Are You Dumb For Using Credit Cards

 What's the difference? Well, one day I just use my money. That's all you got You're gonna use your money to pay it off. Yeah, you don't have your brain turned on absolutely dumber than rock You don't want to have your brain turned on you want to just go to swipe it and not think about it I don't want to think about my money and I want to have some but yeah, magic. I'm ironic Welcome back to better wealth reacts my name is Caleb Williams in today's video I'm gonna be reacting to two videos one video is very pro never use a debit card use credit cards for all your purchases for credit or protection for building credit. We literally live in a credit-based society The other video is three months ago Dave Ramsey in 2023 doubled down very very passionately and strongly why you'd be an idiot if you use a credit card and you should use Debacars They're just as safe. They're just as convenient and so like always I'm going to be watching both of these videos and and then I will be giving my final thoughts at the end of both These videos and obviously I'll sprinkle in my two cents throughout this reaction. So without further ado Let's dive into why you should never use a debit card when you're purchasing now one other tip I'll give you is I don't own a debit card. I've never owned one I've never allowed my three sons to possess one certainly and truly the worst financial tool ever given to the American Consumer so a long time ago I asked myself a simple question. How would I remove 99.9% of my personal liability Like that. We're really don't worry about all these things So I use the safest form of payment that exists on the face of the earth and that is a credit card credit card V's a master card American Express discussion notice the word payment use of payment He's he's by all means not endorsing spending money that you don't have But he's saying credit card is the most useful way for payment over a card not debit credit But credit card every day of my life. I spend their money. I don't spend my money My money sits in a money market account at earns interest actually nobody knows where it is because not exposed anybody to find it It's just sitting there. I go to the dry cleaner. I give my card. I pick up the groceries I give my card. I put fuel in my boat on the weekend I use my card I pay the marina to keep my boat in the water all year long They put the rent on my credit card. I travel all over the world Why I wait to get reimbursed? I use my credit card if I need euros I go to the ATM machine. I use my credit card I'm not gonna use my debit card to get euros overseas or a pounds and break Britain and Every day I use my card and then if I pay the bill and full a part of the bill my credit score goes up So I'm building credit while I'm using that credit card and if tomorrow and I'll do everything to protect my information But if tomorrow someone gets my card number and charges one million dollars on my credit card by federal law My liability is zero. I have no liability. So yes, I love to shop online I don't use a special card. I just use my credit card if they don't deliver the merchandise if they deliver it It's broken if the host side I went to was fictitious to begin with I have no zero a liability when you use your debit card Every time you reach for your exposing the money in your account the only person's gonna get robbed is you when you use your debit card You can use it for the next 50 years 20 times a day. You will not raise your credit score by that much And of course when you use your debit card You are liable up to a certain amount and it takes a while in order to get that debit card fixed So when we do post investigations of breaches and we say to someone on your instance what happened? Well, I was in target, but I used a visa card So I don't know nothing. I got a they cancel my card the next day two days later FedEx sent me a new card And that was last I heard about it. What about you? I now use the debit card there that took three thousand dollars out of my checking account It took me two months to get my money back while they said they were investigating I had to pay my rent at kids to vision Everything I couldn't pay it because they had my money So I do it for that so I had three sons that went off to college and I said to them not giving you a debit card I've actually applied for credit card. You're not so sure card for sure 18 have no credit So I guarantee the card so as a guarantee or the card three things take place one the bill comes to me and I'm responsible for the bill So if you spend a lot of time in the bar I'm gonna know that too I set the limit on the card So whatever I want you to spend each month is why you're at school. I'll set that limit third every month that I pay the bill goes on your credit So by the time you get out of college you should be looking at a credit score of about 800 You want to buy a card buy a house buy a condo? You're not gonna need me to do that all three of my sons came out of college with great scores of around 800 And I will say if you're a parent watching this and you buy into this message I would highly recommend you look at figuring out how you can get your kids on your cards Because they can graduate college with an amazing credit score versus the person that maybe never got a credit card to begin with They're credit score is not gonna be as favorable just because they didn't have as much time in the system One of the best things you can do for your kids is to teach them to learn to use credit early on and build credit in their name Credit is a Build credit wisely very important thing 30 years ago It only meant whether you got the car you got the house today Everything is based on your credit the company hires you they're gonna check your credit If you buy auto insurance, you're gonna check your credit you buy life insurance Gonna check your credit everything is based on your credit So you want to make sure that you maintain a good credit and it's one of the best things you can do with your kids So here's what I would say to that I obviously agree we have to ask ourselves who are we targeting So this message that we just heard pro credit card You should use credit card when you're purchasing what he wasn't saying is using the credit