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Video Transcript
CHAPTER 4, LESSON 4
GEORGE KAMEL: So, let’s talk about credit cards. Do you guys have any credit cards?
MALE 1: You have to have credit cards.
GEORGE: Whoa! Whoa! Whoa, have to?
MALE 1: Okay, okay. So, you want to take a ...
GEORGE: Strong statements here.
MALE 1: Well, you have to, because ...
FEMALE 1: Sure, to establish credit in the beginning. We had a credit card just to establish credit.
GEORGE: Do you have or use credit cards?
MALE 2: Yes, I do.
GEORGE: How many do you have?
MALE 2: I have two.
GEORGE: Two—what do you use them for?
MALE 2: Predominantly major purchases only. Everything else is cash.
FEMALE 2: I have a single credit card. That’s all I’ve allowed myself, so just one.
GEORGE: Okay, and what do you use the card for?
FEMALE 2: Paying gas, ‘cause when I had little ones, I didn’t want to get out and go inside to pay
for gas.
GEORGE: Okay, do you know how many you have?
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CHAPTER 4, LESSON 4
FEMALE 3: I used to have five.
GEORGE: Okay.
FEMALE 3: And now I’m down to two.
GEORGE: Down to ... so, why did you downscale them?
FEMALE 3: Tired of your check having to go out and pay for something, you know, that you don’t
even use anymore.
GEORGE: What if you didn’t pay it off every month? Would then you feel guilty if you didn’t?
FEMALE 4: Yeah, I would feel guilty if I didn’t, so ...
GEORGE: Why is that?
FEMALE 4: Um, I want a good credit score, so I can buy a house one day, and ...
GEORGE: Oh, so it’s for the credit score!
FEMALE 4: Yeah!
GEORGE: So that’s why you’re paying it off every month intentionally.
FEMALE 4: Yeah.
GEORGE: You know, do you get any perks or anything that you get excited about?
MALE 1: Oh, for gas, for gas. Fill it with gas, we get money off.
FEMALE 1: He gets cheaper gas, I get points.
GEORGE: Okay, so you like the points, he likes the gas—something for everybody.
MALE 1: Something.
FEMALE 2: ‘Cause you rack up points and you get free money. You get money back on your
credit card.
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CHAPTER 4, LESSON 4
GEORGE: How much ... how much free money have you received from credit cards?
FEMALE 2: I’ve got about $700.
GEORGE: Okay.
FEMALE 2: Yes. So then, I also use my credit card for, you know, trips—airline tickets, big
ticket items.
GEORGE: Big ticket items that you don’t want to use a debit card for?
FEMALE 2: Correct.
MALE 2: I just rented a condo in Hilton Head for ten days. You can’t very well put it on a debit card.
GEORGE: And why not?
MALE 2: Well, because I don’t keep that much money in a ... now, I could pay it off. What happens
if I have to cancel that, due to illness or something like that?
MALE 3: We try to use our credit card online, just, identity theft issues and things like that.
GEORGE: Do you get like, rewards from using your card?
FEMALE 4: I do, a little bit, yeah, and ...
GEORGE: What are those rewards?
FEMALE 4: So, right now I just would get a little bit of cash back.
GEORGE: Okay.
FEMALE 4: Yeah.
GEORGE: Does that change your life, or is it kind of just ... eh, it’s an extra meal?
FEMALE 4: It’s nice.
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CHAPTER 4, LESSON 4
DAVE RAMSEY: Myth—I need a credit card to rent a car, buy things online, and build my credit
score. I need a credit card. And then, also, this little bitty piece of plastic has magical powers.
When I get this piece of plastic, it says I’m an adult! You’re not an adult based on plastic. I
know this ‘cause I meet 54-year-old children with wallets full of these. They are not adults.
They do not know how to do self-control or self-discipline. I mean, this thing does not have
magical powers, but it’s like a rite of passage.
