Earlier this month Dave Ramsey went off on credit card rewards in a poorly thought out rant.
Frank from Asheville said he and his wife use a credit card for groceries, health insurance, medical expenses, and other home expenses. They pay it off monthly, and they earn rewards. Ramsey thinks this is stupid because that’s what broke people do, and airline miles don’t make you a millionaire.
Dave Ramsey: Not a single instance. We studied 10,167 millionaires. The number of them who do what you’re doing is precisely zero. Rich people don’t do what you’re doing. Broke people do.
That’s a bad sign. Now, is it going to cause you to go bankrupt? Probably not. But the problem is that you’ve somehow used your decision-making framework around money to convince yourself that this is a good idea, and that it’s somehow going to get you ahead more than simply investing.
Investing is where money comes from. Living on less than you make is where money comes from. Not from trying to trick Citibank.
Caller: Mhm.
Dave Ramsey: The number of millionaires who became millionaires by adding up all their airline miles is precisely zero. None of them. Not one. Broke people chase airline miles. Seventy-eight percent of airline miles are never redeemed.
And yet people spend a lot of brain calories chasing this bullcrap that these rip-off huge banks are screwing America with, and then convince themselves that it’s a good idea to dance to their tune.
Dave Ramsey said broke people chase airline miles.
Dave Ramsey: Not a single instance! We studied 10,167 millionaires. The number of them that do what you're doing is precisely zero. Rich people don't do what you're doing. Broke people do.
Okay, so that's a bad sign. Now, is it… pic.twitter.com/20dcNejBQj
— Ruzy.hl (@0xRuzy) June 27, 2026
If Ramsey surveyed over 10,000 millionaires and found that none of them use credit cards, or that if they do they’re using cards that don’t earn rewards, I’m skeptical though it’s possible there’s selection bias in the sample (‘Dave Ramsey listeners who say they’re millionaires and either do what he tells them to do, or tell him what he wants to hear’).
In fact, he actually has it backwards. Frequent flyer program members skew much better off than average.
- 40% of active American Airlines AAdvantage members have household income over $100,000 and contribute 61% of the airline’s revenue, with 44% higher average yield and nearly three times the annual flight revenue per customer versus non-members.
- Wealthier people use credit cards. According to the Federal Reserve, 97% of adults with income of $100,000 or more have a credit card, versus 46% earning under $25,000. Also, Amex Black Cards exist.
The argument Ramsey is making, in the best possible light, is:
- rewards are not a wealth-building strategy because they net you a fraction of what you actually spend
- budgeting, saving, earning, and investing are still necessary.
That is not enlightening. Ramsey’s caller was not claiming airline miles replace investing. He was asking whether he should accept rebates on spending he already does. And he should. Airline miles don’t make you a millionaire. But compared with the best available alternative payment method they leave the user better off.
- Ramsey’s benchmark is irrelevant. “No one became a millionaire from airline miles” is meaningless. The question is whether they give you incremental value. No one became a millionaire by going to the bathroom or saving $10 with an online coupon. You should still do these things!
- There’s no tradeoff between miles and investing. In fact, someone who pays attention to miles is likely to pay attention to their money, too, and to the costs of investing. It’s possible to invest and to take a 2% rebate on spend at the same time. They’re also probably not going to spend money on Dave Ramsey’s courses.
- Some card users overspend or revolve balances. And those people should do something different than a consumer who manages their spending well.
- The claim about ‘78% of miles are not redeemed’ is sloppy but also irrelevant. Take cash back (and by the way the goal isn’t to spend every dollar you save). One prepandemic estimate was that “Some 15 to 30 percent of all airline miles end up unspent and thus expire.” (Many more programs have eliminated expiring miles since then, which also reduces the percentage that never get used at some margin – a greater percentage of accounts than mileage balances never get used because they don’t earn enough to redeem for real value.)
