The Ramsey Show - App - Is Now the Time to Refinance? (Hour 2)

Episode Date: March 4, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Matthew starts off this hour in Minnesota.

Hey, Matthew, how are you? Good. How are you doing, Dave? Better than I deserve. What's up? Just want to say welcome back from your vacation. Thank you. Matthew, how are you? Good. How are you doing, Dave? Better than I deserve. What's up? Just want to say welcome back from your vacation. Thank you. So my question is, I am currently working full-time as well as my wife, and I'm working part-time a few days a week delivering pizzas, and I just want it to be more weird. So I signed up or I applied for another part-time job to bring in more income. But at the same time, I am feeling like I need to do more of a balance between family and paying off

debt. And that's where I feel stuck. Okay. How old are your children? He is going to be six in May. And in what way is he being harmed by you working? Well, I just of me not being home a lot in the evenings, and he goes to school during the day.

Okay. And how much debt do you have? We started at $85,000, and we are down to almost $78,000. Okay. So you're making a little progress. Okay. What's your household income? Our household income, uh, is around 85 to 90.

Okay. All right. And what kind of debt is this? Um, it's a student loans, uh, car payment, um, medical debt. And how, how, how, how much is owed on your car? It is around $22,000. Okay. Well, I mean, there's two parts to this. One is some common sense that you have to be around and see your child, obviously. Okay.

The other part of this is, and, uh, I'm from a different generation, so bear with me. Okay. Um, when, when I was, uh, when I first became a Christian, a guy came to our church and he said, when you have little daughters date, take your daughters on a date, dress up and take them to McDonald's or dress them up and take them to a fine restaurant or whatever. And I thought, man, that's a great idea. Date your daughters, right? So you get to know your kids, you spend time with your kids, and it establishes a bond between the dad and the daughter.

And I think it's a great idea still. I think you ought to do it still, okay? Meg Meeker agrees with me. She thinks it's a great idea. But here's what's weird. If you interview, and it's been done, by way rachel cruz or denise whittemore and you ask them they will tell you dad took us on dates all the time you know what the truth is five times that's the truth five times i that, and I got credit for all the time.

And so the point is with little guys that they do view the world differently than us. They're not as rote, and they don't have as much grasp of time. And so you taking him for donuts at the Krispy Kreme or the Dunkin' Donuts and spending an hour and a half with him at 7 a.m. on Saturday morning is going to feel like you spent three days with him. You see what I'm saying? So that's the kind of balance against what you're saying. And by the way, whether you're out of debt or whether you're working a lot or not, that works, okay?

My son-in-law's a football coach. Denise's husband's a football coach, and he's a world-class guy. He's a world-class dad. In the fall, he does not see his kids she's a widow she's a football widow in the fall i mean we and she signed up for that she married a football coach so no whining yeah and so that's what you get and she has a six-year-old son by by the way, my grandson. And yet I would tell you that Bill Whittemore is a world-class dad. He finds a moment or two, even during football season, to grab William, his son, and spend a little time with him, and it magnifies in the kid's head.

And then when they're not doing football, he's game on with the kids, okay? So when you get out of debt, you'll be game on with the kids when you're not doing debt free so all of that to take a little bit of the guilt tripping you're giving yourself off of you and saying hey working real hard for the good of your family for a short period of time so you never have to work like that again is probably worth it do balance it out do use some wisdom but don't be guilted guilting yourself too heavily they'll be okay they'll be okay. They'll be okay. When I started this business, I was working 16 hours a day.

I'd come in at 8, and I'd leave here at 11. And I did that when our kids were little, and I did that for a couple years. Our kids have benefited from that. Right. I lived like no one else, worked like no one else, now I work like no one else. It just took a month off, right? So, you know, there's a balance through the scope of your life. There's a period of time here that you're going to be out of balance.

Do it with wisdom. Catch those special moments with your son. Don't completely abandon him. I'm not suggesting that. I don't want him to have emotional problems or developmental issues, and I want you to be a good dad. But I also want to let you off the hook and say you're being a much better dad than someone who didn't even have sense enough to ask this question. Right.

You're okay, dude. Right. And another thing, too, is one person told me that kids don't remember how much time they remember what you did. Exactly. That's my point about the donut thing or the dates, right? Right. It's like I got credit for months and months and months and years of dating my daughters,

and I didn't do it. That's the truth. I intended to do better than I did, but I pretty much like five times each. I mean, it really, but I got got it did so much emotional good that it expanded just exactly what you just said and so that's why i told you that story it's not to say don't do it it's just to say you don't have to guilt trip and go i'm a really bad dad because i didn't do all of check all of these boxes perfectly the very fact that you ask this question says you're a world class dad period you're a world class dad you're a hero amen thank you for calling you're a world-class dad, period. You're a world-class dad.

