25 Reasons Dave Ramsey’s Credit Card Advice Is Impractical

We wholeheartedly agree with Dave Ramsey on many things. First, credit cards can seem unethical to some people, and the average Joe may not have the discipline or financial intelligence to use them carefully.

Second, a credit card is a risk and a trap unless one is affluent, and even then, it can quickly turn into a hot mess. However, credit cards can be effective if you have your financial issues sorted out and no longer have to worry about debts, monthly installments (EMIs), and late fees.

In this article, we examine why Dave Ramsey’s credit card advice cannot be generalized and why a black-or-white approach is impractical. Credit cards can be great if you are not financially weak, have an emergency fund in the bank, and use them only for convenience. Here are 25 reasons why you may need a credit card regardless of what Dave Ramsey thinks.

1. Autopay Is Great

Many people, including Dave Ramsey, advise you to refrain from setting up automatic payments on your credit card, except under certain circumstances. There is truth to this advice because you end up paying for many subscriptions you may not even need.

However, if you only use it to pay off your utilities and other essentials, you can avoid late payment fees and penalties. Moreover, do you want your Wi-Fi connection interrupted because you forgot to pay your bills?

2. Credit Cards Help You Keep Track of Your Finances

Credit cards keep track of all your expenses at every retail store and online touch point. This means you can always go back and check if you have a doubt and raise claims if something is amiss.

When you pay by cash, you can’t do this. Of course, you must ensure you don’t have any outstanding credit card debt if you choose this way.

3. Loyalty Programs Are Useful

Dave Ramsey often views loyalty programs as useless and hogwash. However, we tend to disagree.

People can save a lot of money when they enroll in loyalty programs and gain access to members-only discounts and offers. These are often offered to certain credit card users only, making it essential to have one.

4. Helps You Practice Discipline

A credit card loan is undesirable, and most people need financial discipline. However, do you want to live in anxiety and fear that you may do something wrong?

As an adult, you must practice financial discipline and learn how to use a credit card to your advantage. You can’t live in fear forever and depend on cash perpetually. That sort of paranoia is not always helpful.

5. Helps You Prioritize Expenses

Most people don’t prioritize their personal and emotional needs, let alone their expenses. As a result, having a card next to you can be tempting if you are impulsive. However, this could also be a valuable behavioral experiment for you to try.

You can use the same credit card to instill the habit of prioritizing your expenses and learning self-control. If it’s a priority, use your credit card and pay it off at the end of the month. If it’s not a priority, use cash.

6. You Don’t Necessarily Spend More When You Pay Using Plastic

Dave Ramsey often states that you spend more if you use plastic to pay. This is not the case, and only a few studies claim so.

Once you realize that money is money, whether plastic or cash, you will become more disciplined and careful. In fact, using plastic is an essential component of adulting.

7. There Will Be Emergencies

Most financial advisors like Dave Ramsey suggest having an emergency fund of 3 to 6 months’ expenses. However, we all know that true emergencies can stretch beyond your accumulated funds. Instead of asking your friends or someone you know for favors, you can use your credit card if you can pay it off the very next month before they start charging interest.

Moreover, even if your friends or family members agreed to lend money during an emergency, they may need to transfer funds. Use the credit card until the money arrives in your bank, and pay it off immediately.

8. Teaches You More About Money Than Your Parents

Credit cards are not your best friends, and that’s one of the reasons why people like Dave Ramsey have created careers out of advising people not to use them. However, life is all about accepting responsibilities and taking risks.

Having a credit card teaches you not to take things for granted and to be careful of your own decisions. It wouldn’t be an exaggeration to say that it teaches you more about money than your parents.

9. Everything Is Digital

We have very quickly moved into a world where cash has become obsolete. Many countries have demonetized and encouraged their citizens to use plastic money.

Most merchants accept only credit cards online, and if you forego using them, you’ll miss out on all those interesting online stores. You can’t escape using a credit card even if you want to.

10. Certain Transactions Require Credit Cards

Certain transactions, such as shopping online, require a credit card. Credit cards sometimes act as authentication tools through which financial entities verify your identity.

In the early days, Apple required every user to share their credit card to use its services. Dave Ramsey may disagree, but there are many services that people would like to use that only accept credit cards.

11. Teaches Self-Control

There are a lot of people who go out of their way and purchase everything they can using a credit card. Dave Ramsey’s target audience is that kind.

If you belong to this demographic, don’t use a credit card. On the contrary, whenever you’re tempted to use it, you can tell yourself that you’re not part of the demographic and can control your spending urges.

12. Helps You Foresee Emergencies

Dave Ramsey often advises getting rid of all kinds of debt, including credit cards and focuses on having an emergency fund. However, you cannot foresee the type of emergencies you may have.