- That some people don’t use their points doesn’t matter to someone that does (it actually increases overall program value for those who engage regularly in the program).
- “Rich people don’t do this” is simply not true. There are centimillionaire readers of this blog I hear from regularly. Plenty of wealthy people care about points, upgrades, private client card benefits, and optimizing their travel. Wealthy people accept discounts, negotiate, and use tax-efficient structures. Miles can buy flexibility, too, just cancel and redeposit your miles – in many programs for free.
- But points are more important to people who aren’t (yet) rich, where saving a few thousand dollars is more meaningful!
- He says mocks “trying to trick Citibank” but that’s silly. Banks make money on a portfolio basis. They lose money on some customers (who maximize rewards, don’t pay interest) and make money on others. And voluntary transactions are often positive sum. The grocery store isn’t ripping you off when you choose to buy a carton of milk. They earn a return and you get something you valued more than the money. So too with credit cards that provide convenient payment, and compete for your payments business by providing you the most value in exchange.
Ramsey says not to ever use credit cards, use debit and cash instead, and that rewards are a trap to get you to overspend and go into debt. He wants you to use debit cards even for car rentals.
Credit cards provide payments convenience that some people misuse. That doesn’t mean they’re even the worst payment method for people who don’t pay off their bill every month. They’re better than the next-best alternative like a check cashing store for someone who needs to fix their car to go to work.
But debit and credit are not the same. Credit cards provide several advantages.
- Debit pulls money out of your financial accounts right away. Credit cards aren’t due right away. You preserve cash until the statement due date.
- Credit cards offer better fraud protection because federal law caps credit card unauthorized use liability at $50, while many cards don’t hit you with that at all. With debit cards the money is already out of your account and you need to get it back, and the legal protections aren’t as strong. You have the Fair Credit Billing Act for unauthorized charges, goods not received, etc.
- Many cards offer purchase protection, extended warranty, return protection, rental car coverage, trip delay/cancellation/interruption coverage, baggage delay/loss coverage, cellphone protection.
It’s not wrong to say that rewards do not create wealth at scale, and also that if you carry balances then be careful with spending choices and APR matters more than rewards. But the idea that rewards alone won’t make you wealth doesn’t mean they aren’t valuable. A rebate is a price reduction and it’s silly for Ramsey to tell his followers they should be spending more at retail than necessary. People still in the wealth accumulation stage should take easy rebates!
The mere fact that some people spend more money using cards, or don’t pay their cards off in full, doesn’t mean that those who don’t fall into those categories should eschew cards.
One thing that I’m increasingly leaning towards, though, is that brain space and focus is scarce and that chasing coupon book credits can be exhausting. That may be positive sum in a narrow sense, but it’s possible to spend too much time and effort doing it for relatively small wins. But that’s a matter for discussion of premium cards that aren’t even at issue here.
I think the gist of what Ramsey is trying to say is that instead of focusing your time and attention on maximizing and chasing rewards, it’s more prudent to spend time on your other finances, invest wisely or in real estate (which is its own time sink that people underestimate), or, even start a side business with an established business model (so that it actually earns you money, but again could be a time sink).
And I agree he is 100% wrong that you should avoid credit cards completely. That’s stupid. But then again, he is pandering to his audience who have confimation bias with click-bait like this and it’s working… after all you are spreading his message, and the “internet SEO algorithm in the sky” only cares about engagement, not that it’s right or wrong.
I have never really thought that Dave Ramsey gives good advice – he’s just good at selling his course and has built up his name into something people that don’t know better take as gospel. His comments about use of credit card rewards just solidifies my thoughts.
We use two credit cards, one for airline mileage and the other for points that can be used for different things. All credit card purchases are paid off before drawing interest. Our disposable savings is $1.2 million now compared to $500 when we were married in 1971. Teacher and social worker salaries until retirement.
Ramsey may be correct for some, but not all.
He just doesn’t get it. Many people don’t – we all know them from our lives. That’s fine.