You're a hero. Amen. Thank you for calling. You're a good man. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. It's what we do here.

Folks, tax season is here. If your tax situation is pretty straightforward, here's my advice. Do your taxes as soon as you can. Get them in. Every year there's a clock that ticks down to April 15th. Why have that monster in the closet? Get it done. The more stress you feel, the more you delay it, right?

The more stress is more mistakes. Stay up all night the night before. You don't want to do all that crap. Just get it done. Bypass all that. Do your taxes. Get them done. Even if you don't mail them yet, just get them done, right? sam owes you you certainly what are you heck what are you waiting for get it done

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and someone stealing what you've worked so hard for. Do you ever use public Wi-Fi? I'm talking about getting online at a coffee shop, a store, the airport, or even at home. Hackers can use a simple $100 device to mimic Wi-Fi, and with just a little bit of skills, they can take over your financial life. This means you may think you're on your bank's site or app or securely making that purchase online. But hackers could see and steal that information. That's why I trust CyberGhost VPN. CyberGhost thinks about cybercrime so you don't have to.

You can try it for free for seven days. Protect up to seven internet devices and keep all of your Internet connections secure. That's CyberGhost VPN. Download it today from your app store and be secure in seconds. thanks for joining us america open phones at at 888-825-5225. Joey is in Nevada. Hi, Joey. Welcome to the Dave Ramsey Show. Hey, thanks, Dave, for taking my call. Sure. What's up?

So my wife and I are in Baby Step 3B. We have about $16,000 saved towards a down payment. Way to go. And I also have, thank you, also have an inherited IRA. That's worth probably about $35,000 right now. And so my question is, would it be wise to just withdraw that amount and put it towards the down payment? Yes. Or would it be more wise to take that money out along with the R&Ds

and put that in, kind of like reinvest that down the line? No. It's not your retirement account. There are no penalties for taking it out only taxes and so it's a taxable account but it is not a penalized account now i would never cash out your own retirement account that is a uh that is penalized and taxed but this is a an inherited yes i would cash it out, pay the taxes, and put it in my down payment fund for sure. Because a paid-off home is one of the two elements we find in the typical millionaire that didn't inherit their money,

which, by the way, is 90-something percent of the millionaires did not inherit their money, based on the research we've done and the largest research study of millionaires ever done. And so guys like you and me that build some wealth, most of the time the first $1 to $5 million that you build in wealth is your house and your 401K. That's what we found, a paid-for house. And so I want you to get that house paid for. One step of that, of course, is to, um, is, uh, the, it starts with a down payment, the bigger the down payment, the less you got to pay off. So yeah, I'm using this money for that. Thank you. Seth is with us in North Carolina.

Hi, Seth. Welcome to the Dave Ramsey show. Hey Dave, how are you? Better than I deserve. What's up? Well, first, I wanted to thank you. I read your book about a year ago after I lost my job, and my wife and I were able to pay off $30,000 in debt in 10 months. I appreciate that. Way to go. Thanks. So my question to you is, now we're in Baby Step 3B,

and trying to figure out if I should sell what got us into the mess in the first place, which is my car. I'm wondering if that can help us jumpstart our savings into buying a house. So you obviously don't owe anything on it. No. So we own both our cars now. What's it worth? They're about $15,000. I did look it up yesterday. According to Kelly, it was like anywhere from $15,000 to $17,000 private party.

What's your household income? About $82,000 right now. Gross. And what would you buy if you sold your car, price-wise? I mean, I was looking. It's kind of hard right now looking but i was thinking probably somewhere somewhere around ten thousand dollar vehicle that so that only puts seven thousand dollars in your account yeah i know i wouldn't do that i wouldn't do that you wouldn't think so yeah

no not worth all the trouble you know seven thousand you make enough money you're in control you're being intentional you laid off thirty thousand bucks in debt already money, you're in control, you're being intentional, you laid off $30,000 in debt already, you're stepping, man. You're getting it done. And so the $7,000 is going to come due to those habits and you being in control and budgeting and you and your wife working together and setting and hitting goals and ringing the bell. That's going to come a lot faster than selling this car. This car is not a problem.

