3 Reasons Dave Ramsey Is Wrong About How Many Credit Cards You Should Have

How many credit cards should you have? The answer can vary depending on your situation, but for most people, there is a wrong answer -- despite the fact that it's the answer given by finance expert Dave Ramsey.

See, Ramsey believes that you should have zero credit cards. But he's wrong about this for three key reasons.

1. Credit cards help you build credit

One of the main reasons Ramsey is wrong in suggesting you shouldn't have any credit cards is because cards help you build credit. A good credit score is a very important financial asset.

With good credit, you can more easily get an affordable mortgage loan so you can buy a home and begin building equity. You can sign up for utilities or cellphone service without a huge deposit. You can also qualify for personal loans or other credit cards.

Ramsey doesn't think these things are important because he doesn't believe your credit score matters. Ramsey urges his followers to avoid debt at all costs. But even if you do follow this advice and steer clear of borrowing, good credit still is important because it affects your insurance costs and your ability to do things like rent an apartment.

Since credit cards are one of the easiest tools to help with credit building and since good credit really does make life easier, Ramsey is absolutely wrong that you should avoid having cards in your name.

2. Credit cards make life more convenient

Credit cards undoubtedly make your life a lot more convenient. If you want to book a rental car or a hotel room, you can put the deposit on a credit card. That way, you won't tie up your money as you would if you made a deposit using a debit card (which is what Ramsey suggests doing).

It's also a lot easier and more convenient to pay with a credit card than with cash. Yes, it is true you can use a debit card for most transactions, as Ramsey suggests. But debit cards don't come with all the same benefits that cards can offer. For example, many credit cards will extend your manufacturer warranty, which means you won't have to worry about paying for repairs on items you've purchased for a longer time period.

Why give up the benefits of having a credit card for no reason?

3. Credit cards allow you to earn rewards

Finally, a third reason Ramsey is wrong about how many cards you should have is that he doesn't believe you should have any rewards cards because the rewards aren't worth it. Ramsey said they often expire or go unused. But in reality, you can sign up for any rewards card you want. This way, you can make sure you get one with perks and rewards you are excited about and will use.

For each of these three key reasons, Ramsey is wrong to tell you that you need zero credit cards. You likely do need a card to help you build credit, earn rewards, and simplify your borrowing. You can always commit to using it responsibly -- and should do so -- to make sure the card helps you over time, rather than hurting your financial security by leaving you a big debt hole to dig out of.