“If You Use Your Credit Card, You Do Not Want To Be Rich,” Warns Mark Cuban On The Dave Ramsey Show

“If You Use Your Credit Card, You Do Not Want To Be Rich,” Warns Mark Cuban On The Dave Ramsey Show

“If you’re using your credit card, you don’t want to be rich,” Mark Cuban warns on The Dave Ramsey Show

American business owner, investor and panelist on ABC’s Shark Tank, Mark Cuban, has warned against using your credit card if your goal is to get rich. Here’s why Cuban feels this way.

During an appearance on financial guru Dave Ramsey’s The Ramsey Show, the two financial experts discussed the money-saving equation between income coming in and income going out.

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While discussing wealth creation, Cuban told Ramsey, “If you’re using your credit cards, you don’t want to be rich. »

Ramsey and Cuban shared a laugh after Cuban’s remark, with Ramsey revealing that people often share this remark with outrage or disbelief. He exclaimed, “Look what Cuban said!” But despite his laughter, Ramsey agrees and repeats Cuban’s remark: “So, cut up your credit cards. If you use a credit card, you don’t want to be rich.” Ramsey adds: “I love that phrase.” Cuban agrees and reveals that it’s his favorite line and he always tells it to people.

In response, Cuban explained that people were asking where to go invest instead. He reveals that “the best place to invest is to pay off all your credit cards and burn them.” You should do this because when you use your credit card, you know the return. For example, Cuban said if you pay 15 to 20 percent interest on your credit card and once you pay that off, you only earn 15 to 20 percent.

Tendency : How much would you have to earn to comfortably afford a $40,000 boat? The number is less than you think!

Ramsey completely agrees with Cuban’s advice that you shouldn’t build wealth using a credit card. Ramsey reveals to listeners how to build wealth and warns them that he’s told people about 100 times. He also notes that a Forbes survey found that “75% of rich people – not your broke brother-in-law who has an opinion – but rich people say ‘get out of debt and stay out of debt’.”

Cuban reveals that high interest on credit cards keeps people in debt and prevents them from building wealth. Cubans’ aversion to credit cards is not new. In fact, in 2014, Cuban told Business Insider that “credit cards are the worst investment you can make.” According to Cuban, his best personal advice came from his father, who told him not to use credit cards.

Ramsey echoes Cuban thoughts on credit cards and, in a blog post, writes: “Life is better without credit cards.” Ramsey believes people don’t need a credit card if they’re building emergency savings funds and using cash to pay for everything.

Tendency : Can you guess how many Americans manage to retire with $1,000,000 in savings? The percentage may shock you.

However, Cuban and Ramsey’s advice might not work for many Americans because using credit cards is a way for them to build a credit history. Colin Palfrey, chief marketing officer at Crediful, explains why: “For many average Americans, buying a home is an important part of their wealth-building plans, and not being able to establish a track record of credit will make it more difficult to get good rates. “

So if you are going to use your credit card, you must do it responsibly. For example, using your credit card to build a credit score means paying your credit card bills on time because payment history is calculated into your credit score. Cuban revealed that he wishes he had followed this advice when he was younger, saying he “should have paid off my cards every 30 days.”

Another way to use credit cards responsibly is to not charge more than you can afford and to pay your bills in full monthly. This means avoiding making minimum payments, which only add daily interest to your credit card bills.

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