Financial Advice for those wanting to be an O/O

You are both right. A debit card used on the credit card network will have the same protections that a credit card has. Transactions run purely as a debit (i.e. using your PIN) do not, or rather, MAY not. That protection depends on the issuing bank, rather than Visa / Master / Discover etc.

 

You are correct. And it takes much longer, and much more effort, to recover funds on a debit card.

 

As someone who grew up rather poor, I can say Dave Ramsey has his place. Do I agree with everything he says? Absolutely not. But he does have some solid advice for someone like myself.

My parents made a decent paycheck when I was growing up, but they had zero idea how to manage their money. They had no debt, but they were always scratching to make ends meet. As such, I didn't gain any knowledge on financial matters from them.

Once I graduated high school and started working, I got a credit card. And for a while I was good about paying it off each month. But as time went on, and I started making more money, I began spending it faster than I could make it. Once that card was maxed out, I got another, and then a third. Then I decided to do a debt consolidation loan and swore off credit cards, until I wanted a new fourwheeler.

Pretty soon I was in $40k of credit card debt, with a consolidation loan of $25k, all while earning $40k a year. I'd also bought a small house, got married and had two kids along the way.

Then one day my brother drops off Dave Ramsey's book and told me to read it. So I read it and did the baby steps. It took a while and a lot of self examination, but I managed to pay off everything but the house. It was a long process, and definitely not fun, but I'm glad I did it.

I still use credit, although I pay it off every month. I only use the credit card because of the ease it gives. I can write one check a month and it's all done. Paying my bills is all done with the card, and it simplifies the bill paying.

One advantage to using his plan to get out of debt is you can still maintain a good credit rating, unlike the debt settlement companies that trash your credit.

For me, coming from not having any financial knowledge, his plan worked and I'm thankful for it. But it's certainly not for everyone.

 

When I was 23 yrs old my future father in law gave me Dave Ramsay’s original book. Here I had just started my business and I’m doing my first dozen or so loads. While waiting in a dock I would read it.

I’m not saying I learned a ton, but it did reinforce things and maybe make those ideals more in the forefront of my thinking. I was fortunate to have already figured a lot of things out thru trial and error at that point. (And from being around smart people)

This stuff is not common sense for a vast majority of people though. It really does help people and I don’t think we should think of Dave in a bad way just because he’s rich. I’ve never subscribed to the jealous way of thinking though. It’s much more productive to yourself to be envious instead.

My wife and I sometimes sit on the front porch of an evening and listen to his podcasts where people call in. It’s pretty entertaining to hear and to form your own opinion on what you think they should do before Dave opens his big mouth. lol

As far as credit cards, man… neither of us have had one for at least 12 or 13 yrs now. I just don’t see the point in it. The rewards would be the only real argument but it’s negligible IMO. As far as ease of use to pay bills or buy things… what’s so hard about using a visa debit and just buying it? lol You still have to track individual receipts.

Likes been said, there’s a thousand ways to be successful, do what works for you.

 

I'm certainly not saying my way is any better than another, it's just what works for me I guess

I don't carry much cash around, maybe $50 at any given time. So chances are, if I go to a grocery store or whatever, I'm gonna be swiping a card of some sort. I just find it simpler to bill it to my credit card, watch the statements for errors, and have one bill to pay, and one less entry in the checkbook. Keeps the checkbook balancing much easier for me. I could care less about any rewards the credit card offers. I'll one day make use of them maybe....

 

I'm a pretty big believer in the fundamentals Ramsey preaches (and preaching is the right word, in my opinion). I have a sister in law that was hanging on by a thread, barely, financially for years and years. Single parent, working at a restaurant. When she finally got down enough to look for help, we paid for her to go through Ramsey's Financial Peace University.

Forward four years, she's paid off all her debt, including her student loans, has an emergency fund, and hasn't had any "ask Dad for help" episodes in forever. She didn't follow the plan to the letter, but she followed it pretty closely.

That's not the big deal, though. She's a much better parent, has a much better outlook on life, her property is maintained, and she now has a much better job, benefits, vacation, the whole bit.

There may be better investments out there, but that $109 we paid for her to attend the class was the best money we EVER spent, and I HOPE, fervently, that Dave uses it to buy gas for his ski boat at his lake house and has a ball. Yeah, he's a blow hard at times, but if he wasn't, he wouldn't have the drive to be on the radio to be a positive influence in the lives of millions of people.

 

It can give people structure and the ability to see a way out of their situation if they have the discipline to stick with the plan.

