No, but you definitely want one.
Regardless of how you feel about credit cards (you should feel great about them, by the way), going without one is going to be difficult. No credit cards means no credit score, and having no credit score will cause you some serious headaches and cost you some serious dollars.
Anytime you need to make a financial commitment - whether it be refinancing a student loan, buying a house using a mortgage, or even renting a cheap apartment - companies need to know your credit score. Your credit score is essentially the definition of how reliable you are financially, how likely you are to be true to your commitments. That matters a lot to people when you say you’re going to pay them.
Going without a credit score is like going on a date with someone you met online that doesn’t have any social media accounts: they may be great, or they may be a serial killer. Hard to tell.
And that’s not a bet every company is going to be willing to take.
Recently, I had a friend who was moving to a new city and looking for an apartment to move into. He found one in a great location at a great price that was a fraction of his income. Unfortunately, though, because he didn’t have a credit score, they weren’t going to give him a lease. He negotiated, showed proof of his income, even his bank deposits, but no luck.
In a final desperation, he offered to pay for the whole year’s rent up front, in cash. After some further back and forth questioning, the apartment complex finally obliged and gave him a place to stay. Thankfully, my buddy got his place, but he had to jump through hoops to do so and ultimately had to fork over $10,000 that could have served as his emergency fund, earned him interest in the bank, or grown significantly in the stock market.
When it comes to buying a house or looking to refinance, even if you are approved without a credit score, I can guarantee that your interest rates on those loans will be much higher than what you would normally qualify for. That means you’ll pay thousands of dollars more than you would have if you had a credit history.
But, if you're a Ramsey faithful and still believe credit cards are inherently evil, you do have options:
My parents are great, but I like having my own place.
Step one, get a budget. Step two, get a credit card, build some history, and enjoy the rewards.
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