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Steve Stewart: There’s Only Bad Debt & Not So Bad Debt

Steve Stewart: There’s Only Bad Debt & Not So Bad Debt

In a past episode I talked to four industry experts about good debt vs. bad debt. Having listened to that episode, my guest today argues that there is no such thing as good debt, there is only bad debt and not so bad debt. I’m joined by Steve Stewart, a Financial Wellness Coach and podcast host from St. Louis, Missouri. Steve’s opinion of debt is that

…we’ve made it almost a necessary evil. My opinion of debt is that we made it too easy for someone to get into it; and I don’t mean just a little bit. I mean non-mortgage debt levels on cars, credit cards, our children’s education. These debt levels can grow to be two, three, even four times our annual salary.

The History of Debt

To explain why all debt is bad, Steve looks at the history of debt that has got us to this point. Where once we only borrowed to purchase a home, it’s now extremely easy to obtain credit and fall into a debt trap. For example, Steve points that

if you think about the history of credit cards and, you know, there was IOUs before that of course, but then we got into these department store credit cards. They’re proprietary; you can only use them at those stores. But then these diner club cards came out in the 1950s, at least in the United States and that opened up to using it at multiple places…

From there, in 1957 MasterCard offered the option to retain a revolving balance and the opportunity to take on more and more debt progressed to what it is today.

Today, we perceive debt as normal. However, Steve’s reminder that the kind of debt levels we carry were not commonplace 100 years ago, demonstrates that consumer debt isn’t normal.

Steve explains that when it comes to a discussion about “good debt” he’d ask that person what their favourite debt is. Although certain kinds of debt appreciate in value, like a home, Steve argues that

it’s kind of like asking someone, what’s your favourite illness? There’s really not a good answer there.

Your Credit Score Is A Distraction

Similar to believing that debt is normal, it’s commonplace to believe that if you have a high credit score your finances are in order and you’re an all around better human being. We’ve said it before that your credit score should not be the goal when it comes to getting out of debt, and Steve agrees. He points out that

credit scores really are only necessary if you plan to borrow money.

For those focused on getting out of debt, a high credit score should not be the priority. He explains that it’s possible to maintain a high credit score by simply paying your bills on time. So this means that if you simply keep up with the minimum payments, your credit score will not be affected, but that doesn’t change your debt level.

Create a Debt Free Timeline

If you’re focused on finding a debt solution or staying out of debt, it’s important to assess your situation. I ask Steve whether he’s making a blanket statement that people should never borrow and although he advocates that all debt is bad, he acknowledges that there are different timelines for debt. Often, taking on debt is necessary, such as taking out a car loan to get to work every day, which in turn pays the bills. Instead, he advocates for research and understanding where you’re at in life to be able to make decisions about your debt. Having a debt free day is one way that Steve and his family have worked toward becoming debt free and he suggests that “everybody’s got to learn where they’re at and then take those steps toward reaching that debt free day at the end of the timeline”.

Steve’s Debt Relief Advice: “Pay Attention”

Being a Financial Wellness Coach and having had debt in the past, I ask Steve what his number one piece of advice would be for listeners who are struggling with their debt. His response: pay attention. Steve’s motto is that people should “pay attention, not interest” and he advises that if you pay attention to your spending habits, you can work toward getting out of debt and becoming successful with money.

So, my best tip is to pay attention to your spending and you will make every dollar more powerful, you’ll discover ways to cut costs and you’ll find margin in your budget for saving.

Listen to the full podcast for more information about:

  • Steve’s rant about the use of credit cards;
  • The problem with credit card reward systems; and
  • The power of paying cash.

Read the full transcript below.

Resources Mentioned in the Show:

FULL TRANSCRIPT show #63 with Steve Stewart

bad debt vs good debt

Doug Hoyes: As regular listeners know, my goal here on Debt Free in 30 is to interview a wide variety of guests to get their perspective on how to become debt free and how to live debt free. Well, that’s what we’re going to do today. Let’s get started. Who are you and what do you do?