It’s more than saving some money or getting a “good deal”. It’s a passion (at least it is for me, but I know it is for many of us)
But he is just factually wrong to say “only broke people”.
Just because an airline credit card holder has an income over 100K doesn’t mean they aren’t broke. If they aren’t paying off the entire balance monthly, the points aren’t worth the cost of the interest being charged. Ramsey is targeting the majority of Americans that carry a balance and his logic makes sense to that demographic.
Wow, I didn’t realize I was “broke”. Food stamps, welfare, and Medicaid here I come.
My issue with Ramsey is that I don’t think I’ve ever seen him turn to a caller and say “You know, I think you need to do X, Y, and Z…and then declare bankruptcy.” This is despite his antipathy towards credit cards and so on, but he has callers who – presuming they could be disciplined – would benefit greatly from bankrupting out their pile of credit card debt.
This guy and CNBC’s Cramer are both full of malarkey. They are more interested in selling their nonsense than helping you with your finances. Their advice should be ignored.
People commenting so far are being too kind to Dave Ramsey. He is and always was a total fraud selling his courses and giving lousy advice. He is so typical of the social media influencers . Good at promoting himself and very little else.
Dave Ramsey is an idiot!
Besides the rewards, credit cards give me float on the money for a month or more! Debt is good if handled well that is why successful companies leverage debt to make profits! Only idiots use debit cards!
Obviously Dave Ramsey did not get a good education or can’t read. He is lucky that he make his living BSing to ignorant folks. These are the types of losers AI will be replacing in the future
Broken clock is right sometimes.
Chasing miles is proletariat. If you had the money, you would just buy the flight you wanted with cash.
Ah, the “Great” Dave Ramsey. The “get off my lawn” angry old guy. The perennial winner (along with Suzi Orman) of the “Largely Useless And Potentially Misleading Financial Information” award. The same guy who can’t hold two different or disparate thoughts in his head at one time. The list of “What Dave Ramsey Gets Wrong” has been, is and will continue to be a very long list. On this one he missed the mark. For Ramsey, “listening” is simply “waiting to talk” opportunity.
I don’t know much about this guy. Uber rich people may be flying private or fly commercial first based upon schedule. They are not interested in banking miles so they can take the family to Orlando. Or getting into the Admirals Club at MCO.
People that get lounge entrance cards with an annual fee over $500 and only fly a few times a year are wasting their money. They’d be better off with a cash back card.
Of course, too many people use credit cards to finance a lifestyle beyond what their paycheck allows.
Typical Dave Ramsey histrionics. He also thinks we should pay for most stuff in cash. The guy even endorsed Trump
This is a yes and no answer. I have an outstanding income and don’t know anyone who actively chases any rewards or miles to get “richer”. If I am going to be buying something I put it on an Amex of some sort then pay it off as soon as it posts. It just makes sense to do. In regards to miles unclaimed. Dunno what he’s talking about. My Chase membership points yearly is enough to buy a round trip ticket which I use it for on Southwest to Vegas. That saves me 300-400 each way. It’s all a byproduct of what I would be spending anyhow.
Says a man who can afford to fly anywhere!
Dave Ramsey is correct (like a broken clock) in one respect. Delta SkyPesos are useless!
Dave Ramsey has some good things to say…sometimes. He is wrong about airlines miles. I cannot count the money I saved using airline miles without having debt; nearly everything goes on a CC and I reap the benefits of miles.
I had a friend reach out one time to use my CC to order something online. I told him No! I told him to stop listening to Dave Ramsey and get CC for online order at least. Do not use a debit card for online orders.
The one negative comment I have about credit cards is that it is much easier to make an impulse upgrade and spend more than necessary. I have started cancelling cards with annual fees. (who knew both United and Delta has no annual fee credit cards). Other than that I cannot see traveling without at least two or three in your wallet. Never can tell when you might need an extra $60k.
