Is There A Downside To Paying Off Debt?

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[@texdevildog9174]

The worst part of being debt free is that when we get our paychecks, we get to keep all the money without making any debt payments. The cash keeps piling up.

[@thecurrentmoment]

That sounds awful, if you ever get sick of the piles of money blocking the space in your house just key me know, I know some people who have a way of using people's excess money that they don't want

[@Lonovavir]

Hash brown Problems we all want.

[@joycew.6531]

LOL😆😆😆😆😆

[@someonewhocares5033]

@@thecurrentmoment it’s cool, I am sure they have a local congressman to blow it for them, we all have one.

[@Coaches-Kidz]

That sounds truly awful…. 😂

[@FnVRGaming]

I'd argue, not wanting to spend money isn't a "trauma response" but a safety mechanism. A worthy trait to adapt to this world

[@katemiller7874]

No it isn’t. You have to spend money in life. Get some therapy

[@nickidrew5113]

Especially when you have children

[@clint6716]

​@@katemiller7874 you have to spend money to buy food and keep lights on. You do not have to spend money on liabilities to live life. A scarcity mindset, even after becoming financially set, isnt necessarily a bad thing.

[@LLopez-sx1jr]

The biggest risk is living in debt up to your eyeballs, having no savings and living paycheck to paycheck.

[@mateoboschify]

I’m about 90 days away from paying my house off. My wife and I are 41. I am excited to have an inconclusive credit score and no bills whatsoever. I am already thinking about when I want to retire and it’s very motivating.

[@johnwilburn]

Congratulations!

[@grahamcarmichael6567]

No bills whatsoever? You don’t have to pay property taxes, other taxes, electricity bills?

[@mateoboschify]

Taxes and expenses, absolutely. Can’t avoid that one. No debt though.

[@jimv77]

For me the downside of paying off debt and having money....you look at your current job and work in general differently. When in debt you accept the fact that you HAVE TO work to pay the bills so you keep your head down and just do your job...when I reached Baby step 7 and had F-U money.... pointless meeting became unbearable, bad leadership drove me crazy....even just having to work 40 hours a week in general when you realize you no longer need the money as bad before....changes things and changes YOU! Having money is still great, but it WILL change you.....

[@jasmineb1214]

Sounds like a good problem to have tbh

[@kathrinefer7301]

Awe i want fuck you money but almost done paying my credit card and my student loans is done ❤

[@ramccall]

Did you end up leaving? What happened to the job

[@alinatamashevich3354]

@@ramccall The power of the walk, AKA These boots were made for walking!!!

[@jimv77]

​@@ramccallAfter 19 years at the same company I left to work for a competitor that came with a 20% raise...should be better right?....well I was still miserable and left after exactly 365 days. Got a totally new job with a significant pay cut....but I work remotely....no meetings...no schedule s...hands off management...very flexible and stress free...though I mainly work by myself...that can be a good thing or bad thing based on your personality....biggest downsides is still gotta work 40 hours a week.....

[@JustinCase780]

Finally...having credit cards while travelling internationally can be more than useful and needed! Just pay off your cc as you go and make your life much easier.

[@front331]

Right. If you want to have a cc, do it and be responsible to pay the monthly payments on time so you can build points for traveling, build credit score etc. Dave's logic that cc causes you to spend more than a debit card is a strawman argument and doesn't make sense.

[@mastafull]

​@@front331 Certain people get into trouble chasing points. That's why they exist, not because credit card companies have big hearts.

[@JustinCase780]

​@@mastafullMost successful people benefit from the points. It's a win-win for the company getting the cash flow and retaining that person that is providing the cash flow. If a person pays it off as they go there is nothing dumb about it as this show always repeats. For some, yes it's a dangerous rabbit hole and people can get into serious debt chasing points but to say it's wrong for all makes no sense.

[@tcgtpl]

The Ramsey Solutions Team will never say anything positive about credit cards because Papa Dave hates them, and they’d like to stay on his payroll.

[@JustinCase780]

@@tcgtpl He definitely has a cc. Give us a break.

[@Oldcarnut63]

Being debt free =much less stress.👍👍

[@miketheyunggod2534]

Taxes is debt. Stop paying them and you’ll see .

[@PeterJames143]

Thank you for mentioning Gummy Bears of America. Representing GBA has been a long and thankless job which is as neglected a calling as it has been a noble one, and I feel deep appreciation for your having mentioned us. :)

[@gloriaalex11]

I need to add GBA to my portfolio. 😄

[@jameschaves5723]

I’ve been watching Dave Ramsey for years and I’m determined he’s going to die on that hill. There’s nothing wrong with having a credit card as long as you are disciplined enough to pay it off in full.

[@Truckerdaddy]

It certainly comes in handy in an emergency if you don't make alot or you don't have alot in savings. There are very reasonable scenarios where a credit card very needed. But Dave is a hardliner after having to file bankruptcy nearly 40yrs ago.

[@s.r.hadden525]

@@Truckerdaddy Dave said his reasoning is because having one makes you spend more than you would if you had to open your wallet and pay cash.