I did a lot of dumb things when I was younger. And I dug my way out. Then I did more dumb things a few years ago and dug myself out. Looking back on the whole Hawaii debacle, I’m still glad that I did it. I’m happy for the experience of living there for a few months even though it cost me a ton. I think I’d have regret if I would’ve said I couldn’t do it because I didn’t have the cash to move. But now that’s all behind me, and all I have is my truck payment.

And I still use a credit card. I realize that Dave has his plan he sells, and he says millionaires didn’t get rich from their credit card points. I have an REI credit card that I use for everything truck related on the road, and also most of my food unless for some reason I actually have cash. It gets me 5% back at the end of the year that gets added to my 10% dividend for purchases at REI. That usually adds up to a pretty nice total to be able to get new camping and cycling gear during the year.

To summarize my plan would be to say that if you’re gonna be dumb with money then make sure you have a big enough shovel to dig yourself out. And thankfully I’ve always had a pretty good sized shovel when I need to start digging.

 

Sorry, I missed it when you originally posted this, no, he bases it on what you can afford to pay cash for, be it $1,500, $5,000 or $10,000.

 

If you'd like, I'll post the bank statements, fraud reports, police reports, etc., related to the $3,750 in fraudulent charges on my checking account that happened between June 20th and July 13th 2021, that resulted from an over the air credit theft related to a Square card reader with out of date security software and protocols. 16 months later, I've only gotten back $2,460 of the $3,750, both state and federal banking regulators have told me flat out, until U.S. Bank has made a full recovery, they do not have to pay me the rest of the money. On June 19th, 2021, my wife picked our dog up from the groomer, used her debit card to pay for it, the groomer had my wife swipe her card on her Square card reader, they emailed me the receipt, all done. Not so fast. On June 20th, between 7am and Noon Colorado time, there was $680 in fraudulent charges from 3 online naturopath retailers in Arizona and a tobacco supplier in N. Carolina. Then on the morning of the 21st, another $360 in charges from two different sporting goods stores in California. On the morning of the 23rd, I got a call from my Dr's office, when they went to process a medical bill for $120, a copay from a procedure, my card was rejected. I was like, that's odd, there was $1,200 in there on Friday, and we only spent $200 over the weekend. Pulled over and stopped, opened the US Bank app on my phone, and was like WTF are these charges. The 3 charges for $680 had not only posted, but also cleared the bank, the $360 were still pending. I called the bank to dispute the charges. The girl then informed me that there were another $1,490 in refused charges due to insufficient funds. I immediately reported it as fraud. The $680, I still have never gotten back, because US Bank has not been able to recover it. The $360 was immediately frozen as fraud and never processed. They immediately suspended both debit cards and issued us new ones, which took 7 days. Then, the following Tuesday, 17 more charges, including 4 from India, totaling $2,880 hit my checking account, all fraudulent, 4 of them, totaling $763.40 posted and processed before we could catch them, US Bank was able to recover $570 of that.
In the end, it turned out, there had been a major update to software and security from Square, our groomer was not aware of this, her computer that her "Square" device was attached to had been compromised via her "Square" device, and hackers were able to obtain data from 30 customers over 5 days before she updated her "Square" device's software.
As a contrast, I carry a company credit card to pay for fuel, repairs, anything truck related or company approved on the road, in Feb. of this year, someone got ahold of my card, we believe possibly via a skimmer on a fuel pump at a CENEX in Nebraska that I used after hours. I bought $300 in fuel, in $75 increments, handed my boss the receipts. Three weeks later, she was looking at the credit card statement, and asked me if I had used the card for an online purchase from a telescope company in California, four days after I bought fuel and forgot to tell her (I'm allowed to use the card for personal purchases, but I have to tell her immediately, and either reimburse her immediately or sign to let her deduct it from paycheck). I was like nope, wasn't me. She immediately called the card issuer, the charge was flagged as fraudulent, removed from our account, and the balance adjusted within 3 hours.

Actually, if you use your PIN, it's supposed to be more secure and more resistant to fraud, and hence better protected. Some of the chip readers require your PIN also to prevent fraud. The difference is actually more that credit card companies have fraud protections built in to their programs, banks do not. In the end, it's up to the policy of the financial institution.

 

True, I don't believe anyone get's rich from their credit card perks. But I pay mine off every month, and the cash back buys us a nice dinner a few times a year. Like said earlier, easy to track purchases, fraud is handled immediately, I would wonder how many "millionaires" use credit. Probably a lot more than you think.