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Original video:
Daniel Iles on our show:
In this video we react to what I call terrible credit advice from the Dave Ramsey show.
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50 comments
Hey Ben, thanks for getting this out to more people! There are tons of perspectives on personal finance but the Ramsey method is infamous. Time to work on my beard tho 😭😭
The issue is the idea of the 'psychology of money'
Ramsey's methods are all about 'reteaching yourself if you are bad with money' and for that audience it's completely on brand, and that audience needs to avoid temptation, it's the "Credit Cards Anonymous" idea of removing yourself. They love to quote stats like 87% of people this, or 2/3 of people this. 4 out of 10 people this
The brand doesn't make sense though for that other 13%, that other 1/3, the other 6 out of 10 who can profit CC churning, who can use debt to invest successfully, etc.
Dave Ramsey advice boils down to "You're in debt so you're dumb, and if you're dumb you better listen to me, because I used to be dumb, and now I'm not in debt anymore so I'm smart"
And guess what that works for the 'dumb', but it's never one size fits all.
Not a Ramsey apologist here, but my last 5 vehicles have been paid for with cash. All used, all in reasonable shape, and all perfectly serviceable. I prefer this route.
Used to be super into Dave Ramsey.. and then I went to school and actually learned about finance and know I realize he’s just a grouchy boomer 🤕
I do agree on paying cash for a car, everything else it’s okay but a car loan, is the only car loan you should never have, because a car also loses value, potentially you’re paying to keep something that is worth less than what you bought it for, adding any type of interest would just be equal to having to pay even more and getting less.
His response and method was the definition of “out of touch”
Saw title, clicked like.
They always conflate credit card usage with carrying debt. I believe it's intentional.
👍
The whole thing is THAT isn't Dave Ramsey.. thats one of his parrots spouting the same garbage..
Devil’s advocate here. Credit Shifu’s audience are a minority since majority of people have do credit card debt and misuse them.
I think of credit cards similar to sugar. One side (credit card supporters) says you can have some sugar and as long as you’re careful with your intake it’s all okay. The other side ( credit card avoiders) argue that sugar so easily misused that it’s best for the average person to just avoid it to stay healthy.
Both sides have good points, and neither is wrong.
Either way, “eating vegetables” (aka not having debt, having an emergency fund, budgeting, and saving a portion of your income) still the best way to stay healthy (aka build wealth)
I just love how you roasted him, with very smart and straightforward logic you destroyed his biased claims
These people are ridiculous. It is no advice at all to tell someone that they should basically increase their income 3 or 4 fold.
Like, if you paid off a house in 26 months, even if that house was only 260k, it means that you make enough to pay 10k a month toward your house. That is almost 2.5 times the average income going to only your house. Like, who has that kind of money? Their advice is pretty much….make more money so you can buy everything in cash. It's actually dumb.
Every time i kept seeing dave ramsey billboards in my state i would flip em off.
Over $200k credit line., credit is the best thing that ever happened to me.
Honestly Ramsey is like AA for debt. His audience is comprised largely of people who have fallen into the traps built into credit cards. I wish his company would just point out that you don’t need debt and that it complicated his strict budgeting in an unhelpful way. Now none of this justifies in my opinion telling people to not get a cc. They could put the cell phone bill on it which would make it budget friendly. I was able to get a home mortgage with a single cc in my credit history.
Most of Dave Ramsey's advice is idiotic and biased.
He was so mad! I saw that video!
The Tik Tok video never said it is unwise to pay $400k cash for a house. He said it's not realistic. Ramsey dude is straight up douchey
I’ve watched Dave Ramsey here and there for years but I don’t agree with all of his methods. He doesn’t like when you go against his approach and his attacks on different generations for utilizing a different method is immature and ignorant.
My net worth went up 30% in the last year because of the home I bought with a 30 year mortgage. I used to follow Dave Ramsay, but if I hadn’t changed my philosophy I wouldn’t be able to afford a home in Austin where I wanted even with a 6 figure salary and no other debt. His plan might work in the middle of nowhere where everything is cheap, not in many places.