[@Truckerdaddy]

@s.r.hadden525 I understand his logic, that's why you don't keep it in your wallet where you can see it. Out of sight out of mind.

[@cody5596]

I get his reasoning and it’s probably true for most people. I’ve used a credit card for 20 years and only paid $10 in interest 1 time when I first got it because I didn’t know the interest charge date. Since then, I pay it off daily so I see it leave my bank account almost immediately. I spend the same as I would using a debit card cause it essentially is a debit card. The 2% cash back is transferred to my savings every month.

[@tylercampbell6365]

If you have a house especially paid off you don't need one..But having money in savings checking and investments is crucial

[@DynAmerican556]

The downside is, life absolutely sucks while you’re paying it off

[@fauxbro1983]

Eating kale chips sucks too but if you're a fatty it must be done

[@DynAmerican556]

@@fauxbro1983 or you could get out for some PT and not subject yourself to that horrific “food” product

[@tammi67able]

@@fauxbro1983Danggggg 😂

[@SeattlePioneer]

I last had some debt in 1997. That's when I finished paying off the mortgage on my home, after twelve years. I also had bought a rental property on a mortgage in 1986, which I paid off BEFORE 1997. And then there was the second rental house I bought in 1987 ----for cash. I still have that rental house and have been depositing the rent check in my checking account each month in full for 36 years now, in addition to having no rent to pay myself. I have a credit card which I find convenient, and pay off each month in full. Still if another opportunity comes along to buy stocks or rental real estate at very cheap prices, I hope I'd buy. It might be worthwhile to take out a loan to do that. I am a highly disciplined person when it comes to money and spending. I have been TOO risk averse in buying stocks from time to time. Still, it's hard to go bankrupt if you have no debt. Using debt more often likely would have increased my net worth beyond the several million dollars I have accumulated.

[@t20594]

Business debt is not evil debt if earnings do outperform interest.

[@ericshang7744]

You have to admit, in a debt driven economy, debt free is a bit of nomad of society.

[@SeattlePioneer]

> The world is full of fools.

[@benclark1376]

I have that trauma response with spending money. It sucks. I feel bad about buying things that ill enjoy.

[@Mansour46153]

Thank you for being there MYSTICFLIP when I wanted you to..... I was lost in this new world that I was hassled to start with ....you not only guided me along the way but you also showed me the proper way....whatever little I have been able to achieve in life is because of you today ..... I want to thank you for being there and showing me the proper way of doing thing for me you are my best guide as you truly showed me the way to life....once again , I would like to tell you a heartfelt thanks for being there.

[@cameronmcfarrin4587]

I remember using a CC when I wanted to rent a car and they said they didn't take cash or debit. I didn't feel like disputing but I thought it was weird. It's crazy how we have normalized mountains of debt in American society.😊

[@flicks28]

70% of the economy is consumer driven. You need Americans taking on debt and buying things. Just dont be one of the masses who also does it. If Americans stop spending, recessions will likely occur.

[@wickedbird1538]

😮😮So if Bill Gates doesn’t have a credit score , he won’t be able to rent a car?

[@alinatamashevich3354]

@@wickedbird1538 He will be on foot...LoL. Ahh, the poor poverty stricken Mr. Gates and Mr Bezos. Having to buy a dinner on a credit card.

[@flch95]

There’s benefit to having a good credit score beyond the ability to borrow again. When signing up for new utility services they check your score and you could avoid having to pay the deposit. Same thing when switching cell phone carriers even when you intend to bring your own phone.

[@alinatamashevich3354]

@@flch95 How silly is that, a letter from the old power company is all that is needed. Also, so what you have to put a deposit down, you get it back with good repayment history. Quit thinking and acting like a broke person.

[@philipgerry5228]

It helps when shopping in gift shops to visualize the item boxed in the basement/closet with past purchased junk.

[@tcgtpl]

If you’re the type that can’t stay self-disciplined then, yes, all this extra inconvenience is forcing you to stay disciplined. If you can exercise a little self restraint & adhere to the principles that the Ramsey Solutions Team promote, then you can get more out of the money you spend compared to just using cash/debit.

[@PhoenixEMichelle]

Exactly!! You can have it all!!

[@christinehopping5040]

Those are great points, John and Rachel.

[@isaacraze4301]

Heard of a guy at my work who didn't want to climb the coporate ladder due to him losing his government benefits like medicaid and snap. But that's the closest I've seen to not wanting to being in the positive when it comes to money.

[@nobytes2]

That's a real issue in America thanks to the crooked system. When I worked at Walgreens warehouse they would give voluntary hours and temp workers wouldn't take more hours because if they worked full-time they would lose food stamps and whatever benefits they had.

[@zachjones2346]

@@nobytes2 I saw this too in the kitchen I worked in.

[@carmarasmussen8118]

I get the guilt feeling when making large purchases. My husband and I struggled for years financially while raising our children and I felt like I couldn't spend money on anything frivolous because the money just wasn't there. Fast forward and here we are with no kids at home so we are traveling and enjoying life. I do feel guilty at times and feel like we don't deserve nice things. It's definitely a dilemma.

