George Kamel - Are You Paying This Hidden Tax? (Check Your Credit Score NOW)

Episode Date: November 14, 2025

❄️ Find out how quickly you can be debt-free with the Debt Snowball Calculator.   Did you know there’s a hidden tax that’s triggered by your credit score? Today, I'll tell you what it is and how to avoid it—because it could cost you more than $100,000 over your lifetime.   Next Steps: • 🎥 Watch my video Best Way to Pay Off Debt Fast (That Actually Works). •💵 Start your free budget today! Download the EveryDollar app. • 📈 Are you on track with the Baby Steps? Get a free personalized plan.   Connect With Our Sponsors: • Get up to 40% off Cozy Earth with code GEORGE. • Get 20% off when you join DeleteMe. • Go to FAIRWINDS Credit Union for an exclusive account bundle!   Explore More From Ramsey Network: 🎙️ The Ramsey Show 🍸 Smart Money Happy Hour 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💡 The Rachel Cruze Show 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Did you know there's a hidden tax that's triggered by your credit score? And if you're paying it, it could cost you more than $100,000 over your lifetime. Today, we'll talk about what it is and how to avoid it so you can, you know, not throw away $100K. I'm a poet, and I didn't even realize it. Stop talking, George. You stop talking. Okay, so here's what's happening. According to a new report, if you have a credit score of 620 or below, and 1 and 5 Americans do, you're getting absolutely hammered by a, quote, subprime tax.

Now, to be clear, this isn't technically a tax that gets collected by the government. This is banks, lenders, and insurance companies charging you thousands more every year just because your credit score isn't good enough for their liking. And it's all about risk. According to the report, the lower your credit score, the more likely you are to fall behind on debt or file a claim. Fair or not, it's as simple as that. End quote. So how much is this subprime tax costing people with lower credit?

credit scores? Well, based on the average premiums and the average debt amounts, here's a breakdown of how much extra they're paying annually compared to someone with a 700 plus credit score. 89 more in credit card interest, 328 more in personal loan interest, $398 more in home insurance premiums, $514 more in auto insurance premiums, $745 more in auto loan interest, and the Big Cahuna, $1,330 more in mortgage interest. All told, that's about $3,400 extra per year. And if you don't improve your score, it adds up over time. You'd pay more than 17,000 over the course of five years, and over 30 years more than $100,000. Now, that's all for having a less than ideal credit score. And if this sounds unfair, it's because it kind of is. It's a gross system,

like gas station bathroom gross, sweaty, floor mat at TSA checkpoint gross, bottom of the ball pit at Chucky Cheese Gross. What's going on down there? I imagine it's just the scene from it. We all flowed here. I'm not saying children die down there. It's not what I'm, but I'm saying it could happen. Be careful, watch your kids. Think about what's actually happening here. The people who are struggling the most financially

are the ones getting punched in the gut with these massive extra charges from lenders. It's kind of like if a gym charged you a higher membership fee than more out of shape you are, which means my fee would be astronomical. It makes no sense from a decent human being perspective, but it makes perfect sense if you're the CEO of a bank looking to maximize profits.

And the irony in all of this, the report we've been talking about is from BankRate, who is also part of the gross system, because BankRate makes money by sending people to lenders and credit card companies. Just look at the fine print at the bottom of their website. Quote, We are compensated in exchange for placement

of sponsored products and services, or by you clicking on certain links posted on our site. So naturally, their solution to all of this isn't to change the system that disproportionately affects low-income households. Their solution is to tell you to just, be better at playing the game designed to make them win. They want you to monitor your credit reports constantly, improve your utilization ratio, and

keep playing your credit score game until you hit that magic mid-700s number, which by the way just gives you access to more debt. But that's clearly not working for a lot of people. According to a recent report, 60% of credit card accounts carry a balance from one billing period to the next, even though credit card interest rates currently average 23% APR. That is insane. Or take this advice from TransUnion Vice President Michelle Ranieri. She says, quote, make sure that you're paying everything perfectly.

That's the way you get the best credit score is to not miss any payments. Thanks, Michelle. So helpful. Should have thought of that. You got it, dude. Of course, their solution is to just keep playing the game and do better, because even if it's not working for you, it's working for them. It reminds me of this Margaret Atwood quote.

A rat in a maze is free to go anywhere, as long as a state. inside the maze. Look, they're selling you a solution to a problem they created in the first place. And it's not even a good solution, because even if you do get better at playing the credit score game, you're still an active participant in this unfair system designed to benefit corporations and their CEOs and shareholders while screwing over the people who are hurting the most. To industry! But there is a real solution to all of this. And I'll tell you what it is, but first, let's talk about a solution to your personal info being all over the internet. And that solution is DeleteMe, a sponsor of today's video. Delete me removes your info from hundreds of

data broker websites to help cut the risk of getting scammed and spammed. Their data privacy experts work all year long behind the scenes to keep tabs on who's got your info. And here's the cool part. If you're Delete Me subscriber and you find your info in one of these sites, you can submit a custom request and they'll get to work on taking it down. And with my special link, you'll get a discounted plan that comes out to about nine bucks a month and it's worth every penny for the peace mind. So to get the deal, go to join delete me.com slash George or click the link in the description below. Okay, back to the subprime tax. What's the real solution here? Well, it's actually pretty simple. Stop playing the game. Now, I'm not talking about having a bad credit score and tanking it.

That is no bueno and that can hurt your financial life. I'm talking about having no credit score. Nothing, zero, nada. Invisible. Okay? It's literally what it is. You become what they call credit invisible, much like I was invisible to girls in high school. and girls today. Nothing's changed. George, meanwhile, had just been broken up with by his first girlfriend and was on his way home. And you know what? Life is way more peaceful when you're not constantly worried about your credit score. You're not checking apps every month. You're not stressing about utilization ratios. You're not playing this stupid game where three companies get to decide how much you pay for everything.

