I Do Not Use Credit Cards

I have not used a credit card in over two years. So far, I have yet to find myself in a situtation where I had to use my credit card. (I still have one, active, credit card account. I keep my card tucked away in my wallet. I’m not sure it actually works anymore. I do not plan to find out.) I do not advocate closing credit card accounts. I have an account that is open and in good standing. I just don’t use it. What have I learned about NOT using my credit card?

Ninety-nine percent of the time, a debit card works just as well as a credit card. (Please, no comments about the security features of a credit card vs a debit card. Evil people will do evil things with whatever tools they can find. Every single person on the face of the planet is one step away from having all of their financial information exposed, exploited, and abused. If you entertain the idea that you are somehow “safe” from the realities of identity theft and fraud simply because you use a credit card, you are sadly mistaken. The true pain of identity theft has as much to do with the “violation” as it does with the amount of money stolen. Many banks are stepping up to the plate to give the same protections to debit cards as they do to credit cards. Be smart, shop with reputable people, and cross your fingers.)

Writing a check or spending cash at a grocery store will make you feel one of two things: Foolish OR Empowered. I love to stand in line, with people behind me waiting to check out, and count out my exact change to the cashier. Contrary to popular belief, this takes just about the same amount of time as it does to swipe a card, grab a pen, sign a receipt and put the card back in your wallet. Also, spending $100 in cash “hurts” a little bit more than swiping a card for $100, and it keeps me disciplined.

I have reserved automobile rentals and hotel rooms without any hassle using my debit card. I then pay my bill in cash or with a check.

I never get a bill from a credit card company.

I never have to worry about late fees, lost payments, finance charges, messed up accounting, or interest rates.

I miss out on cash back, rebates, and credit card rewards. Oh well.

I have not found that many places give discounts for using cash. In fact, most places would rather that you use “in-house” financing. But, in person-to-person transactions, cash rules. I’ve paid for auto washes, yard work, and plumbing with cash, and received a discount each time.

Paying cash for a dinner with a group of friends is always interesting. In almost every case, if I pick up the check, it starts a conversation. People are simply amazed that I don’t use plastic. Some are actually “offended” by the fact that I don’t take advantage of the “float”. I’ve had more than one person tell me that I’m “crazy”. On the other hand, I’ve had a bunch of people say, “Man, I’d love to live that way. I use my credit card way too much, I’m behind, I’m broke…”

It feels cool to have some real money in your pocket.

Did I mention that I get no bills from credit card companies? Oh yeah, I said that already. Just checking.

I have tried several “cash management” systems, but an old fashioned money clip works the best for me. I wrap my “folding money” around my license and my debit card, and I’m good to go. I usually just leave my wallet in the glove box.

I use online bill pay and I only have to write about 6 paper checks per month. I’m going to move to a system where I pay our daycare provider via online bill pay, and I’ll be down to 2 paper checks per month.

People tout the “organizational” benefits of credit cards. I simply keep receipts and bill stubs, and I have my online bill pay records for taxes.

Final word: I really, really enjoy the freedom of not having to use a credit card. I like having and using actual money. Truth be told, I enjoy being a bit of an “oddball”. Cash rules!

Edit: In response to all of the feedback and comments (Thanks Lifehacker!), I’ve written this post: People Sure Do Love Their Credit Cards. Take a second and check it out!

Edit:  When I moved my site, the comments were deleted.  Sorry!


NCN

http://www.ncnblog.com

No Credit Needed is a personal finance blog about debt reduction, saving money, and simple living. Thank you for visiting the site and please consider subscribing to No Credit Needed by Email. Have a blessed day!

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31 thoughts on “I Do Not Use Credit Cards
  1. John Doe

    It’s nice to see I’m not the only one… At one point I had 8 credit cards!! No longer. Closed them ALL. I have not used credit card since 2003. Paid everything off in 2004. Never had an issue where I felt “deprived” by my lack of credit card usage. Debit Cards work just fine on the rare exception where cash is not accepted. I also do not feel I’m somehow missing out on the “New Car” feeling since my car was paid for in cash.

    I guess it could be the fact that whenever I drive past someone in a massive 15mpg SUV that cost $37,000+ Interest Payments I just think how I drive a mint condition Honda CRX Si that gets 40mpg that was purchased with CASH. My wife and I love it and the vacations we take with the $$$ we save.

    Then again it could be the fact that I have $22,553.00 in my bank account and ONLY pay Savings, Rent, Power Bill, Food, Gas, Netflix.

    I don’t know.. I guess people like us who live debt free are just “Crazy”.

     
  2. michelle

    quit using em a while back. now it’s PayPal and on occasion debit when i order online. normally don’t post another’s site but…if ya want a rebate i love a site called mr rebates

     
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  4. Jason

    “I miss out on cash back, rebates, and credit card rewards. Oh well.”

