Why I'll Never Use a Credit Card 

Rachel, don't forget that credit card companies not only make money off of fees and interest, but off of transaction charges the seller of the product you are buying has to pay to use their services.. which is why you see some vendors offer discounts for cash payments. As an online vendor, more than once I lost money on a sale - due to transaction fees.. which all get passed on to the consumer.. even the cash buyers have to subsidize the added cost in most cases. Thanks for posting this video!

I have been using credit cards since I was 18. Paid them off fully every month and have never paid a dime in interest and have made thousands off cash back rewards. By the time I was 25 I had a credit score in the high 700's, bought a house with 2.5% fixed interest. Not everyone can do what I do but there are many that can.

I am 41 years old and have never once used a credit card. Best decision I’ve made financially.

“The system being gross” really resonated with me

I totally understand why some people should not use credit cards. If you aren’t a responsible spender, it’s a dangerous game. However, I am extremely responsible with my money, & I use a credit card for purchases I would have made anyway. I use different credit cards that get me more cash back depending on the type of store I’m buying from. For example, a certain card at grocery stores because I get 4% cash back, or I use a certain gas station for 3% cash back, etc. I pay then off in full every month. I’ve gotten thousands of dollars in cash back over the years. It just takes discipline, but I realize a lot of people don’t have that discipline & use them irresponsibly. It all depends on the person.

I’m a responsible adult and I will always have a credit card. You can still budget and use a credit card.

I can attest to spending more (even if you pay it off every month). When we’ve done experiments on the months we only use cash/debit cards we save over 50% more. I’m way less likely to buy something if I know it’s coming directly out of my account. I’ve also found that we come way under budget in categories when we only use cash/debit (hence saving way more). The psychological effect is real.

I too used to think "I'll use this credit card for an emergency" but then what about the balance on the CC and the interest, who pays it? I do. It's better to put money aside and use _THAT_ as an emergency fund. My family is the type that uses a ton of credit cards, get themselves into debts, and then don't pay them or pay them when CC calls them or sends them letters. I'm debt-free and plan on being that way for as long as possible. Anyway, good advice, Cruze, and you have good intentions, but everyone is different so some will use CC responsibly and others irresponsibly. So.. yeah.

Here’s an idea. You can adhere to the Ramsey Solutions Team’s principles & use credit cards responsibly. Just because others are irresponsible doesn’t automatically mean you have to be irresponsible as well.

I'm in my Forties and my husband and I also don't have credit cards. If we don't have the money, we can't buy it.

My debit card was cloned after I used it at a gas station. My bank responded quickly and I did not incur any penalties, but I was lucky. I choose not to use a debit card to avoid this. I use my credit card and pay it off twice a month. Be responsible with your spending no matter what payment method you use.

Just because other people are bad with their money, doesn't mean you should be too. If you are responsible with your credit, keep using it, having a higher score will be useful at some point in life, but you don't know when until that time comes.

Absolutely hate using cash. Such a hassle. A credit card with rewards and auto payments in full each month is such a better option

This is an amazing message. I hadn’t thought of this before! Huge thank you! I get caught up in the dang rewards. Please continue talking about this topic. And maybe the steps to take to break up with our credit card, and the steps to take to start budget and using the Debit card instead. So inspiring.

Always keep multiple forms of payments. If your debit card is compromised, you need a different form of payment. Also you can keep a budget and use a credit card. Not that difficult.

I’m in the process of paying off credit card debt (I actually cut up my credit card a little over a month ago ✂️💳). What Rachel says at 5:54 gives me encouragement. Can’t wait to get to a point where I don’t owe anyone anything.

I've paid cash for all my purchases for over 20 years and never felt like I needed credit. I even saved enough to buy a brand new Ford F-150 Lariat with cash and the sales person looked at me like I had two heads.

I bought my last vehicle with cash and not with their line of credit. The car dealer looked at me like I was from Mars. I told him I'm paying with cash so take my money or the lot next door will. He took it.

All this talk about credit score. I'm just a regular guy and I have never felt the need to ever check my credit score.

Debt free. No credit card. Just Mortage.

We have people like Robert Kiyosaki who encourage debt; then you have people like Dave Ramsey who avoid it at all costs (2 extremests), its important to learn the benefits if both sides. What if, for example, you want to purchase a forplex to generate wealth, but you can only afford 20% of it? What if you wait to purchase your dream home but you're too afraid to finance so you decide to wait to buy it in full only to realize that the house that you waited for has appreciated 1.5-2x its value, now costing you more.

