When she turned 18, Jessica from South Carolina found out her mom had been using her Social Security number since she was a toddler — racking up $186,000 of credit-card debt in Jessica’s name.
After hiring a lawyer, Jessica was able to have her credit wiped clean, but she’s left with zero credit history and can’t get a credit card.
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She called into The Ramsey Show to find out how she could recover from having her credit history wiped. “Not even a secure credit card will touch me,” she said.
Making a ‘paradigm shift’ on the value of a credit score
Jessica feels “stuck” and says she can’t even buy a car with a co-signer. While she says some financial advisors suggested her “best option” is to get married, co-host Ken Coleman flagged that suggestion.
“I want to challenge this idea that you’re stuck because you have no credit score and that you have to get married in order to have a car,” he said.
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Nor would it necessarily solve her issue. While credit scores aren’t impacted by marriage, if a married couple jointly applies for financing on a large purchase, such as a home or car, Equifax says lenders usually check both spouses’ credit information.
So what’s the solution?
It involves a pretty big “paradigm shift,” according to co-host Rachel Cruze. Jessica is focused on living her life around “having a great credit score.” But, as Cruze points out, “primarily you use a credit score to go into more debt.”
That paradigm shift involves living debt-free — without a credit card.
Consider that Americans owe $1.18 trillion in credit-card debt as of Q1 2025, according according to the Federal Reserve Bank of New York.
And the average credit-card debt, per American, was $6,371 during this same period, according to TransUnion’s Q1 2025 credit industry insights report.
Plus, high annual percentage rates (APRs) on credit cards can make it even harder to get out of debt.
“Although Federal Reserve rate cuts began in 2024 after two painful years of rate hikes, average credit-card APRs are still well above 22%, offering no relief to consumers who revolve balances from month to month,” according to Experian.
Thanks to her credit being wiped, Jessica is debt-free. She doesn’t even have the option to apply for a credit card to get into more debt, “so see that as a blessing,” said Cruze.
While Jessica has a full-time job as a debt collector and makes $19 an hour, Cruze suggests she look for a side gig (or a higher-paying job) to earn some extra money each month that she could put toward a vehicle.
If she made an extra $2,000 a month, for example, she could save enough to pay cash for a $5,000 to $7,500 secondhand vehicle in a matter of months — no credit card required.
How to live debt-free
In a survey by Forbes Advisor, 58% of respondents said card payments are “their prime facilitator of higher spending,” which is “a reflection of the ease and perhaps the less tangible nature of using cards over cash, which seems to loosen the psychological purse strings.”
And more than half (52%) of respondents are “more likely to make an impulse purchase when paying with a card compared to just 24% with cash.”
“Society tells us you have to have a credit card to survive, you can’t go to college without student loans and you’ll always have a car payment. These are straight-up myths,” according to a blog by Ramsey Solutions.
On the other hand, living debt-free means “not buying anything unless you can pay cash.”
Cruze says to start by coming up with a detailed budget and knowing exactly how much you’ll need for basic necessities such as food, shelter, utilities and transportation. Everything else can go toward saving up for your biggest needs — in Jessica’s case, that would be a car and her last semester of college.
“As you track your spending, you’ll see red flags and how quickly you get to the point where you’re spending more than you earn,” according to the Credit Counselling Society, which recommends using cash instead of cards.
“Cash-only diets are a great wake-up call to your spending because you physically see the money exchange and feel the drain on your wallet.”
If you have multiple credit cards, consider consolidating your debt onto one card (the one with the lowest interest rate or best terms) and cancel any cards you don’t need. You’ll also want to build up an emergency fund so you won’t have to rely on your credit card if you suddenly need money for an emergency.
While Jessica is “blessed” without a credit card, those looking to get out of debt can use techniques such as the snowball or avalanche method to whittle away high-interest debt.
Most likely, it will also involve increasing your income (working overtime, looking for a higher-paying job or taking on a side gig) while reducing your expenditures (cutting back on anything unnecessary, such as takeout, travel and entertainment).
To realize even greater savings, you could also look at ways to simplify or downsize. For example, is your rent eating up most of your income each month? If that’s the case, it may be time to look at finding a smaller place, getting a roommate or moving to a less expensive neighborhood (though you’ll also have to factor in the cost of moving).
“Don’t be leaning on the credit industry to get you out,” Cruze advised Jessica. In other words, getting a credit card isn’t going to solve her issues; it will only serve to get her into debt.
And, advised Coleman, “don’t get married at the advice of a financial advisor so you can get a car.”
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