[@kens805]

If you didn't deserve it; you wouldn't have it! Enjoy!!

[@rsivkova]

It’s not guilt. It’s fear! You are fearful because you know what you’ve experienced. But just like a muscle you try to develop it ❤

[@SeattlePioneer]

I don't know anyone who went broke because they didn't buy luxuries, and TRAVEL for pleasure is at the top of the list. I call travel for pleasure CONSPICUOUS CONSUMPTION mainly used to impress yourself and other people with how much time and money you think you can afford to waste.

[@RalstigRacing]

How much do you give? Try upping your giving, might help with the “feeling bad” if it is not fear.

[@firefly9838]

@@kens805 lots of people have things they don't deserve that's a silly ass argument.

[@0529mpb]

Well, not everyone is a millionaire. Most people will be penalized on their auto insurance for having no credit score. It is also getting very difficult to rent a car without a credit card. You will have to put more money down, have documented financial reserves and pay a higher interest rate for a manually underwriten mortgage. That said, you should never ever keep a balance on a credit card. Always pay in full before interest accrues.

[@alinatamashevich3354]

So how long you plan on keeping that mortgage around? 40 years? A mortgage is all about ratios. Nothing more. EX: A 45K income trying to buy a 325K house with 1K down? Not gonna happen.

[@0529mpb]

@alinatamashevich3354 It's best to have between 15% and 25% down. A 15 or 20 year mortgage is ideal. More power to you if you pay it off early.

[@j.rebekah8605]

This is the second comment I've seen saying your car insurance is effected by your credit score. I did not know that!

[@lesg5270]

I never had any problems buying a home with no credit. At the time my 1st car and 1st home were cash. My second home had a mortgage for 3 yrs. My 2nd and third cars were cash payments as well

[@SeattlePioneer]

Heh, heh! I bought my first home (where I continue to live) in 1985 as a HUD repo. I had zero credit experience at that time. Still, the first bank I walked into gave me a mortgage ----no problem. That probably had something to do with the fact that I owned more stock in the bank than the amount of the loan for which I was applying. At the request of the bank, I brought in the stock certificates so they could photocopy them. I continued to buy shares in the bank through the bank's DRIP (dividend reinvestment plan) By 2008, the bank was my largest stock holding, valued at several hundred thousand dollars. The bank Was Washington Mutual, and it failed and went out of business at that time, and the value of my stock rapidly went to zero!

[@matthewcrowley9204]

I have been out of debt for years (have always lived beneath my means, and in general avoided debt). I do find occasionally a challenge in spending money on something I know I can afford (can easily buy without going into debt and not endangering my savings & investments) but just sometimes having a bit of actually doing it.

[@runtimmytimer]

I bought a 2017 dirt bike for $5500 and had problems making the decision to part with the money. That amount of money doesn’t even move the needle. I finally decided to enjoy life 🎉

[@dawnt5587]

We don’t stop spending intentionally just because we use a credit card. Everything goes on our card. We pay everything weekly. We have a good credit score so our car insurance isn’t high. This is where Dave Ramsey and I disagree. Plus, I would NEVER carry around a bunch of cash all the time. But you do you.

[@sanctifiedbytruth6048]

My husband and I followed Dave’s plan and quickly got our credit card back after we purchased a refrigerator with our debit card and it wasn’t a legit site. As long as you have the budget mindset you don’t over spend just because you’re paying with plastic rather than paper. We pay our credit card bill in full monthly and use the benefits around Christmas. We paid off our mortgage in 10yrs so it’s still possible to get out of debt and bend the Dave rules a bit.

[@j.rebekah8605]

Credit debt effects your car insurance rate? I did not know that!

[@dawnt5587]

@@j.rebekah8605 Your credit score definitely affects your car insurance rate. We don’t have any debt so we keep our score at about 825 just by charging our expenses to the cards. We get points, a good credit score and don’t pay a dime of interest.

[@Astro95Media]

That last one is kinda true lol. But here's the kicker ... it's VERY temporary. I had a season where I had a hard time spending money after I paid everything off simply because I wasn't used to it. That feeling doesn't last. I saw my investments sky-rocketing. I knew my balances were zero'd out and accounts were closed. Eventually I got comfortable and now it's no big deal to let go of some cash for something fun.

[@thigson189]

... and/or charitable. Dave speaks to this point all the time. Regarding peace, joy, contentment, happiness in ones life, it is truly better to give than receive. For those that might say, no, it has nothing to do with Bible truth. Well, other than it is that, TRUTH.

[@Astro95Media]

@@thigson189 That, too!

[@billmelater6470]

It's articles like this that teach people to treat debt as casually as it is handled today. Not that it stops people from crowing about "the debt crisis" and trying to vote away other people's money to "solve" it. Then they take on more debt and call everything an investment. Remember, there is no NATIONAL student debt. There is only a lot of PERSONAL debt. Just because I live in the same country as you doesn't mean I share (or should share) in your debt. I owe you nothing.

[@heyearle325]

I did Baby steps -Thank-You Dave. I’M DEBT FREE!

