Here's Why Dave Ramsey's Wrong About How Many Credit Cards You Should Have

Listening to Dave Ramsey on this issue could be a costly mistake.

Dave Ramsey is a finance expert who has provided advice on a wide variety of issues, from saving for emergencies to what type of mortgage you should take out. While some of his advice is great, other tips he gives could lead you astray.

Specifically, one of the biggest things that Ramsey is wrong about is the number of credit cards you should have. 

How many credit cards should you have? 

Ramsey has a simple answer to this question. 

"The answer is zero," the Ramsey Solutions blog states. Ramsey believes that even one card is too many because "you're relying on something else for security when you can rely on yourself." 

While Ramsey indicated that many experts recommend having a credit card to help you build credit, earn rewards, and prepare for emergencies, he does not believe cards are the right way to do any of these things. 

Instead, he says you can earn rewards by spending with a debit card and you should have savings for emergencies instead of relying on credit. Plus, Ramsey states that you don't even need to build credit at all but if you do, there are other ways to do it. 

Here's why Ramsey is wrong

Ramsey is right that credit cards are not an ideal tool to use for emergencies. They carry a high interest rate and you can get trapped making payments forever, neither of which are good things. A card definitely shouldn't be your plan for covering surprise expenses and you should have a hefty emergency fund with several months' worth of living expenses to make certain that a loss of income or surprise expense isn't devastating.

However, cards are actually important to build credit -- and despite what Ramsey says, having good credit is important even if you don't plan to borrow much. A card can be the easiest way to establish a positive payment history and show you can use credit responsibly so you can earn a top credit score. Good credit will enable you to get a mortgage and will help you when you undergo background checks for potential jobs. It also helps you qualify to rent an apartment and to get insurance.

While it is technically possible to do these things without credit, as Ramsey says, it will absolutely make your life much harder. You'd need to find a lender that does manual underwriting (and not all do), and landlords and employers may simply not be willing to look deeper to assess your trustworthiness if you have a poor credit score or no credit score at all. You will seriously limit your options and add a lot of needless stress and hassle to your life if you make no effort to build credit. 

Further, while some debit cards offer rewards, they are generally far less generous than those you could earn with a credit card. And debit cards don't typically offer other perks that cards do, such as trip interruption insurance or airline lounge access. If you can earn rewards for everyday spending, why not do it?

The reality is, if you use cards responsibly -- which means you charge what you can afford and pay them off in full -- you should have at least one and perhaps several to maximize your rewards. There is no reason not to use this tool as long as you can trust yourself not to wrack up tons of debt you can't pay back.