cards to enable bad purchases He even said like if one of his sons are going to the bars He's gonna know and so he's gonna be able to maybe correct that But he's not endorsing spending money that you don't have what he's saying is it's using it to purchase things I use credit card to purchase things for a couple reasons I use it for not just protection, but I use it because it's at like we actually get points and you know Dave Ramsey's gonna make fun of it in a second, but we have millions of points Based on using credit cards. We've never spent money on a credit card and then didn't have the money to pay that back We have money doing its thing over here and obviously if you follow my content There's some pretty cool cool places that you can save your money that can get a better rate of return and a checking account We have to be really mature about the audience that we're speaking to because you can be pro credit card Go to talk to people who don't have any self-discipline or use credit card and think it's free money And they ruin their life and the credit card is not the reason, but it is in Nable or it's the key to open up a horrible life for them But if you're if you're someone that's like that's not an issue and you have a way of tracking money If credit cards can be incredible. So with that we're gonna listen to Dave Ramsey Dave Ramsey doubles down big time And I want you to know like is it did he make good points? You agree with him you disagree with him Do you think Dave Ramsey's kind of painted himself in a corner where he's got to come up with more relevant concepts? Or do you actually believe and agree with him because I do know people that refuse to have credit cards that use Devacards and I think this video does a very very good job just fine Why that's the case and so without further ado? Let's jump into why you should never use a credit card Dave Ramsey edition. Yeah, my debit card has had fraud two times in a two-week period It's time consuming to change all the auto payments and to get a new card Some people say that credit cards are harder for thieves to do fraud than on a debit card What is your experience and opinion with this is there any truth to that theory? Also, some people recommend using a credit card for all purchases and paying it off at the end of the month I know that you advise against doing that method Can you shed some light on just to be very very clear? That's the only way I would endorse a credit card is and again I've had videos that I talk about this is like are you going to purchase this thing at the answers? Yes Do you have money to cover it the answers? Yes, then you know whether it's a debit card or credit card It's really a horse of peace You could make an argument that a credit card could actually be better But I am not endorsing at all using credit cards for money that you don't have I think there's many people that say that could be great for an investment opportunity I think you potentially are playing with fire especially if you're using credit and it doesn't turn out You could be dealing with some high interest credit card that so I just want to make my my stance very clear as we go into what Dave rancy says about this So why this is an unwise method? Happy to I love that you called it a theory because that's honestly what it is I'm gonna be honest with you asked for my opinion in my experience I have never ever had problems with using a debit card and I have experienced much fraud You know, there's been plenty of times where I saw the guy I saw the transactions from best by popping up on my screen as it was happening around Christmas Time and I just called the bank and I said someone's got my information It's the fraud purchase fraudulent purchase. I mean, look at he split the money was back in my account And you can look and I was just talking with Dave about this You know, I think a lot of people get hung up because if you look at some of these acts the electronic funds transfer act You know and some of these things it'll say there's some slight differences But at the end of the day the actual contract on your master card right on that that trumps that and it's zero liability It's the same if you look up master card and be said look at the actual agreement online for it says for debit cards and credit cards You know the exact same fraud protection You have a zero liability zero zero now if your debit card in a two-week period as you had fraud two times So I just want to be very very clear That might be true But there's other perks that some credit cards give you like extra insurance perks like I know and if you have some cards If you rent a car you don't need to get insurance because the card actually covers it and there have been times where You know if you if you do get a fraudulent They'll take care of it today versus a debit card. They they'll still take care of it But it just might take time So I just want to be very clear that there are some differences But when it comes to the the fraud protection I do believe Dave's right that they're both the same Your credit card would have had fraud too just wherever you're using that thing is being picked up somewhere It just means somebody has your information now and if I get your credit card information You're gonna have to change your credit card same thing You're gonna get the same phone call from the same bank and they're gonna say we have activity that does not look like it Is your normal activity and we're going to stop all charges until we verify this you get that from debit card to get that from credit cards With my bank. It's an automated thing they call up and I have to push one Yeah, I have to push about three things. I verify that verify that verify that so you know I was down in Mexico a cabo a few weeks ago and they're like where are you doing in Mexico? You're a hillbilly and I'm like so they should you know weird charge weird charge weird charge I'm like no not weird charge. It was me. I'm here and so yeah But that's that it the algorithms follow the pattern of the purchases for a debit card or credit card because here's the thing in either case Credit card or debit card You are not liable for a transaction that was not yours if you have a visa or a master card product That is their agreement with you