"me and my wife…" the privilege of a dual income household, no kids, no school debt (?), no medical bills (?)…
Yea, stay in your lane D.R. acolytes.
The Dave Ramsey advice is good for the lower middle class and poor people without discipline. If you make let's say +$200k a year as a couple you don't want to pay off debt early at a 1-2% interest rate to miss out on investments making +10% a year, especially during inflationary times. The debt just has to be low in relation to income and yes at one point you might as well get rid of it.
I don't trust anyone who wears a headset with a big mic 🤣
Dave Ramsey is overrated. It might work for some people, but I don't think his advice for most people is even realistic.
Ben, I love your videos. However you’re being extraordinarily hypocritical here. Your videos are literally about promoting your own “financial religion” by doing credit cards.
As for the “paying off the credit card debts,” there’s $856B just in CC debt. So people are doing more what Dave is talking about, then what you’re talking about. Especially with that number going up, not down.
Truthfully it sounds like you’re just butt hurt that the Ramsey show called out one of your buddies. You said it yourself, there’s more than one way to do personal finance. Should we expect your next video calling out all of your buddies bashing Ramsey for his financial advice? Cmon now man, be better than this.
I used to listen to Dave Ramsey. His advice is useful to a certain point, but one thing you’ll notice about all the speakers on this show is that they all repeat the same tired old phrases on this show that Dave himself repeats over and over. Finance isn’t a one size fits all but if you aren’t following their program, you are ostracized and belittled.. as is evident by this hosts criticism of people pursuing any other method than DR’s.
No matter what the topic may be…this is another typical example of "show hosts" infighting.
You know…my dog is bigger than your dog…blah, blah, blah
This is so very frustrating to me. Four years ago I had zero credit history because I grew up in a house where, despite no Dave Ramsey around, we thought that credit and credit cards were the devil. I paid for everything with my debit card, got zero cash back or points and would overdraft regularly because I didn't have a cushion. Then I got my partner to add me as an AU on his card. Then I got the Discover it and the Chase Freedom. A year and a half later, my credit score was in the low 700s and I got a mortgage. That house has appreciated over $200K, I refi'd last year down to 3.25 and my credit score is in the 760s. I have 12 cards now and I've never paid any interest. In Washington State, where I live, if you made even $100K a year, you are never, ever going to save up enough to put like 50% down on a 15-year mortgage. You'll be dead before that happens. These people act like it's the 1950s, when housing cost like one years' salary, not five! Dave Ramsey's advice is ONLY good for people who treat credit card limits like additional income and spend like crazy. Anything above and beyond that, be it investing or building credit, is total BS from him.
You need a credit score for even phone lines nowadays 🥴 when i was 18 my mom tried to get me on my own bill & i coupdnt be able to bc I DIDNT HAVE CREDIT.
The last time we were looking for a house TO RENT they asked for a credit check.
And the average price of homes where i live is $800k & the average renting price is $2k & up. How am i supposed to save so much to buy?
Dave Ramsay's advice is for people who have gotten themselves in trouble by making a series of terrible financial decisions. Nobody in their right mind would listen to him for advice on building wealth.
Dave Ramsey‘s book is the only one that I’ve ever asked for a refund on from Audible. Growing up in a very conservative Christian family/church I recognize exactly who he was within moments. If he was a youth pastor he would’ve destroyed your non-Christian CDs. If he was a pastor he would damn you to hell if you sinned – and I hated how he immediately equated fat to poor and thin to rich. I know some of his methods are solid, save an emergency fund and yes, I did spend the last year and a half paying off all of my credit card and business debt and because of that we are currently in contract for a first home but I also only put 5% down in a 30 year conventional mortgage. I don’t live that life where I can drop 400K. OK, rambling now but yeah, that guy really gets to me. I’ve seen his type in many churches throughout the decades.
PSECU Approved me for $50K in 11 days of me becoming a member no docs and no proof of income only need $10 one time donation and $5 share savings.:) They giving out limits like candy join today!