The only three-digit number you have to worry about is your weight. And the code to the pool at your ex's apartment complex. What she doesn't know won't hurt her. Plus it's salt water and they have those little sunshelf loungers. I love those. That was creepy. Because when you don't use debt, you don't need their approval for anything. You buy cars with cash.

You save up for a house and put down a solid down payment. And you don't need permission from the three major credit bureaus to live your life. Now before you come at me like, well, George, you're not being realistic. Okay, you need a credit score for everything. Can it, Buster? It's going to be okay. Let me walk you through this. Our society has been so brainwashed by the financial industry,

we think we need a credit score like peanut butter needs jelly, like Batman needs Robin, like a bachelor contestant needs a tragic backstory. But a lot of people live perfectly fine lives without credit scores. Now I know what you're thinking. Well, George, what about buying a house? Well, you can absolutely get a mortgage without a credit score. In fact, I've done it. It's called manual underwriting, and this is where banks look at your actual financial situation

in order to give you a loan. I know. It's a novel concept. And remember, credit scores have only existed since like the 19th. 90s, so people have been doing this for a long time before this three-digit number made it way easier. Now, what about renting an apartment, you say? Well, guess what? Most landlords care way more about proof of income and a good rental history and a lack of, you know, criminal background than they do about your credit score. And if one landlord says no or one apartment complex, go to the next one.

There are plenty of landlords and companies out there who understand a good credit score doesn't equal a good tenant. Just know that whatever you think you need a credit score for, there is a way to do it without one that isn't going to ruin your life or take a bunch of time. And even if it's a tiny bit harder, at least you can sleep better at night knowing you're not a rat in the credit maze. So there's really no excuse to keep your debt hanging around just to keep up a credit score. Pay off your debt ASAP and never look back. And I know that's easier said than done, but I believe in you. You can do this. And the best way to do this is with a method called the debt snowball. The psychology of this is brilliant. You get quick wins early on, which builds

momentum and keeps you motivated. So let me show you how powerful this can be with our trusty debt snowball calculator, which you can find on our website for free. I will also link it below. So let's say you've got a credit card with a $2,500 balance. So we're going to add that one in. Interest rate is 23%. Let's say minimum payment, $75.00. All right. Next debt. Let's do another credit card. $4,500 this time on this one. We're maxing that. bad boy out, 145 minimum payment with an interest rate of 22%. Shall we add another one? Sure. How about a car loan? Let's do that. Those are popular these days. 15,000 dollar balance, minimum payment $325 a month, and you've got a 6% interest rate on that. All right, so we've got

our debts in there. Now we're going to include our income. So let's say we bring home $5,000 a month. We're going to check our debt-free date just based on that. That's not. That's not what you want to see, right? You got $22,000 total in debt, and your debt-free date is April of 2030. That feels apocalyptic. I'm not sure we're all going to be around by then. So what if we set a more aggressive goal, right, to not pay off our debt in like five plus years, but more like two years? So what if we could throw an extra 400 bucks a month, right? We cut some expenses, we make a little more money, maybe do some side hustles. $400 bucks a month would get it done by December of 2027. Not bad, but at the time of this recording, that's still over two years

of debt payoff. So what if we could do it in 18 months? What would that take? Let's see. If we throw 600 bucks at it, now we're talking July of 2027, 700 bucks, May of 2027, 800 bucks, April. As you can see, as I add another hundred bucks per month, I trim another month off my debt-free date, which I love to see. If we can do $1,000 bucks a month, now we're cooking February of 2027. I like the odds of this so you can use this slider and drag it up and down to see how quickly you can get out of debt. And if you don't like the number you see, it tells me something. We need to make more money or we need to spend less money and ideally both. So if you follow this plan and you get out of debt within 18 months, about six to 12 months later,

your credit score will become indeterminable like mine is. If you stay out of debt, that means no more credit score anxiety, no more subprime tax, no more giving banks permission to control your financial life. Now, I'm going to drop a link in the description so you can use this calculator for yourself with your own debt numbers to plug it in and see how quickly you could become completely debt-free. And again, if the calculator shows something like six years, don't panic. Let's just start creating more margin in your budget to throw at that snowball. And that might mean picking up extra work, selling stuff you don't need, cutting back on eating out for a while, cutting back on subscriptions, reshopping insurance, whatever it takes. Every extra dollar you throw

with this gets you to freedom faster. And the faster you're free, the faster you can stop fretting over your freaking FICO score, my friend. Today's video brought to you by the letter F. That's it. Now, if you want some extra help with this, you've got to download the Every Dollar app. You can get it in the app store or Google Play. You can go to Everydollar.com slash George or just click the link in the description. And here's why.

All these recommendations don't thrown at you. It will personalize it in the app and then help you budget the dollars to get debt-free even faster. So check it out. It's incredible and it's helping people find thousands of margin in just the first 15 minutes of downloading the app. All right, so if you're one of the 21% of Americans affected by the subprime tax, the question is, what are you going to do about it? Are you going to stay trapped in the system, or are you going to fight your way out and stay out? Now, I chose to fight back in my day.

When I was getting out of $40,000 of debt, I said, no more. I'm done with debt. And I highly recommend doing the same, because life is better when you don't have to worry about interest rates. So if you're ready to get rid of your debt, check out this video for a deeper dive on the debt snowball method. Give it a click right here or use the link in the description. That's it for today. If you enjoyed this video, hit the like and subscribe buttons, and share this video with your ex so you'll have something to talk about in case you run into her at the apartment pool. Thanks for watching. We'll see you next time.