No Dave Ramsey… You’re Wrong!

When I first decided I wanted to get into “The Points Game” and start teaching others how to earn money from money you were already spending, the most common thing I was told was “Dave Ramsey says credit cards are bad”. I agree… for people who spend more than they make and use credit cards to offset their income, they are a trap… and will most likely result in loads of debt. For people, like myself, who try our best to spend less than we make… I disagree with him. I am not saying you need to go out and get every credit card I have, or that “Points will make you a millionaire”, what I am saying is this… If done correctly and strategically, you can and WILL end up saving money and taking aspirational trips with your family that you most likely never would have taken, because they cost too much money out of pocket.

“You’re so stupid to think points are free”

Let’s get a couple things straight, I never have and never will say “points are free”… because they aren’t. If I told you for every $1 you spend I will give you 2 cents back, bringing your net cost to 98 cents, most people wouldn’t bat an eye. What if I told you that I could save you $1,200 a year…every year? You still have to spend money to earn these points, but why wouldn’t you want to spend less than the person in front of you at the grocery store for literally the exact same items.

For quick math, lets say you get your first credit card at age 21, die at the age of 78(average life expectancy in the US) and spend the US consumer average of $60,000 a year, you would save $68,400 in your lifetime! I know personally there are plenty of things that I could spend an additional $68,000 on! These points can be turned into trips with your family, vacations for life milestones, or even simply by using them to pay for your purchases at a 1% back redemption rate. Points aren’t free but neither is buying groceries 🙂

“The more money you make the more credit card debt you have”

Dave goes on to state that the reason you have more credit card debt is because “you are so stupid to rationalize points being worth anything and therefore don’t experience pain by swiping your card”. Statistically speaking, that may be the case… but I certainly am not a statistic and I am teaching all of you how to go against the statistics as well. As some of you may know, I am a bit neurotic when it comes to my credit cards because I previously had credit card debt in college. I pay off my cards nightly… yes nightly, thus ensuring that I never have the chance to go into credit card debt.

Using this strategy you are able to overcome two of Dave Ramsey’s main objectives to credit cards, 1) You don’t experience “pain” when you use a card and 2) You don’t know how much you are actually spending. If you allow your balances to accumulate for weeks on end and pay your card off monthly, I could see where he is coming from, however that is not how to master the points game. Every night that I pay off my card, I am able to think about what I spent; Was it necessary? Was it an impulse purchase? What can I do ensure I am not wasteful spending? By analyzing all of this, I am able to ensure that I am not playing the game… I am mastering it!

Let me know your thoughts… Do you agree? Do you disagree? What objections do you have to getting into the points game?