'Chaos always eats money’: Dave Ramsey says pay these 5 things before your credit card — regardless of the balance

“If I can’t afford my credit card payments, what do I do?” the caller, Katie, said. “Like, do I just not pay them?”

In response, Ramsey had two suggestions: First, he tells her to sign up for a budgeting app and create a detailed budget allocating every dollar she brings in each month. Second, he tells her to get rid of the credit cards.

Why is Dave Ramsey opposed to credit cards?

Over the years, Ramsey has repeatedly expressed his skepticism toward credit cards — in fact, his personal finance company advises that you shouldn’t have any credit cards at all.

He doesn’t get into all of the reasons why he doesn’t like credit cards during the call with Katie, but his website, Ramsey Solutions, outlines several reasons why someone might choose to forgo having a credit card.

The main argument comes down to credit card debt. Americans have amassed $1.26 trillion in credit card debt, according to the Federal Reserve. Americans by and large do not pay off their balances in full each month.

Additionally, 63% of adults in the U.S. say they have the cash on hand to cover a $400 emergency. For many of those who aren’t able to cover a bill like that, their solution is to put it on their credit card and pay it back when they can.

Ramsey’s solution to the caller’s problem is to start with a budgeting app where she can pinpoint exactly how much money she needs to cover the essentials: “food, shelter, clothing, transportation and utilities.”

By deciding in advance exactly how much she will spend on each of her needs before she ever has the money, he tells her, “you’re going to feel like you got a raise.”

By doing that, she’ll eliminate the variables in her financial life. As he puts it, “chaos always eats money.”

Why Dave Ramsey’s credit card advice might not be great for everyone

For someone who is deep in credit card debt, switching to a strategy where you seldom put anything on your credit card could be helpful. However, Ramsey’s advice fails to account for the 37% of adults who can’t cover a $400 emergency.

It’s a good idea to have an emergency fund. If your car breaks down, for example, being able to fall back on saved cash to pay for repairs will put you in a better position than charging the expense to your credit card and trying to pay it back as soon as possible with interest.

But starting an emergency fund is often easier said than done, especially for people in low-paying jobs and those living paycheck to paycheck.