It’s not for everyone that’s sure.

I only use credit cards. As someone who has had their checking account hacked - trust me you don’t want that to happen. I use credit cards and pay them off weekly. Haven’t had a monthly balance in 20 years.

Here is an idea for a video. Give us a behind the scenes tour of Ramsey Solutions. Many of us will never get there.

I just redeemed $200 in credit card points. I don’t pay interest because I pay my credit card off every month. It’s easy if you’re responsible. Also. Fun fact. When someone steals your debit card information it’s hard to get that money back but with a credit card, stolen money is easy to recover. When I go on vacation I don’t want to worry about trying to find a rental car company that will accept me. Sounds like hogwash.

Using a credit card allows me to do a version of the envelope system online. Surprised that more people do not talk about this. I have an online bank that allows me to split my savings account into categories. Each month I deposit a pre-determined amount from my paycheck into each category, then every two weeks I pay off my credit card from money gathered from each category. If a category reaches zero, which rarely happens I cut back at that point. If you do this right you will rely less and less on your paychecks and more on the online buckets/envelopes that have accumulated money over time.

I work for the county. When I got hired they had to check my credit history and score on top of the background checks. It was intense lol.

I understand the principle of not having credit cards, but if you’re responsible then there isn’t a problem. Take advantage of the perks.

I am 67 years old and when I was in my 20's I borrowed money for my first car. I realized then how bad dept was. Never again! Larry Burkett showed me a better way.

I agree and I prefer to pay cash as much as possible. However you may be out of luck with just a debit card if you are traveling outside the US. Some car rental and hotels accept credit only.

If you have DISCIPLINE AND INTELLECT to stick to your budget and pay it off monthly you can use them. 18% interest for those who don't have these abilities, well, they SHOULD NOT use them. But, PLEASE GIVE SOME CREDIT TO THOSE OF US WHO ARE INFORMED ENOUGH TO Succeed AT THIS.....I DO NOT PAY INTEREST AND HAVEN'T SINCE 1980!!!!

I follow 99% of the Ramsey principles besides this one. I have one credit card. Have never carried a balance nor paid a single PENNY in interest. Not even an annual fee! Have $1200 in points that will let me take a fun trip nearly anywhere in the U.S. for free. I'd say that's a pretty good deal, in addition to all the other benefits my card gives me.

Exploiting others' interest/late payments for my flights and hotel stays is one of the most fun things I've ever done

I use VISA or Master Card when I travel international , very easy you don't have to cary cash money and still stay within monthly budget

After getting in debt, the trying to use a debt payment plan, then getting served, going through bankruptcy and then finally being discharged I don’t use credit cards anymore. I don’t want to go through that again.

Never have used a credit card before! Only have been living on debit card most of my life with none of the problems described in the comments.

I travel about 45% of the year (160 days) for work. In 2017 when I went aggressive with paying off my student loans and car loan, I quit using credit cards full stop. It for sure helped me get to the goal of being debt free. To this day, I still do cash envelope budgeting for my dining and groceries since I always find it easy to overspend with those categories. However, after a recent run of gigs I had in Europe, I was curious post--covid era how easy it would be to only use my debit card. In Germany, France and the UK I ran into several problems at hotels, restaurants, and particularly rental car companies. Yes my debit card had a Visa logo, and I tried with a 2nd debit card with a MasterCard logo. From the minute I got to the airport, the rental car company would not accept debit, only credit. Same thing at dinner - I asked a restaurant manager why they didn't accept debit cards and they said that the merchant in their country (France) was 100% liable for fraud with EMV cards (the standard type of card we all use today, ie chip cards). The manager said merchants are not liable for credit card fraud, therefore the restaurant associations out there and their banks all require their account holders use credit. So, I'll always be a fan of what the Ramsey crew teaches, but for my line of work, ill have to keep using a credit card when abroad. Dave says he 'travels as much as the next person', but for someone like me who travels in coach, stays at 3-star hotels, does this monthly both in the US and abroad, I just wanted to chime in with some real world personal experience here. If you're someone who lives in the US, doesn't travel because you're getting out of debt and don't travel for work, then you can probably get away with only using a debit card and cash. And in that scenario always default to cash for your daily spending since fraud on your debit card is no fun to deal with. Just my two cents Rachel! (Or two dimes with inflation ;)

I have a Paypal debit card that I use as an “envelope” for all my variable / fun money. It’s so easy to just load more money to it and there’s no connection to your actual bank. Don’t know why more people don’t do this.