If it was worth $47,000 and you wanted to move down to $7,000 and put $40,000 against it, yeah, we'd probably talk about that. That might be fun. But, you know, you're just throwing a few dollars against it. I wouldn't do it for that. Okay, I got you. Well, I'm just trying to figure out ways to jumpstart it. You have jumpstarted it because you're freaking paying attention.

Proud of you. Thank you. I appreciate it. Well done. Open phones at 888-825-5225. Chris is in California. Hi, Chris. How are you?

Hi, Mr. Ansley. Thank you for taking my call. Sure. What's up? About three weeks ago, I found you you on YouTube and I'm kind of, you know, my husband and I have hit the ground running. I got your book, The Money Makeover, and I'm kind of reading through that. I am currently working a full-time job. My husband works three part-time jobs and we have two little ones. My question is, do you suggest I get a part-time job as well

to kind of help get the debt lowered faster, or should I just change my W-4 because I do get a pretty large tax return at the end of the year? Well, those are independent questions. You should change your W-4, period, automatically. That causes nothing but a little bit of effort because if you get a tax refund, all that means is you paid that much too much in taxes, and they give it back to you with

no interest after you left it up there all year. Okay. Now, Santa Claus doesn't live in D.C. No, he doesn't. Matter of fact, the antithesis of Santa Claus lives in D.C. The paradox opposites. Okay, anyway, now back to the other thing. What do you make at your full-time job? I make about $32,000 a year. And why does your husband not have a career? He is trying to start up his own business. Start a what? It's been a few years, his own business, his own massage therapy business. Okay, okay why is he having trouble doing that it's very competitive out here where we live um there's a lot of companies that do it too and a lot of independent contractors um so it's been a little bit hard but it has been kind of

what has kept us afloat because that that does bring the most cash in from his part. Okay. All right. Yeah, I want him to, here's my guess on that. The reason I ask that is I suspected something like that was in the offing. And I think the best probability of you guys adding substantial income to your household is not you working yet another job it's him getting this business working and he's a better massage therapist than he is marketer yeah and that's not unusual by the way there's nothing wrong with that that means he's good at his craft right but he needs to learn to sell and promote himself and develop some marketing techniques.

And so I want him reading articles by other massage therapists and people in the personal training business of how they grow their clientele. I want him reading books and articles at least an hour and a half a day starting today. He needs to learn how to sell himself and sell that service and build clientele and get referrals of everybody's friends that he already is doing their massage therapy right and he's not doing that he goes in does the job collects the money walks back out he has tried in the past he's um you know done social media has done done, like, kind of promotions. If you refer, I give you a free, you know, hour, and you pay the second one.

And he doesn't do that anymore? He does it on occasion. See what I mean? He sucks at it. He has to sell. He's not good at that. He's got to work on that because that's going to make your family more money than the two of you put together doing the stuff you're doing now.

He can make $50 or $60 a year doing that if he builds this up. Yeah. But he's going to have to get his butt in gear and learn how to sell himself, and that's what I'm saying. He's going to have to start reading and learning how to do that. I'm going to send you a copy of the book Entree Leadership. If you took a part-time job, what would you be making? Maybe $40,000.

It wouldn't be that much because it would just be part-time. So $8,000 a year, right? And you'd be working how many days? Maybe three days, three, four days. Yeah. If he worked that many days, he'd make three times that. Yeah. Yeah.

We got to get him in gear. That's a better answer than putting you out there. You guys are not afraid of work. You just got to get your working smarter. Hold on. I'm going to send you a copy of my book, Entree Leadership, for him on running his business. Okay? And it'll help you with that.

It's how we grew our business. But marketing himself, that's the key here. This is the Dave Ramsey Show. We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn to make connections,

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Thank you for joining us, America. We're so glad you're with us. Open phones at 888-825-5225. That's 888-825-5225. Andy is in Illinois. Hi, Andy. Welcome to The Dave Ramsey Show. Thanks, Dave.

Thank you for taking my call. Sure. What's up? About three months ago, my wife and I did a 1035 exchange from our whole life policies into fixed index universal policies of 125K each. We rolled about $7,600 of cash value into those new policies. We're paying about $190 a month for those. Now I'm having second thoughts as if we should have done that or can we use that money. So you did an exchange to protect the taxes on $7,600 and not even all of it was taxable? Yes. Yes.

