Dave Ramsey vent

[Delicateflower]

I know we've had this discussion before, but argh! I listened to his podcast last night and kept wanting to throw things at the computer.

There were two things in particular:

"millionaires don't use credit". Yes, they do, all successful businesses do. It's called leverage and it's sound business practice.

then someone wrote asking for ammo against their 22 year old daughter getting a credit card. He went off into a tirade about how they're a crutch for weak people, yada yada yada. Maybe for him, but if that girl doesn't get one now and walks into a bank looking for a mortgage in ten years time she'll pay a lot more for the loan if she doesn't open a credit card now, use it every once in a while and keep the balance at zero. Like the majority of credit card users do. His advice wasn't just opinion, it was BAD, and it will cost that girl money if she listens to him.

[lolar2]

LOL

If you don't want to hear anti-credit rants, don't listen to Dave Ramsey! He believes that credit is morally dubious at best, as per his reading of the Bible. That's the main part of his schtick. I agree that he is overly hard-line about it, but you know, you may as well listen to Rush Limbaugh and be upset that he's a Republican.

[chiromamma]

Originally Posted by Delicateflower

I know we've had this discussion before, but argh! I listened to his podcast last night and kept wanting to throw things at the computer.

There were two things in particular:

"millionaires don't use credit". Yes, they do, all successful businesses do. It's called leverage and it's sound business practice.

then someone wrote asking for ammo against their 22 year old daughter getting a credit card. He went off into a tirade about how they're a crutch for weak people, yada yada yada. Maybe for him, but if that girl doesn't get one now and walks into a bank looking for a mortgage in ten years time she'll pay a lot more for the loan if she doesn't open a credit card now, use it every once in a while and keep the balance at zero. Like the majority of credit card users do. His advice wasn't just opinion, it was BAD, and it will cost that girl money if she listens to him.

I don't like Dave Ramsey either. I just think he's self righteous.
However, I don't think a 22 year old needs a credit card, especially if she's still in college. I don't think they are a crutch for the weak but I no longer use CC's. We cut them up about 6 weeks ago. We do cash and debit.

[chiromamma]

Originally Posted by lolar2

LOL

If you don't want to hear anti-credit rants, don't listen to Dave Ramsey! He believes that credit is morally dubious at best, as per his reading of the Bible. That's the main part of his schtick. I agree that he is overly hard-line about it, but you know, you may as well listen to Rush Limbaugh and be upset that he's a Republican.

[Norasmomma]

Millionaires don't use credit? Isn't Chrysler going bankrupt because they can't make a deal with their creditors? hmmmmmmm.....

I like some of DR's ideas, but I know he'd hate what we do with our finances. To each their own.

[Delicateflower]

Originally Posted by lolar2

you may as well listen to Rush Limbaugh and be upset that he's a Republican.

eh, at least Rush doesn't pretend to be speaking the truth, or that he has knowledge or wisdom on anything like Dave does.

[dogmom327]

Originally Posted by chiromamma

However, I don't think a 22 year old needs a credit card, especially if she's still in college.

I disagree. A 22 year old definitely needs to be establishing positive credit history otherwise he/she is going to need to rely on mom and dad for a long time for co-signing, large down payments, etc. on cars, homes, etc. Certainly a 22 year old (or anyone else) doesn't need to be ringing up credit card debt but charging one or two small things a month and paying the card off in full establishes good financial habits and goes a long way to showing future creditors that you are a responsible person. I view credit cards like driving a car. If you drive responsibly you can gain a lot of benefits. If you drive irresponsibly, there will be negative consequences.

My little sister really thought she was being responsible by not getting a credit card when she became an adult. A few years later the car she paid cash for (a cheap car) was totaled by a tow truck driver who took off and she literally had to sue (still hasn't received the money just a lien against his business). She went without a car for a year but finally needed a car for her job. DH and I took her car shopping but since she only had one credit card she'd just gotten 6 months earlier, no one would extend her credit without a substantial down payment or a co-signer. DH and I ended up co-signing (no flames please--it was a better decision for us than giving her a large down payment--this is a decision we took very seriously, she's the only person we would ever do this for and we had lots of safety-nets in place like being sure we could afford the payment ourselves and I was constantly online checking that she was current on the payments. The car was refinanced in her name alone a year later and she now has great credit). If she'd established credit earlier and used it responsibly, the whole thing would have been much easier and she wouldn't have had to involve us.