I'm debt free and have a fully funded emergency fund and haven't paid interest in years. I have a credit card not for credit score purposes but for protection. I had my debit card hacked and I dont walk with cash. I would much rather have the banks money hacked then my own money. So keep your cc just discipline. She is addressing only 1 type of cc person. I understand why it won't work for some but it definitely works for a lot!

All these people I see comment on Rachel’s and Dave’s channels stating they are wrong about not having credit. Think I will listen to the ones who have money, not credit.

I still maintain a CC can be used responsibly...

I will not use a debbit card when shopping online or on Doordash/Uber. I pay my card off each month in full and I use a 0 based budget so always know what I have put on the card, and what my budget is.

I use a credit card, it doesn’t use me I’ve had a credit card for over 30 years and not had any problem and never paid any interest In fact, the credit card as help me with certain purchase rights and protection and deals And bonuses, BUT if your financially incompetent DO NOT GET A CREDIT CARD

I'm one of those people that don't have credit card ever... banks are offering me but nah, i can pay cash. Cash is king.

I have paid off my credit card about 3 years ago and I’m not using a credit card anymore. I also have my mortgage paid off and working on paying off the car I’m driving. When that’s done I’ll be saving ($1400 per month) money so, I’ll have a good emergency fund in 2 years time. The paying off stuff will be getting done within a 3 year time period. 🎉🎉🎉

Sometimes I love Rachel. Sometimes I can’t stand her. But I always keep coming back

mark 5.12 she is shaming the people that use credit wisely vs those that don't. i didn't know shame was/is part of the christian ethos...

I dont want to touch credit cards! I have family members tell me well that means you won't be able to buy aa house or rent a place. well im determined to find ways around all of that. its way more stressful trying to keep up with credit card bills that it is to just work around the debt system. I will even pay cash for a mobile home if that's what I have to do. I dont care

I have had a credit card. I never got cash back. However I’ve now realised that there’s no point in spending the banks money and instead use my own money. It’s a false illusion to own a credit card and spend on it and it’s also a trigger and just allows you to think spending the banks money is normal. It isn’t. Just use your own money. ❤

Even if she wanted to have a credit card, there is no way her dad would let her have this job if she did have one.

Yes I wouldn't use a credit card again. I have been in debt with three and all it does in eat away to you and so not worth it, I'd rather have savings for huge purchases and be able to pay out right rather than having something that causes stress and anxiety over paying it off

I literally follow all of the other ramsey principles except for credit cards. As a result of following their principles I do not have credit card debt and I literally pay it off every single day.

Great video! I totally agree with Rachel. I paid mine off every month before closing it but i spent way more each month and that amount could’ve been in savings. I get that using it vs debit does things psychologically in the brain than “borrowing.” The game is not worth any amount of points/miles/cashback imo.

Whenever you get income, you can also budget for bills, groceries, gas, etc. by over paying on your credit card, if you're worried about over spending. Kind of works as a pre-paid card. Then you get more rewards that way, also. And avoid having to pay more in interest, also.

You can still budget the same way with the same methods with the credit card… With $90 extra each month 🙌🏽

I think the rewards gimmicks are predatory. Paying with cash makes you aware you have this amount of money for such and such purchases. I think the average interest rates are much higher now, well north of 20%.

It's weird that I'm supposed to not use a credit card because other people who are not me, have never been me, will never be me, and could never be me, have gotten into trouble by using credit cards.

I get what she is saying but I need an apartment. In the bay area, you need a 700 or above. So do you. And I pay off my cards at the end of the month. I've been doing it for 2 years. Never once have I paid interest.

I never spend more, money because I am using a credit card, I pay off the balance every month and this month I got three items for my home that I needed for free that would have cost me several hundred dollars. I do not owe anyone any money. I have a budget that I follow. I totally disagree with your attitude that because some people can not be responsible with their cards and receive benefits of using a credit card that I shouldn't use a credit card. That is not logical to me. I get many things for free that I would have to spend money on. Cashback has save me thousands of dollars over the years. Your reasoning just doesn't make sense.

