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.

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

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

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.

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.....

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.

Being debt free =much less stress.👍👍

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. :)

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.

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.

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

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

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.

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.😊

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.

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

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

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.

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.

Those are great points, John and Rachel.

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.

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.

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

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.

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.

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 🎉

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.

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

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.

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

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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

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

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.)

Thanks so much for!!

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.

That last one... totally me!

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. 😢

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

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

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.

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

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

"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."

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.

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.

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

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.

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.

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

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

this guy has ticks off the charts, Crazy

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

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.

John loooooooooves his poncho shirts

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.

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

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

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?

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

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

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.

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

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.

My wife and I are mortgage free and completely debt free . One downside believe it or not. It just isn't as much fun putting money in the savings or investing as it is to pay off debt.

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.

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.

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

Right! Then who is gonna clean up that mess 😂

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.

I don't consider renting passive income unless you have professional property management. Most people who rent don't count their time and effort needed just to make a tiny return on their massive investment. For example, you invest $599,000 to buy a second home and rent it out for $3000 a month. Let assume you are cash flow positive on the property and you make $1000 a month or $12,000 a year. What would your annualized return be? 2 percent on the entire amount. Now, you can argue that your return is much higher since you only put down $120,000 on the property. However, you are on the hook for the full $600k regardless of what the future FMV of the house is. Furthermore, people assume that their home will always appreciate in value however, this is a false assumption you can make. In the best case, you will gain some capital appreciation thanks to the central bank increasing the money supply, however, if inflation heats up, you can see your property actually start to lose money in real terms. This is because there is an inverse relationship between housing and nominal interest rates. The central bank will attempt to slow down inflation with higher interest rates and curb lending. We haven't seen inflation in a big way but we can see all the massive stimulus money that the government is pumping turn into inflation while taxes will be hiked to pay for all the COVID spending, your best choice is to look into MYSTICFLIP Its more profitable.

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.

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.

The downside is I would have been able to plow even more dollars towards retirement allowing it to grow exponentially and then use some of the proceeds to pay off the mortgage. Having said that, there is no guarantee how the market will perform during the years you instead divert those dollars to pay off the mortgage. Most do neither and just expand their lifestyle with extra dollars. With the mortgage (and all other loans) behind me now, I still need my job but not like I used to. Life is less stressful as a result. It’s a trade off for sure…your choice. I don’t regret my choice btw!

If your great at paying of cc and all other bills that majority of people have to live and emergency fund. Having credit helps. I wish government would give people great credit if you paid of all debt and showed great payment history. Unfortunately not the world we live in.

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

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

I totally agree about paying things off,but if you aren’t carrying a balance on a credit card how is it harmful?

WHY NOT USE A CC AND PAY IT OFF LIKE A DEBT CARD , YOU CAN SET AUTO PAY FULL STATEMENT EVERY MONTH

I have my house paid off. I sleep better and take vacations and really enjoy them

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

I don’t understand this persistent thinking that having a good credit score or wanting one means you have no discipline and are just bad with debt and loves debt lol. Having a good score is just an extra little something nice to have in your back pocket. Credit scores get checked for all kinds of reasons other than wanting to borrow money.

What's so bad about having one credit card for travel purposes. This is the one thing that doesn't make sense to me.

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.

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

debt and owning a credit card aint exactly the same. I have 0 debt and have never used my credit card. (I have a single one). Travel is the only reason i have it, just incase its the only payment method. Such as the rentals she mentioned, thats credit card only in Europe. They freeze the guarantee amount which doesnt get charged if car is in good condition.

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

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

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.

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!?

There’s no downside to paying off debt. There may be a downside to never using a credit card in the modern world since this form of payment is so prevalent. But paying off debt and keeping out of debt is wise.