I Think Dave Ramsey is a Hypocrite

Here's an interesting comment I recently received from a reader:

Regarding an earlier post, Dave Ramsey's website DOES accept credit cards. You can buy any product he offers with a Visa or Mastercard. He has a disclaimer on his website stating that his policy is debit cards only but that they cannot tell the difference electronically between a credit and debit card. He considers this an issue of integrity and expects people to not use the credit card. I have been a Dave Ramsey fan for ten years and have followed his program and am debt free. But this is totally hypocritical. When I started following his program 10 years ago, he did not take any cards (debit or credit). His company drafted the money directly from your checking account. However, as his business has grown and his fame has increased, he decided that in order to continue to grow and keep up with the demands for his products, he would have to accept electronic payments in the form of a card, debit or credit. To his account, he clearly states that he expects people to be honest. However, the vast majority of people buying his products are the very ones who cannot control their credit card spending...hence the need for his products. You wouldn't give an alcoholic a beer, why give someone who cannot control their spending the opportunity to go further into debt? Could it be that Dave has compromised his integrity just a little himself????

I was a little skeptical that this was true since I've lived in Nashville (Dave Ramsey's home town) and know he would rather kill himself than accept a credit card. Or so I thought.

I went to his website and looked under his debit card policy. In normal type it details what he does and does not accept with the summary being:

• He does not accept credit cards.
• He does accept debit cards.
• He does the latter because it is essentially a payment in cash, not credit.

Then, in little, itty-bitty type at the bottom, with an asterisk just like the credit card companies use, it says this:

The Lampo Group, Inc. and Dave Ramsey recognize that the Visa and MasterCard virtual monopoly on the debit card industries prohibits merchants from only taking debit cards. As such, it is impossible for us to ensure that every order has complied with our debit card policy. We trust that all of our customers hold EXCEEDINGLY high levels of INTEGRITY and maintain EXTRAORDINARILY high standards of TRUTH and HONESTY. Basically, anyone ordering from us who does not follow this policy is a shady and dishonest character. Don't put yourself in this group. You're better than that. Stick to our policy, NO CREDIT CARDS, and make us all happy.

You've got to be kidding me. He does accept credit cards.

Yeah, he's couched it in terms that make it look like he doesn't want people to pay with credit cards, and my guess is that he really doesn't want them to, but still, the fact remains, he does accept them. This seems totally hypocritical to me. Come on, Dave! If you really believe credit cards are so bad, why not eliminate the use of them on your site? And if that means no debit cards too, then that's what it means. But I guess the almighty dollar is more meaningful than sticking by your principles, huh?

Personally, I'm fine with people using a credit card and I've documented here many times how I use mine to earn cash back. I'm more of a believer that adults can control themselves if they want to, and hence having a credit card doesn't condemn you to a life of debt and over-spending. In fact, I have credit cards, only buy budgeted items and I pay the cards off every month -- I've done so for 20 years. But if someone is going to rail on credit cards, call them evil, cut them up on stage, and all the other things Dave says/does about them and then offers them on his site (even if it's in a back-door sort of manner), I have to lose respect for that person.

What do you think? Am I being too harsh or does Dave deserve this sort of backlash?

Comments

[Randall]

I'm voting on Dave's side.

The reality is he CAN help more people if he takes plastic, and since there's no way to differentiate between debit and credit cards he's had to make a decision;

Either exclude anyone that can't/won't pay by check or money order, or 'trust' people to only use debit cards, taking the risk that they won't.

By trusting people, he reaches a wider audience and can get the word out more effectively. If someone comes in and buys using a credit card, it isn't an ideal solution, but it still gets Dave's information and materials in their hands. Hopefully, that would be the LAST time they used a credit card.

It's not perfect, but it's better than shutting out people you could otherwise help.

[Traciatim]

I agree with Randall. He makes it plainly obvious that you shouldn't do use your credit card. I know of no credit card processors that would be able to set up an account for you where only actual debit cards are used.

In Canada he could actually have people e-mail him the money, or use the banks bill pay system and set up as a bill payment. I'm not sure if you can do thing like that in the USA since there are so many banks and no system that I know of for e-mailing money.