Steve Stewart:  Well, Doug thanks for having me on the show, I’m a fan. And I just want to let you know that this has been a passion of mine for the past few years. My name is Steve Stewart. I’m a Financial Wellness Coach based out of St. Louis, Missouri. This has become my livelihood in teaching people how money really works.

Doug Hoyes: And where can people find you right off the bat?

Steve Stewart:  Everything that they want to find out about me is at ‘Cause the guy that owns the .com has owned it since 1997 and I don’t think I’m going to get it anytime soon.

Doug Hoyes: Bummer, you can’t get it from him. So, you had a podcast that ran for, what was it a couple of hundred episodes? It was a long time.

Steve Stewart:  It was 200 episodes.

Doug Hoyes: It was 200 episodes, which you’ve now retired and just started a brand new podcast at end of October, beginning of November. Tell us the title of that new podcast and what it’s all about.

Steve Stewart:  Yeah the podcast is called No Debt, No Credit, No Problems. It still has the underlying basis of everything I’ve believed in with money, is that you can live with no debt. You don’t even have to worry about credit and you’re not going to have any problems. As long as we pay attention to what we’re doing, we’re going to turn out just okay.

And of course there’s other things we can do to improve our lives and I’m hoping that the podcast will spotlight some things like new products that are coming out. There’s always new stuff coming out. So, I’m going to have interviews with people who are coming out with new services, maybe authors with new books with ideas. I’m also going to have a regular occurring guy here in the St. Louis area who’s just got this great humour around the subject of a very unhumorous topic, which is taxes. And then I’m also going to be featuring in a segment from my favourite author and I’ve gotten his permission to use content and his name’s Tom Corley, he’s the author of a book called Rich Habits and he’s all about changing our habits and how that can help us to grow wealth just by making these little incremental changes along the way.

Doug Hoyes: Excellent. And well I think the best way to make changes in most areas of your life is  little changes because little changes add up to make big things. So, well okay let’s get right into it. You mentioned the word debt, obviously that’s been a focus of a bunch of the stuff that you’ve done in the past and that’s going to be part of what you’re going to do in the future. So, tell me right off the bat what’s your opinion of debt.

Steve Stewart:  I think we’ve made it almost a necessary evil. [laughter] My opinion of debt is that we made it too easy for someone to get into it. And I don’t mean just a little bit. I mean non-mortgage debt levels on cars, credit cards, our children’s education, these debt levels can grow to be two, three even four times our annual salary.

And if you think about the history of debt, at least in the past 100 years, you know, we used to only borrow money on a house, but then came the automobile and we started borrowing on that because it’s a high ticket item. But nowadays it’s just super easy to fall victim to credit card debt. And, you know, how did this credit card come into play? You think about the history of credit cards and, you know, there was IOU’s before that, of course. But then we got into these department store credit cards; they’re preparatory – you can only use them at those stores. But then these diner club cards came out at least in the 1950’s, at least in the United States, and that opened it up to using it at multiple places which then progression takes on from there and MasterCard in 1957 began to offer the option for retaining a revolving balance. And that was really the beginning of the problem with debt.

We’ve now made it so easy in this technology savvy world to buy anything instantly, have it delivered our front door. It’s just too easy to even pay for stuff with our watches like Dick Tracy. And so, we’re not really spending enough time on the thinking part of what we’re going to buy. We just go ahead and say I want it, I want it now, and that’s the culture we’re in today. So, my opinion of debt is that it’s not a good thing because we over abuse it.

Doug Hoyes: Yeah and I guess we don’t really think about the history of it. But 100 years ago, there was no such thing as a credit card. And as you say a lot of them got started in the 50’s. But they really didn’t become prevalent until, I don’t know, the 70’s probably and with obviously Visa and MasterCard being the huge ones now.

If we think back to our parents and, you know, you and I are both roughly the same age, over 20, that’s all we’ll cop to here, you know, our parents and certainly our grandparents weren’t carrying around five credit cards in their wallet. It just wasn’t something that they had, which is why today people perceive it as being a normal thing. Well, it really isn’t normal. So, is there – you mentioned a couple of examples of debt, a house being one of them, a mortgage, is there a difference? Is there good debt? Is there bad debt or is it all in the same category for you?

