“If You Hate Women and Children, Do This”

Summary

Episode Summary: “If You Hate Women and Children, Do This”

Release Date: December 18, 2024
Podcast: The Ramsey Show Highlights
Host/Author: Ramsey Network

In the thought-provoking episode titled “If You Hate Women and Children, Do This,” hosts from the Ramsey Network delve into the ethical and societal implications of credit card rewards programs. Through a candid conversation between Speaker A and Speaker B, the episode challenges listeners to reconsider the true cost of seemingly beneficial financial incentives.

Introduction to Credit Card Rewards

The episode opens with Speaker A addressing a listener’s query about obtaining a travel points credit card. The listener, Meg from Maine, expresses her disciplined approach to managing credit cards by charging expenses and paying them off immediately to earn points without accruing debt.

The Hidden Costs of Rewards Programs

Speaker B launches into a critical analysis of credit card reward systems:

“I think you should get a credit card for points if you hate widows, orphans, and those who are struggling to pay their bills.”
[00:47]

Initially taken aback, Speaker A reacts:

“Oh, John. Shots fired.”
[00:54]

Speaker B continues by sharing a personal anecdote about utilizing a rewards credit card during a significant family move, only to realize the broader societal impact:

“It's not the companies. It's not the credit card companies, not the airline. It's not the hotels that are paying for these rooms. It's the single mom with three kids who just left an abusive relationship who is struggling to feed her kids...”
[02:00]

This revelation underscores the systemic reliance on individuals from vulnerable backgrounds to subsidize rewards benefits enjoyed by others.

Statistical Evidence of Inequity

Speaker A references a study from her book, Breaking Free from Broke, highlighting alarming disparities:

“A 2023 study by the Federal Reserve... an aggregate annual redistribution of $15 billion from less to more educated, from the poorer to richer, and from high to low minority areas, widening existing disparities.”
[03:10]

Further emphasizing the issue, she notes:

“Families with household incomes below $40k are less likely to qualify for these rewards but more likely to pay late fees. Conversely, families making $100k or more have easier access and fewer penalties.”
[03:38]

The Moral Dilemma of Rewards Programs

The hosts debate the moral implications of participating in credit card rewards:

“I'm not a better person than anybody, but in this one particular thing, this is just a hot button issue with me.”
[04:19]

Speaker B articulates a strong stance against these programs, arguing that:

“If you like the idea of somebody's wealth being redistributed from the least of these in our communities to pay for your flights and hotels, knock your lights out for me.”
[05:00]

Practical Alternatives to Credit Card Rewards

Transitioning from critique to solutions, Speaker A suggests alternative financial strategies:

“If you spend $25k a year on travel, that's a lot. Instead of spending an extra $500 on a rewards card, you could save $40 a month and reward yourself that way.”
[06:03]

They advocate for maintaining financial discipline without falling into the psychological traps of reward incentives, highlighting the minimal tangible benefits compared to the broader societal costs.

Supporting Small Businesses and Personal Financial Health

Speaker A emphasizes the importance of supporting small businesses by opting for cash payments:

“I pay cash and get a discount. This hurts the small business owner because they have to pay a 3% fee or pass it on to you.”
[07:04]

By avoiding credit card fees, consumers can contribute to the financial well-being of local businesses rather than funneling profits to large credit processing companies.

Conclusion: Opting Out for Greater Good

The episode concludes with a strong endorsement of financial autonomy and ethical consumption:

“Once we started following the Ramsey plan, we realized we can use our own money and have freedom and control over our lives. Screw the rewards.”
[08:12]

Speaker B reinforces the message:

“Imagine if America said, go fund yourself. Go fund your own retirement. Go fund your own credit card rewards, and America would be a better place.”
[08:37]

By choosing to opt out of rewards programs, listeners are encouraged to prioritize personal financial health and contribute to a more equitable economic system.

Key Takeaways

• Ethical Considerations: Credit card rewards programs may inadvertently perpetuate economic disparities by relying on financially vulnerable individuals.
• Statistical Insights: Significant funds are redistributed from lower-income and minority communities to wealthier demographics through rewards systems.
• Practical Advice: Opting for cash payments and disciplined saving can provide financial benefits without contributing to systemic inequities.
• Support for Small Businesses: Avoiding credit card fees helps bolster local businesses and ensures a fairer distribution of profits.