[MissPinkKate]

What are his other options? Having people mail in checks? Or perhaps quarters taped to a piece of paper? Never fails to amaze me what people on the internet have time to get all worked up about.

[Randall]

Traciatim, don't forget Paypal. It can withdraw directly from your bank account. But I don't think Dave takes that.

[Chris Thomas]

It's my understanding that you cannot accept VISA debit cards without accepting their credit cards as well. Believe me, if Dave could turn off the "credit" option, he would, but he would have to stop accepting debit cards as well, and that's not fair to the people out there who use debit cards the way he teaches.

[FMF]

Miss Pink --

I'm not really that worked up about it. But it seems highly ironic to me that someone so extreme when it comes to dealing with credit cards actually has ANYTHING to do with them. I would have expected him to rather not sell anything via debit or credit card versus allow even one person the opportunity to buy on credit.

[Rick]

"What are his other options?"

His other options are to accept ACH bank transfers, the same way many companies accept payment. Another option is to accept Paypal or another similar payment processing service.

Sure, some of these may be inconvenient for buyer and/or seller. The fees may be higher than credit card fees. But that's the cost you pay for avoiding credit cards. Dave Ramsey takes a very hard line against credit cards, an opposition which, in my opinion, is unwarranted. Credit cards, in fact, are not evil, no more evil than guns are. It's how you use them.

I side with FMF on this issue. You can't have it both ways. When you decide to avoid credit cards at all cost, then you must pay the cost of not dealing with credit cards, and if that includes losing customers or market reach, then so be it.

[Rick]

Apparently 4 other people had the same thoughts while I was typing my reply ;-)

[Brent]

I think he is in a tough spot. Ideally it would be best if he didn't accept credit cards to begin with but he also says he uses a debit card and I'll agree that the system probably can't tell the difference between the two.

Sometimes to help yourself in the long run you have to spend more money in the short term. I do this very thing with appliances, it hurts a lot more in up front money but in the long haul it more than makes up for the difference. Personally I went to the library and got his stuff because I refused to pay for anything else that would put me further in debt.

[Robert]

I am a Dave Ramsey fan and have purchased merchandise on his website...he repetitively states on his radio show that he does not accept credit cards and there is no credit card option when you go to pay...if someone is desperate enough to try to use credit against Dave's request, that's their integrity on the line not his...cut the guy some slack.

[Chris]

While Chris Thomas of Dave's staff is partially right, there also have been other options provided that could eliminate the need for credit cards. Paypal was mentioned. In addtion, Dave's web page could be set to refer someone to an online seller, such as Amazon. Finally, it is my understanding that credit cards and debit cards with the Master Card or Visa Logos have seperate numbering schemes. For example, if I had a regular Visa, the numbering scheme would be A. If I used the Visa debit, the scheme would be B. Dave's team could manually sift through the card numbers and not process the ones that don't meet the debit numbering scheme.

Finally, I've volunteered at a number of DR events. I've been told never to accept credit cards. And I've been told to really advocate debit only, but if someone insists on using a credit card, then take it.

I love Dave. I love his program. Dave can also be a little fast and loose with the rules sometimes. Hypocritical? I hate to use the word. But then again, I'm a fan and live the program. But I do think there is a lot of winking and slight of hand.

If he really didn't want to never ever take credit cards, then there are ways to handle it.

[Scott Riddle]

In my opinion, it is a valid question, but I side with the posters who believe that he is in something of a no-win situation and at least he makes an attempt to stick to his message even as people are ready to pull put their credit/debit card. I see it is close to a non-issue. If he took credit cards, with no disclaimers or warnings, I believe it would be a legimitate complaint.

[FMF]

Robert --

"he repetitively states on his radio show that he does not accept credit cards and there is no credit card option when you go to pay."

That's just the point -- there is a credit card option.

[Matt]

I work in the electronic funds transfer industry for a level one merchant (there are only 400 in the world that big). It's true that you can seperate out debit card bins (the first 6 to 9 digits of a card) from credit card bins, but only if you know them. To know them, you have to have all sorts of NDL's and be in control of your own card processing. I doubt the Lampo group is large enough to even consider these this.