Steve Stewart:  No, my stance is there is no such thing as good debt. There’s only bad debt and not so bad debt. Let me explain that. You know one can argue that borrowing money at lower interest rates to invest for higher returns is good debt, but the definition of debt is that something is owed or it’s the state of owing money. And I would ask that person who says that there’s good debt, what’s your favourite debt? And I think then people would then about it twice how they would answer that. And it’s kind of like asking someone what’s your favourite illness. There’s really not a good answer there.

And then taking it biblically, the bible says that in Proverbs 22:7 that the rich rules over the poor and the borrower is slave to the lender. Try borrowing money from your parents and not feeling weird about it ’cause I did that about 20 years ago and it still feels weird that I did that. And then, also, notice in the scripture it says that the borrower is slave to the lender. It didn’t say that the borrower was indebted or inconvenienced. It didn’t say that we were a servant or that we were a steward, it says that we’re a slave.

And so, in America and I can assume it’s pretty much the same in Canada, people fought their way out of various kinds of slavery; racial slavery that caused the civil war in the United States, it’s the most extreme example. But most people feel like slaves to their jobs or they’re in a toxic relationship and they just can’t see their way out of it. I’ve never found a positive form of slavery, and that’s how I feel about debt. So, there’s no such thing as good debt, there’s only bad debt and not so bad debt.

Doug Hoyes: Well, and I agree with you. And I don’t think anybody in Canada or the U.S loves their banker. But okay, so let’s assume you’re right, debt is bad. And obviously I’m not a big fan of debt myself, that’s why this show is called Debt Free in 30. But let’s say I want to buy a house and let’s say I assume that’s actually a good thing to do and you can I could that debate. But let’s take it as a given that it’s a good thing to have. So, in Toronto for example right now the average house price is a million bucks.

Steve Stewart:  Wow.

Doug Hoyes: I know. And, you know, places like Vancouver and obviously if you go to places like New York or California they’re pretty huge and I’m sure St. Louis isn’t cheap, it’s a big city as well. So, how am I supposed to buy a house without borrowing money to do it?

Steve Stewart:  Well, if you have the money you can pay cash for it. Now I haven’t done that myself. Obviously, that’s a difficult thing to do. But obviously it would make things a lot simpler, the process goes a lot faster, you could actually close on a house sooner if you have the money. But if you don’t have a million dollars, and that is a lot of money, you know, I understand the majority of people are not going to be able to pay cash for a house. I get that. So, I don’t disagree with taking out a 15 year mortgage if the monthly payment is a reasonable amount of take home pay.

It’s again, pointing back to the easy of credit, that we’re able to qualify for these big – I don’t know what it’s like in Canada but I know here you can pre-quality for a mortgage and the calculation can throw you up to 50% of your take home pay. And I don’t know anybody who can make that enough – well there’s some people, but there’s a lot of people who if you take 50% of our income and you put it towards a mortgage, the taxes, you know all the escrow stuff, you’re not going to have much money to do anything else.

So, you can buy a home without a mortgage if you had the cash, if you don’t and you’ve done the calculation and you figure out that it’s better to buy than to rent and we can take a whole other discussion off of that, then, you know, just make sure that it’s reasonable. And remember you’re not going to be in that house forever. This could be a starter home. This could be the first step towards getting toward getting to that dream home. But it is just a house and a lot of it turns out to be what you make of it. Don’t get yourself into a situation that you’re stuck because once you sign onto a mortgage, that is by definition a very long-term debt. You won’t be able to get out of that.

Doug Hoyes: Now you said that you do have a mortgage yourself.

Steve Stewart:  Actually I have about one month left. We’re going to be done by Christmas.

Doug Hoyes: Okay, one month left. So, you’re almost done but you have obviously borrowed to purchase your house. So, doesn’t that make you a bit of a hypocrite, then? Saying well debt is bad, but I borrowed to buy a house, where do you draw the line on that?

