Dear Dave,
I’ve been an avid follower of yours for as long as I can remember. I remember you for your common-sense, no-nonsense personal finance advice that gives the average person a realistic pathway to wealth in their lifetime. For that, I and so many others are eternally grateful.
But there are chapters in the proverbial Dave Ramsey bible that seemingly stray from this tenet of helping the average person generate wealth, and instead they’re blamed for living their best possible life in a financially sound way.
I’m speaking of course about credit card points and airline miles, and your infamous shunning of them both. The goal of personal finance is to help you live the best life you can afford, which is what you’ve been helping people do your whole career. Credit cards enable people, who otherwise would never be able to afford it, to fly in first class and stay at 5 star hotels for almost free. Yet you aren’t happy for them. You don’t help them do it the right way. You scold them. All while hiding behind the word “debt” as an excuse to lie about the benefits of credit cards and never have a real conversation about their pros and cons. It’s time someone addressed it.
I’m happy to have this conversation with you, but for now, this letter will have to do.
Here is a transcript of a video with your thoughts on credit cards and airline miles that you posted on your Instagram page a few months back:
“I’ve met with thousands and thousands of millionaires, I’ve never met one who said “You know, Dave, I made my money with my airline miles. All those Discover points broke me through financially.” Hey, let’s do the math, okay? You know how you get $1,000 back from Discover? You spend $100,000. How does spending $100,000 to get $1,000 back ever make you rich!? Where did you take your math class!? Really!? This is absolutely ludicrous. But everyone’s counting their dadgum points, and everybody’s trying to figure out some way I’m beatin’ up on Chase. Chase is kicking your butt! Their building’s bigger than yours and their furniture’s nicer than yours. You aught to have a clue by now.”
Let’s dissect this sentence by sentence and go over every way you’re misleading your listeners and personally disappointing the piece of me that looks up to you:
“I’ve met with thousands and thousands of millionaires, I’ve never met one who said ‘You know, Dave, I made my money with my airline miles.’”
This is the biggest false premise you make, and is clearly a strawman argument. Nobody has ever claimed that credit cards or airline miles will make you a millionaire. That’s not the goal. So the fact that they haven’t made anyone a millionaire is an irrelevant fact, proving nothing other than the fact that you don’t understand why people like the points and miles that credit cards earn.
Those in the points community almost exclusively never carry a balance on their credit cards, and (with few exceptions in the “manufactured spend” community, which for the sake of this letter, I’m not treating as part of the average credit card points community) don’t change their spending at all based on how much credit they have access to or how many credit cards they have. If you know a specific person does not look at credit cards in this healthy way, then by all means, tell that person not to use credit cards, just like you’d tell an alcoholic not to have a glass of wine. But that doesn’t mean we go full prohibition either.
This means the credit card user’s goal is not to become a millionaire from points and miles - their goal is to earn extra money that they otherwise wouldn’t have earned on spending they’re already doing, by using this piece of plastic instead of a different piece of plastic. That’s it. No one is selling a get rich quick vision.
Given that you can earn several percent back on each purchase by using my preferred piece of plastic instead of yours, your advice here is effectively recommending that all of your followers pay 2%+ more for everything than those who don’t follow your advice.