Asking people not to use them on his site would be about the only option since he wants to accept debit cards.

[FMF]

"I've volunteered at a number of DR events. I've been told never to accept credit cards. And I've been told to really advocate debit only, but if someone insists on using a credit card, then take it."

Ok, for those of you thinking Dave would do something else if he could, how do you explain the quote above?

[Chris]

I side with Dave on this. He has to enable the credit card option to enable the debit card option. He repeatedly says not to use a credit card to buy his products.

I get food served on a plate at any restaurant. The waiter tells me not to eat the plate, but I do it anyway. It's the waiter's fault?

[Matt]

Opps, forgot to add that Dave is right on his Visa and Mastercard not allowing you to only take debit cards. If you accept Visa and Mastercard, you cannot decline any card that is a Visa or MC. If he rejected credit cards, he could have his merchant account closed for violating the agreement, most of which are standard.

[FMF]

Chris --

If the waiter was on TV, radio, and print telling everyone that plates were bad, people should NEVER use plates, that he hated plates, etc. and then served you on a plate, I'd certainly question his integrity.

[Aimee]

I think that you are being overly rough on him. He has made it as clear as possible that although you can technically use a CC, he doesn't want that to happen. It's not his fault that Visa and MC have it set up that way, and not allowing people to use a debit card is just plain silly.

He could accept PayPal, but even then who's to say it's not coming from a CC? There isn't a good way around it unless you want to have an e-check, which a lot of people don't trust online.

[BradM]

Dave Ramsey is better at psychology.
Dave is an extreme guy....the kind of person that puts all his chips into the pot no matter what he does. And if you are going to help someone that has $100,000 in credit card debt, then this person would have to go to extremes to pay off the debt (aka getting rid of the credit card). His principles can help ALL people.
His Financial Peace University usually costs $100. Is that really much "damage" if someone has more than $10,000 in credit card debt? Besides, this is such a small portion of his program.
I wouldn't have gone through the hassle of trying to get his material, if he didn't take Visa. Most people want it now! And if he's going to reach a large number of people, this is one of the areas he has to compromise to reach his audience.
(I use debit rewards card, never had a credit card.)

[Eli]

He's also a Christian, right? I mean he quotes Larry Burkett enough to make one believe he is a Christian. Anyway, he could consider -giving- things away to people whose only other option was to rack up more debt. I think he might find the reward in heaven to be greater. But what do I know?

[eli]

One more thing I forgot to point out. Until a law gets through the Senate (I think it just recently passed the House), using a debit card believe it or not is no guarantee that the person is paying with their own money. Most banks now will let a charge go through when your checking balance is zero, as a "convenience" to their customer. Problem is, that convenience will cost the account holder an NSF fee, and negative balance fees until the account is in the black. It's a dirty secret at your bank, and the banks that do "offer" this service, do not allow you to request them to stop it. It's predatory lending at the institutional level, and anyone who accepts debit cards contributes to it.

[Dan]

eh, who cares? Pay the card off right after you use it for Dave's site. He's made a living off of never borrowing again, and wants you to do the same. Maybe you never will after using credit on his site for the last time...?

[Susan]

Hmm...I wonder what Dave would do if he was back in waist-high debt. Would he use the credit card for advice or employ his God-given common sense and just say no?

[annab]

Cut the guy some slack. I know I wouldn't let a random vendor take an echeck from my account. No way. What protection would the consumer have that the computer site won't get hacked and the files compromised? You can at least stop a debit card, but once an agency has your routing number and checking account number, you're screwed.

And as to Paypal, etc -- well, not everyone has reliable internet access, so relying solely on a digital method of payment can really alienate potential users. And forgoing an easy method of digital payment can isolate the others.

I think the person that posted you is being overcritical -- unless they can come up with a better workable solution, then they're just looking to poke holes.

[annab]

Cut the guy some slack. I know I wouldn't let a random vendor take an echeck from my account. No way. What protection would the consumer have that the computer site won't get hacked and the files compromised? You can at least stop a debit card, but once an agency has your routing number and checking account number, you're screwed.