What kind of fees did you pay to do that? I didn't pay any fees on it. I just got a tax form at tax time that said I had the income on it that was not taxable. So why would the $7,600 be taxable? Well, I don't think it's taxable. It's just that's what the cash value that I moved from the whole policy is. Yeah, I got it. I mean, the only reason to do a rollover of the cash value is if the cash value is taxable,

and it almost never is because your basis in a rip-off whole life policy is the total of the premiums you paid in. You paid in more than $7,600. Right. So you can close this whole thing down and have no tax event, can't you? Yeah. I just, I know you've been talking about the whole life insurance, not a good idea, just go with term. No, I'm just saying if you wanted to go that way and you said, okay, I'm going to have some inexpensive term insurance, I'm going to do investing of my $7,600 and my $190 a month into good investments.

You don't have a tax event if you do that, do you? No. My only concern is the surrender charges is about $6,000. On the $7,600? Yes. Good Lord. I think I got into something that maybe I shouldn't have. Yeah, I think you got screwed.

You got screwed. Yeah, so I'm wondering if it's worth taking that loss to go forward. It is, because the problem is that the money, it's the $200 a month that you're losing now. $190 a month is going into crap, and you've already established that it's crap, and yet we're putting more money in it. And so that's the downside. It's not what the $7,600 could become.

It's what that $2,400 a year is becoming, and that turns into money fast. That's a lot of money. What do you make a year? Our income for the home is $130,000 a year. Yeah. I thought you were making good money. So really, honestly, the truth is at the end of the day, 20 years from today, if we set fire in the middle of your kitchen table to $2,400 a year

and we set fire in the middle of your kitchen table to $2,400 a year, and we set fire in the middle of the kitchen table to $7,600 once, you still are going to be able to build wealth. And here's the good news. Here's the good news. We're only setting fire to one of them. Yeah. To free up the other one, right? Yeah.

Yeah. I mean, because the problem is that you're adding more to an investment that's not going to do well and has extremely high fees. Okay. That's bigger problem than the dad gum, man. I hate it though. It, it, it doesn't turn your stomach to lose that six grand college things. That's the part that I, I, I understand what you're saying.

I bought a rip off when I was a kid in my twenties, that way I learned all're saying. I bought a ripoff when I was a kid in my 20s. The way I learned all this stuff was I bought a ripoff. Man, I got screwed so bad. Northwestern Mutual, Whole Life, which is like one of the worst whole life policies out there. I mean, it's the worst math on the thing. And I bought the thing, and I was dumping. I didn't have a lot of money. We were making like $30,000, $40,000 bucks a year and I'm dumping almost 200 bucks a month.

This is in 1980s early, right? Almost 200 bucks a month into this thing, but with the promise it was going to build cash value. And so I was overpaying for my insurance, like 10 X, 12 X in order to build this cash value. And then when I canceled the thing two years in, I had a zero cash value because for the first three years they keep all your money as fees and so i had that same experience of you know getting a little getting a little throw up in your mouth you know yeah definitely that's kind of what i'm going through yeah and it's more intellectual than it is actually mathematical but you know the good news is i i'm now, so that's almost 40 years ago.

And you know what? The good news is I've never done it again. Yeah, that's good. Yeah, the memory was thorough. So and I talked to a whole bunch of other people out getting ripped off, too. So, yeah, I understand the emotion is my point point and i don't blame you for that uh good news is six thousand bucks in your world's not that much money you're going to be okay and it's better to stop doing bad investing uh from an intellectual standpoint a mental health

standpoint and a financial standpoint because you know you're getting screwed you don't want to just keep that putting money in that pocket there's a hole in the pocket. You know, it's that simple. All right. Mike's with us. Mike's in Kansas. Hey, Mike, how are you? Good. How are you, sir? Better than I deserve. What's up? Hey, uh, common play refinancing my home with my wife. We're at 4.95 on a 20 year and we've got quoted 2.95 on a 15. Um. Our balance is only 106 on the mortgage, and we have a long, our goal is to actually pay it off in the next three years anyway. Mm-hmm.

So what's the closing cost quote? Somewhere probably 3,000 to 4,000, but we get 1,000 of that back after payoffs if we went through this lender. So what are we going to call it two thousand net yes okay you're going to save two thousand in one year yes two percent on a hundred and two thousand is two thousand bucks right yes sir so you break even after a year everything after that's gravy if it's going to take you three years you're going to save two percent on the balance during that three years now granted it's not going to be a hundred thousand because you're

going to be paying it off quick so you're saving two percent on maybe let's say let's call it 50,000 okay and so that's a thousand bucks a year so it's probably going to it's probably going to gain you a couple of grand if you pay the house off in three years, if you refinance it, and your closing costs are two grand net. Okay. You see how I did that? Yes. But if we don't pay it off, we're still ahead. I mean, we would be, for some reason, if our goal doesn't happen.

