I personally do not like Dave Ramsey's advice on credit cards. Credit cards can be the best tools for a lot of different things, as long as they are used correctly. Credit cards are not free money go passes for you to live above your means.

I recommend only carrying credit cards and not owning bank issued debit cards or carrying to much cash. I don't even own a debit card, I do own an ATM card for making withdrawls from the ATM. Credit cards offer a lot of protection aginist fraud, unlike your banks debit card. If you CC gets stolen or used by someone else, you are protected and the credit card company will jump all over it because it is their money that was stolen. If you debit card is used illegally or stolen, the bank will take their sweet time because the money was stolen from you, out of your account. The bank may take up to a few weeks before solving the issue and may not even recover all your money. This leaves you at an extreme disadvantage if you have checks out for rent/mortgage, or to pay bills, ect. Now those may bounce because the money is not their and the bank will hit you with over the limit fees, ect. So my advice is to not even own a debit card, just a plain old fashion ATM, which you will have to ask for since the banks like to give out debit cards because they make money off them. Even owning a debit card puts you at risk because someone could always get your number from a data base.

Cash can be stolen so I suggest not carrying large amounts but does limit your losses to what you have on you or in your house.

Also, credit cards, used responsibly, is one of the best ways to build up credit. I do exactly what you do, use the CC for all daily purchases, then pay it off, IN FULL, at the end of every month. You have to be careful not to use more then 30% of your available credit so you do not have to much credit utilization, especially a few months prior to applying for a auto/home loan, you may want to stop using them all together until you secure the loan.

Additionally, credit cards allow you to make money. That's right! If you have credit cards that offer cash back, you can actually collect a good check. I just got a check for $656.00 last month. Other cards may offer rewards programs which are not as good in my opinion but you could buy gift cards you'll use like gas cards or others and even sell them for cash, or even take advantage of flyer miles, if you fly often.

Moreover, some credit cards even offer additional bonus like free insurance for rental cars, 1 year extensions manufactures warranties on products you buy with the card, and even free roadside assistance.

So all in all, credit cards are the best tools ever, USED CORRECTLY. If you are the type of person, which many are, that can't seem to figure out how to budget or understand that you do not need that new LCD TV, Juicy purse, or new rims, you do not have cash for so your paying on them for 8 months at 22% interest or whatever interest rate you have, then I would suggest not using them.

Hope that helps.

Thanks! I agree with your thoughts on ATM-only cards too. I hadn't considered requesting a non-debit-card-but-ATM-only, but that's a good idea. I appreciate your complete and thoughtful reply.

Anytime. Yeah, most people don't really think about the debit card risk because they are so popular but debit card fraud is one of the fast growing crimes, especially with the economy the way it is. Not just with people stealing the card itself, but security breaks or shady bank employees could get the info for your card and easily program a hotel key to work as your debit card for a one time fee of about $200.00 for the programming machine. No Joke! Or someone from an online store you bought something at could steal it as well, ect. This is why even owning the debit card is bad, even if it is stored in a safe or lock box. It's still a link to your bank account. I would prefer not to own a debit card and to spend my credit card company's money. Let them deal with the loss of their money if it happens. I might seem a little paranoid but not to the 100s of people it happens to daily that cant figure out how someone got the card.

If you are able to handle having credit without getting yourself into trouble they are a great thing to have. I would just watch for interest rate changes in case an emergency comes up. Many banks are raising rates on customers even if they have good payment histories.

That's a great thought. Such a great thought that I just called my bank requesting to cancel the Visa Check-Card (that I've never used for that purpose) and replace it with an ATM only card. ... They said they do not issue ATM only cards anymore and everybody automatically gets Visa Check Cards (I guess that's how I got it without asking for it a couple of years ago). The guy told me they made that decision because Visa offered better fraud protection than the bank could offer by itself. Something about zero liability if reported in 60 days and if Visa investigated the claim and agreed the charges were fraudulent. And something about how the bank could offer preliminary reimbursement but the ultimate decision on reimbursement would be made by Visa. ... So yes, exactly what you said. The money stolen would be my money, and I wouldn't get it back until Visa completed their investigation (and agreed it was fraudulent). They are mailing me the Visa Check-Card terms agreement. I look forward to reading it.

discipline is the key word, you obviously have it, kudos to you, handling of credit should be taught in school, I taught it to my son and things work fine, but some just loose control of their spending

__________________

If you have listened to Dave Ramsey you would be able to answer this question in 2 seconds. He states all the time that by using credit cards you tend to spend money faster because unlike cash you feel it leaving your hands and that's all you can spend. With a credit card you tell yourself that you will pay it back later. Credit card companies now can change the cards limits and if they change them and you are over the limit they can charge you. That never happens with cash. Lastly, cash requires you to budget and forces you to spend only what you have.

Many people can budget just fine with a credit card or with cash. Credit cards are superior for these people, because they are able to get points back and do not have the same concerns when losing a credit card as if they lose cash.

As for the debit card vs. ATM card I completely agree. Banks do not really like you to use the ATM card, because they want you to buy things with your debit card so they get a piece of the action. This is not in your best interest. I highly recommend working with a bank that allows you to have just an ATM card. They will all fight you a little, but if you push they generally can still print these cards.

I'm only 25 and didn't own a credit card until I absolutely had to in order to gain credit so I could buy a new car. I too use it for everything, clothes, gas, food, my car, buying girls i barely know at the bars expensive cocktails..you name it..and I also pay it off differently every month..I don't beleive it screws up your credit. I checked my credit score the other day and it was actually pretty high..so I say keep doing what you're doing IMO

Simple, just use a Visa Bank Card at your local credit union. With it I am able to reserve hotel rooms, rental cars, buy things online and the best part is that it comes directly out of my bank account. Also, if someone steals my card I am completley protected from Fraud. You don't need credit cards for anything except to build a credit score.

Actually if your creidt score is the issue, the Dave Ramsey's of the world are even more wrong. The Dave Ramsey's in the world assume most people are irresponsible and thus his business is to the general public thus his answers. One reason not to take advise about serious financial issues form a guy on the radio or TV who doesnt know all the details.

Anyway, the only thing you are doing that is wrong is just having one credit card. I am not suggesting getting a bunch of credit cards and ringing up a bunch of charges. But credit card scores are based not on just prompt payment, but on the total line of credit, the number of lines of credit, how old the credit is and debt to total avaliable credit. Typically 4 or 5 lines of credit are the minimum for the best credit scores, these can include mortgages or outstanding car loans. So you might want to consider having a backup credit card or 2, and just use it every other year just once to keep it active on your credit score. My guess is that your score regardless is +720 which is very good