It’s Impossible to Live without a Credit Card, Unless Your Last Name is Ramsey
My oldest son recently moved to a BIG southern city for an internship for the summer. Prior to moving, he’d been pestering us about getting a credit card. All of his college friends were getting one he said. Supposedly to establish credit he said.
But my husband and I discouraged him from getting a credit card for a couple of reasons. First, getting a credit card when you are not financially mature enough to handle the responsibility can cause big problems. And second, because according to financial guru Dave Ramsey, it’s easy to live life without one.
Life doesn’t always work out the way you thought (or the way Dave Ramsey said)
Since our son was moving from Canada to the States and needed access to U.S. money, our first step was to open a U.S. bank account. Easier said than done. He already had a student account with a bank, so we thought this account would be as easy to open as the first.
We decided to open an account with a U.S. bank with a large presence in Canada, so that he could open the account while he was still living in Canada AND receive a debit card prior to the move. We planned to seed the account with a couple of hundred bucks so he would be good to go on his first day in the States.
Just opening a bank account was a little harder than we imagined. We went into our local bank and filled out loads of paperwork while the Canadian manager was on the phone with a U.S. manager to open the account. Despite the fact that the U.S. manager had a copy of my son’s American passport, the account was opened under a misspelled last name and an incorrect home address. We didn’t discover this until he tried to sign into the account remotely and found the error. Unfortunately, the FIRST debit card was shipped to the wrong address.
My son went back into the branch and once again got on the phone with a U.S. manager and a Canadian manager. The problems would be fixed within two business days they said.
One week later (and nearing his departure date), the issues with the incorrect name and address were still not fixed. I then accompanied my son to the bank and was again promised the problems would be corrected and a new debit card would be overnighted to our home. This time, the bank came through.
Getting an apartment, utilities and furniture is very difficult without credit
The next step was to find a place to rent. Not so easy with no established credit. All of the apartment complexes required a credit check. With no credit history, they refused to rent a place to my son.
According to Dave Ramsey aficionados, if you can’t rent an apartment in a large complex because of a lack of credit, try finding other places to rent through private homes.
If your son was going out on his own for the first time to live in an unfamiliar city with millions of people, would you really trust a private homeowner sight unseen for accommodations?
Our solution: put the lease in my son’s name, but co-sign the lease using our credit history for the credit check.
The next step was to sign up for electricity and internet for the apartment. The utility company and internet provider required a credit check. With no credit history, they refused to provide service. Our solution: put the utility and internet in my son’s name, but co-sign the account using our credit history for the credit check.
Once more from the top
The next step was to order rental furniture for the apartment. The rental company required a credit check. With no credit histo…….do I really need to keep typing? You can see where this is going, right?
At this point, we realized it would have been impossible for him to rent an apartment, turn on the power and get furniture without credit.
Had it not been for our credit history, I’m not entirely sure he would now be working for a fantastic company, living large in the big city and saving money in a bank account that was not so easy to set up.
The final straw
While we were going through this arduous process of trying to get my son out the door and land on his feet, I asked the apartment, the utility company and the furniture rental company how a young adult was to establish credit when no one would rent anything to him.
Each company responded with the same answer. Get a credit card.
Ugh, I guess their last names aren’t Ramsey either.
Please don’t get the idea that I am anti-Dave Ramsey. To the contrary, I believe he has done more to help people get out of debt than anyone in recent memory. However, I think a lot of his mandates are great in theory, but very difficult to practice.
In the past few months, we’ve realized that trying to live without credit is VERY difficult, regardless of your last name.