I have 13 credit cards, charge a cheap recurring subscription or charge on each except for one every month then autopay the statement balance. So anything like $5 amazon gift card reloads, cloud storage subscriptions, gym membership, netflix, etc… then autopay it. Every month I have 13 ontime payments reporting every month and low utilization. The last one I use for daily.

Thanks, I got into a debate yesterday over this exact topic & the Dave Ramsey video I found I guess came off to them as a bit of a gut punch to them. I think it turned them off. This one breaks is down, actually gives more facts out, & puts it more politely. I'll think I'll share this one next time.

Different strokes for different folks. I love cash back interest free living. But that’s just me. 😆

We just stopped using our credit card (paid off in full every month) for moral reasons - as much as it is up to us, we aim to live at peace with everyone. We don't want to be responsible for another's suffering, (I know that you can present a hypothetical argument that at any time, you might be causing another's suffering) but KNOWINGLY doing so bothered us. This was a personal conviction xx

You can dispute a charge through a credit card company -- not so with a debit card or cash! My credit card company ruled in my favor on a dispute, made the merchant stop bothering me and told the collection agency to jump in the lake. Never heard another word about the charge. Problem solved.

I'll bet Rachel doesn't live in a neighborhood where it's dangerous to carry around enough cash to go to the grocery store...

I mean I understand the sentiment, but I do use a credit card for purchases I was going to make anyways. I usually use the cash back for free coffees. So not a bad gig. Also, Apple Card has a great visualization of your spending and probably tracks it better than Everydollar. But anyways, not everyone should have a credit card for sure.

4:46 when you realize that the credit card industry is like a big silent version of the Hunger games where you only win because others are being crushed to death under the accumulating interest fees!

Haven’t had a credit card since late 2018. I agree the only time I missed it was the few times I’ve rented a car. Other than that I’ve somehow survived without one, weird.

This is terrible, horrible, advice. If your credit card is subjected of fraud, you are responsible for only $50. If someone steals your debit card information using a skimming device, they can empty your bank account. Skimming devices are installed not only in shady places. Known grocery stores and gas stations are vulnerable to skimming. If you cannot control yourself using a credit card, then you have a problem. A serious one.

I was super responsible up until my late 20s now I’m paying them off which feels great. At 20 years old I would’ve been like year sure but life happens and I understand this !

Every apartment I've ever applied to required a credit check. Not having a credit score reduces already limited options. In this housing market? I don't think so.

Most of these arguments are pretty bad but the biggest part I can’t get over is the “I don’t like these credit card companies because they are taking advantage of people therefore I don’t want to be part of it” which is fine if you actually believe that but how can you say that when you literally partnered with the 2nd largest creditor Mastercard to do the gazelle debit card. So you won’t be part of it then but if there is business and profitability than it’s fine to work with them?

You cannot get around not having a credit score in Canada, lol. I know someone who tried and could not get a mortgage from any reputable company in Canada. They had to get their dad to co-sign their mortgage to buy a home. It doesn’t work like this in Canada, silly.

I think using credit cards for online bill pay specifically is totally acceptable. In my budget I know what all my fixed bills / expenses are and pay them online. So using a CC for those bills gets me about 1k/yr in cash back. But I only use debit for any variable expenses.

I'm planning to stop using credit cards in the next few months.

Privileged.

I guess I half agree and was trying to just use just debit card until my bank kept locking my card if I made online purchases and they would keep saying there was fraud activity but it wasn’t it was just normal purchases, so I had to switch to CC’s. Also I think it’s Clark Howard who is against debit card use.

Thanks for DR solutions and you for sharing this information , always helps

I have learn a lot watching Rachel and dave about how not to use my 2 credict cards,0 balances for a wile now..!

Great advice, I was doing good with my 1st credit cards for awhile and then it got out of hand. I had to start thinking how were people living before credit cards, they were just fine. I am now changing how I do my finances. Debit card and using my own cash. That's the way to do it. Even when you have a credit card you still need to have your own cash in the bank to pay it off so what's the point. Love this video!