Steve Stewart:  Well, I think it’s a good lesson to learn that I’ve had debt and I realize the other side of it. If I just came in and said debt is bad, debt is bad, but I’ve never taken out a loan before, you know, is that person going to have credibility? So, what I have realized is, and this has been an eight year process; eight years ago is when my wife and I decided we’re going to get on a budget, we’re going to be purposeful with our spending. We started focusing all our extra income towards our consumer debt. We knocked that stuff out and then we started saving for retirement, our daughter’s future and now we’re paying off the house early. So, is it a hypocrite to have had debt and now say, hey I’ve been there and it’s not a place to go? I don’t think so, not one bit.

Doug Hoyes: So, let’s say I’ve invented this time machine thingy and you can get into this box with your wife and family and go back eight years, 15 years, whatever, whenever you bought the first house for the first time. Would you have done things differently?

Steve Stewart:  I’d have to say yes it’s more of a technicality. I found out a couple of years ago – I was ignorant to a lot of this stuff when I first got married; my wife and I got married in the year 2000. We bought the house in 2000 and we bought it on a five year arm. And I didn’t know what it was, it just was what the banker said was a good deal at the time ’cause interest rates were higher, the terms were good and we figured we could refinance in five years. Thank goodness that we able to refinance and we were able to get a better rate. So, we refinanced and of course that pushed off our debt free date. Now we’re able to pay it off early because we’ve been focusing all the extra dollars on that. But your question was, again, what was your question?

Doug Hoyes: Yeah so if it’s the year 2000, you’ve just gotten married and you and your wife are going to buy a house, obviously you couldn’t buy that same house for cash ’cause it cost more than the money you had in your jeans, so going back to 2000, would you have waited, save a bunch of money, perhaps bought a smaller house five years in the future or would you have done what you did?

Steve Stewart:  If we were able to jump back in time I think what we would have done is focus more on getting that mortgage structured right, and then of course we still lived with credit cards back then, we had car loans up until 2006 so we may have had different purchase after that. Again, this is looking back seven years – seven or eight years to what we’ve done now. Having bought the house back then we probably would have looked at the price a little bit differently. We may have chosen a different house. But this was within out reasonable price range and I don’t think we would have changed too much. It’s just I think we would have looked at the terms of the deal a little bit different. And going forward we would have made different choices along the way.

So, I’d say 15 years ago when we bought the house, that’s when I’d want the time machine to stop, be able to reset the whole thing and we would obviously be in a much better financial situation than we even are now.

Doug Hoyes: Yeah ’cause you wouldn’t have had to pay all that interest for all those years. So, let’s explore this a little bit further. So, let me tell you the story of some guy who can get a really good job but it’s in the next town over, you know, 25 minutes away, he can’t ride his bike there ’cause he lives and either St. Louis or anywhere in Canada where the snow comes down. There is no subway; there is no bus ’cause he has to be there at 2 o’clock in the morning. He needs a car. And he needs to have a car that is at least reliable enough to get him there. It doesn’t have to be a brand new car it has to be worth at least $5,000. And he doesn’t have $5,000, he’s only got two saved. He has to go out and borrow the other three to get this car, which will dramatically increase his earning power. Is that something that he should do or should not do? ‘Cause again he’s taking on debt.

Steve Stewart:  Well, you’re asking the should question. So, I guess that’s going to depend on the person’s beliefs. While I would warn them about the debt, if they choose that they’re going to be able to handle this amount of debt, we’ve got to then think about what could go wrong? Could we handle what goes wrong? And when something goes wrong, you know, are we ready to take it head on?

We saw back in 2008, 2009, at least here in the States, a lot of people lost their jobs. They started losing their houses ’cause they didn’t have the money to pay for their mortgages; obviously the cars also went to the wayside. If the guy’s going to borrow money for the car I would want them to borrow as little as possible and focus on getting it paid off; committing to no more borrowing of money so they can take all the extra dollars they have to pay off that car. Because once the car’s paid off, their cash flow improves, if something were to happen in the household where they lose a job, they don’t have to lose their car in the middle of it. And they also have a little bit of savings, I’m hoping, that they’ll be able to float until they get the new job.