Isn't it about the audience? IIRC Ramsey pushes his show on an audience who fell into real trouble with debt or who had bad decipline & just need some good coaching to get things under control. People who already know how to make debt & credit cards work for them rather than against them won't need Ramsey. I don't know about you but if I were someone who carried a balance on CCs I'd hope I know that whatever miles/cashback/points I get will be more than cancelled out by the interest rate. Those bonuses only work for people who never revolve.
Thank you for this video! I've been listening to Dave Ramsey recently and felt it was unrealistic for me at least. I have 4 kids and I'm not married. Most of the people who pay cash for everything seem to be childless and have dual incomes. It left me feeling discouraged. I use credit cards and pay off my balance monthly- self control is key. Thanks for making me feel normal.
You just simply can't build generational wealth without debt.
From one perspective, I actually like Dave now. If you think about it, the people that follow him most likely have debt. That makes people who hold bank stocks like me richer and richer. Then, people who follow him keep way more than enough cash on hand. That means they leave values on the table. The fractional banking system would lend that money out and make the rate difference. That makes people like me richer as well. And Dave tells people to not buy a place as soon as possible. But they need a place to live. And that makes me richer again since I hold rental properties. I use to think Dave gives out garbage advice, but now, I like him.
I mean – I make all of my life decisions 60 seconds at a time based off of Credit Shifu – and Ben, I have a beard (so I can't be wrong, the beard is the way – the mandalorian….probably). Jokes aside, Dave is a religion and while I'm sure it's helped somebody, most people would be better off in the cult of Credit shifu, keep up the great content and Ben, it's time, grow the beard so that you'll get Dave's undying respect, let him know who is boss!!!!
Dave's advice literally costs his listeners hundreds of thousands of dollars if not millions in retirement by having them treat home mortgages like high interest reddit card debt.
I wish that was an April Fool's skit.
Be careful because Dave Ramsey is known for coming after channels that talk about him. Even though he does it himself. Lol
I found out about Dave Ramsey in 2015 and followed him for years after that. He taught me a lot and I was able to get out of consumer debt. But he is a little outdated with his beliefs about credit and credit scores. He is completely against credit partly because of his experience of losing all he had when he was younger. Check out his story if you care to😊
GREAT VIDEO!!! Just an FYI, another YouTuber who called out Dave was demonetized. So, be careful!
I AM currently debt-free. AND I have a credit score! Gasp!!! I have been off the credit score "grid" for years. I've overpaid on insurance rates, had to pay deposits, and, yes, I paid for my SUV, phones, etc. in cash. Meanwhile, as I saved up the cash to buy things, I could have been investing it for my retirement. My son also had to pay a huge deposit for his 1st apartment, in addition to the usual 1st, last, & damage deposit, because he didn't have a credit score. NOW, I've learned about building my credit & using credit cards, which actually earns me more money & protections I previously didn't have. I wish I had done this years ago!!!
Also, in order to save money to buy my SUV in cash, I worked 70+ hrs/wk, which left me exhausted, malnourished, and missing out on spending precious time with family, especially my mom before she died. I missed my grandkids' birthdays & holidays. My house is paid off, so I also didn't have a mortgage or rent to pay. Plus, I have a decent income. They're expecting people to pick up extra jobs to save all this money, but who's raising their kids when they're working so much??? What is it doing to people's physical and mental health? I worked so much because I had to due to nursing shortages. Not because I chose to. Also, with the massive increases in rent, who can actually save money???
I could respect what this guy was saying if these were his own beliefs but the problem is all he does is regurgitate everything Dave Ramsey says. It almost makes you question whether he really believes what he’s saying.
It wise to save up 400k cash to buy a house plus closing cost mortage insurance and other fees ill habe my first house by the time im 65 and ill have a brand new car by the time im 64 but hey its paid off dave ramsey is a moron who went bankrupt twice
Change the words to fit his narrative that's what he always dose.
Why would I spend 10 bucks on a debit card and earn nothing when I can spend 10 bucks on a credit card and get a small amount of cash back?
Thanks for bringing this. The ramsey guy is totally wrong. Daniel never said that one should go in debt with credit card.
I think you made a great point comparing average housing prices to average US incomes. This is the ultimate litmus test for “is this advice good for the average person” which the Ramsey method aims to be.