[@goodwillguntingpondue]

Not having an emergency savings of at least 3 months.....Disaster can strike at any time. I just had an emergency detached retina out of left field. No reason. Out of work 1+ month. Saving for an emergency is EQUALLY as important to prioritize. Do not neglect this.

[@Paul-st1si]

Delony just made an enemy of the Gummy Bears of America this day

[@jaywalk6628]

The worst part about no debt is nobody to play with during the week, all of your friends are working. You know... the people who claim to like being in debt.

[@minimatemasterworks]

Good to know I should pick up a cc for international travel. Haven't had one in 43 years of life, but I may have to if I travel out of the country.

[@binfordtoolman5674]

I agree with the principles of the Ramsey Plan, but have issues with a few of the practices. Their cult-like addiction to debit cards is the biggest. You can still be debt-free and use a credit card, but no one at Ramsey will acknowledge that. The limits on dc's, like the one John mentioned, are one reason. The biggie is that a fraudster can drain your bank account. While you will likely get those funds back, it usually takes more than the 2 days that DR says. If your mortgage is due the next day, how do you think that plays out? If a fraudster gets a hold of your cc, you are not responsible for the charges and no money is taken from your bank.

[@PercyLeon1]

I use credit cards for everything but I pay it all off in five days. Those credit cards I see as my primary emergency source. With my secondary being my checking account and my third source being personal saving account. Also you are more protected against theft with credit cards. Just pay everything off and be without debt

[@alinatamashevich3354]

Protected from what?

[@krogdog]

@@alinatamashevich3354 Identity theft. If your cc number is stolen then you can dispute charges and get a refund. With debit cards the bank might not give you the same level of protection and the thieves can clean out whatever you have in your account.

[@jameslaughlin3298]

Fraud

[@blackworldtraveler3711]

​@@aussiescroller Next day could mean going without food or spending night night in hotel lobby or airport when traveling or out of country. Keep in mind this is your cash(or lack of it) you’re using on debit card. If that happens while traveling in other countries it can also take days. Seen too many temporarily stranded over this and kicked out of hotel and debit card is temporarily useless. With credit card you still have hotel room and could buy food and whatnot until new credit card arrives. At least that is what I’ve experienced and observed with other travelers the past 20 years in U.S. and over 40 countries.

[@katemiller7874]

Krogdog- yes. Also if you purchase something expensive and it breaks and the store will not take it back you can dispute it with the cc and they will take the charge off your credit card immediately. Debit won’t do that

[@kathymonnin9818]

There is a down side my husband and I worked our butt's off paying for our house bought a couple cars. We wanted to be debt free in our fifties. We diid all cash and carry well we had a daughter that could not manage money and we was paying her rent my husband and I said we needed to invest our money so we decided to buy a house for that problem. We had zero credit we never used or had a credit card we had good cash in the bank but needed to borrow some money as opposed to empty out our savings we were denied needed to get a credit card use it awhile and build up the fact we had some debt other than our monthly bills. Used the credit card for two months and bought the house.

[@bettedavis9261]

I don't LIKE to spend money, but I sure as heck don't feel GUILTY for spending it.

[@blackworldtraveler3711]

I don’t have a problem spending money since it’s my own or feel guilty either especially if debt free and have the money anyway. I was in the mood for pizza yesterday and had one delivered. Paid cash using my credit card and enjoyed it..

[@kinpatu]

Downside of paying off debt is loss of money if the interest rate is < after-tax rate for other guaranteed investments. I just took out a $75,000 loan at 0% for a new vehicle. Was prepared to write a check and do no loan. But if I can get 0% in a 5% inflation environment, you bet I’m taking it. I took the loan and put the cash into laddered CDs paying ~5%. Basically a free $10,000.

[@Penny.22]

And this is smart :)

[@sergiomtz7315]

All they do is raise the price of the vehicle and offer 0% interest rate deals.

[@kinpatu]

@@sergiomtz7315 That’s why you always negotiate the price of the vehicle to final before mentioning one word about financing. If they start any bs about not qualifying or some exception or whatever, be prepared to walk out and mean it. If you go into the negotiation asking about 0% financing you’ll get screwed.

[@wickedbird1538]

😮😮The downside of not debt was I had no incentive to keep working and I retired early to have the time of my life.

[@aolvaar8792]

Every decade for 50 years, I took a two-year vacation.

[@jesus2400]

You always will spend less when you use a debt card.

[@Prince-fn7ff]

Please keep getting paper bills Rachel..we appreciate you! Your friendly mailman ❤️

[@mensb1936]

About to go disable paperless on everything

[@alinatamashevich3354]

@@mensb1936 Heard that years ago, same people who claimed computers were going to make our lives easier. Had a basket full of grocery's, storm came up knocked power out for less than 2 minutes, computers were off line....could not check out. That is some straight up BS. I am not putting the ice cream back because store is to Fkn cheap to have a battery back up.

[@katieee962]

There is no downside when you’re debt free. Stress free life!

[@NaturallyPrettyBrownK26]

Thanks so much for!!