    Yeah, oh well. I pay all of my credit card bills in full every month because I’m a responsible spender, and I get hundreds of dollars back a year for paying all of my utilities, medical and dental fees, etc. on a rewards card.

    If you need to use cash to be a responsible spender, you’re probably smart enough to use a credit card responsibly. If you’re irresponsible it probably doesn’t matter if you carry cash or not.

     
  5. Larry

    No credit cards for me either. I love paying with cash. When I’m standing inline watching people pay with credit cards, I’m thinking “what a pathetic way to go through life.” I’m financially free and sleep great at night. No credit card bills or worries for me!

     
  6. Larson Moraes

    The author of the blog above said the following and I quote: “I miss out on cash back, rebates, and credit card rewards. Oh well.”.

    So what you’re really saying is that you are leaving money on the table, right? And while I agree with you that people should live a debt-free life, I disagree with you on the approach that “all credit cards are evil”. I pay everything, and I mean everything with my credit card throughout the month. Once the bill comes though, it is paid in full. Not only doing this provides an additional safety feature (should I ever want to dispute a charge), but this also raises my cash back rewards. As a matter of fact, in 2008 alone, my TOTAL money back received from three credit cards totalled more than $2.200.!!!!

    And oh by the way, I do live a completely debt-free life too!

     
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  8. Tam

    I’m with you…it’s been 3 years for me w/o credit cards. I had to learn the hard way but I’ve learned. Nice to find like mindd people.

     
  9. Tam

    I’m with you…it’s been 3 years for me w/o credit cards. I had to learn the hard way but I’ve learned. Nice to find like minded people.

     
  10. johnny from Miami

    Larson Moraes says:
    January 3, 2009 at 6:14 pm
    “So what you’re really saying is that you are leaving money on the table, right? And while I agree with you that people should live a debt-free life, I disagree with you on the approach that “all credit cards are evil”. I pay everything, and I mean everything with my credit card throughout the month. Once the bill comes though, it is paid in full. Not only doing this provides an additional safety feature (should I ever want to dispute a charge), but this also raises my cash back rewards. As a matter of fact, in 2008 alone, my TOTAL money back received from three credit cards totalled more than $2.200.!!!!

    And oh by the way, I do live a completely debt-free life too!”

    “Jason says:
    May 12, 2008 at 2:10 pm

    “I miss out on cash back, rebates, and credit card rewards. Oh well.”

    Yeah, oh well. I pay all of my credit card bills in full every month because I’m a responsible spender, and I get hundreds of dollars back a year for paying all of my utilities, medical and dental fees, etc. on a rewards card.

    If you need to use cash to be a responsible spender, you’re probably smart enough to use a credit card responsibly. If you’re irresponsible it probably doesn’t matter if you carry cash or not.”

    Okay Einstein and Sherlock,

    Your comments are very valid and yes, I’ve heard them many times from other people. Let me give you a scenario that happen to a known citizen.
    A family of four, stable income, vehicles on credit, big house on credit, furniture on credit and the list goes on. They paid their credit on time being well organize and responsible with credit card payment.
    Suddenly one of their kids gets sick.
    Small boy of six years is diagnose with cancer. Not only is treatment expensive but one of the parent has to quit their job in order to take care of their child at home. Health insurance company does not cover expenses.

    You feeling were I’m going with this?

    Debt starts pilling, they have to sell the house, they have to sell a cars and return them to the dealer, they have to spend less and take care of the [unfortunate situation].
    And now they own more then 100,000 dollars on credit card bills +.

    You see, folks, some people can lose it all at sun rise. Not only is depending on credit a loss but the desperation grows largely.
    The father shot himself. He preferred to kill himself then to see his kid die slowly. It’s not about being responsible. It’s life being life.
    Sometimes you just don’t know. That is why you do not buy things you do not need because all you need in life is to enjoy it and leave healthy.

     
  11. Christi Pemberton

    I think that Larson Moraes and others who agree with him missed the boat on this one. You can be a responsible person with a credit card, but that does not mean that you will not find yourself in a hole, as many people with perfect credit and using credit cards responsibly are having their interest rates go higher as well, due to credit cards running scared from the upcoming legislation…this is all proven as we receive news reports from consumers on how the credit card companies are now going after the “responsible” consumers to get more money. So, do not think that you are immune from this just because you pay your credit card every month. Some people do not realize that it is not about how wonderful you are with paying off your balance every month, because every other week we hear in the news that those same wonderful people are experiencing the same treatment as others who were not as responsible. So, the best way to go is to not use credit cards, unless you are really in an emergency situation. When you use a credit card, or think you need one, you are using a crutch. What is the point of having a credit card, something that will add interest to your balance if you make one mistake in paying late, or raising your rates for no reason? If a debit card can work just as well, and a debit card comes with less risks than a credit card, then why not use a debit card? A debit card can not raise your interest rate at the drop of a hat. Paying by cash is great as well…actually more admirable than flashing a credit card, or feeling like you “just have to have one”. Unless you need a card for an emergency, if you just have to have a credit card, then you are indeed addicted to that lifestyle, even though you may make your payments every month. So I say, don’t use it, use cash and debit.

