the rewards gained is better than Ramseys svara then I have to argue. Because for most people it will be detrimental to them to use a credit card over cash even after calculating the rewards.

I never claimed that. People that spend more using credit cards should stop using credit cards. I set all my clients up with strict YNAB budgets so after each purchase they have to allocate which bucket of money it's being paid with to cover the charge.

Unless you’re saying that the people spending more are spending so much more so it’s skewing the study so dramatically. Maybe but I wouldn’t assume so unless you have something backing it. As one can see by themselves how easily people swipe for things right and left these days.

Yes, that is my proposition. I don't have data to support that the data is skewed, it's my hypothesis. I'm claiming we don't know and it's not a helpful stat to bring up for people budgeting properly. If you want to claim that the stat is spread equally with no skew so that it applies even to those operating a fiscally responsible budget, then the burden of proof would fall to you to show the datas distribution.

[Yo ssi]

Sure recipe to get shut down

-1
No problem as long you aren't credit cycling.

No question using a credit card even if paying at the end of the month on time (or even every day) you end up spending more.
Debit card my guess is people spend more (not as much as credit cards). But nothing beats cash, You run out of cash there's nothing to talk about until you go to the bank or replace it.

I don't think anyone will argue that the convenience of online shopping makes it a lot easier and more likely to spend and technically if one just used cash there overall purchases would be less.

[niebloomj]

-1
No problem as long you aren't credit cycling.
I don't think anyone will argue that the convenience of online shopping makes it a lot easier and more likely to spend and technically if one just used cash there overall purchases would be less.

Agree on both comments here. It's just a Ramsey straw man to talk about the convenience of credit cards to paint them as evil.

[MiInvstr]

I never claimed that. People that spend more using credit cards should stop using credit cards. I set all my clients up with strict YNAB budgets so after each purchase they have to allocate which bucket of money it's being paid with to cover the charge.

Yes, that is my proposition. I don't have data to support that the data is skewed, it's my hypothesis. I'm claiming we don't know and it's not a helpful stat to bring up for people budgeting properly. If you want to claim that the stat is spread equally with no skew so that it applies even to those operating a fiscally responsible budget, then the burden of proof would fall to you to show the datas distribution.

“If paid off monthly and used responsibly, credit card benefits can be worth it and help with growing wealth via cashback or traveling with your family with travel rewards.”

Ye it can be worth it but chances are it’s probably not worth it.

Try for yourself to walk into a liquor store and buy a bottle of wine or whiskey with cash. See how much you save.

[MoYS]

Ramsey doesn't mandate cash, they are fine with debit cards which have the convenience of online shopping. There are two separate issues, one is the very usage of debt, the other is the amount spent because of it. Whether or not they are connected is debatable but they don't push the point so much on the pod.

I actually like the DR pod for the way they give over their message, they spend most of the time discussing ways to be proactive, to be intentional with money. If you are truly intentional you won't spend more, be it cash debit or credit, and if you are not intentional using cash is just a hindrance, not a mentality shift. They only recommend cash when someone has unchecked spending habits.

[MiInvstr]

Ramsey doesn't mandate cash, they are fine with debit cards which have the convenience of online shopping. There are two separate issues, one is the very usage of debt, the other is the amount spent because of it. Whether or not they are connected is debatable but they don't push the point so much on the pod.

I actually like the DR pod for the way they give over their message, they spend most of the time discussing ways to be proactive, to be intentional with money. If you are truly intentional you won't spend more, be it cash debit or credit, and if you are not intentional using cash is just a hindrance, not a mentality shift. They only recommend cash when someone has unchecked spending habits.

They are somewhat fine with debit cards maybe but not with credit cards.

[moko]

Try for yourself to walk into a liquor store and buy a bottle of wine or whiskey with cash. See how much you save.

once again....same argument cash vs debit card

[NYHeel]

I've been watching some Dave Ramsey videos recently. He's got some really good practices mixed in with some so-so stuff mixed in with some ridiculous stuff (his 8% retirement withdrawal rate stuff is completely absurd). But overall, his premise is very good for most Americans. In regards to credit card use I've come to the following conclusion. If you're living paycheck to paycheck with a very limited backstop then you likely shouldn't be using credit cards. Everyone goes in assuming they'll pay it all off every month and yet most people don't do that. It's because it's just so easy to not pay the full balance when challenges arise. You're better off just not starting since there's a really good chance that things will go awry at some point.

If you've got a 3-6 month emergency fund or some other form of a backstop like liquid investments then I think credit cards are a good way to spend and get points on the side. But if you have no backstop, I believe that there's a strong likelihood you're going to fall into credit card debt at some point. That's not to say you can't take out personal loans or things like that if you don't use credit cards, but it's just so easy to fall behind on credit cards if you don't have the cash to cover you when you have a few bad months.

This is why I'd recommend young adults just starting out not spend on credit cards until they've built up some savings that can help withstand the typical fluctuations that occur. Sure, some will be fine using credit cards but this just seems like a prudent move to avoid opening yourself up to major risk. I'd also add that using a debit card or cash also makes you more likely to properly budget since you need to do a better job managing your bank account to ensure your funds are actually there. 

[avromie7]

I've been watching some Dave Ramsey videos recently. He's got some really good practices mixed in with some so-so stuff mixed in with some ridiculous stuff (his 8% retirement withdrawal rate stuff is completely absurd). But overall, his premise is very good for most Americans. In regards to credit card use I've come to the following conclusion. If you're living paycheck to paycheck with a very limited backstop then you likely shouldn't be using credit cards. Everyone goes in assuming they'll pay it all off every month and yet most people don't do that. It's because it's just so easy to not pay the full balance when challenges arise. You're better off just not starting since there's a really good chance that things will go awry at some point.