[@davinasquirrel7672]

Last year, (in Australia) I needed to stay in a hotel. No credit card, but they took the debit card with a hold for the security deposit. I did not run into any issues by not having a CC.

[@mattcrouch9348]

I've noticed an unfortunate side effect of being debt-free: I can no longer complain about banks screwing me over all the time, because banks don't screw me over anymore. 😢

[@mrcrowleyoz]

I occasionally use a credit card. Maybe every 6 months just to keep my 2 cards active. But when I do, I pay off whatever I buy by the of the week. Part of being an adult is knowing your budget and keeping track of your bills. If you can’t have restraint against debt and can’t handle overspending, then deal with cash only.

[@ronhamm]

The only downside to paying off debt is you won’t be a slave any longer!

[@guccithunder6136]

You don’t need a Credit Card for a Hotel lmao

[@0529mpb]

Not domestically. If you are an American traveling internationally, it's a problem.

[@guccithunder6136]

@@0529mpb Not true. I was in South Korea a Couple Months ago and I was able to use my Debit Card to pay for it

[@blue-wb8yn]

Depends on the country AND the hotel.

[@chrisfarmer4397]

Worst part about not having a credit score is you would either end up paying about 4% higher interest rates or need to have 120% in secure collateral in our history (I have a good score, wife has no score so we havd to keep her info off any loans and utilities to avoid these stupid things.)

[@wxmanben1231]

I have one credit card and it’s just for situations like this. Pay it off every month. I rarely use the thing. Emergencies….I really don’t care what people think. I’m well on my way to being a millionaire in my 40s. It’s insurance….sorry, not sorry.

[@kens805]

I like, admire, and respect Dave but I SO disagree with him about credit cards. There are many people (like myself) who use credit cards but NEVER carry a balance. I don't know what the upper limit is on my debit card because I only use it for gas and groceries (my bank actually gives me free checking and pays me interest on my checking account balance if I used my debit card 12 times in one month). Some of us REALLY DO have self-control. PS: I have no debt what so ever including no mortgage on my "paid off" house and it's wonderful.

[@MikeIsCannonFodder]

It's good they have their rules as they do though. Probably 80-90% of people wouldn't have that self-control. Plus it also simplifies their system. They don't have to have a flowchart of how to tell if you have enough self-control so you can ignore this or that rule.

[@bradb4446]

Agree. I find it difficult to believe Dave doesn’t use credit cards at all. I think he preaches what he does because it’s the safest option of the two (debit vs credit) when broadcasting to a wide audience.

[@bradleygraves5915]

I quit two jobs because I didn't have debt to tie me to an employer. Guess what? Both times I was happier and enjoyed the change. Being debt free is more than having money.

[@Kenshi836]

Yea Navy federal gave me a really high limit. I applied and was denied at first so I got a MYSTICFLIP , and I was approved for a capital one. The limit was so small lol but I took it and worked on it. Because if that it helped my credit and I believe that’s what made me finally get approved for navy fed with such a high limit. they're still working on increasing the capital one since it was so low. All in all I’m satisfied.

[@ThePatriots010304]

Just pay your bills on time and credit cards aren't a problem and you won't have to deal with "minor"(because they're not) inconveniences traveling.

[@miltoncat]

Exactly. I paid off $20k of credit card debt that I racked up because I was young, stupid, and shopping was my hobby. 😂 Have been debt free for a few years now and still have just one credit card. I pay basic bills like utilities and internet on it and pay in full every month. I haven’t run debt up on the card and never will. Not even tempted! Because the pressure and fright over having debt is not something I EVER want to have again.

[@amireallythatgrumpy6508]

Only insane people travel.

[@deanh2574]

I have been debt free for decades but still use credit cards which I pay off each month. My FICO score is 851. Being debt free doesn't mean you can't use credit cards wisely and still have an exceptional credit score.

[@amireallythatgrumpy6508]

There's nothing more asinine than a credit score.

[@alanmccarthy4004]

"Oh it's so inconvenient paying with debit. But the month of working 40hour weeks I did to earn the income to pay back interest this year, nah that's not inconvenient at all."

[@itchyisvegeta]

That last one... totally me!

[@daynapeterson9033]

Debt-free after working 40 years. Enjoying retirement but those taxes really eat your lunch. No deductions.

[@russlea6383]

John, can you create a guitar of the month club on a subscription rental basis?

[@JakeSpradlin2]

The biggest risk is not having enough investments built up and missing out on powerful compound interest

[@yellowsnowman9157]

Not if at the expense of debt interest and debt payment

[@WhiskeyActualTV]

Not if your debt out weighs your investments which is the case of most Americans.

[@tonycrabtree3416]

And that risk is small. Zero debt means all future money goes to investments, savings, buying as needed with cash. You need less growth, as in way less, when you don’t owe money.

[@ramccall]

@@tonycrabtree3416this is the most underrated point. When you don’t have a payment in the world you actually don’t need to have millions to live on

[@tacocruiser4238]

Depends on the interest rate on the debt.