period So in either case if best buy or I don't know whatever Place in Taco bar, Mexico, right? Is showing up that means somebody got your number and it wasn't you in this case It was me in your case it wasn't you but if they if they let that money go Yeah, the bank lets that money go out of your account if it's a debit card or just against your credit card They can't get it back. They lose money. That's right So and they lose the exact the same money on a credit card fraud as they lose on a debit card fraud And so they run the same theft and fraud Algorithms to track to see if you're doing it's no different. It's no different So if you don't like having to change everything and get a new card with all your auto payments With a debit card you're gonna have the exact same thing happened with your credit card What do you think is more convenient the debit card route or the credit card route? It has nothing to do with debit or credit has to do with where you're using the stupid thing right? You're running somewhere where somebody's picking the thing up and You need to look at your somewhere you're going where somebody's got a fraud reader or something a card reader that's a stuck in the thing and Or your password stuck something somebody's getting your information I know some of the guys around here. They like privacy.com because you can buy things online and you can basically use a incognito card So they're never seeing your information. So that's an option for people who are looking But I like that and I kind of want to address the the second part of this question Which is saying some people recommend and I this is again, this is the thing that everybody is doing and since everybody's doing it Don't do it, which is I There is a good point to that if everyone's doing it. It's usually something that you should avoid I'll give all my purchases for the month on my credit card just to make it easy days I don't have to think about it. You know, I just go to store swipe it and then at the end of the month I can just pay it off when my check comes in I put all my purchases on my debit card and comes out my checking you down What's the difference? Well one day? Oh, I just use my money. That's all you got The month you're gonna use your money to pay it off. Yeah, you don't have your brain turned on absolutely dumber than a rock You don't want to have your brain turned on you want to just go to swipe it And not think about it. I don't want to think about my money and I want to have some but yeah Magically, yeah, magically you'll have just enough from your paycheck to pay it off that well, we know that's wrong I may help you with it. No, that's not the case. People who don't think about money don't have any that's how this works a trillion dollars Davis of credit card debt. That's what we're at All right, so here's the thing. I'm with them till the very end I would agree with them if we just want to be on our little island and say debit cards and credit cards at the same fraud Protection at the end of the day. Yes. See if you have fraud you call the bank It might be a bigger pain to to take care of it But you're good. You're not like the banks not gonna get you money I think majority of people would agree with that But when we're talking about like turning your brain off and when you're we're talking about the actually Devacards being more efficiency I love the word efficiency because efficiencies are moving any friction to get to where you want to go a Fission C is what we should all want. It's like another way to think about efficiency is a better way So if you're telling me that a debit card is Better than a credit card for purchasing something that I'm already gonna purchase That's where I just don't understand like I want to seek first to understand But I don't understand now the only thing that I can maybe tie to is you have this fundamental belief that Some people overspend using credit cards and as a result credit cards is the key that could unlock a bad behavior And so it's almost like for those of you who might not have a drinking problem But you have friends that may have a drinking problem and so by you drinking you are almost enabling or maybe condoning bad behavior. That's like me trying to seek to understand The the debit card over the credit card conversation because there are many people that you cut off their credit card Never use a credit card because they can't save money and they're in credit card debt and they're overspending The credit cards enabling that I agree and I would love to live in a world where that could be true And I tell half of America or 60% of America cut up your credit card and The people that have money are saving money are investing money Understand how to spend money wisely Are using credit cards not using their own money so they get a 30 days For their money to potentially grow a little bit Use their own money to pay that off get points and get all kinds of perks and benefits along the way Lots of things I might do a video where I just add up all the things that were purchased or were had Based on the stupid credit card points because again I won't I have never purchased something because I had a credit card because I've always had the money to purchase something So I would I would have used my debit card if I didn't and so credit card has never enabled A single purchase and yet I have a lot more to show for it because I swived one piece of plastic versus the other So would be very very curious your thoughts on this obviously I'm a little biased But it's like I can be biased and also have a ton of empathy and I know that for Dave Ramsey But he's speaking to lots of people But he's speaking to a group of people that need to hear this and he cannot Give an exception because then everyone will go for that exception But I I think you're not a moron if you use a credit card Like I'm just obviously that would be really damaging to his message But I wonder if he would say that behind closed doors and just agree that he's got to stay consistent for the brand I I will respect the Consistency there, but again, we can agree to disagree love to hear your thoughts And like always thank you for subscribing liking sharing We are only here because of you and so stay tuned for tomorrow and live intentionally You