Yeah, the longer you're in debt, the more it makes sense. Okay. Because you're saving 2% the longer you're in debt now we don't want to use that justification to stay in debt but but you know the math in terms of the way the math works the longer you're in debt you're saving two percent on whatever that balance is after you broke even on the closing costs and you'll break even in the closing costs in 12 months is what we're saying okay so yeah i'm probably going to do this one if the numbers you've got are solid um you know if you make

sure you dial it in real careful and that it truly is two thousand dollars out of pocket and that you truly are doing 4.9 over 2.9 and you're truly putting it on a 15 year and there's no prepayment penalty it's a standard mortgage a fannie mae mortgage or something along those lines or credit union loan or whatever it is i don't care if it's a portfolio loan or not but um the whole point being that uh if you get those numbers dialed in the way we discuss them here it makes sense now let's say it takes you two years to break even i probably wouldn't do that deal then because i think you're probably going to be out of debt in three, maybe four,

and it starts to be real borderline at that point as to whether it's worth all this trouble. But the whole thing is not going to be worth much more than $2,000 or $3,000 net savings to you if you do it exactly the way we talked about. It's not going to be worth a ton of money, but it's nice. I mean, you hand me a check for two grand, I'll cash it. I can promise you. There you go. Hey, thank you for the call, man.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Common sense for your dollars and cents. This is the Dave Ramsey Show. Thank you. if you're selling a house listen up the surest way to not sell your house for what it's worth under sell it sell it for too cheap is to let it get stale sitting on the market for too long. If your listing goes stale, it's basically like driving down the highway with the windows rolled down, throwing out fistfuls of $100 bills. Do not let this happen. And the main difference between

a house that sits on the market and a house that actually sells is a real estate agent who knows what the flip they're doing and cares about keeping the money in your pocket. And this starts with you knowing the value of a good real estate agent. It's worth it to find an experienced agent who sells lots of houses. Real estate is such a weird world. I mean, if you went in with a, if you had a $150,000 car, you were driving a Maserati, and you took it into the mechanic, and he says, you know,

I've only worked on two Maseratis this year. You would get in your car and leave. I just got my license working on maseratis you would say no you are not touching my 150 000 car but in real estate we go well you know joan's son just got his license over at the church and you list your largest freaking asset with this guy who doesn't know what the flip he's doing that's nuts you wouldn't do that with your maserati don't do it with your house get one of the get you want the best possible maserati mechanic to work on your 150 000 car you don't want a beginner You don't want somebody that sees one twice a year or five times a year. You want somebody that has a Maserati under the hood every day.

You want somebody that knows what they're doing, right? This is why we endorse only experienced top agents who are producing high protein, high octane in our ELP program. DaveRamsey.com. Click on ELP for real estate or DaveRamsey.com slash agent. You can find the proper Maserati mechanic in your neighborhood. Jan is with us. Jan is in California. Hi, Jan. Welcome to the Dave Ramsey Show. How are you doing, Dave? Better than I deserve. What's up? so my economic dilemma is i have what i have been told is a outstanding unresolved debt with a revolving credit card company and i can name names if you want or not if you don't that's fine who is

it uh capital one okay and so you you owe them money and you haven't paid them properly how much money well here's well here's the deal. I did a debt consolidation with them, a low-interest card, you know, for the life of the arrangement deal with, you know, this will never go up and yada, yada. Turn your high interest into low interest. And I did all that with good faith. And then gradually over time, they started jacking up the interest rates to 19.74% from 2.99%.

You mean Capital One lied? Shocking! Okay. So, anyway, so I called them on their junk every time, and I said, look, what are you doing here? We're moving in the wrong direction. And I gave him several opportunities along the way to renegotiate the contract with me and say, look, let's move it to something else. Let's keep the interest rate at a reasonable level. No, sir. No, sir. This is a districtly, a business arrangement decision has nothing personal. You know, we still love you, but you know, bend over. And so anyway, I just got to

the point where I said, look, you know what? what, I'm going to make a personal business decision. And the decision is I'm not paying you anymore. I'm done. And so $10,000 outstanding balance ballooned into $14,000 and changed with late fees and fines and all this stuff. And then they finally froze it. And then I, again, I gave them last best chance of negotiation. And I said, look, you know, what can we do to resolve this thing? And they said, well, you can make monthly payments of $1,300 a month until the full balance is paid off, or you can give us a lump sum payment of $10,000. And I wasn't able to do either of those.

