Dave Ramseydismissed credit card rewards as a wealth-building tool during a sit-down on theYoung and Profitingpodcast, calling the entire points system 'bad math' and citing a landmark study from his firm that surveyed 10,167 millionaires.
'We did the largest study of millionaires ever done at Ramsey Research, 10,167 of them,' Ramsey told host Hala Taha. 'And the number of them that said I became a millionaire because of my points is zero. None.'
Taha pushed back onRamsey's long-standing hardline against credit cards, noting that Gen Z and millennial listeners are 'all about our points, getting free travel, free hotel, free flights.' Ramsey held firm. The exchange, which aired as part of a wider conversation about debt and high-income money mistakes, has since circulated widely on social media.
Ramsey grounded his argument in spending psychology. Research from Dun & Bradstreet has shown that credit card users spend between 12 and 18 per cent more than those paying with cash. Ramsey argued that layering a rewards incentive on top of that gap only widens it further.
'And if you add to it, oh, I'm getting points — then I'll even increase my spending yet more,' he said. 'So, you gave up a dollar to get a penny. How's that increase wealth?'
He singled out Apple Pay as the extreme end of frictionless spending. 'You don't even see an expenditure. It's just you wave a wand and stuff happens,' he said. He also questioned the basic arithmetic behind cashback programmes.
'I get 2% back. So you spend $100,000 (£75,000) and you got two grand. How does that equate to wealth? It doesn't. It's bad math.'
Dave Ramsey reveals why 0 out of 10,167 millionaires got wealthy using credit card pointsHala Taha: "A lot of people are really interested in points, especially Gen Z, millennials. We're all about our points, getting free travel, free hotel, free flights. Why is that still a…pic.twitter.com/8rvwPFCA0o
Ramsey added that the rewards model ultimately serves card issuers, not consumers. He claimed that 78 per cent of airline miles are never redeemed, a figure he presented as evidence that loyalty programmes benefit banks and airlines far more than the people using them.
'It's a game and you're playing with a multi-billion dollar company who has more algorithms tracking your behaviour patterns than you can even imagine,' he said. 'And believe me, they're not coming out on the short end of this. The consumer is.'
Source: International Business Times UK