In in my mid 40's now. I've had credit cards since I was 18. Wanna guess how much I've paid in credit card interest thus far? $0. Guess how much I've got in cash back, points, whatever? Substantially more that $0 I buy my cars in cash (with one exception where I took the financing option to get an extra $2k off, then promptly paid the whole thing off after the 1st payment). My home is paid for. My FICO score is over 800. You can absolutely be responsible with credit cards. From what she mentions, it sounds like the majority of people are.

Really enjoy the show and I hear the point about people receiving rewards because of other people paying interest. However, when the bank pays you interest on your savings, it doesn’t seem to be a problem then? Seems a little hypocritical.

Cash and debit is best for merchants cause they don't pay transaction fees so the money isn't being widdled down

We pay our card off in full each month (also no annual fee). Most all hotels we use do not take a debit card. Having cash can be risky and time consuming and not optional. We go out to eat Saturday night..oh wait, I can’t as I can’t get cash as bank closed hence use a CC. Don’t suggest take cash out early as my account earns interest so I prefer to have it stay there earning interest rather than pulling out cash. Applied for a job and they check credit history-one applicant applied and not offered due to no credit score (red flag as no score thinking wrong identity).

If you don't know how to use cash, don't get a credit card. In my business, I don't except credit cards. Because of the fee's.

And what about those who live frugally, often work two jobs, but don’t make a lot, and then life happens times 12? Car accident, divorce, unexpected pregnancy, bad fall, get priced out of an apt, and whatever may have been saved is wiped out? And the bad luck just never stops…

Why do you care so much about others paying interest? That's on them and not me.

I use my credit cards for my fixed bills, gas and groceries. I also use it for protection against fraud. I would hate to use my debit card and it gets hacked and my legit money comes out of my account and it takes longer to get the money back especially if I’m traveling! No sir. I had someone charge my credit card for $700 and disputed it immediately and closed the account and got a new card.

Love your earrings. I am trying to not use credit cards or bank loans. I had both paid off then hubby went to hospital and used credit card/bank loan to pay bills.

Congratulations of having a bad credit score, but that works for you. What works for me is having a 835 credit score and paying off my credit card every month. People are different, no one like the same things and thank God that is so. Can you imagine if everyone like to eat the same food every day or drive the same car every day or do the same thing everyday?

the banks should go to prison but we all know the politicians and their owners are in on it.

Spoken like a multi millionaire's favorite daughter. She never needed one because she had first national bank of dad to be her safety net and never let her be in need of anything.

paid with cash house, paid with cash truck. at 65, my CR just sits ther. i don't care. i do care i get1000-2000back every year for utilities, food, etc. it costs ME, nothing.

Hi Rachel, you're sharing a way of life and that is debt-free living, and I agree with it. It doesn't mean that there aren't responsible credit card holders, and that there aren't cases where having a credit card might make things happen more quickly, but ultimately what you're suggesting is a WAY of life. I agree with you and Dave. It IS a choice, wether to be responsible and have a good credit score or whether to live debt-free. It's kinda like vegetarianism and meatatarian. The latter will say that vegetarians lack certain minerals etc, but the vegetarian can get them, just in more unique and maybe through more task-intensive preparation methods. Ideally, I think a vegetarian diet is healthier. Living without debt is such a foreign concept to a lot of persons that to live without it appears like a fairytale and impossible to achieve. But, just change your MIND. 😊

Budgeting is definitely much more difficult when you are using credit cards. If you use credit cards for everyday spending the day you pay the bill there are already new charges on it that you are not seeing or paying because that will be on the next statement. That means you are always in debt even when you pay the statement in full. It is near impossible to stick to a budget with credit cards because it is just too hard to track.

you pay off your cards, why would you not use credit. you are leaving ''money on the table' otherwise. use your credit card linked to your checking acct. it's a simple phone call.

The problem with these shows is they fail to admit the good side of credit cards and condemn everyone as a whole who has them

If only the number of people who say they pay off their credit card every month were true. The numbers simply don't lie. The overwhelming majority of people carry a balance on the credit cards.

I use credit cards to get cashback and I know what the Ramseys will say, and I agree to an extent, but I'm responsible and always pay it in full so I don't get hit with interest and let me tell you that seeing that money leave my bank account kind of hurts me because I try to save as much as possible and sometimes it just isn't possible. For example, food, it now costs more despite the quantity is the same as before or less so I'm paying more for less. :/

But wouldn’t the increase in spending of 12-18% associated with a card also include a debit card? The study is only cash that they pay less