He is right their personal assistants do it for them just like they pay the water bill. And those pa’s use those miles for upgrades on their own travel
Dave Ramsey, by a factor of probably 1 million, has done more good for common sense savings / investing advice for average Americans than anybody on this thread. Your insane jealously and petty jibes just make him sound even more reasonable. This is a fact.
Who is david ramsey and why should I care what he thinks? I don’t see how giving up a rebate increases my investment capital. I don’t see any inherent wisdom in giving money to Wall Street as compared to banks. It’s all rigged and we need to play the game knowing that. And yes, there are other games out of town like foreign real estate.
Ramsey’s advice is akin to telling an obese person to eat less to improve their life…obvious and largely ignored.
I looked him up and know why I never heard of him.
He’s right. Grown adults do not try to accumulate fake currency in the form of miles, points, happy-faces, etc. It’s juvenile.
If anyone is stupid enough to blindly follow the “advice” of any self-proclaimed “expert”, you deserve the results you obtain.
Anyone with a fully functional brain would probably listen to this advice and perform a bit of honest self-reflection. Am I making purchases just to earn points or miles?
As with many things, your mileage may vary. If you’re like Dave, and you can successfully juggle many different credit cards, use them to maximize rewards, and pay them in full each month, Dave Ramsey’s advice is hogwash. If you’re uncomfortable with having access to credit, paying with cash or debit cards suits you to a “T”. Me? I generally use them for things I was going to (or need to) buy anyway (like gasoline at Costco), and pay the bill in full each month.
I don’t expect to become a millionaire with this strategy, but points and miles silently accumulate in the background, and provide a nice free or generously discounted treat when redeemed.
Use your own brains folks!!
“He’s right. Grown adults do not try to accumulate fake currency in the form of miles, points, happy-faces, etc. It’s juvenile.” Every year Citibank gives me about $1500 for the points I get using their card for restaurants, flights, and hotels. Citi received no fees and no interest from me (but also let me use there money for free, the float).So, I’m juvenile for using that card instead of paying cash or using a debit card? Oh, and by by the way, this juvenile took the cash from Citi in 2022 and 2023, bought Citi stock for about $43/share on average. It is now, $142. I wish these were the types of mistakes I made in my youth.
He’s right. Only smart people pursue these.
Ramsay only ever talks to one type of person – the type that runs up large credit card bills and can’t pay them off. I suspect he just doesn’t want to add any noise to his message. His audience does not understand nuance. But using points to get international saver awards when you pay your cards each month is just free money. Also you make a point worth repeating that using a debit card like it was a credit card is opening yourself up to scammers. I’ve known people who have lost a lot of money that way.
@Keyboard is correct. When I was poor, I had an Amex confiscated at the point of sale. Got my head straight and have been debt free, personally and my business as well for as long as I can remember.
Ramsay is talking to the mass that is carrying so much (Trillions) debt to impress the neighbors. I now have a net worth approaching an ungodly amount of millions. However, I never agreed with his CC ban. I pay them off every month and just hit EXP. The problem is debt on debt and people paying them off the min. The discipline to do that and invest wisely is his message and he’s made a lot of folks free of debt. I was doing his plan before I ever heard of him, and haven’t bought his program or been to his events. I have listened to his radio program, and am glad I’m not in need of his services.
My wife and I are millionaires. We play the points and miles game per Gary’s rule of pay off all cards every month. But, Mr. Ramsey never surveyed us.
Acquiring wealth and acquiring miles/points are not mutually exclusive. We’re smarter and more efficeint than that. We want it all..
For a lot of people, at all income levels, credit cards make it easy to spend money that you don’t have. Chasing points/cashback/status can also encourage you to spend on things you might not otherwise purchase.
We’ve all seen airlines & hotels tack on fees when you redeem your points, not to mention all the devaluations. Instead of redeeming points for a flight (and paying for hotel, uber, restaurants, souvenirs, excursions, etc.) maybe you would have taken a much cheaper vacation close to home.
