Dave Ramsey Urges You to End This 'Toxic Relationship.' Should You Listen?

This may be one situation when listening to Dave Ramsey is a bad idea.

Dave Ramsey is a financial expert who has given lots of good advice to his readers and listeners. But that doesn't mean every suggestion he makes is the right one.

Specifically, the Ramsey Solutions blog urged readers to end a certain "toxic relationship." But, if you listen to this advice, you could come to regret it. Here's why. 

This is the toxic relationship Dave Ramsey wants you to end 

So, what is the relationship Ramsey wants you to sever? It's your relationship with your credit card companies. 

"If you're finally ready to end that toxic relationship in your life (aka your relationship with credit cards), you've got to kick them to the curb," he urged. "Yep, break up with them and never look back."

Ramsey suggests paying off any credit card debt that you currently owe, then taking your kitchen scissors and cutting up the cards so you will never be tempted to use them again.

"If you stop using credit cards and finally pay them off, you'll never have to worry about your credit card balance. Ever. Again. What does this mean? It means you get to start paying for things with your own hard-earned money in the form of cold hard cash (or your debit card)," Ramsey explained. 

Ramsey believes that credit cards are unnecessary and, in fact, dangerous to use because you spend more on them than when using cash and can find yourself in over your head and owing interest. And while he acknowledges that cards can help you earn rewards and improve your credit score, he doesn't believe that either of these benefits are worth it. 

Rewards cards don't pay off in his opinion since you'll end up paying more interest than the rewards are worth. And he says building credit isn't necessary since you only need credit if you're going to take on debt, which you should avoid -- except for a mortgage. Ramsey says you can get a mortgage without a credit score by finding a lender that does manual underwriting and looks at your entire financial picture. 

Here's what you should do instead

Ramsey's advice to end the "toxic relationship" with your credit cards is not good advice.

He is right that you do not want to carry a credit card balance. But rather than breaking up with your creditors and losing the benefits that cards can offer, you should instead find a way to make the relationship work for you.

Specifically, if you understand how to use cards responsibly and commit to doing so, then your relationship with your creditors can be a great one. 

If you buy items on your cards that you would need to purchase anyway and you stick within your budget, your card issuer will give you rewards for routine spending. And you will not end up paying any interest at all because you will be able to pay off your balance in full before interest begins accruing. And if you don't use too much of your available credit and you pay your bills on time, you'll develop a solid credit score (which, contrary to what Ramsey says, does matter). 

The big question is, why wouldn't you want to get all of these perks? Like any relationship, it's all about what you put into it -- so turn that "toxic" relationship into one that can bring you a whole lot of benefits by simply committing to responsible credit card use today.