     
  12. Hate credit cards

    I hate credit cards. They seem like a hassle. I used to have one and like others I was responsible and paid it off right away. Then I realized it was just as easy to pay with cash and not have to bother with the middle man (credit card). It was just one unnecessary bill I had to pay. Cash rules and where I can’t use cash, I have a debit card. I agree with this article 100%.

     
  13. Moonlight Lady

    There is absolutely NO REASON to ever use a credit card anymore. A lot of people think that you “have to have one” in case of emergencies, you simply DO NOT…that’s a myth the banks want you to think to keep you in debt. If you want to purchase things “online”…simply put things in your online cart and figure up what you are going to owe the retailer…figure up the tax and shipping…once you’ve got the amount..go out to the mall, or a place like Walgreen’s and purchase a VISA GIFT CARD which works like a VISA debit…the beauty part is…your checking account is “safe” because this is a one time purchase with one “card”. I get the VanillaVISA at Walgreen’s and use it for all my online purchases. Be sure to register the card at the VanillaVISA site online, so that the retailer can connect “you” with the card. The entire thing takes less than a half hour from the time you see what you want to purchase, to getting the card, and purchasing the item, and that little bit of extra effort is well worth it because you will have the piece of mind that you did not use a credit card OR your debit card to your checking account, and you’ve responsibly paid for your item. Folks, listen to me, “TEAR UP THOSE CREDIT CARDS” and go VISA GIFT for your online purchases. You’ll be glad you did.

     
  14. Al Filho

    Credit card companies are out of control!!! They are making unbelievable profits by over charging you with their outrageous interests and fees. In part, we have to blaim our government for not doing anything about it. But here is the solution: STOP WAISTING YOUR MONEY BY USING CREDIT CARDS. It’s not easy to dicipline yourself to use only cash, but if you only use cash you will have more money and peace of mind.

     
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  16. Izzi

    gosh – i love this blog – i am so grateful for likeminded people….thank you so much – I LOVE being a bit of oddball in this day n age too! I lived without a mobile phone for years and people gave me such a hard time…now every time a new mobile phone style comes out..i still have my normal, original $30 per month pre-paid phone -and I am so not tied down to my phone! i have people i work with that are just ‘consumed’ with technology….i love how healthy my ‘mind’ feels – I feel in control of my choices, no matter what anyone else thinks or says…MOST of the responses I get are ‘gee, you’re really smart with your money hey’……lol

     
  17. Jay

    Good posting. But leave your wallet in your Glove box? This is really silly. Most of the car break ins are caused because the would be thieves think they can find something valuable inside the car and your post just reinforces their beliefs.

    Get your wallet and your id stolen can become your worst nightmare, worse than even have a $5000.00 credit card maxed out. I know someone who had his wallet stolen and I can tell you, it was a nightmare that still impacts this guy today, years after it happened.

    If I were the author of this article I would cross that portion out. Very silly advise indeed.

     
  18. IMO

    First of all I ABSOLUTELY HATE TO SHOP!!! So no real danger of excessive credit card use. I live in a very modest house (furnishings ALL PAID FOR), drive a 19-year-old car and have one credit card. I pay for EVERYTHING with that card except for stuff like utility bills which would charge a “convenience fee” if I paid with credit card. I keep all my receipts to verify my credit card bill when it comes in. I pay the credit card bill in full every month & discard the receipts I don’t need. I pay absolutely NO finance/interest charges, late fees, annual fees, etc. If my purchases are timed right, I get about 55 days use of “free money” before the credit card bill is due. Over the past years I’ve gotten thousands of dollars in “rewards” from the CC company. I have them send ME a check. It works just fine for me. I am debt free – and get extra TAX FREE income from the CC company.
    PS: For those who have trouble corralling their purchases/spending…..and like to use a credit/debit card – try this….carry a check register booklet (the booklet that comes with your checking account) and enter each transaction as it happens – just like you would if you were using a check to pay for the purchase. This gets you a bit more ‘involved’ than just swiping a card. You could even enter your monthly spending limit and deduct each transaction as it occurs. You need to stop BEFORE you get to zero balance!

     
  19. AnnaLaura Brown

    I have one monthly bill that I have to pay for with a credit card and that is all I use it for any more. As an internet marketer I have to have certain tools and my autoresponder company refuses to accept debit cards. I have never encountered any other place with that policy. So yes for the most part debit cards are just fine.

