My sis and bro-in-law had a 28% downpayment for their home and paid off a 15-year mortgage in 7 years and were still unable to get a loan without a co-signator.

This is one area I will always adamantly disagree with Dave Ramsey. Credit is a tool. Abuse it and it will hurt you. Use it correctly and it can help.

So I wanted to jump in on a few points.

Allison – what you said is basically what I was saying in the article (regarding myth 2)– yes, you may be helping them establish credit… but the gist of Financial Peace University (which is what my articles are based on — see DaveRamsey.com) there isn't necessarily a reason to establish credit. Purchases can be saved for. Wouldn't a family member/friend be just as well served being encouraged to save up money for the purchase rather than establishing credit that can cause a whole lot of headache down the road?

Colin – I've used these places before, so I know that they can get a person through a tight spot. But it is temporary — it is a bandage over the wound – not a cure! It creates a cycle. The interest is insanely high, and what happens the next week, when you've advanced your paycheck? Guess what? Your paycheck isn't going to cover the bills that week either… So the cycle begins.

You're better off working at saving money at any cost (even the risk of *gasp* having a payment be late) than creating that cycle.

Layla — The tax I am speaking of is not an actual TAX. I mean it is taxing to people. It takes money aways from other bills that need to be taken care of. It depletes money from savings. I know first hand the effects of gambling to "get rich". For the majority of people, it ain't gonna happen. The lottery preys on our idea of "Gettin' Rich Fast and Easy". But statistically and realistically?? Doesn't happen.

Thanks for sharing your thoughts everyone!

Also, I have to take issue with #4. Your "truth" is a needlessly incendiary phrasing used in political situations by opponents of lotteries. The real truth is that no lottery is properly called a "tax," as they are not compulsory. Also, it is unfair to say that they are "levied" (to use taxation language) on the poor. Those who lack money-management skills may be more likely to gamble, certainly, but this is a chicken-and-egg issue. The truth is that those who want to gamble will do so, whether there is a state-sanctioned lottery or not. I am from Tennessee; our lottery is relatively young (about 5 years). Before it was instituted, droves of people flocked to Kentucky or Georgia to purchase lottery tickets, and illegal, underground "numbers running" was a major problem in many poorer communities. Now, the money is kept in-state, and the proceeds benefit university students (the lottery scholarship has allowed many, many Tennesseans to attend college when it would not otherwise have been an option for them), instead of the shady characters who used to operate the numbers rings.

I know your point was that one shouldn't count on gambling to bring wealth, but you phrased it in a very careless way.

"There{sic} are rip-offs that aren't needed and benefit no one but the owner of these companies."

The fact is that without these institutions, poor people with no credit or bad credit cannot get financed. If such persons are using these services to their own detriment – that is their mistake, not the lenders. These people might need emergency funds for an operation, car problem or other situation. A normal lender will not give them money.

People who support laws controlling interest rates (not necessarily the author) are effectively denying the poor access to credit, while ignorantly and hypocritically feeling self-righteous and benevolent about doing so.

We co-signed for my sister and brother in law when they were buying a house. They both had good jobs and had demonstrated their financial acumen, partly because they had paid cash for EVERYTHING in their young lives and had not built up ANY credit debt. They had no problem paying the loan.

Bottom line — know the financial situation of those for whom you'd co-sign AND be prepared to pay the loan.