Notable Quotes

• Speaker B: “If you like the idea of somebody's wealth being redistributed from the least of these in our communities to pay for your flights and hotels, knock your lights out for me.”
  [05:00]

• Speaker A: “Families with household incomes below $40k are less likely to qualify for these rewards but more likely to pay late fees.”
  [03:38]

• Speaker A: “Imagine if America said, go fund yourself. Go fund your own retirement. Go fund your own credit card rewards, and America would be a better place.”
  [08:37]

This episode serves as a critical examination of the hidden societal costs embedded within popular financial tools, urging listeners to make informed and ethically conscious financial decisions.

Transcript

[A]

Brought to you by the EveryDollar app. Start budgeting for free today. Today's question comes from Meg in Maine. I've been an avid follower for 20 years and I'm debt free. However, I'm facing a bit of a challenge and would love to get your advice. I travel quite a bit now that I'm semi retired, and I've been considering getting a travel points credit card. My plan is to charge my travel expenses and large purchases, then pay them off immediately. I feel disciplined enough to handle this without carrying any debt. Plus, the idea of earning points and not carrying so much cash is appealing. But here's the kicker. Despite having a credit score of 833, I've been turned down for several credit cards since I haven't used one in many years. Do you have any suggestions on how to approach the situation or any alternatives I should consider?

[B]

I think you should get a credit card for points if you hate widows, orphans, and those who are struggling to pay their bills.

[A]

Oh, John. Shots fired.

[B]

Hot. So I remember I was, it's not for Ramsey. I was moving across. I was moving. I was taking a long move and the plate, the business I was moving was, would pay reimburse my move. There's a whole family one like big old monster trucks. But I had to front it. So I thought, oh, man, I'm gonna open up a credit card and with points on it, and I'll make just free points because I'm just going to turn around and this new company that I'm working for is going to reimburse me for the movement. So I did that and I remember getting a whole bunch of free points for opening the card. And then I got a whole bunch more points for this massive amount of money I spent right out of the gate to move my whole family. And then I was literally driving down the road and I remember thinking, wait a minute, the credit card company's not my friend and the airline company's not my friend. Like, they're not hooking me up. Like, bro, you spent money with us. We're gonna hook you up. Somebody's paying for this flight and somebody's paying for these hotel stays. And when I dug into it, that's when, to my horror, I realized, oh, it's not the companies. It's not the credit card companies, not the airline. It's not the hotels that are paying for these rooms. It's the single mom with three kids who just left an abusive relationship who is struggling to feed her kids, who puts this credit card in and Then her boss cuts her hours and she gets a 50 late fee or a 39 late fee, or her APR goes from 13 to 29 in one month. She's paying for my flight. Or the single dad whose wife just passed away. And like, they're scrambling and scrambling. He opens up a credit card out of desperation, and then he misses a payment and it balloons on. That guy's paying for my flights. And it, it all of a sudden got very gross for me. Like, I don't want to be a part of this system. I travel. You. And I travel a lot. I travel all the time. All the time. I'd rather pay for my own flights or work out a business arrangement with a company that's paying me to come speak for them than ever think I have some single mom who can't put food on her table, pay my bills, and it just got gross for me real fast.

[A]

Yeah, I mean, there's a.

[B]

You did some research on this, right?

[A]

There's a moral argument to be made. Yeah. My book, Breaking Free from Broke. Here's the quote from, from the book, a 2023 study by the Federal Reserve. They set out to determine who pays for these credit card awards. And the results, though expected, are alarming. In the report, the Fed said, we estimate an aggregate annual redistribution of $15 billion from less to more educated, from the poorer to richer, and from high to low minority areas, widening existing disparities.

[B]

Simple.

[A]

And here's. It gets worse, John. As they dug into it, families with household incomes below 40 grand are less likely to even qualify for these rewards, but they're more likely to pay late fees. And addition, the family's making 100 grand or more, obviously more likely to have access to these reward cards and less likely to pay late fees and interest. So it's not saying you're a bad person if you use the, the rewards. This is not like a moral argument to say John's a better person than you. I mean, I'm just kidding.

[B]

I'm not.

[A]

John sleeps better at night because of it.

[B]

I, I, I, Yeah.

[A]

And can you play the game? Sure. Is it worth the 2%? Let's say you spend 25 grand. I mean, is it really worth that?

[B]

Well, they put in huge font. Cash back. Yeah, right. Cash back.

[A]

Well, and they go, well, it's points now, John. It's not cash. What's a hundred thousand points? I don't know. It's like Chuck E. Cheese. You spend a hundred, A hundred dollars at Chuck E. Cheese to get a thing that's actually worth $7.

