Credit Card Debt Trap: Billionaires Warn of Financial Pitfalls

Credit card debt is an everyday financial burden for many, but according to billionaire entrepreneur Mark Cuban, it could be the decisive factor preventing people from building wealth. Cuban is not alone in his stance on the use of credit cards. Other financial giants like Warren Buffett and Dave Ramsey have repeatedly emphasized that high-interest debt is one of the greatest obstacles to financial success. As early as 2014, Cuban appeared on "The Dave Ramsey Show" to discuss credit cards, debt, and wealth-building strategies with financial advisor Ramsey. Bluntly, Cuban stated that those who use credit cards obviously do not want to become rich. Paying off debt is a crucial step to financial health. He explained that eliminating credit card debt with interest rates of 15% or 20% is equivalent to achieving a comparable return. Ramsey, known for his pragmatic approach to money management and clear financial advice, agreed with Cuban, emphasizing that "75% of wealthy individuals advise achieving and maintaining debt freedom." According to the Federal Reserve Bank of New York, Americans' collective credit card debt amounted to $1.14 trillion in the second quarter of 2024, $27 billion more than in the previous quarter. The average credit card balance per consumer also rose to $6,329, compared to $5,947 in the previous year, according to TransUnion. Warren Buffett, the Oracle of Omaha, also shares this aversion to credit card debt. He once advised a friend that paying off high-interest debt is the best financial decision one can make.