Doug Hoyes: Yeah and I think what you’re really saying is you got to stress test it, which of course is what got all the banks into trouble in 2008 and so on. But okay if I do finance this car and if my income gets cut back a little bit, am I totally pooched or you know what? The payments only a couple of hundred bucks a month, I’ve got a little bit in my emergency savings fund I can get through till I get my next job. And I guess that helps make the decision, a loan payment on a $3,000 loan to buy a used car is a lot different than a loan payment on a $50,000 car I would assume.

And so, you know, you’re not making a blank statement you should never borrow. You’re saying well look at all the alternatives and look at what can go wrong if you do. Is that an accurate summary of what you’re saying?

Steve Stewart:  Yes. Because I believe that everybody’s coming onboard with this idea at a different time of their lives. When I first came on board with the idea of being debt free, that someday I could be debt free, we had debt. We had a $12,000 car loan, maybe $2,000, $3,000 of consumer debt, other than that, we were in a different place than somebody who suddenly found themselves out of jobs and couldn’t pay the existing credit card they already had, couldn’t pay the car loan, couldn’t make the house payment. They’re on a completely different piece of the timeline. So, everybody’s got to learn where they’re at and then take those steps forward to reaching that debt free day at the end of the timeline.

Doug Hoyes: So, let me throw another concept at you, then. Credit cards you’re obviously not a fan of, interest rates are high, I kind of get all that. But what about the guy who has credit cards and gets all the points on them, the reward points or the cash back or whatever. You know I pay it off at the end of every month so it’s not really debt. I’m paying it off every month, is there really any problem with that?

Steve Stewart:  You really don’t want me to go into this do you? [laughter]

Doug Hoyes: Give me a bit of a rant here.

Steve Stewart:  Well, I need to warn the listener then that what they’re about to hear will either A, make them come to the realization that they’ll need to stop using credit cards for the rewards or B, continue collecting the rewards, but they’re going to be conflicted by the knowledge that I’m about to share. So, maybe they can skip ahead a couple of minutes while I answer your question. And this isn’t going to be about how spending money with plastic causes us to spend 10 to 18% more money. We all know that swiping is a lot less painful than paying with cash so we end up spending a lot more on credit.

But the average processing fee for a merchant that they pay on $100 charge is 2.65%. So, you figure $2.65 that goes right out the door. This is money that is not collected by the store or the plumber or the friendly financial coach that you’re paying to help you with your debt, this is overhead that’s paid by the merchant. The listeners might be familiar with PayPal and that 2.9% plus fee that they charge when you collect money from customers it’s kind of the same thing. It costs money to go through the middle man and that’s what a credit card is.

And then on top of that when you use a reward card, you’re increasing the charge, that swipe fee, to 1.5% more. So, that brings us to about 4% that the merchant has to pay to process a credit card transaction. So, they have two choices, the merchant either loses profit, the profit margin goes down, or they raise prices to cover the cost. What do you think they’re going to do? They’re going to raise the price of the overhead, to cover the overhead.

Now when I’m using a pin number when I’m purchasing with my debit card, the merchant actually saves 1.1% off of that average swipe fee, meaning it only costs them about $1.55 for every $100 in processing instead of four bucks. So, it’s for that reason I prefer to use cash when it makes sense, like buying small things outside the house, or pay with my debit card with my pin number where it makes sense, such as we cover the key pad when we enter out pin numbers at the gas pump or in grocery store.

And I can’t always do that. Sometimes the merchant doesn’t give me the choice and there really is no way to use a pin number online. But at least I feel better that I’m not causing prices to inflate because 4% is being sucked out of the economy and being sent to a credit card company on the east coast. I can’t play that game. The rewards points are being paid by somebody and it’s not necessarily the credit card company, they’re passing those expenses onto the merchant who raises the prices and those rewards are paid for, the credit card company collects those rewards, you redeem them and it’s coming off the backs of the consumers. So, I can’t play that game.