And as to Paypal, etc -- well, not everyone has reliable internet access, so relying solely on a digital method of payment can really alienate potential users. And forgoing an easy method of digital payment can isolate the others.

I think the person that posted you is being overcritical -- unless they can come up with a better workable solution, then they're just looking to poke holes.

[beastlike]

BTW - What's stopping our country or the world from completely getting away from anything but credit?

I am not for this, but I NEVER use cash or keep much at hand so I don't loose to inflation. I also pay my c bills off each month, which is why I have little sympathy for people that can't pay off their credit cards!

[Steven Farrar]

I have to go with Dave on this one. He doesn't really have a choice. The kicker in all of this, is that you can get all the information you need, without paying Dave a dime. It's all Free (radio & now TV). His information has allowed our family to have a stress free financial life, free from payments, allowing us to invest literally 1,000's every single Month. Income that used to go to Chase / College Foundation & Jeep Chrysler, we now get to give & keep as we choose.

[Eric]

I think you're being too hard on him. His message is great and he's helped countless people get out of debt. His intent is to get people out of debt, not farther into it. Saying he should give his book to anyone in debt because he's making them go further into debt is ridiculous. Anyone who buys his book is probably in debt, so he would effectively be making it free. People are responsible for making their own decisions...

[Greg]

I think Steven Farrar is on the right track. I learned all I wanted to know about Dave's program without spending a dime. Yes, perhaps I'd have gotten a lot more from his FPU by paying $100, but reading his books at the library (free) and listening to him on the radio (also free), was plenty to get me motivated to start turning things around. Then I started reading other books from the library, reading personal finance blogs, etc. We're not debt-free yet, but we've certainly made a turn for the better. But Dave's got a business to run, and sometimes you have to run a business as a business, and if that means accepting credit cards because that's the only way he can accept debit cards, then I guess that's what he needs to do.

[Justin]

Dave is a liar in this case, plain and simple. He only wants people to send him their money. He says he doesn't accept credit cards, but then he does. He's nothing more than a sack of hypocrisy.

[Chris Thomas]

Yeah, I've personally used Paypal for years, but as far as I know you can pay with a credit card that way as well, right? Someone would probably complain about that too. ;)

[Daisy]

Way too harsh, dude. Don't you believe in the honor system? I don't think it's hypocritical to expect people to behave themselves. The liars would be the folks who do what Ramsey asks them not to by using credit cards. Whether his program is a good buy or not, though, is something else entirely. Like Steven and Greg, I've never seen the point behind spending money on materials that teach you how not to spend anymore money.

[maxconfus]

I say give Dave a break. It's probably impossible to operate online without accepting credit/debit cards.

[Chris Thomas]

We also accept bank drafts. Look, ask yourself this question: Wouldn't it also be hypocritical for Dave NOT to accept debit cards after singing their praises on the radio everyday? He's finally talked you into cutting up your cards and getting a debit card and now you can't use it on his site??? Sure, that person could use a bank draft, but so can the person who is trying to buy with an actual credit card, so please don't try to use that argument. We choose to trust that our customers won't be stupid enough to use a payment method that Dave is so adamantly against.

[Chris Thomas]

And lastly... Chris @ 12:46, I'm sorry buddy, but no one on our staff has ever told you to accept a credit card under any circumstances. Debit cards are typically branded as such. If that brand is not seen, our people are supposed to ask whether or not it's a debit card. If the customer says it is a debit card, we can only trust them. If they say it's a credit card, we don't accept it, period, no matter how much they insist. I would love to know exactly who instructed you that way, and since you've volunteered at "a number" of our events, I'm sure you remember some names, right?

[Lord]

Sounds like a wack job to me but running a 12 step program for debt alcoholics does open him up to that charge.

[chris]

Chris Thomas: I'm not sure how you can know what was said at a given event. I've never personally met you and I've worked a number of events.

The second issue and more imporant question is why would I lie?

There are some familiar faces at live events, such as Marshall (he's never said to allow a CC) and some others whose names escape me. Some are regulars, others come and go. But Marshall, Heather and the dark haired skinny guy who introduces Dave and works with Heather in the training sessions have always been there.

