Is Dave Ramsey's Stance To Only Buy A Cell Phone With Cash?

Summary

Podcast Summary: The Ramsey Show Highlights Episode: Is Dave Ramsey's Stance To Only Buy A Cell Phone With Cash?
Release Date: June 20, 2025
Host/Author: Ramsey Network

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Introduction to the Question

In this episode of The Ramsey Show Highlights, listener Mason from Michigan poses a pertinent question regarding personal finance management: “Is Dave’s stance to only buy a cell phone in cash, or is he okay with putting it on an installment plan with a cell phone provider over two or three years?” This inquiry sets the stage for a comprehensive discussion about debt, consumer behavior, and financial responsibility in everyday purchases.

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Dave Ramsey's Stance on Buying Cell Phones

Dave Ramsey addresses Mason’s question by emphasizing a debt-free approach to purchasing cell phones. He states:

“Only buy a cell phone in cash and installment plan is effectively debt because you have to finish paying off the phone before you actually own it. And you're also locked into this contract for two or three years.”
(00:35)

Ramsey underscores the financial implications of installment plans, likening them to debt due to the obligation to complete payments over an extended period. This commitment not only affects ownership status but also restricts consumers' flexibility in changing phones or providers.

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The Pitfalls of Installment Plans

Delving deeper, Ramsey explains the broader impact of installment plans on consumer behavior and the economy:

“I feel like these installment plans also have caused, like, cell phone inflation because the cell phone company is like, we can charge whatever. They'll just put it on payments.”
(01:37)

He criticizes how installment plans enable companies to inflate prices, leveraging the allure of manageable payments to encourage higher spending. Ramsey warns that such financial structures can lead to a cycle of debt:

“If you're okay with this payment, why not buy now, pay later, right? They promise 0% too well.”
(01:46)

George Kamel reinforces this point by likening installment plans to a "gateway drug" that can entangle consumers in ongoing financial obligations:

“And the thing always is when you get stuck in a system where you have to... You're locked in and you cannot get out. That's not fun.”
(01:56)

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Importance of Buying Phones in Cash

Ramsey advocates for purchasing cell phones outright with cash to maintain financial freedom and avoid unnecessary debt:

“So that's the simplest answer.”
(02:09)

He further advises listeners to consider their financial capabilities:

“If you can't afford the brand new iPhone 16 Pro Max with 512 gigabytes, then don't buy it. You can buy a used phone.”
(00:49)

This counsel promotes responsible spending and encourages consumers to opt for more affordable alternatives when necessary.

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Discussion on Used Phones

Emphasizing practicality, Ramsey shares a personal anecdote about selling a used phone:

“Within a day. And I got great money.”
(01:06)

This example illustrates the viability and benefits of choosing pre-owned devices, aligning with his broader message of financial prudence.

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Anecdotes and Personal Stories

The conversation takes a lighthearted turn as Ramsey and George Kamel reminisce about older phone models, highlighting the evolution of technology and personal preferences:

“It was like an iPhone 6. It was so vintage. It had the one lonely little lens.”
(01:09)

George shares his journey through various phone brands, ultimately becoming an iPhone user despite initial reservations:

“I'm giving you my... My cell phone. I was a Nokia user and then a BlackBerry and then an Android for two years and I swore I would never get an iPhone. I don't know why I didn't like them. I didn't like the people that had them.”
(02:21)

This exchange underscores the personal dimension of financial decisions, where brand loyalty and social perceptions intersect with economic considerations.

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Brief Discussion on Phone Brands

The hosts engage in a playful debate over phone brands, touching upon user experience and social dynamics:

“I like to upset the Android people with their green bubbles. I don't need you in the group chat, all right? That's all I'm saying.”
(02:40)

Ramsey humorously comments on the preference for iPhones over Android devices, adding a relatable and entertaining element to the financial discourse.

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Conclusion and Final Thoughts

Wrapping up the episode, Dave Ramsey reiterates his core message of financial responsibility:

“That's the real answer.”
(02:45)

He encourages listeners to make informed and debt-free decisions when purchasing cell phones, aligning with his broader philosophy of managing life and money wisely.