A credit card helps you prepare for such eventualities and live worry-free lives. Instead of stagnating your emergency fund, you can invest it in something more lucrative.

13. Instills Necessary Fear

Dave Ramsey and other financial advisors have created a bogeyman from credit cards. This fearmongering is unnecessary and can work against people’s spending habits. They may make wrong investment decisions just because they need more credit available.

Speaking of fear, it’s important to remember that this primal emotion is often necessary to protect ourselves, including financial emergencies. When you fear using credit cards, you are less likely to use them.

14. Demonizing a Financial Instrument Isn’t Necessary

A credit card may charge you very high interest rates, but that is how this financial instrument works. Unless you understand that credit cards are costly loan facilities, you shouldn’t use them anyway.

Instead of demonizing a legitimate financial instrument, know that you can get into serious trouble if you use it carelessly. This allows you to be wary yet confident about when to use it.

15. Credit Card Discounts Do Add Up

Several credit cards offer discounts on purchases that you make. Some may offer cashback, and others may provide flat discounts on purchases.

Even if it is as low as 3%, it adds up to something at the end of the year. Of course, we hope you belong to something other than the target demographic of Dave Ramsey, who gets into financial trouble by recklessly using their cards.

16. Purchase Protection Is Important

Dave Ramsey may advise you to pay by cash everywhere, but he may have overlooked that cash payments do not usually come with purchase protection.

If something goes wrong with the product you purchase and the merchant doesn’t oblige, you can always complain to your credit card authorities. You may be entitled to purchase protection if the product is not delivered or if there is some fraud.

17. You’ll Miss out on Chargebacks

Similar to purchase protection, chargebacks are only possible on credit card payments. If you notice fraudulent transactions on your statement, you can quickly call customer care and request a chargeback. Most chargeback claims are arbitrated in favor of the customer.

Considering the rise in online scams and fraudulent transactions, these facilities are extremely important for people who shop online and others.

18. For Some People, Credit Score Does Matter

Although Dave Ramsey is strictly against taking loans or building up a credit score, his advice cannot be applied universally. Many people depend on loans and mortgages as financial instruments and credit scores do matter.

When you use your credit cards judiciously and make payments at the end of the month before they charge you interest, your credit score starts to build. This can be very helpful when applying for a mortgage or a loan.

19. You Can Dispute Billing Errors

There have been several incidents where customers pay by cash and cannot dispute billing errors. The merchant may argue that the balance was paid in cash, but there may be no proof.

However, if you pay using a credit card, it becomes easier to dispute such billing errors. This gives you peace of mind, knowing that your money will not be misused by anyone.

20. Helpful During International Travel

If you are the kind of person who travels abroad frequently, you can’t simply be carrying cash, hoping that you’ll get a reasonable exchange rate. Carrying cash may work in some countries, but it’s always safer to have your credit card beside you in some situations.

Even if you lose it, you can call customer care and ask him to block the card. After all, losing your credit card abroad is safer than losing cash.

21. You Have an Interest-Free Period to Purchase Things

People like Dave Ramsey promulgate the fear that any credit card purchase accompanies a payable interest. This is not true and amounts to fearmongering and paranoia. Every credit card offers an interest-free period during which you can make purchases and return the whole amount without being charged. Moreover, you can even earn loyalty points and discounts in some cases.

22. You Can Analyze Your Expenses

Tracking your expenses is one thing, but analyzing it is an entirely different ballgame. A credit card gives you the tools to understand how you spend your money and where to scrimp your budget.

You may notice that you’re spending money more often on Uber or eating out, giving you valuable insight into planning for the next month. As a result, you will notice that you will spend less money each month.

23. Some Cards Offer Extended Warranties

Whenever you purchase a product using a credit card, there is a high likelihood that you will be offered extended warranties on certain products. Instead of buying an extended warranty separately, you get it for free.

This allows you to get your product fixed or replaced if something goes wrong within the assured period. Imagine the amount of money you will save if an expensive product that is faulty is replaced for free.

24. Credit Cards Are Overrated

Unless you are not financially savvy or are prone to impulsive purchases, there is no need why you should not be using a credit card. It offers the convenience of not carrying cash around you, and even if you lose it, you can immediately block it.

Most importantly, it’s a simple financial tool often overrated. Just use it when it serves the purpose, and ignore it at other times.

25. Just Another Financial Tool

A credit card is one of the many financial tools available to consumers today. Ignoring or avoiding it as if it were a disease is unnecessary.

Many people like Dave Ramsey have built careers demonizing credit cards, but the reality is far less sinister. If you have the personal qualities to control your urges and be conservative, then a credit card is just another financial tool to use.