I remember one instance for sure. The Cleveland event held at the Baptist Church in Akron in March, 2006. During the breakout training, after Heather and the dark haired guy give the initial group talk, we were taught to fill out the paperwork and told to emphasize debit cards or cash, but if someone insisted on using a credit card, then take it. Frankly our group was surprised, but the instructions were never retracted.

And to be fair, we were also emphatically told to give a book away if we felt led by someones condition or situation.

The second wasn't quite as emphatic, but at Grand Rapids in February 2007, someone asked the CC question during break out forms training. We were told to us our best judgement, but that debit cards were the policy. And we were also told at this event to give a book away if we felt led to do so. At Grand Rapids, we were told to check the card to see if it said debit card and to ask if they had one if it appeared it wasn't a credit card. We were not told to deny a sale.

I've been at other events where we were told under no circumstances to take a CC. The policy is debit cards.

Here's a unique situation. My recently expired debit card did not say debit card, check card or any other designation to let the cashier know it wasn't a credit card. How would any of the volunteers know if I was being truthful if I handed that particular card? Again, it was debit and had no charge capability. I bought items with that card at each event I have attended, either as a volunteer or paying customer. It has never been denied or questioned. A normal volunteer would never be able to discern the numbering scheme to determine whether it was a credit or debit card. It did have a Visa logo.

Chris, understand that I love this program. The instructions may have been in error, but they were communicated in the manner I just decribed. And I've used a debit card that was not identified as a debit or check card.

Just for the record, I am debt free (except for home) and use no credit. I share Dave and the concept where ever I go. I am now able to give more freely and to my church. I am on step 6.

I will never "live like those who live like no one else" nor have ski-dos or lake homes, but I do have a pretty good system in place to stay out of trouble on a modest income.

But I have no reason to tell a falsehood about how I was trained.

[plonkee]

Meh, Dave Ramsey is a (relatively benign) cult leader. I'm not in the cult. I don't think I can get worked up enough about it to really care.

[Chris Thomas]

Chris, you seem to remember everything about the event except the name of the person who told you this. You even admit that your whole group noticed, that you guys were "surprised," and yet you can't recall who actually said it. Doesn't that sound the least bit fishy to me? If I ever heard someone in Rush Limbaugh's camp say that he was going to vote for Hillary, and that person was serious about that statement, you can bet I would pay attention to who it was that was talking. In fact, I would probably never forget who said that. I'm not suggesting that you're lying. I am, however, suggesting that you somehow misunderstood or that this person was making a joke that somehow was lost on your group. It just didn't happen. I know this because I work with these people and they are unbelievably ethical and unbelievably hardcore about what we do. Now seriously, if you were in my shows, be honest... Who would you believe? The people you'd been in the trenches with for 6 years or the lone guy on a blog ripping your boss, the same boss who you know is exactly the same off the radio and he is on the radio?

[Chris Thomas]

*shows = shoes.

[Chris Thomas]

Blagghghghg, I've learned my lesson never to type while my blood pressure is clearly rising! That comment I left is filled with more errors than a Royals baseball game!

[Michael]

Splitting hairs and not really adding much to the conversation of getting debt free.

Ramsey would probably be the first to tell someone in large credit card debt to not buy from his website and go to the library.

If this was Digg, I would say "bury - Ok, this is lame"

Chris Thomas: First, I know you guys are hard core. I'm kewl with that. Most don't let something bust their veins. And for the record, I'm not ripping your boss. And you're right. The people I've met seem to be very ethical. And if I was here to diss your boss, your co-workers or the program, then I would have said it happened at each event I've been to. I didn't do that. I only reported the two where it happened.

Second, I know what I heard, because I've heard it as described above.

Third, it wouldn't be uncommon not to remember who told us those insturctions. I can't remember the guys name who introduces Dave when the event begins and works with Heather on stage in the training. Yet I've probably seen him 5 or 6 times in the past few years. I do remember Heather. I do remember Marshall. But some people, including the introductin guy I don't remember. I seem to remember a Vicki but only in Grand Rapids. Also, there are always familar faces at these events and there are always many new faces.