In our culture today, a sign of womanhood or manhood is a cell phone and a credit card. That
means, “I’m now there. I’ve arrived. I’m a full-flown ... I just want to be an adult.” Don’t fall
into that! That’s their marketing. They’ve trapped you. “I have to have a credit card to win at
life.” The truth is you can do both of these things, all of these things, with a debit card. Credit
cards are snakes. They’re designed to bite you. They’re not your friend and you’re not gonna
win. I have ... “Dave, I heard you get airline miles.” I’ve talked to thousands and thousands of
millionaires. I’ve never heard a single millionaire say, “Dave, you know, I made all my money
with airline miles.” It’s never come up. “Well, Dave, I get points back on my credit card. I get
1% back on my Discover Card. I mean, you don’t get points back if you do this other stuff.”
No, wait a minute, wait a minute, wait a minute. Look, you get 1% back. Let’s do some math
here, because you kind of sound stupid.
[laughter]
1% back means that if you spend $100,000 on your credit card, you get $1,000. I’m confused.
How does that make you wealthy? You spend $100,000 to get $1,000. Y’all, that’s stupid,
okay? That’s straight up dumb. So, don’t fall for their stuff, guys. They’re really good at
making you believe it. Don’t fall for it. These are snakes. They will bite you. You’ve got to
decide. I haven’t had a credit card in 30 years. I have two debit cards—one on my personal
account, one on my business account. That’s all I have, and I travel all over the world. I stay
at some of the nicest places. I eat in some of the nicest places. I rent cars. I can do everything
people want to do, except go in debt, which I don’t want to do, even accidentally—because
sometimes those cards just jump out of your pocket and buy stuff!
[laughter]
So, you don’t need the FICO score. You don’t need college debt. You don’t need a credit card
to build a FICO score, ‘cause credit card companies give you all kinds of free stuff, and don’t
they make money? Yeah, you need to study them a little bit. You’ve got to think about how
much money they make. To start with, most of them, almost all of them, charge you an annual
fee when you take out a credit card. They charge you $50, $100, $500, whatever it is, annually,
just to have the piece of plastic, whether it ever leaves your wallet or your purse or not. You just
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CHAPTER 4, LESSON 4
(Dave Ramsey, continued)
pay table stakes to get to be at the table. You just pay a fee to get to have the plastic. And the
more prestigious the piece of plastic—and isn’t this kind of humorous? The color of your plastic
says you’re someone. Think about that! “I have gold plastic.” “I have platinum plastic.” It’s
plastic! It’s not gold and it’s not platinum! And yet, “I’m someone because I have the black card,
I have the platinum card.” That’s marketing. You feel it? You’ve got to stay away from that stuff.
And of course, credit card companies, once they hook you and you do go buy something—
you’re in college and you know, “It was an emergency pizza and I needed one, and I didn’t
have any money, and the whole darn floor needed emergency pizza, and I had this magic
card that would just bring emergency pizza, so I bought the whole floor a pizza.” This stuff
happens all the time in college, okay? Think, think, think. Now, you’re in debt.
Well, credit card balances for college students, on average, are $1,400 while they’re in
college, carrying credit card debt. That’s what it comes down to. “Well, you needed a
credit card.” No, you didn’t! I’ve been talking about this. Rachel told you to have a written
game plan for your money so you don’t spend money you don’t have, and you budget, and
you plan, and you think into the future. We’re being grown-ups here and we don’t have an
accidental pizza.
Average interest rates on credit cards at that age is 21%, and that’s the average. They go
anywhere from 10% all the way to 38%, we’ve seen them. ‘Cause people, when they sign up
for credit cards, especially college students, don’t look at the rate. All they said was, “I got
a free T-shirt. Can I have the card, please?” “Oh, now I’m an adult. I have the T-shirt and the
card.” False sign of being an adult. Not true. Don’t fall for it. So, if you’ve got a 21% interest
rate on a $1,400 balance on average, your average payment is $52.50 a month. How long
does it take to pay this off? Oh, between three and four years. 37 months is the average.