[Sk8ermaiden]

Originally Posted by Delicateflower

eh, at least Rush doesn't pretend to be speaking the truth, or that he has knowledge or wisdom on anything like Dave does.

Are you serious? That's all Rush does.

[p1gg1e]

I agree with Dave Ramsey. ( I don't agree with him always) you don't need a fico score and you don't need to worry about your credit score. You can be breathing , find a job and have a fine credit score. If her rate is so so she can get her loan underwritten. But having a good job you can get credit pretty easy.

Owing someone may work out fine till your not making money any more and need to pay the loans... I think though Dave knows allot of old money millionaires and that's where he gets his opinion about them. That's why he calls them successful ones...because he was one with credit and he lost it all.

But hey I'm not a Suzy Orman fan...I don't sue people to get rich and then write a book

[RoadWorkAhead]

Dh has a great job, and we still couldn't get a vehicle until he had a card on my account giving him a strong (and long) credit history despite having 0 debt and a wife with a 750+ credit score. I call BS when people say a credit score isn't needed - its more needed than ever right now.

[Sk8ermaiden]

Originally Posted by Kierdan'sMom

Dh has a great job, and we still couldn't get a vehicle until he had a card on my account giving him a strong (and long) credit history despite having 0 debt and a wife with a 750+ credit score. I call BS when people say a credit score isn't needed - its more needed than ever right now.

Well, if you follow Dave Ramsey, it isn't, because you will never need it. He would never, ever advise someone to finance a car. So his advice makes sense if you follow his advice. : If you take half and leave the other half, you'd probably end up in a bad spot.

[shayinme]

Originally Posted by dogmom327

I disagree. A 22 year old definitely needs to be establishing positive credit history otherwise he/she is going to need to rely on mom and dad for a long time for co-signing, large down payments, etc. on cars, homes, etc. Certainly a 22 year old (or anyone else) doesn't need to be ringing up credit card debt but charging one or two small things a month and paying the card off in full establishes good financial habits and goes a long way to showing future creditors that you are a responsible person. I view credit cards like driving a car. If you drive responsibly you can gain a lot of benefits. If you drive irresponsibly, there will be negative consequences.

My little sister really thought she was being responsible by not getting a credit card when she became an adult. A few years later the car she paid cash for (a cheap car) was totaled by a tow truck driver who took off and she literally had to sue (still hasn't received the money just a lien against his business). She went without a car for a year but finally needed a car for her job. DH and I took her car shopping but since she only had one credit card she'd just gotten 6 months earlier, no one would extend her credit without a substantial down payment or a co-signer. DH and I ended up co-signing (no flames please--it was a better decision for us than giving her a large down payment--this is a decision we took very seriously, she's the only person we would ever do this for and we had lots of safety-nets in place like being sure we could afford the payment ourselves and I was constantly online checking that she was current on the payments. The car was refinanced in her name alone a year later and she now has great credit). If she'd established credit earlier and used it responsibly, the whole thing would have been much easier and she wouldn't have had to involve us.

I agree with you 100%. A dear friend of mine is learning that while having no debt is good, having had no credit on her own is backfiring on her. She recently got divorced (everything had been in the ex's name) and she is having a hard time because while she has good credit, she has no credit history. She just had to have her Mom co-sign so she could get a car, so I think at 22 its a decent age to be starting a credit history. After all she will be out of school and working soon.

As for Dave Ramsey, I have tried to get into him and I just can't. He is just too black and white and IMO refuses to see the shades of gray. I have a problem with a man who filed BK saying you should never do it.

[Jadzia]

Even worse is Dave Ramsey's investing advice.

