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- [00:02]
A
Brought to you by Y Refi Refinance your defaulted private student loans today@yrefi.com Ramsey.
- [00:11]
B
So I was just calling to see if this was normal. My boyfriend has used the credit cards that are in my name and two of them are in both of our names, but I don't use the credit cards. And I was wondering if that is a normal thing because he's saying it's normal and I don't have to worry about the transactions because he's making, he's taking care of the bill.
- [00:36]
C
Yeah, I, I would have an issue with that. Well, first, the mistake that I see is that you have credit cards in both of your names. So I think that that is a mistake because either of you can spend on them and if either of you decides that they're not going to pay the bill. So let's say you guys were to break up and he ran up a balance on it, you're both on the hook for it. And if he doesn't pay it, it can affect you, you know, in a negative way. So that's the first issue. Then the second issue is then if you have a credit card that's only in your name and he's insisting on spending money.
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A
Yeah. And it's him spending it. There's no guarantee that he's. That he's going to pay for it.
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C
Right.
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A
The bill, I mean, there's a chance he doesn't. And then it's stuck with under your name and you're completely liable for that. So how has he gotten access, Katie, to your credit cards? Are you giving it to him or is he with.
- [01:24]
B
Yes. So we. It was an agreement to open the credit card because I needed to build my credit. I had no credit at all. And so that was the way that we were going to build the credit cards. Since, I mean, the credit. Using the credit cards, what you need.
- [01:45]
C
Credit for, what were you trying to accomplish?
- [01:48]
B
Just the history. I had no history of any credit use at all.
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C
And did he say that that was a good idea?
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B
Yes.
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C
Okay.
- [01:59]
A
It was his idea, I'm assuming, of.
- [02:02]
B
Course, because I had, I don't, you know, have any knowledge in the finance area.
- [02:07]
A
Totally. So, Katie, just so you know, so that you can be armed with some of that knowledge and education, the only reason you really need a credit score is to go into debt. And we really do believe the best way to win financially is not to have debt, is not to go into debt. And the biggest piece of debt that people get into, that they're like, no, I have to have a credit score for is a home, right? So when you go and apply for a mortgage, they will pull your credit score, but you can do what's called manual underwriting. So you can actually get a mortgage without a credit score still. Now places will pull your credit report. You know, maybe if you're applying for a cell phone or maybe for work or something. Um, but if you don't have a history, all you have to say is, yeah, I've never borrowed money before and debt's not a part of my life. So you actually can go through life. And this is a big piece of misinformation. A lot of people believe you have to have credit in order to do things, but you really don't. Now you have to have it to go into debt. But we, you know, again, that finish line, that start to finish of building wealth, debt does not need to be part of the picture. So what Jade was saying earlier is exactly right. I would. I would cut up all the credit cards, Katie. Any credit card in your name, I would cut up. And for you to keep everything separate. And you guys are already kind of combining, you know, purchases and all of that. I would keep your income with your expenses, his income with his expenses, very, very separate. And then later down the road, if you guys get married, then that's when you want to combine them. But until then, it's a very dangerous game that you guys are playing, not just on the credit score game side, but the fact that you have this other individual that legally you have no attachment to. Right. I mean, from the, from a, from a legal perspective, there is no marriage, nothing. And, and Kate, and, And we take the calls, Katie. I mean, which, of course, we're calling chauffeur of money. So we get all, we get all different kinds of calls, but we get the calls that are, hey, my boyfriend broke up with me. I can't find him now. He blocked me and he racked up $10,000 on my credit card. He said he was going to pay it, and now what do I do? And then that, Katie, we would have to say to you, well, you got to pay it because it's under your name. So it's just a, It's a big risk. That's what you're taking. And I understand maybe his intention was good. Trying to quote help, but. But it's, but it's not helping.
- [04:16]
C
I mean, let's, let's understand this kind of big picture because, Katie, you're not the only person who has gotten that misinformation the truth is debt is a product. It is, it is a product that, that institutions make money off of. It's not something that's required. It's not a law. It's not like your driver's license where you have to have it in order to drive a vehicle. And. But it is marketed that way, right? It's marketed as this thing that you can't live without, you can't do without. And they'll even make it seem as though if you want a car, you need a loan, if you want a home, you need this. They make it seem that way. But that is not the truth. The truth is, like Rachel said, a lifestyle without debt is absolutely there. You do not need a credit score. And the only way that, the only reason it seems that way, it's because it's such a well marketed product that they have fooled us into that. And so. And there's a lot of money that's made on it. And so a lot of people have kind of locked their arms around making it seem as though this is the case. And it's truly, truly, truly not the big areas where people kind of, I don't know, Rachel, I would say butt heads on us or, okay, then how do I buy a car? Okay, then how do I rent an apartment? Okay, then how do I buy a house? I feel like those are kind of the top three areas and rightfully so. You should be asking those questions. And the truth is, we would say if you're in a car loan right now, yeah, work to pay it off very, very quickly. And then your next car, make it a point that I'm going to save up and pay for cash even if I get something a little less expensive. Right. That's how you get out of the car loan debt. And then for somebody who says, hey, I want to rent an apartment, the truth is there are lots of apartment complexes that will say, you can't. We only go by credit score. That's true. There's also a lot that will go. And if you bring in other proof of purchase, whether it's your cell phone bill, electric bill, maybe you lived with your parents and paid them rent, they will use that. So that is the truth. Same thing. Rental cars. You can rent a car without having a credit card. So anything that tells you otherwise, Rachel and I are, are here to tell you and kind of debunk that myth, because it's not true. And even the biggest one, Rachel buying a house.
- [06:15]
A
Yes.
- [06:16]
C
We all know so many of us think you have to have a credit score to buy a house, that's the biggest thing. And it's just not true. You can still do something called manual underwriting. And in that they look at people who do not have credit scores, have a zero credit score, and they go, okay, we believe that a zero credit score is just as good as a high credit score.
- [06:34]
A
Right, Right.
- [06:34]
C
And we can look at your actual money, your actual transactions, and we can determine if you are in a good position to borrow money for. For a home. And so I. I hope you learned that, Katie, on this call, that it's not something that is necessary at all. Not even required.
- [06:51]
A
Right. Like.
- [06:52]
B
Yeah, yeah.
- [06:53]
A
But. But again, it's understandable why someone would think that, because in our world today, it is just so, so normal. So. So, yeah, Katie, if. Yep. If I were you, I would today cut up every credit card with my name on it. Not even just because of the element of what we talked about, living without debt. But I'm gonna say yours has an extra caveat too, because there's another person in your life using those credit cards under your name, which adds on a whole other level of risk that you cannot control. Right. Some people think, well, I can control myself. Right. And we have a level of respons. So that's. We can talk about that. But this is like an extra layer, Katie, that you. It's just a lot of risk. And I know everyone's in love all the time and it's. And we're going to be together forever. Everyone believes in the relationship, but again, we get the calls on the other ends of reality of what happens. So I just want you to be protected, Katie. That's what we want for you. We are here for you and we want you to make these decisions in a really smart and wise way.
- [07:48]
C
Yeah. So at the end of the day, we're not. We're not putting other people's name. If you do choose to take out debt, for the love of God, don't put someone else's name on it with you. That's really the moral of the story. And then, of course, don't go into debt, period, because you don't need it. This is the Ramsey show.
- [08:02]
A
Why refi refinances delinquent private student loans for struggling borrowers. Learn more at Y r e f y.com Ramsey.