In addition to that, every time you use the card, not only are you paying them trillions and
trillions of dollars in America today, but in addition to that, every time you use the card they
charge the merchant 2% to 3% of that transaction, and so, they hit the merchant, too. So,
that shirt that you bought has built into the price another 3% that you just paid, because they
charge more for the shirt, because the credit card company takes 3% of their profits. They
charge more for the jeans. They charge more at the restaurant, because in the restaurant’s
profit and loss statement is credit card fees that are anywhere between 2% and 4% on every
transaction. And believe me, that restaurant’s not paying for that, that store’s not paying for
that. They’ve built it into their cost of their goods, the cost of their service. You’re paying for
it yet again. They’re getting unbelievably wealthy. Meanwhile, we’ve got an entire culture,
many people in many households with credit card debt, that are really struggling because
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CHAPTER 4, LESSON 4
(Dave Ramsey, continued)
they believed lies. If you head to Florida that way, it’ll bring you pain. It’ll make you afraid.
It’ll bring anxiety. It’ll bring stress. And it takes the fun out of the trip because you’re lost, and
that’s most people in America today. You don’t want to fall into that. And it’s a great joy of
mine to show people, and then they go, “I’m not gonna be normal anymore. I’m not gonna
be like everyone else. I’m going to be different.” And you get to make that choice. You get to
make that choice. No one makes it for you. You get to decide.
You know, when I was a little kid—I’m an old guy. I was born in 1960, and in the 1950s and
the 1960s, and even up into the ‘70s, every movie, and every rock star, and every country
music star, and all the cool people that were on camera anywhere, every time you looked at
them, they had a cigarette hanging out of their mouth. Watch the old 1950s and 60s movies.
They’re all just smoking like this. They’re just smoking like they’re a factory, right? All of the
Hollywood beauty queens smoked. All of the Hollywood hunks smoked. Everybody smoked.
It was day-to-day-today-to-day. Nowadays people have realized, decades later, that it kills
you, and it became kind of uncool to smoke. People that smoke now, people kind of look at
them and go, “Really?” You know, “Really?” And, “You didn’t get the memo, did you?” You
know? And certainly, we don’t promote it to teenagers. It would be a sin to promote it to
teenagers today, but in those days they promoted smoking to teenagers. It was promoted,
and it was just like, “This is what you do.”
And it would be uncool today, but I mean tobacco companies have been sued because they
were killing people. They were sued because they got teenagers involved in this nicotine
addiction. And soon, the cigarette went from the cool people were doing it and everybody
did it everywhere, to, “Oh, wait, this isn’t working.” Florida is that way. The truth is the cool
people aren’t doing it. The truth is it’s killing you. The truth is we’ve got a national addiction
to nicotine. The truth is the cigarette, over time, went from being cool to exposed as a fraud,
and the cool people dropped it, and everybody turned from it, and it went from no smoking
sections in restaurants to no smoking, period, to no smoking anywhere in the building, to
now you have to go off to the edge of the property and people are standing in the cold at the
far edge of the property line, going ... you know, like this, right? And there’s three of them,
and 1,000 people are in the building, warm, right? I mean, it’s really went from cool—y’all
getting this? To being uncool because it was exposed as a fraud.
You see, I personally think that the credit card is the cigarette of the financial world. I think
all of the cool people are doing it, and they all think it’s great and they get airline miles, and,
“I get a 1% back on my Discover, and I’m building my FICO score”—and we’re exposing the
lie. The truth is it’s killing you, and I think someday we’re gonna look back and go, “No one’s
doing credit cards anymore, ‘cause everybody figured out the game.” And there’s a few
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CHAPTER 4, LESSON 4
(Dave Ramsey, continued)
people on the edge of the property line doing them, but everybody else is gonna give them
up because we realized that the culture had been sold a lie, and the culture turns on them,
and pounds them. And that’s what’s happened with the cigarette, and I think that’s coming
with the credit card, I really do. Because the correlations are really there in the way people
are moving with it, the way the marketing has gone, and the benefits are not there. They’re
destroying people’s lives with this debt. They’re taking away their futures. And you young
people, before you even start your future, I don’t want you to surrender it. Don’t let the future
you be mad at the current you.
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