I remember watching his TV show once (about a year and a half ago) when a guy who was 60 and nearing retirement called and asked if should have some bonds in his portfolio for safety. DR basically laughed at the guy, sneered at the idea of owning bonds and then proceeded to preach his recommended portfolio of "good growth mutual funds which earn 12% a year."

Yeah, I wonder how all those people who followed Dave's investing advice are doing now? Sheesh.

I would run very far away from most of Dave Ramsey's advice other than actually paying down debt. He doesn't seem to really have anything helpful to say to people who aren't in debt

[Denvergirlie]

I know more than a handful of folks that never used credit before getting a mortage, the mortage was just manually underwritten. Not having a credit history will not affect the abiliity for someone to get a mortage so long as they have records to show how they will be able to meet the obligation of the mortage.
So on that, I do agree with DR. No one NEEDS a credit card. It can be a tool, but lots of people have learned the hard way that credit cards are not a wise tool in there plan.

DR is also correct about businesses. Credit is not a NEED. But it can be a tool, some people will pick up that tool and use that shovel to replant a bush. However, others use that same shovel and will try to dig to China or use it in another way and smack a neighbor over their head with it..... Big difference of course.

Credit can be a tool, it can have it's place and time, but I don't think it's ever a need.

[Smithie]

Agreed. Dave Ramsey's method can be an awesome thing for people who are in debt and/or are prone to racking up consumer debt. And that's a lot of people so I think his gospel does more good than harm.

For the rest of us who have not had the misfortune of falling into debt and/or are not prone to racking up CC debt, he does sound a little bit kooky and his suggestions are often not in line with what we'd advise a friend or relative to do WRT using credit. But he's not as kooky as Rush!

[polyhymnia]

As someone who works in an industry related to the financial industry and is married to someone even more involved in the financial industry - we would not have our jobs without good credit scores. We had full credit checks run by our respective employers before being offered our jobs. I know one candidate for a position similar to mine did not make the cut because she had no credit.

[Delicateflower]

Originally Posted by p1gg1e

you don't need a fico score and you don't need to worry about your credit score. You can be breathing , find a job and have a fine credit score. If her rate is so so she can get her loan underwritten. But having a good job you can get credit pretty easy.

That's not true. It's simply not true. You may be able to get the mortgage, but your rate is going to be higher. Especially if you rent privately and always share it's usually easier to get the utilities in their name, then suddenly you're 30, no credit history at all and you're paying 1% higher on your mortgage.

Are you serious? That's all Rush does.

Nah, he doesn't really mean it. The other day he was going on about how having light colored cars would increase global warming. No-one would actually believe that, he just says it because it's entertaining and funny. And they call themselves "the excellence in broadcasting network" in a satirical manner. He's the original Colbert.

[Delicateflower]

I just figured out how he should be seen. On money matters he's like an alcoholic. I wouldn't expect an alcoholic to give me a good opinion on whether to have a Chablis or Pinot Noir with shrimp. But they also wouldn't be hosting a radio show on home brewing!

[mnnice]

Originally Posted by shayinme

As for Dave Ramsey, I have tried to get into him and I just can't. He is just too black and white and IMO refuses to see the shades of gray. I have a problem with a man who filed BK saying you should never do it.

Dave tells callers to declare BK pretty often. He does discourage people often too.

While many businesses to use debt. There are also many sucessful businesses that were started and built with no or nominal debt.

I find him simplistic too. He really doesn't offer much in the way of advice for people once they finish his baby steps.

[Sk8ermaiden]

Originally Posted by Delicateflower

I just figured out how he should be seen. On money matters he's like an alcoholic. I wouldn't expect an alcoholic to give me a good opinion on whether to have a Chablis or Pinot Noir with shrimp. But they also wouldn't be hosting a radio show on home brewing!

This is very true. And I think 95% of his advice is spot on for other alcoholics.

DH and I tend to just keep doin' what we're doin' because we've never had debt and probably never will. Our best friends are clawing their way out of debt to try to start their marriage on the right foot and his advice has been a godsend for them. Being people with a tendency towards living beyond their means, they will always have to be more careful I think.