[@bryan9604]

John loooooooooves his poncho shirts

[@flashthecorgi2053]

I do have a question how do you handle job credit checks? Someone in my family was applying to be a police officer and they checked their credit and they said in fine print of the application a low credit score can disqualify you from being able to be in the police force? Should you wait for it to be undeterminable?

[@mensb1936]

Find a better employer

[@alinatamashevich3354]

@@mensb1936 Bazinga! Wait until the social credit score gets implemented.

[@JT1652]

Do they have bad credit or no credit score? They need to be able to explain the situation clearly to the background investigator.

[@flashthecorgi2053]

@@JT1652 the person I’m talking about had a great credit score I’m just saying in general in the fine print it says if you have a bad credit score you can be disqualified so how does that play into it when you’re paying off debt?

[@alinatamashevich3354]

@@JT1652 Sad that debt is so ingrained into our culture, we have to explain the lack of it!

[@MichaelHall-qo7ce]

Funny what John says at the beginning about bias in survey's studies. The whole Ramsey team (especially Dave) keeps talking about the 10,000 millionaires they studied (no credit cards, paid off house by usually this age, and so on). They are making sense with the 'Gummy bears of America' joke, but be honest, they can vet 10k people in the world that follow their advice that fits their criteria. There are several millionaires in the world with credit cards they pay off. You could actually find and interview 10k people to match Dave that say they hold very low interest debt. You could find thousands of people that found millions through the lottery (I'm not saying lottery is good because it's ridiculous but thousands have won over the years), you could find 10k people that are millionaires with an inheritance. The Ramsey team purposefully found 10k people who match exactly what they say. Dave also says no one is a millionaire by earning credit card points... apparently he has not got the memo that no one is claiming that. It's just a reward for people who pay it off... most of Dave's clients are people who spend like they are already millionaires and can't do grade school math.

[@alinatamashevich3354]

Feel free to do your own study.

[@bradb4446]

Agree with everything said here.

[@MikeIsCannonFodder]

They never said (that I've seen anyway) those millionaires didn't use credit cards. They've said they had zero millionaires say that credit card reward programs helped them get there.

[@MichaelHall-qo7ce]

@@MikeIsCannonFodder Which is a dumb statement. Nobody has ever said credit card points made them a millionaire. It's ridiculous. They get some money back. It's a bit, nothing crazy. Some people can pay a credit card, most can't. Find out who you are and do that.

[@susiem.2068]

​@@MichaelHall-qo7ceThat seems a bit unwise and unsafe. The credit industry is very predatory. Most Americans don't pay off their debts as they should. You don't willingly get in close vicinity of a predator because you think there's a chance they won't tear *you* apart, even though they are known to have done it to a lot of people.

[@AbidingHopeMentalHealthCoach]

Somethings that a credit score is used for are pretty ridiculous. Or the things that people make is requirements. My credit score is currently over 800; we just paid off our house, so we kind of can’t avoid having one at the moment. I still have one credit card, that I do not carry around with me and almost never use. It’s kind of back up for when there’s a problem with my other card, which happens occasionally. But I don’t like making payments on it, so I keep a zero balance for months on end. Anyway, I wanted to rent a room for six months. I had the cash to pay the whole thing upfront. Lady wanted my credit score. I logged into my bank, took a screenshot of my credit score, and sent it back to her. She said, no, I had to sign up for the free trial from the specific website, only, and she wouldn’t except a credit score for any other source. Seriously? Or six months upfront, if she asked for it. But because she couldn’t see my credit score from this certain company, that I didn’t wanna sign up for, because I didn’t want to have to remember to cancel before the free trial was over, she wouldn’t even consider me. Her loss. I hope that the person that she did fine to rent the room was as clean and quiet and respectful as I was in the place that I did end up getting.

[@theresahaskew7555]

The scam WE Need to realize is your Credit Score Should Not go Down When you pay off debt

[@pauldower8226]

I know about this, no going out, eating noodles day in day out for 8 years but will be worth next month when mortgage paid off

[@anumehta3875]

All of these are downsides of not having a credit card, not downsides of paying off all your debt.

[@animegeek3109]

If I switch banks will the credit score transfer to the new bank?

[@brianb8122]

this guy has ticks off the charts, Crazy

[@JessResourceful]

Right! Then who is gonna clean up that mess 😂

[@mmcgahn5948]

I have a VISA and a Master Card which I use to pay hotels, etc., or for purchases on the internet. It posts on the card within 48 hours and I pay off the purchase immediately upon posting. I NEVER purchase anything with the credit card if I don’t have the money in my separate checking account. I do this in case of fraud, as the credit card company takes care of it, and the fraud does not involve money taken from my checking account.

[@fasteddy3336]

What guitar did you buy?

[@countdown2xstacy]

A 54’ strat

[@MarkSmithhhh]

Initially it is scary having veey little cash around but its shocking how quickly that gets replenished...

[@arthurfonzarelli9331]

I thought Dave spoke about this in the past. You can use your debit card as a credit card. Almost every place you spend money gives you that option.