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Key Takeaways:

1. Debt Avoidance: Opting to pay cash for cell phones helps avoid the pitfalls of debt and long-term financial commitments.
2. Financial Flexibility: Avoiding installment plans provides greater flexibility in managing personal finances and adapting to changing needs.
3. Consumer Behavior: Installment plans can inadvertently contribute to higher consumer spending and overall economic inflation in the cell phone industry.
4. Practical Alternatives: Purchasing used or more affordable phone models is a viable strategy for those seeking to minimize expenses without sacrificing functionality.
5. Personal Preferences: Brand loyalty and social perceptions play a role in financial decisions, highlighting the intersection of personal values and economic choices.

This episode serves as a practical guide for listeners striving to balance technological desires with sound financial management, reinforcing Dave Ramsey's commitment to empowering individuals with actionable financial advice.

Transcript

[Dave Ramsey]

Brought to you by Y Refi Refinance your defaulted private student loans [e-mail] Ramsey Today's question comes from Mason in Michigan. Is Dave's stance to only buy a cell phone in cash, or is he okay with putting it on an installment plan with a cell phone provider over two or three years? Couldn't tell you Dave's stance? I could guess Dave's stance, but we can give you George and Rachel's stance at least. I don't want to put words in the guy's mouth. He's not here to defend himself. But the simple answer is yes. Only buy a cell phone in cash and installment plan is effectively debt because you have to finish paying off the phone before you actually own it. And you're also locked into this contract for two or three years. So if anything happens, you want to switch, you want to change phones, well, you're kind of stuck in these handcuffs with that cell phone provider. And so I always recommend buying a phone in cash. And if you can't afford the brand new iPhone 16 Pro Max with 512 gigabytes, then don't buy it. You can buy a used phone. In fact, I just sold a used phone online.

[George Kamel]

Oh, you did?

[Dave Ramsey]

Within a day. And I got great money.

[George Kamel]

Nice. And you were laughing at some guy's phone in the lobby.

[Dave Ramsey]

It was like an iPhone 6. It was so vintage. It had the one lonely little lens.

[George Kamel]

We were taking pictures and I never even noticed that stuff. George is like the Apple guy. And he's like, hey, is that the. Is that. Is that the iPhone Model 4.

[Dave Ramsey]

This is from a former Apple store employee I know, as you can tell.

[George Kamel]

And the guy in the lobby with the. With the phone, he's doing great.

[Dave Ramsey]

He's thriving.

[George Kamel]

He's living a great life.

[Dave Ramsey]

Thriving.

[George Kamel]

He's fine. So you can buy a cheaper phone if you need to. All's going to be okay.

[Dave Ramsey]

I feel like these installment plans also have caused, like, cell phone inflation because the cell phone company is like, we can charge whatever. They'll just put it on payments.

[George Kamel]

Yes.

[Dave Ramsey]

So it's part of the problem. And it causes you to get into a cycle where, like a gateway drug to other payments. If you're okay with this payment, why not buy now, pay later, right? They promise 0% too well.

[George Kamel]

And the thing always is when you get stuck in a system where you have to. You're locked in and you cannot get out. That's not fun. Like, that's not. That's not what you want to do. So that's essentially what debt is and essentially when what these kind of plans are.

[Dave Ramsey]

So that's the simplest answer.

[George Kamel]

Good question.

[Dave Ramsey]

And I hope he's buying an iPhone. Don't be an Android guy.

[George Kamel]

Oh, come on, George.

[Dave Ramsey]

I'm not an elitist.

[George Kamel]

Such a judgmental. Do you know I had an Android?

[Dave Ramsey]

Did you?

[George Kamel]

Yeah, I had a BlackBerry. This is back on like 202007 or something. But it was a BlackBerry.

[Dave Ramsey]

That doesn't count, does it?

[George Kamel]

And then an.

[Dave Ramsey]

That's not an Android. Oh, then an Android.

[George Kamel]

I'm giving you my.

[Dave Ramsey]

Thank you, James.

[George Kamel]

My cell phone. I was a Nokia user and then a BlackBerry and then an Android for two years and I swore I would never get an iPhone. I don't know why I didn't like them. I didn't like the people that had them.

[Dave Ramsey]

There we go. That's the real answ.

[George Kamel]

That was in like 2010.

[Dave Ramsey]

And now you've changed. Now you are that person.

[George Kamel]

Now I'm that person and I've been that person.

[Dave Ramsey]

I kid. I like to upset the Android people with their green bubbles. I don't need you in the group chat, all right? That's all I'm saying. Why refi Refinances delinquent private student loans for struggling borrowers. Learn more at Y r e f y.com Ramsey.