Mark Cuban Says, ‘If You Use A Credit Card, You Don’t Want To Be Rich’ — Why Financial Icons Warren Buffett And Dave Ramsey Agree

Bank card debt is a typical monetary burden, however billionaire entrepreneur Mark Cuban says it could possibly be the very factor stopping individuals from constructing wealth.

Curiously, Cuban is not alone in his stance on bank card use. Different monetary icons like Warren Buffett and Dave Ramsey have additionally beforehand argued that high-interest debt is among the largest obstacles to monetary success.

What Occurred: In a 2014 episode of The Dave Ramsey Present, Cuban joined monetary advisor Ramsey to debate bank cards, debt, and wealth-building methods.

When requested about his stance on bank card use, Cuban did not mince phrases: “If you happen to use a bank card, you do not need to be wealthy,” he mentioned, highlighting that paying down bank card debt is a vital monetary step.

He really helpful paying off high-interest debt because the “finest place to speculate” resulting from its assured returns.

“The very best place to speculate is to repay all of your bank cards and burn them,” including, “If you happen to’re paying 15% or 20% curiosity, paying that down is like incomes 15% or 20%.”

Ramsey, famend for his no-nonsense cash administration method and clear-cut monetary recommendation, echoed Cuban’s sentiments and identified that “75% of rich individuals say get out of debt and keep out of debt.”

See Additionally: ‘It’s Not Evil. It’s Simply Math’ – Dave Ramsey Was Referred to as A “Unhealthy Christian” for Elevating Rents …. And He’s Not Sorry About It

The numbers underscore the size of the bank card debt challenge within the U.S. as we speak.

Based on the Federal Reserve Financial institution of New York, People collectively held $1.14 trillion in bank card debt as of the second quarter of 2024—a $27 billion enhance from the earlier quarter.

The typical bank card steadiness per client additionally rose to $6,329, up from $5,947 the earlier 12 months, in keeping with TransUnion.

Why It’s Essential: Cuban and Ramsey are usually not alone of their disdain for bank card debt. Warren Buffett, the Oracle of Omaha, has additionally been vocal about his desire for avoiding high-interest debt.

Buffett as soon as suggested a good friend, “If I owed any cash at 18%, the very first thing I might do with any cash I had can be to pay it off. It is going to be method higher than any funding concept I’ve acquired.”

Nonetheless, the Berkshire Hathaway chair isn’t totally against utilizing bank cards however warns in opposition to carrying a steadiness, which ends up in accumulating curiosity.

Jay Leno, one other financially savvy determine, shares an identical view. The previous Tonight Present host and self-made millionaire avoids utilizing credit score for purchases, even main ones like a house.

“If I am unable to afford it, I do not purchase it,” Leno advised CNBC in 2018, noting that purchasing on credit score would “drive [him] loopy.”

Picture by way of Gage Skidmore on Flickr

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Disclaimer: This content material was partially produced with the assistance of Benzinga Neuro and was reviewed and revealed by Benzinga editors.