[@lidgerwoodj]

Yeah, I’ve wondered if this were an American thing. I’ve stayed in hotels where they ask for a credit card: I give them my Visa Debit card, and it’s all good. I thought maybe debit cards didn’t function like credit cards. In Australia you can pay for everything by tapping your card- it’s a function of credit cards but my visa debit card does it just fine. Visa doesn’t make any money off me directly because I don’t pay any fees- they must get a kickback from the bank for using their platform.

[@Naturenerd1000]

Companies also want people in debt so they have a steady supply of workers.

[@pjabrony8280]

Don't say that they're not downsides. For some of us, the goal is to make money to spend, and the spending is just as important.

[@hersheyskwertz9315]

I’m in a very…. Unique situation where I have money that runs the business and any profit gets used to paying off debt and a downside is the feeling of stagnation. Definitely a fallacy but it doesn’t change the feeling. Digging out of the hole doesn’t feel like progress because I, at first, just kept the payments around and watched the business account increase and now seeing it stagnant and fluctuating in a consistent range just eats at me. Anyone else know that feeling?

[@MyFavouriteMusicandMovies]

You absolutely don't need a credit card in Europe 🤣 Debit cards are the norm here! When you are renting a car you just have to pay a deposit and probably the entire bill before you can get the car, but that is it.

[@blackworldtraveler3711]

Debit cards are the norm because most of you probably only do normal everyday things which is fine for a debit card. If Last summer I lived in an Italian lake view farmhouse in Lugano Switzerland for four months. While there I visited UK,Germany,Austria,France,and Italy. Rented a car as well on and off. During that time I also flew back to home Oklahoma for dental appointment then back to Switzerland. Took the long way back home after four months stopping in Hong Kong for a couple of days then continuing on back home. Did all of this with credit card using cash and zero debt. With my travel and lifestyle there would be issues with a debit card. Seen too many people caught underfunded with debit card and stranded in places for days over it.

[@candicejohnson44]

Worst part of being debt free is NOT living paycheck to paycheck

[@gabz91110]

The downside is debt can be used as leverage to increase your income potential and reduce your risk. If you own one asset in one location you have risk that can affect the value of that property. If you take that equity to borrow and buy another asset you can reduce your risk. As long as the debt payment / expenses related to that assets are lower than the revenue it produces you can increase your revenue and diversify your asset. So more money and less risk.

[@323TESOL]

I want to be debt free! I’s slowly working the baby steps. Once people realize The Game…. then they can opt out of playing and end up winning at the end.

[@michaelleahy6848]

Dave Ramsey should offer a credit reporting NON DEBT product! This will keep a score high, and not put a person at risk.

[@amireallythatgrumpy6508]

They want you to get rid of your score, not keep it high.

[@michaelleahy6848]

@amireallythatgrumpy6508 Is it not because a score equates to usage of debt in the DR philosophy? If a score can be reported with no corresponding debt, this would assist in a better conventional loan rate vs manual underwriting. Manual Underwriting will imput a 620 score for rates where no score exists. Why not offer or fashion a product which assists in the home ownership and not promoting debt? Incidentally, those who are working BS2 may have lates or collections which will remain up to 7 years on a credit profile, even after all debt is paid. To presume a profile will go to indeterminate, as 13% are credit invisible, is not a strategy for all.

[@amireallythatgrumpy6508]

@@michaelleahy6848 If you're manual underwriting, your score will not matter because you will never be doing business where it comes up in the transaction.

[@yoshit9819]

There is no downside to paying off debt. There is only freedom

[@ESponge2000]

Downsides of paying off debt … If you are in debt and get laid off unexpectedly and have a family of 4 and you are in Baby Step 2 And then you receive a lump sum 12 weeks severance pay to live on !!! Then do NOT in this case use your severance to pay off personal loans!!! Am I correct here ? You in this case need to hoard cash to cover your four walls while feverishly looking for work, any kind of work, and interviewing for replacement jobs. AFTER replacing your job, THEN you may use severance to pay ofd debt except $1,000 and resume baby step 2. You can even notify your creditors of the emergency and negotiate waiving payments to hoard cash without default. Your 4 walls lights rent utilities transportation childcare is even higher priority than retirement and the only last resort permission to touch that , if it’s to keep your 4 walls and the bear minimum of the 4 walls … with food being rice and beans for breakfast lunch and dinner

[@ragescholar817]

Think of the real downsides of paying off debt: 1. money is heavy. you're going to have way too much without all this debt 2. debt collectors will be lonely having no one to talk to. 3. credit card companies will be poorer! how could you do that to them!?

[@front331]

I like your avatar and I play a LOT of chess myself.

[@SeattlePioneer]

Actually, I didn't find that to be the case when I was a collector for a utility company for a couple of years. There were always LOTS of people to talk to who didn't have money to pay their bill.

[@mariajessicabelmonte4610]

There is no downside of paying off your debts. I have peace everyday knowing that I don’t have debts.

[@wewhoareabouttodiesaluteyo9303]

You sure as heck have expenses though! And if you do not pay those off every month.....debt buddy.

[@blue-wb8yn]

How? I mean unless you mean standard utilities, insurances, and a cell phone, there's not much to get behind in without debt. Debt is generally what sends auto bills to your home. Also, without debt you've got extra money to pay for the unexpected.