Dave Ramsey’s fans tend to focus on reducing fees, reducing interest rates on debt, reducing spending, paying off their mortgage, and investing regularly. For many people, it’s a decent strategy.
That being said, many of us regularly churn credit cards and try to find new forms of manufactured spending 🙂
A lot of Dave Ramsey’s advice is suspect and I’d counter than only poor people listen to his constant, loud, blathering. People actually in need of financial advice would be better suited by a wealth manager, not someone with a big mouth and microphone.
Smart people don’t pay attention to Dave Ramsey.
Ramsey’s advice is good for and aimed at the simple minded, average Joe listener, who is not good at managing his finances and is prone to running up credit card debt and paying high interest rates. For those people, Dave offers a simple to follow program to help them get in better financial shape, without having to think too much. So I would agree, for those people, Dave’s advice makes sense. It’s like telling an alcoholic not to have a single drink. For the disciplined person, have a cocktail in the evening is not an issue, but for the alcoholic, it is dangerous… so better not chance it. The same concept applies here. Trying to keep up with programs and payments are probably going to get this type of person in trouble. For those who already manage their finances well and keep their credit card balances paid off and are not paying interest, it is stupid NOT to take advantage of the perks offered. But, these are not the people who typically listen to Ramsey’s radio show.
@Arthur. I think you hit it on the head. If I taught a personal finance course at a middle-class high school, what would I say to a kid who thinks pursuing FF miles with cc purchases is a great thing? I’d discourage the heck out of it. I can plot card usage that makes me thousands of free dollars every year without spending more that I would spend if I used a debit card exclusively. Many can’t. And those are the ones who (need to) listen to DR.
“doesn’t want to add any noise to his message. His audience does not understand nuance.” DR is like a sober counselor who argues excessive drinking can only be solved by abstinence.
Its an attractive, sexy time consuming hobby but one elapse, mis-payment, bank gotcha, misinterpretation of terms or awards or even a malicious clerk or property can negate the gains of the entire livelong effort.
But its built into our psyche to want something for “free” and “game” the system and be “special” in the travel orbit.
Took me 20 years but finally moved to a 2% cash back on everything while devoted my energies elsewhere. If and when the time comes, I’ll just use the cash and breakfast offsite. I’d have another $60,000 if I took my own advice years before – instead of watching 3+M points in point devalue continuously.
But as Russ Hanneman famously said, “no one ever gets laid putting money in the bank” and I can attest to that…
@MT gets it.
First, Frank from Asheville said he and his wife use a credit card for groceries, health insurance, medical expenses, and other home expenses.
Then, Ramsey said something completely unrelated to that statement and built a nonsense argument around what he said, not what was said to him.
“No one became a millionaire from airline miles” Guess what – no one ever became a millionaire by paying for their health insurance, food, medical expenses, or housing expenses. DUH! They also don’t become a millionaire by paying the necessary expenses with cash or a check, either. But quite obviously a person would get closer to being a millionaire faster by being smart about how they manage their money and spending less on discretionary purchases. Not necessarily by doing less, but instead of spending $1000 on airfare, giving the airline $200 and investing the other $800 in their own future instead of the airline’s.
Much to my surprise I am a millionaire. I pay off my credit cards several times a week, I hate owing money. But I use the cards for earning points and miles as a hobby much like others collect stamps or play golf.
I used to listen to Dave Ramsey all the time while driving around, and I appreciate his advice for people in debt and struggling. I kind of ignored the christy stuff because its not my thing but have to disagree on his point on earning miles. Use of cash, envelopes of money dedicated towards different goals is a legitimate form of budgeting. But credit cards are OK too if you have self control.
