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Your Top Credit Card Debt Questions Answered

If you’ve listened to Dave talk for more than 60 seconds, you know exactly how he feels about credit card debt. It’s the way Taylor Swift feels about cheaters, Chandler feels about Janice in Friends, and anyone who’s not a Patriots fan feels about Tom Brady.

He hates it. And so do I.

The Federal Reserve has found that Americans are approaching $1 trillion in credit card debt.1 The numbers don’t lie! Credit card debt is a major problem in America. In 2019, there’s just no good reason to have a credit card.

And look, I totally get that credit cards are completely normal in our culture today. But that’s because the credit industry wants nothing more than for you to believe that credit cards are just a way of life and you’re a weirdo if you don’t have one.

So, let’s take a look at the truth behind some of the most common questions and rebuttals I hear about credit card debt.

1. What if I pay off my credit card debt each month?

I’ve heard it time and time again: “I can pay off my credit card each month! So what’s the big deal?”     

Here’s the big deal, you guys:

  • One in three Americans are behind on bills.2 
  • The average credit card balance is $6,506.3
  • Studies show you’ll spend more when swiping a card versus using hard-earned cash.4

So even if you really think you’ll keep a level head about the amount of money you’re spending, the odds are stacked against you. Payments and late fees have a tendency to pile up, and they steal more than your paycheck—they steal your joy too.

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Don’t let credit control your life! Learn the proven plan to win with money.

There’s no positive side to credit card use. There’s no beating the system, because it’s all been set up to benefit the credit card companies, not you.

These companies know you’re likely to overspend and rack up thousands of dollars of credit card debt. Over the years, that means you’ll pay them thousands of dollars in interest as you carry a balance.

And even if you promise to pay it off every month, all it takes is one lost or missed payment to make the situation exponentially worse. If that happens, your interest rate skyrockets, your credit score drops, and you get slapped with fees. With just one mistake, you’ve gotten yourself into a big money mess.

2. What about my airline miles, cash back and rewards?

Everyone knows the surefire way to wealth is to accumulate credit cards points. Just kidding! I can’t even say that with a straight face.

I love a good deal, but that’s not what you get with a credit card. There’s always a catch! Here are some promotions credit card companies use to really try to get you:

Airline Miles

People love airline miles. It’s one of the most common reasons I hear for having a credit card. But I think they are seriously overestimating what these travel points are actually worth!  

For example, a popular sign-up bonus I see on several different cards is for 50,000 airline miles or travel points. And that sounds like a lot. You should be able to fly round trip to Jamaica like, three times, right?

Nope. Actually, from where I live (Nashville), 50,000 airline miles would barely get me one round-trip ticket.

But let’s say that seems worth it to you. Credit cards that offer airline miles usually have an annual fee between $70 and $100. Once you’ve blown through the points you get for signing up, you’ll need to spend around $8,000 on the card every year for three years to get another free round-trip ticket. Even if you pay it off each month, in those three years, you’ll have spent at least $210 in annual fees alone—and you can buy your own plane ticket for that amount!

Cash Back

Here at Ramsey, we like cash—but this is one instance when we don’t recommend it. You have to spend thousands on a credit card to get a measly $100 cash back. And by the way, it’s probably just a credit applied to your account, not actual cash in your pocket. Plus, that cash back is a fraction of what you’ve paid in interest on the credit card debt.

I know we’re all just looking for ways to come out ahead, but you guys, this isn’t it. It’s just not worth it, so keep your real cash instead.


Now let’s talk about the rewards. Plenty of people love credit cards for the sole purpose of using the rewards or coupons they get. This is especially true of store credit cards. And, sure, you might get free shipping twice a year or a 15% off coupon the first Tuesday every other month—but is it really saving you money? Let’s break it down.

You’re so excited to take advantage of your 15% off exclusive cardmember “benefit,” and you rush to the store or website. You get there, and . . . they’re having a sale! At this point, they’re practically paying you to shop! (Listen, I’m a spender at heart, so I know how to spin this.) So you wind up going on a $150 shopping spree—which is $50 over your budget.

Suddenly that 15% you “saved” goes out the window, especially if you don’t pay off the balance and then have to pay interest. You’ve just won more credit card debt, and your “reward” wasn’t really a reward at all!

3. How do I keep my FICO score up without a credit card?

This one really gets me fired up, because creditors have convinced everyone that it’s impossible to live without a credit score—and that’s a lie.

If you’ve bought into it, don’t worry—you’re not alone. Our culture pretty much idolizes the almighty credit score. Why? Because we think it somehow proclaims to the world how awesome we are at managing our finances.

In reality, all it does is show how much we love debt.

Friends, step away from the credit score. It’s okay—you can live without it!

A high FICO score doesn’t mean you’re wealthy. In fact, as you pay down your debts, your credit score goes down. As great as you feel making progress on paying off your credit card debt, FICO doesn’t see it that way. Your FICO score only measures your debt: how much you have, how much you use, and how often you pay it back. You’ll never build wealth that way.

Here’s another reason people want to build their credit score: “I need a credit score to buy a house.”

I love debunking this one! The truth is: You can totally buy a house without having a credit score. You just need to find a mortgage company that does manual underwriting.

This just means they’ll make a judgement call about you based on the details of your actual life rather than simply relying on a few debt-related numbers. They’ll look for things like a strong history of paying your rent and utilities on time and how long you keep a job.                            

4. Can I shop online without a credit card?

This one is kind of important, especially to me. I love Amazon Prime as much as anyone, but guess what? I shop with my debit card!

You may have heard that paying online with a credit card is safer, so that’s a good reason to keep it. But did you know a debit card offers the exact same fraud protection as a credit card? So that safety theory is simply a myth.

And here’s my pro tip for online shopping: Always check your budget first, and before you make a big purchase, sleep on it. Living within your means is all about being clear and intentional about how you’ll use your money. Managing your impulses is a huge piece of this! 

5. Does anyone actually use cash instead of a credit card?

Yes, of course we do! Some convenience stores and flea market vendors will even give you a discount for paying with actual cash, because they get to avoid processing fees when you do.

But here’s why paying with cash really gives you an advantage: You’ll spend less.

Like I said before, studies show you spend more when using plastic. But when you pay with cash, it’s an emotional transaction because you can feel the money leaving your hand. You just don’t get that same feeling with credit cards! Whipping out a credit card is easy because you know nothing happens to your bank account at that exact moment.

Have I convinced you to cancel your credit cards yet? If you really miss the convenience of a card, use a debit card. It works just like cash.

What would your life look like if you stopped reaching for the credit card? What if you got out of credit card debt for good and had no more payments? Sound too good to be true?

It isn’t!

We have a plan that teaches you how to transform your money habits and pay off your credit card debt. When credit cards stay out of your wallet, money stays in!

Ready to take control of your money and get out of debt? Just plug in your numbers and take the first step to kicking credit card debt to the curb—and creating a life you love!

Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, and host of The Rachel Cruze Show. Rachel writes and speaks on personal finances, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches 18 million weekly listeners with her personal finance advice. She has appeared on Good Morning America and Fox News and has been featured in publications such as Time, Real Simple and Women’s Health magazines. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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