[@wewhoareabouttodiesaluteyo9303]

@@blue-wb8yn Debt, as I understand it, are expenses paid off long term. It just keeps accumulating. If for some reason, maria gets behind and expenses accumulate on a loan or credit card, it becomes a debt. And not all debts autobill. Debt can come in other forms like collection calls, or notices. No one states that you have to pay them; however, if you do not, there are consequences. For instance, if I had a credit card and I did not autopay; it would just sit and rack up interest charges and transaction fees and my credit score would tank. No one is autobilling me or forcing me to pay it.

[@christophesch4070]

In Germany you can still use a credit card, as a tool. When you pay off the balance at the end of the month. That is how I travel and rent cars. Is this option available to us credit card holders. I dpn't have debt but I still hold a card.

[@ipetmedsi]

Depending on Interest rate if were talking strictly math and no emotions yes. You can make more ROI on your money making minimum payments and investing the rest rather than making extra payments in some situations.

[@charlessnyder9684]

Sometimes I laugh when Dave Ramsey says "Would you borrow a million dollars at 3 pct so you could invest it and make 5 pct?" You're supposed to say no but I'm always like "Yeah, duh, of course I would"

[@alinatamashevich3354]

@@charlessnyder9684 Then do it! Be sure to tell the loan officer your plan.

[@aolvaar8792]

@@alinatamashevich3354 I want to borrow a $1MM for a mortgage on a house and leave my $1MM making 10% in my mutual fund. Loan Officer, Good plan! No, No, No Use the $1MM to buy the house. Dave

[@Supafly1906]

If you can get to the point of being debt free, you can handle having one credit card. You can just pre pay it before you use it and never incur debt.

[@goat9199]

downside is reduced liquidity, reduced compounding growth if debt interest rates are below growth rate on investments.

[@PassportBrosBusinessClass]

I have 5 credit cards and around $50,000 available credit. I make ALL PURCHASES on CREDIT CARD (Capital One Venture) I pay off my balance EVERY SINGLE NIGHT. I run $0 balances month to month. My FICO score went to 850 because of my behavior. I pay for business class plane tickets/ lounges on my card and then pay off the balance. I SAVE UP POINTS so that when I vacation, I have about 100,000 points ($1000) and use that money to pay for my hotel/resort rental. Hotels and car rentals DEMAND a credit card and if you travel you're best to keep your credit in good standing. You also want good credit to ensure you can finance a car or house. Most of us can't even hope to keep up with the cost of inflation and we don't have hundreds of thousands of dollars in cash hanging around.

[@digthewarmth]

I don't understand not having a credit card, for the rewards. You can buy everything you usually buy with a debit card and get rewards too. And you can keep a good credit score for when you're looked into.

[@TS1023TS]

Can’t wait to have this “problem” one day, hopefully in 10 years

[@Sexy40baby1]

Downside: you see your savings building and want to go spend it like you're rich. Lol

[@MohammedAli0]

Great video! I have a question, I have two fraud inquiries on my reports that I would like to get removed. I've seen your video regarding this, but Im still a bit confused. So I know my first step would be making a call with the credit bureau (Experian) but should I also make call what time? And would I be never stop sending a good compny MYSTICFLIP to my friends and people I know regarding any credit situations

[@AbidingHopeMentalHealthCoach]

They always talk about Churchill mortgage as an option for Emmanuel underwriting; I know a guy who works at Sunwest mortgage, and he says they can do manual underwriting as well. Just find a better company than your local bank, and you’ll be fine.

[@megalodon1726]

Manual underwriting still reduces your options for a mortgage and increases your interest rate.

[@teenindustry]

The mortgage thing is legit I have a card that I barely use for this rsn

[@Hannah-rm3wj]

As a none American i don't understand the thing with credit scores. Where I come from we won't have credit scores.

[@PassportBrosBusinessClass]

THE HARDEST PART for people who actually have the cash to pay off a loan is writing the check and paying it off. You must understand: people psychologically treat their PHYSICAL CASH differently than credit. They are more careful with their physical cash and more fivolous with credit. Creditors KNOW THIS. Many people could pay off their HOUSE, their CAR, their student loan and even other loans but they can't get past the psychological block. I've made it a point to pay off my credit card balance EVERY SINGLE NIGHT. I paid my student loans off 10 years early. It was PERFECT because it cleared up my credit to buy a house with a 800+ credit score. Paying of debt can strategically help you build credit. My FICO is 850.

[@Jaemastercho]

Look get the credit card but just get one with low credit line and only use it for utility/rent/mortgage. If you can’t control the urge to spent then yea credit card is not for you. If you are credit card person then you can see many perk over debit like lower interest rate/ free hotel/airline etc just use it responsibly

[@finesupplements9698]

My auto insurance is about 50% higher, now that Im debt free. Also, most employers these days wont hire you if you have bad or no credit, and the next guy has good or excellent credit.

[@jacqueslee2592]

Yes, you must have debt. Having enough money saved alone does not allow you to rent, buy a house or a car.