Dave Ramsey usually is right, however not this time. I have lots of rewards for multiple cards. I am considered to have some wealth and love my Costco, BJs, and SAMs points. I also have Delta, United, Hilton and Mariott points with the hotels over million points. I have been considered a points wh*re because it is a game for me on how many I can get. I have used them to go first class to Hawaii stay at hotels for free and love to save money doing this.,
Oh, by the way I have an exceptional credit rating and pay of all credit cards once posted
Like all “self help gurus”, Dave Ramsey has some great ideas and some that, if not bad, just may not apply to your own situation. They will also say things, and then contradict themselves in other contexts. Context is often key. Note that different trainers of Tony Robbins, just like different disciples of Jesus Christ (perhaps the first and greatest life coach of them all) will give different recommendations for different circumstances. Read, listen, think for yourself.
All that said, my parents built large successful businesses, retired wealthy. And they buy everything personal and business with their United Airlines credit cards – and whenever they fly somewhere they immediately burn those miles if enough to redeem.
But, does Jeff Bezos – who OWNS a loyalty program (Amazon Prime) also use it himself, as a billionaire for whom the cash back and discounts and free shipping mean nothing financially? Who knows..
He is probably correct when he says don’t chase the miles. Data shows less than 20% of miles are never used. Take the cash back card. Latest info values airline miles at around .01 cents a mile. Quite a few cash back cards yield .02 cents a mile and cash can be used anywhere, Do the math.
Guy is an idiot. With miles, points, cashback, discounts, SUBs, offers, etc. my family has made almost a quarter of a million dollars in value since the 1986.
We are Chase United Ultimate Club Card Holders and yes the annual fee is pretty salty. However, we have already met and exceeded the $50K Charged Threshold, received two 10,000 mile credits, became an “All Club Access” member and attained Silver Premier Status for 2027 as well working towards Gold! We have also used $708 of club access and will use an additional 10 more club visits before the end of the year (worth another $590). With the bonus miles and miles specials offered to club members, we are flying in United Polaris to Germany for 55K each from Denver and coming home in Premium Plus for only $40K each (Utilizing our 20K Miles Credits). Basically, it saved us at least $6,700.00 in total if we paid by cash. In addition, the Travel Insurance provided has paid back hotel / food charges due to weather delays as well as denying the Cruise Line Insurance saving another $500 each time!
We auto pay our credit card bill in full every month and have NEVER paid an interest charge. Yes, we are retired and in the top 15% of monthly income (Great Pensions, SS, Military Retirement) and maxed out our 401K plans while working which have done very well. If you are paying interest every month on a large unpaid balance paying only the minimum, I tend to agree with Ramsey.
I don’t believe your article named a person who became a millionaire from credit card rewards, did it? So I guess his statement was correct.
I think Ramsey is spot on………the whole mileage game is to encourage increased spend which is not a wealth building strategy……….I just moved to Paris and I am about to go the way of the debit card here and not look back……….And I can’t think of anywhere I want to fly to when the TGV is everywhere I need or want……………
SNCF has their Grand Voyageur points loyalty program. You will forgo those points ?
To understand Dave’s position, you need to understand his audience. Gary’s audience isn’t Dave’s audience. The bulk of Dave’s audience are financially struggling people with little to savings, and often little impulse control around spending. Giving them an inch of “OK, you can use a card but only if you have the money and you gotta pay it off every month, and if there’s some rewards, you can use those too!” would be too nuanced for most of them to grasp, and many of them would take liberties with that and turn it into “Dave said it was OK to use a credit card!”
This is not good for someone who is a habitual overspender and is running a balance. Keep that in mind when listening to Dave. He’s not talking to most of us. He’s talking to the guy who is going to go buy a new truck they don’t need and now can’t feed his family. So Dave can’t (or won’t) break character, even when the occasional caller gets through.
That’s why the zero tolerance regarding credit cards. It’s just like one or two beers is fine for most, but not an AA (not American Airlines) member. Zero tolerance.
@Uncle Jeff — I liked your ‘AA’ joke. Sometimes, we do also need an American-Airlines Anonymous.