But isn't it funny that there is no issue with me remembering I was told to give a book away if I felt led by someone's circumstance, but for some reason I must be in error when it comes to the issue or credit cards. And that the message is sometimes not cast in stone, but in some cases don't deny a sale and in others the policy is no credit cards.

I also remember being told that we can get a book to combine a sale from a publishing table, but not to let merchandise from the FPU tables go to the publishing tables for sale because they are two disctinct divisions.

Each time I've had form fill out training, it has been with a new person I've never seen before. They frequently are calling on the tall skinny guy to answer questions that come up. And he frequently is the collector of the black money envelopes at the end of the breaks.

Also, I didn't choose the debit card that wasn't marked as such. It was the one I used for several years. It was taken at both events I attended as a paying patron and the events where I vounteered and bought materials to give away to others. It was never questioned and always accepted.

Look, again, why would I lie. Or why would I remember so many things but seem to have this one detail in error? Twice as a matter of fact.

Dave runs a great program. I'm not here to diss it. But when I see a topic like this, I will review the content and tell my experiences. Most have been nothing short of great.

[chris]

Chris Thomas: First, I know you guys are hard core. I'm kewl with that. Most don't let something bust their veins. And for the record, I'm not ripping your boss. And you're right. The people I've met seem to be very ethical. And if I was here to diss your boss, your co-workers or the program, then I would have said it happened at each event I've been to. I didn't do that. I only reported the two where it happened.

Second, I know what I heard, because I've heard it as described above.

Third, it wouldn't be uncommon not to remember who told us those insturctions. I can't remember the guys name who introduces Dave when the event begins and works with Heather on stage in the training. Yet I've probably seen him 5 or 6 times in the past few years. I do remember Heather. I do remember Marshall. But some people, including the introductin guy I don't remember. I seem to remember a Vicki but only in Grand Rapids. Also, there are always familar faces at these events and there are always many new faces.

But isn't it funny that there is no issue with me remembering I was told to give a book away if I felt led by someone's circumstance, but for some reason I must be in error when it comes to the issue or credit cards. And that the message is sometimes not cast in stone, but in some cases don't deny a sale and in others the policy is no credit cards.

I also remember being told that we can get a book to combine a sale from a publishing table, but not to let merchandise from the FPU tables go to the publishing tables for sale because they are two disctinct divisions.

Each time I've had form fill out training, it has been with a new person I've never seen before. They frequently are calling on the tall skinny guy to answer questions that come up. And he frequently is the collector of the black money envelopes at the end of the breaks.

Also, I didn't choose the debit card that wasn't marked as such. It was the one I used for several years. It was taken at both events I attended as a paying patron and the events where I vounteered and bought materials to give away to others. It was never questioned and always accepted.

Look, again, why would I lie. Or why would I remember so many things but seem to have this one detail in error? Twice as a matter of fact.

Dave runs a great program. I'm not here to diss it. But when I see a topic like this, I will review the content and tell my experiences. Most have been nothing short of great.

I'm in the camp that doesn't understand why Dave Ramsey gets attention. I couldn't force myself to listen to his show more than twice. Who cares what he thinks about credit cards? Can I assume he doesn't like gambling either?

Anyway, he is a hypocrite. But it's all about the money. It's just business. If he were really altruistic he'd be selling his book and classes at much lower rates - suitable for the folks these products are aimed at.

[fivecentnickel.com]

This makes me laugh. Dave pushes people to lead a life on inconvenience, but when that inconvenience might cost him a few sales, he gives in. Nice.

[Emma]

Sometimes I wonder if bloggers write posts like this to up their traffic. I may be totally offline, but it's important to mention. Especially when you look at the most popular posts on other financial blogs.

[FMF]

Emma --

Ha!

[Ben]

@Emma...interesting thought.

I once heard someone say that you could dig a hole in your backyard that was 6 feet deep and jump in it. Even then, you wouldn't be able to get away from all the world's hypocrites.

I can't figure out the agenda here. It could be that you just don't like Dave and you are trying to rain on his parade. Or it could be that you are just disappointed with him. However, I don't think the latter is true since you are advertising credit cards for Chase.

If you are going to bash someone for being a hypocrite, explain how you are not one and why we should take this blog seriously.