Doug Hoyes: And I can’t argue with your math. The math is the same pretty much the same in Canada that you’ve talked about. But if every other consumer is using their credit card, the prices are going to be the same if I’m the only guy paying cash well, I’m the same as the guy paying credit, you know, do I worry about what everyone else is doing or do I look out for my own best interest.

Steve Stewart:  It’s up to you. It’s a choice you have to make yourself. But again, I’ve taken the stance that if I’m teaching people how to get out of debt and then I turn around and say well use credit cards responsibly for the rewards and that’s on the back of the other consumer who’s paying interest or late fees, I just – it’s against my morals and my belief system. So, I can’t do that. And I’m not trying to guilt anybody out of doing that, you know, getting rewards and stuff, but it just – there are good rewards programs out there, it just is not the credit card industry ‘case you think about what they’re – what are they creating?

Doug Hoyes: Debt.

Steve Stewart:  Yeah. They’re selling us money at a premium. Whereas if I go to a reward program – if I can take a minute and give you an example – there’s a gas station called Speedway; they’ve got a chain out in Midwest United States. And, you know, if the gas on one side of the street is the exact same but Speedway has a reward’s program, I’ll go use them. This is not a credit card; it’s not even a pre-paid debit card. This is just like a library card. You can go use it and it tracks your purchases and they give you points back and you collect the points and you get a reward. I’m okay with that because it’s not coming out of the pockets of other people. It’s a marketing tool to get people to come to their store, not their competitors.

Doug Hoyes: Understood. So, I guess to sum up, there are a number of reasons not to use credit cards just because you want to get the rewards or the points. Obviously, there’s the moral dilemma about rising costs for the merchant. But you hit on another reason at the beginning where you said that if you’re using credit cards you’re likely to spend more than if you pay with cash because credit cards are so convenient. And of course if you don’t pay them in full every month, you’re paying huge interest, which is the biggest problem with credit cards. So, well that’s some great practical advice, Steve. Thanks for being with us today.

Steve Stewart:  Thank you, I appreciate it.

Doug Hoyes: Welcome back. It’s time for the Let’s Get Started segment here on Debt Free in 30. My guest today is Steve Stewart. We’ve talked about a number of issues. And Steve I want to pick your brain on two more. First of all, credit scores. We all believe that having a high credit score is very important. You’re a better human being if you have a high credit score. Tell me why I’m wrong to think that way.

Steve Stewart:  [laughter] Well, credit scores really are only necessary if you plan to borrow money. And I teach people the benefits of getting out of debt and saving up for things such as cars, vacations, replacing the windows in a 27 year old house like we just did. And I personally despise all the rhetoric about building FICO scores. It’s a distraction.

And what I found to be true is this, that you can – and you can all test me on this – you will have a good credit score and qualify for good interest rates if you simply pay your bills and debts on time. That’s really all it takes. You don’t have to go out and borrow a bunch of money and take out a bunch of different credit lines and two or three credit cards and this whole 30% utilization rate stuff, that’s – it’s all more complicated than the payoff. Just pay your debts and bills on time and you’ll have a good credit score.

And if you follow my teachings of saving your money for larger purchases, then even if you don’t quite save enough money, like the example I used earlier in the show, borrowing three to five thousand dollars for a car, that remaining balance that we end up financing, even if we pay a higher interest rate, 1, 2, 3%, it’s not going to be a whole lot more money, not in net. And that’s because we reduced the amount that we borrowed. Even if it’s a higher interest rate, we’re going to get out of it sooner and we’ll be better off because of it.

Doug Hoyes: Well, and as you say the credit score only matters if you’re borrowing money. So, if I’m going to out and buy something for cash, it’s a completely irrelevant metric. And I’ve always said that the credit score is a way for the banks to know if they should lend you more money. It’s not for your benefit; it’s for their benefit to put you into more debt.

So, let’s talk about debt then. You’ve had debt in the past, you’re, you know, on the verge of being completely debt free, mortgages, the whole bit. So, what’s your advice to somebody who is listening to us today who either has a little bit or a lot, well I guess if they’ve got a massive amount of debt and their wages are being garnisheed, they’re coming to see me, but somebody who’s got a lot of debt, but it’s, you know, the situation is still salvageable; what is the thought process they should be going through to get out of debt?