And I said, look, that doesn't work for me. Is there anything else? And they said, absolutely not. So how long ago was that? Approximately two years ago. Okay okay and so where do we stand today so it's in collections with a collections agency and it's been outstanding uh for like 39 months yeah and i'm being told that it will take 39 months of our resolve that this afternoon for it to be removed from my credit report and get my credit rating up again. So I just want to resolve the thing, but I'm at an impasse with them,

and they're not open-minded. They're just giving me one hard option, and that's it. What's the hard option they're giving you? It's the $1,300 a month until it's paid off. Still? Yeah, that's it. The collection agency didn't. They haven't been paid in 39 months

and that's their best offer yes okay yes all right let me tell you what what what what's your advice 39 month old credit card debt will usually settle for around 20 cents on the dollar okay perfect and that's of the existing balance current including all the crap so um four thousand dollars will probably settle it cash cash on the barrelhead, but you're probably going to have to argue with them. And as you have already discovered, credit card collectors are stupid people. Yes. Because if they could get a good job, they'd be working somewhere else.

Correct. And they also lie, as you've already discovered from Capital One. Yes. Okay, so you have to treat this like you're a snake handler and not get bit okay and you just you just pound them and pound them and pound them and pound them and it's like i'm not gonna listen to you be abusive you're getting ready to talk to a dial tone you idiot okay now listen listen fool if you guys want money it's real simple there's two things you're gonna do you going to give me the settlement in writing,

and you're not having electronic access to my checking account. Because they are crooks. They will clean out your checking account. You cannot give them access to it. Okay, so you send a wire. You send a certified mail. You have a prepaid debit card with nothing else on the card except the exact amount you settled for.

And you negotiate this to about $4,000. In writing, no access to your checking account. Got it? Yes, and can I also stipulate with them that once the dispute is resolved, that all records of it be removed from my credit rating immediately? Very difficult to pull off. Okay, okay. Because they are not supposed to do that. They're supposed to, under the agreement with the credit bureau report what occurred and what occurred was you haven't paid

your bill in 39 months okay and now sometimes you can talk them into it but it's it's on their part it's unethical okay and let me ask you something, one final question. If I go forward and I need to establish some sort of business arrangement with a utility company or a landlord or something, is that mark enough to knock the wind out of my sails? Is that enough to throw my train off the tracks? No, not at all. Okay. Because it's a worse mark today because it's a bad debt unpaid. When it becomes a bad debt settled, that means you've made good on it, right? Correct.

And so it does positively affect you, and it will remain. All credit remains on your credit bureau report, good or bad, for seven years. Okay. Except for a Chapter 7 bankruptcy bankruptcy which stays on 10 years but this one thing is not going to keep you from living your life it's it's the only thing ever in the entirety of my have you learned your lessons dealing with credit cards yes yes good good okay yes all right if that's all it costs you then you're going to be okay you'll be all right it's not a costs you, then you're going to be okay. You'll be all right.

It's a horrible lesson to have to learn, a horrible way to have to learn it, but if it's thorough and you never go back, it's probably worth it. Settle it in writing. No electronic access to your checking account. If it's not in writing, it didn't happen. An email is fine. Keep a hard copy of the email, a hard copy of the payment receipt in a file for the rest of your life because these people are incompetent and they're crooked. You can tell a credit card collector is lying if their mouth is moving. They're scum. Thanks for calling. A guy hit me

on social media the other day. I don't like it when you say credit card collectors are scum. I'm a credit card collector are scum i'm a credit card collector i'm like well dude you ought to get a better job then then you wouldn't be scum you know because the industry is they they break federal law there's a federal law called the federal fair debt collection practices act the way that you're supposed to interact with the consumer when they owe you money and they break that law on a daily basis. And they lie. We work with them all the time.

It's the scum of the world, man. So the best way is never have a credit card and never have credit card debt, and then you have to deal with all this stuff. Some of you think I'm being melodramatic. Well, you haven't talked to American Express and Discover and Capital One like we have. This is The Dave Ramsey Show. Hey, guys, this is Kelly, associate producer of The Dave Ramsey Show. Did you know over 16 million people listen to The Dave Ramsey Show every week? And a lot of those people listen on one of our 600-plus radio stations across the country.

To find a station near you, head to DaveRamsey.com slash show. week. And a lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.