[B]

Right. So you get like a, like a cool monogrammed Bluetooth speaker. Like because I got a hundred thousand.

[A]

A no name brand.

[B]

Yeah.

[A]

You get some, you know, one of those sticky hands.

[B]

Yeah.

[A]

Pack of gum and you're like, I.

[B]

Spent 20 bucks for this refurbished like New balances. Right.

[A]

So can it be done? Can you be super disciplined and beat the cyst? Sure. I don't think it's worth the brain calories and the energy and the money spent to try to do it personally.

[B]

And if, if you, I mean, geez, I don't want to make it a moral issue, but I, I want to call these programs to task. If you like the idea of somebody's of wealth being redist distributed from the least of these in our communities to pay for your flights and hotels, knock your lights out for me. George. Just got gross. And again, we can line up the things that, that I need to work on. I'm not a better person than anybody, but in this one particular thing, this is just a hot button issue with me. Y. The, the banks aren't your friends, the credit card companies aren't your friends, the airline companies are not your friends. They're running businesses. They would not be giving you these flights if it was, if they weren't making that money up somewhere else. Right. There's an, there's an old saying in the Internet world. If you get online and you log in and you have to put your, your email address in for free and you get a product for free, you're the, you're, you're, you're the product right there. You, they want you. Right. So it's similarly asking that next layer question, who's paying for these flights? Actually, who's paying for the advantage I just think I got because they're not hooking you up like your friend or your neighbor.

[A]

Well, when you think about this, let's say you do spend 25,000 a year on travel. I think we'd all agree that's a lot. That's a, that's a, someone's traveling a lot with 25 grand a year and 2%, it's 500 bucks. You could put 40 bucks in a savings account every month and give yourself the rewards.

[B]

Yeah, absolutely.

[A]

And so you're never going to convince me because of humans being emotional creatures that psychologically you're not going to spend 500 more on that card over the course of a year because you're going, well, I'll get some points, might as well get the nicer flight.

[B]

Well, and if you. If you fly, like, like if you fly Southwest or America, you fly these companies all the time. You get flight points for participating. I'm okay with that. Right. Because they're marking up that your ticket and they're going to give you a piece. That's fine.

[A]

If I fly 25 times of Southwest, I'll get a free flight.

[B]

Knock your lights out. That's fantastic. That's awesome. It's that next level of, hey, my gasoline, my Snickers bar, my whatever, your haircuts, which is a. I mean, that's a lot of money.

[A]

I'd get some serious cash back, but instead, here's what I do with my haircuts, John. I pay cash and I get a discount.

[B]

I do. Because we used to say barber. He gives the cash discount.

[A]

Exactly. So I'm like, well, I'm making more by paying cash than by swiping my card. Which, by the way, hurts the small business owner because they've got to now pay the 3% fee or pass it on to you all to get my 2% cash back. So either way, you are not the one winning. It's the card processing companies. It's Visa, it's MasterCard, it's Amex, it's Discover, it's Southwest, it's Delta. And these are not evil companies. This is how they do business. And you need to understand how they're marketing to you. There is a reason they're always offering you, hey, John, you're so wonderful. Here's more line of credit. We're going to give you an extra $5,000 in credit that you can spend. You're telling me psychologically, I don't get the dopamine hit that tells me I am winning. The banks love me.

[B]

Yeah, they love you. So I. I don't know. As for me, in my house, we solve for peace. And if I can opt out of a system. I like that. I like that.

[A]

That's truly how we love people. Think. Well, they just have to say that on air. Dave secretly. No, you can check his wallet. You can check any of our wallets. There is not a single credit card to be found. And it's not because we're scared of Dave finding out. It's because we truly have no need for that.

[B]

Opt out of the system.

[A]

Once we started following the Ramsey plan, we're like, oh, we can just use our own money and have freedom and control over our life. Great. Sign me up. Screw the rewards. It's just, again, where's the George Kibbles T shirt. Screw your awards. I like the one that says, go fund yourself. That one I'm still trying to get as part of Ramsey Merch.

[B]

That's fantastic.

[A]

Yeah. I don't know that Dave's gonna go for it yet.

[B]

He could.

[A]

I like that, though.

[B]

I hear a lot on the show.

[A]

Imagine if America said, go fund yourself. Go fund your own retirement. Go fund your own credit card rewards, and America would be a better place. Instead of making banks and lenders richer.

[B]

If you made a shirt that said, go fund yourself, and I made one that said, that gives me hemorrhoids. You and I would both.

[A]

We'd be billionaires.

[B]

America would buy those T shirts.

[A]

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