Steve Stewart:  Well, I think this is the best advice that can be summed up for most people in the world and that’s what I’ve learned in the last few years is to pay attention. My motto is pay attention and not interest. If you simply pay attention to your spending, then you will spend it more wisely. It’s not bad to spend money. It’s just sometimes we spend money in irrational ways. We buy things ’cause we want to and that’s not necessarily helping with reaching our goals. Paying attention, it’s more important than talent or intelligence. I’ve met hundreds of people, they’re not professors, they’re not scholars, they’re just good people who work hard and they’re successful with money. And there’s some who are intelligent, who aren’t successful with money. And I found that when you pay attention, not just with finances but with your marriage, your career, what you pay attention to is what you improve and that’s going to help you reach those goals that you have.

So, my best tip is to pay attention to your spending and you will make every dollar more powerful, you’ll discover ways to cut costs and you’ll find margin in your budget for saving money.

Doug Hoyes: And I guess that kind of goes back to what we were talking about with credit cards versus cash, if you have to pay cash for something, that forces you to pay attention to it. I have to go to the bank, the bank machine, to take out the $100 that I’m going to spend. I have to open my wallet. I have to actually put it on the table. As opposed to swiping my credit card, which doesn’t require any thought at all and it doesn’t even matter if I have the money there, well, they’ll lend it to me and it’ll all work out. So, I guess that’s all part and parcel with what you’re saying. Cash would be better than credit in a lot of cases for that very reason.

Steve Stewart:  Yeah. And it seems kind of weird that we’re talking about using cash in a world that’s completely absorbed by credit and paying for things online. But I think cash still has a lot of power, and yeah, there’s emotion tied to using actual paper money, but again, it forces us to think about our purchases. And when we think about our purchases, we’re able to make better purchases.

Doug Hoyes: Yeah and using a debit card, the money has to be there as well and there is still some thought involved. A lot of people have more than one bank account. If you can get numerous free bank accounts, fine, that’s the account I’m going to put the money aside to save for the refrigerator and that way when I go to buy it I know the money’s there. I certainly don’t advocate somebody walking around with hundreds of dollars in bills coming out of their pockets ’cause there’s a danger to that.

In the last minute we’ve got tell our listeners how they can find you, where the website is, what the podcast is and what they can do to find out more about what you do.

Steve Stewart:  Well, thanks Doug it’s been a pleasure. The podcast, the budgeting course, how they can find out how to reach a hold of me is at The podcast just launched, it’s called No Debt, No Credit, No Problems. And I teach people what’s out there, what they’ll be aware of, to pay attention and not interest.

Doug Hoyes: Fantastic and I will put links to all of that in the show notes. Steve, thanks very much for being with me today.

Steve Stewart:  Thank you, Doug, it’s been a pleasure.

Doug Hoyes: Thanks. That’s the Let’s Get Started segment. I’ll be back to wrap it up. You’re listening to Debt Free in 30.

Doug Hoyes: Welcome back. It’s time for the 30 second recap of what we discussed today. On today’s show my guest was Steve Stewart. And he said that it’s too easy to borrow money and that causes problems. He doesn’t believe there is good debt. He said there is only bad debt and not so bad debt. That’s the 30 second recap of what we discussed today.

So, what’s my take on Steve’s opinions? Well, not surprisingly I believe that excessive debt does cause huge problems. If you pay cash, you never pay interest and that makes your life a lot less stressful. I thought Steve’s opinion on why he doesn’t agree with using credit cards just to get the rewards points also made sense. Of course it takes a lot of discipline to pay cash and forgo the rewards, but I guess avoiding debt is also, in its own way, a big reward.

That’s our show for today. Full show notes are available on our website including links to Steve Stewart’s website and the courses and resources he offers. So, please go to our website at, that’s h-o-y-e-s-dot-com, for more information. Thanks for listening, until next week I’m Doug Hoyes, that was Debt Free in 30.

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