If you've got a 3-6 month emergency fund or some other form of a backstop like liquid investments then I think credit cards are a good way to spend and get points on the side. But if you have no backstop, I believe that there's a strong likelihood you're going to fall into credit card debt at some point. That's not to say you can't take out personal loans or things like that if you don't use credit cards, but it's just so easy to fall behind on credit cards if you don't have the cash to cover you when you have a few bad months.

This is why I'd recommend young adults just starting out not spend on credit cards until they've built up some savings that can help withstand the typical fluctuations that occur. Sure, some will be fine using credit cards but this just seems like a prudent move to avoid opening yourself up to major risk. I'd also add that using a debit card or cash also makes you more likely to properly budget since you need to do a better job managing your bank account to ensure your funds are actually there.

This sounds like a nice shtikel, but a responsible person will only end up in CC debt when the alternative is to not eat. As bad as CC debt is, forcing a family to starve or have their electricity shut off isn't a better option.

[aygart]

This sounds like a nice shtikel, but a responsible person will only end up in CC debt when the alternative is to not eat. As bad as CC debt is, forcing a family to starve or have their electricity shut off isn't a better option.

There are a number of people who I otherwise considered to be responsible who ended up with CC debt and there was no concern of starvation. I can even understand how it ended up happening.

[NYHeel]

This sounds like a nice shtikel, but a responsible person will only end up in CC debt when the alternative is to not eat. As bad as CC debt is, forcing a family to starve or have their electricity shut off isn't a better option.

This is complete nonsense. There are so many people in credit card debt and very few of them got there because they needed food to eat. They got there because they were living the way their friends lived. They got there by spending money on items that aren't essential, eating out/taking out from restaurants being a primary money waster. Or maybe our definition of a responsible person is very different. I'm thinking of people I know that are solid responsible people but make mistakes financially by spending more than they should because they and/or their spouse work very hard and want those things and see others with it. It's really easy to justify purchases because they aren't large on their own. Things like, I've been working really hard so we're going to take out again tonight. Each purchase isn't outlandish but they add up really fast. This is done by responsible people. 

[Kobe Bryant]

This sounds like a nice shtikel, but a responsible person will only end up in CC debt when the alternative is to not eat. As bad as CC debt is, forcing a family to starve or have their electricity shut off isn't a better option.

Seriously or just trolling?

[chbochur]

This sounds like a nice shtikel, but a responsible person will only end up in CC debt when the alternative is to not eat. As bad as CC debt is, forcing a family to starve or have their electricity shut off isn't a better option.

IMHO a really responsible person will realize this is the time to reach out to others for help instead of snowballing into major debt to a point that no one will be able to help put him back on his feet.

[NYHeel]

IMHO a really responsible person will realize this is the time to reach out to others for help instead of snowballing into major debt to a point that no one will be able to help put him back on his feet.

That's true but a lot of people are also somewhat ashamed to ask for help when it comes to things like this. Or they may not have anyone capable of providing meaningful help.

I've got no issue with credit cards. I have always used them and have accrued a lot of value from the points/sign-up bonuses. I just think credit cards should be left to people who have room to withstand the bumps in the road that inevitably arise.

[chbochur]

That's true but a lot of people are also somewhat ashamed to ask for help when it comes to things like this. Or they may not have anyone capable of providing meaningful help.

I've got no issue with credit cards. I have always used them and have accrued a lot of value from the points/sign-up bonuses. I just think credit cards should be left to people who have room to withstand the bumps in the road that inevitably arise.

Of course people are ashamed. But imagine how much more ashamed they are later.

Whenever you're gonna answer it will always be harder later on. Better get a handout now then when a handout won't even help.

I deal with this every day and all stories are similar, they had a small emergency/simcha/temporarily lost job and before you know it they are deep into it when all they needed was a small loan from a friend or a one time handout from the community tzedaka fund. But instead of reaching out they decided to borrow on credit cards and a small purchase here and a small purchase there ends up being tens or when hundreds of thousands of dollars.

I'm not ch"v blaming anyone or judging how they got there but this is the narrative every time. Which is a shame cause it can be avoided if taken care of the old fashioned way.

Another point is (aside from sign up bonuses) there is no way that regular every day spending on a credit card with all the points earned are more economically sound then debit/cash. You always end up spending more.

Btw iirc discover has some sort of points or cash back program on their debit cards

[db23]

The "gemachs" I know that do this charge a monthly fee, not an upfront fee, so I guess that's better? Idk. I am still confused why its called a gemach given the profit / profit margins for the service, but that can be another thread.

the gemach links you up to a frum law firm, they cover the initial meeting. the lawfirm works with a 3rd party NGO who negotiates with the cc company's. the charge is up front with a cc and that is rolled in along with your other balances into the program. they work out the math and show you the amount you will be saving and its a very large savings!

[db23]

Sure recipe to get shut down

i paid my bill a few times a week for a long time and even pre paid weeks and weeks in a row with amex, never had an issue.

[Yo ssi]

i paid my bill a few times a week for a long time and even pre paid weeks and weeks in a row with amex, never had an issue.

Credit cycling? (stay away)

[Euclid]

Credit cycling? (stay away)

No problem on a charge card

[Yo ssi]

No problem on a charge card

By definition it can't be credit cycled?