Dave Ramsey Heresy

A heretical opinion on debit cards

I fear that Dave Ramsey may go gunning for me.

There’s an old joke that I heard twice. The first time the teller was Dr. James T. Jeremiah, president of Cedarville College, a very conservative Baptist college. He told it in chapel. The second time I heard this joke a flaming Atheist used it as part of his case against Christianity.

Here’s the joke.

It recounts a conversation between a suicidal person standing on a bridge and someone trying to talk him down. Along the way we learn that the two people agree about religious faith at each point through a series of narrower and narrowers categories.

The joke ends with a distinction so fine that nobody except the two people involved can recognize any difference. Whereupon the first guy changes his mind from trying to disuade the suicide to push him off the bridge with the words, “Die, heretic scum!”

Atheists like this joke because they think all categories of religious thought are equally bogus. Maybe so. Maybe not. But I think Dr. Jeremaiah saw another reason why the joke works: When you feel very strongly about something, and you encounter someone who mostly agrees about that thing, but deviates only a little from that agreement, it can lead to fisticuffs.

Let’s apply this principle to Dave Ramsey and heresy.

I passionately believe that debt is dumb, cash is king, and the paid-off home mortgage has replaced the BMW as the status symbol of choice. If you have ever listened to Dave Ramsey’s radio show, you’ve heard him say this. And if you run into me and ask, “How you doing?” I will invariably answer, “Better than I deserve.” I stole this from Mr. Ramsey twenty years ago and I seldom answer differently. (I even said “better than I deserved” through two rounds of chemotherapy when I had cancer.)

Not only do I listen to Mr. Ramsey’s radio show on a regular basis, I also teach his Financial Peace University class at church.

I agree with Dave Ramsey a lot. Last year I changed my mind about debt repayment strategies from advocating the “debt avalanche” to the “debt snowball” method. That is, accelerated debt repayment can either be in the order of smallest principal balance to largest (snowball) or in the order of highest interest rate (avalanche). I agree with Mr. Ramsey more today than I did just last year, having switched from avalanche to snowball.

After this preamble, you should expect me to say…


I’m a heretic about credit cards.

Mr. Ramsey is right about credit cards. Anyone who carries a balance on any credit card and pays the insane interest rate–anyone–who does this needs to have his head examined. That’s stupid. Going into debt this way is like burying yourself alive in a box.

This isn’t the part that makes me a credit card heretic.

There are times in modern society where it’s impossible to get by without a credit card. In such cases, Mr. Ramsey grudgingly approves the use of a debit card instead.

Grudgingly is good! You should esperience the sensation of money leaving your fist when you spend it. If it’s easy to spend money, it’s harder to save.

This part doesn’t make me a credit card heretic, either.

What makes me a heretic is that I totally DISapprove of debit cards. I use credit cards instead. Mr. Ramsey wants me to cut up all my credit cards–and I will cut up all my credit cards on one condition. I established that condition back in 1980 when I was first married.

My lovely new bride questioned the wisdom of using credit cards. She was a Ramsey-ite before Ramsey was Ramsey! I looked her in the eye and swore this solemn vow:

I will pay off the entire balance of every credit card every month. On the first month when I fail to keep this promise, or pay one penny of interest on any credit card, I shall cut up all of our credit cards.

(Same goes for annual fees.)

At the time I thought I was being clever–I would get the benefit of float for so many days before the bill came due. (But what made it NOTclever was how it made it easier for me to spend money when I coulda/shoulda been more frugal.) Nevertheless, I have managed to keep this vow for decades and have not cut up all my credit cards.

This is MY zero-interest credit card plan. If I had had less disposable income and been at risk of spending more than I could comfortably pay off completely each month, I would not have any credit cards.

Dave Ramsey is a behaviorist. If your budget is tight, you need to install every possible speed-bump in the way of spending. If you have to fill an envelope with greenbacks on payday, then dole them out at the store when you buy something for the rest of the month, that friction will slow your spending. You’ll think harder about not just spending the money, but the hassle of refilling those stupid envelopes. This will make it easier for you to cut out all but essential spending.

But Dave says to cut up all your credit cards. And if you have to, use a debit card instead…

Nope. Not going to use a debit card. I’ve got two reasons: FCBA and EFTA. FCBA stands for the Fair Credit Billing Act, and EFTA stands for Electronic Funds Transfer Act. These laws govern the handling of funds transferred via credit cards and debit cards, respectively. (I spent a good part of my career keeping financial institutions on the right side of banking regulations and my son is a lawyer who toils in this area of regulatory law.)

FCBA grants the consumer more rights in the case of fraud.

EFTA grants the bank more rights in the case of fraud.

How does fraud apply here? Ever heard of “identity theft?”

Have you been bombarded with all those scary advertisements for identity theft monitoring services? If someone uses your credit card or debit card to make fraudulent charges in your name, that’s …er… fraudulent.

There have been scores of times when my credit cards have been swapped out by the bank after someone I do business with online has been hacked. Never lost a penny. I use credit cards, not debit cards.

The law governing credit cards–FCBA–makes fraud the BANK’s problem.

But the law governing debit cards–EFTA–makes fraud MY problem.

Maybe if I were in the business of selling identity protection services, I’d have a different feeling about it.

EFTA provides the consumer some protections against fraud, but they require diligence on the consumer’s part. You must pore over your statements frequently, and verify every transaction is kosher. Should you find anything wrong, you must jump up and report it as fast as possible.

This is a pain. I suppose that if I paid money to one of those identity protection services, they could do some of that poring and ease my pain–for a price. And after this responsibility of reporting fraudulent transactions fell upon my shoulders, the identity protection service will hold my hand and help–provided I’ve paid for it up front.

But I’m just ignorant and old-school enough that I’d prefer the bank shoulder their fraud-prevention responsibility. They have lots of experience at it and know all about how to deal with it. MY responsibility shall be to make sure I don’t put any expenses on my credit card that I cannot pay off in full every month.

Therefore, if summoned before the Ramsey inquisition I have these prepared remarks:

I cannot and will not recant anything, since it is neither safe nor right to go against conscience. Here I stand, I can do no other. May God help me. Amen.

Steve Poling

Masters degrees in math and computer science. Poet in several computer languages. I write stories about Sherlock Holmes' brother Mycroft, steampunk, and SF.

Grand Rapids, Michigan http://www.catfoodretirement.com