     
  20. kc

    Regarding credit card companies and how great it is to get rebates and free stuff, it is like Dave Ramsey says “if you are going to play with snakes, you are going to get bit.”
    My life is much simpler without credit cards hanging over my head. Living on a budget with a plan for my money is the only way to go. The funny thing is that when I am on a plan, I have WAY more money.

     
  21. jack

    The argument that having a credit card will allow let you earn rewards is not false, but it also tempts you to spend where you normally wouldn’t anyway. In the end you will have less net worth than if you didn’t have a credit card, it’s almost a guarantee. Credit cards offer no more convenience than debits cards, except with debit cards you spend your own money.

    I learned not be reckless with money. After all, my great-grandfather co-founded a bank and the banking mindset has stayed with the family.

    You can’t beat credit card companies. You just can’t. So stop trying and put your efforts into starting a business and investing wisely.

     
  22. LOL

    Credit cards are useless. You have to pay annual fees for them anyway. Plus, you don’t ever get a discount on a price with a credit card. You can only do that when you have cash. Also, credit card users typically spend more than they would if they use cash. People who use cash can visibly see what they are spending. Credit card users just think of a dollar amount of how much they have and then go, “Oh, I can afford it.” I bet if they used cash, then they would think about saving the money instead.

    A credit card user rarely saves money. If they did, then they would know that using cash is better. You can easily reap up rewards by just investing your money properly so that you can gain interest. The only way you reap benefits from credit cards is if you spend more money, and those rewards don’t last forever.

     
  23. Dan - BankVibe

    Couple things…

    1) The game has changed slightly since this post originally came out. It seems like most of the argument here is that on one side people are saying you don’t need credit cards to go about your daily life – which is true for most people, the exception being people like @AnnaLauren Brown who uses it for her business as an online marketer.

    2) And on the other hand, you have people talking about how much rewards, cash back, etc your missing out on by spending only with cash or debit. While it’s true, imo, that the best rewards do come from credit cards…and no @LOL, not all cards come with annual fees. There are a number of cards (for instance the chase freedom mastercard) that comes with no annual fee and a sweet cash bonus of $200 just for signing up. Plus you get the 5% rewards etc.

    But I guess my point is that since this post was created a couple of companies have begun issuing debit cards with rewards. The main one that comes to mind is Perkstreet which nets you 2% cash back with your debit card along with free ATM use. So options like these seem like the problem solver with benefits that match both sides of the argument.

     
  24. Credit Card or not

    I’m quite impressed with how you handle your everyday situations without a credit card. I happen to work at a place that run credit card promotions and was doing research into ways for financially responsible card use. I learned a few tips here. And yeah, it sure hurts to give up a $100 bill for groceries.

     
  25. Tracy lish

    Yes cash rules, when you go to Lowes to buy a new stove, washer, and fridge and use cash, just start counting out the Franklins and see the huge discounts, the $680 stove cost me $450, the $500 front loading washer cost $350, the $500 fridge cost $425. And they threw in a free Ice Maker, I even paid cash for my wifes Land Rover, and no I’m not a drug dealer or in the mob. Just debt free. Even paid cash for my home, just save up to buy, if you have to get it on credit, you don’t need it!!

     
  26. Tracy lish

    Yes cash rules, when you go to Lowes to buy a new stove, washer, and fridge and use cash, just start counting out the Franklins and see the huge discounts, the $680 stove cost me $450, the $500 front loading washer cost $350, the $500 fridge cost $425. And they threw in a free Ice Maker, I even paid cash for my wifes Land Rover, and no I’m not a drug dealer or in the mob. Just debt free. Even paid cash for my home, just save up to buy, if you have to get it on credit, you don’t need
    it!! Why spend fees on the money you worked for.

     
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  28. Lady E

    Thank you so much for this article. It has solidified my decision to not use credit cards. I am not yet 18 but will be in a few months. Both of my parents are smart with money and have taught me about making smart decisions, but this article showed me that I can get by only using checks, debit cards and cash. It seems that society will have you think otherwise, though. I will never open a credit card since they seem to cause more trouble than they’re worth.

     
  29. New Gypsy

    Thank you for a very enjoyable article. At this point I have decided to withdraw myself from the modern financial system as much as is practical. Still feeling my way into this new life choice and am gathering information along with anecdotal accounts of those who have done it… successfully or otherwise. I look around me and in my own life and see what is clearly misguided participation in a dysfunctional system that will most assuredly get worse, by design, and to the benefit of a select few. Fine for those who like that sort of thing but as for me I am returning to what I am calling my ‘reality zone’. It’s the way I did things as a young artist… cash. I’ll keep one debit card for those that demand it, (motels reservations, etc…). Hahaha… the memory of my cash on the barrel-head practice in my youth seems so much more realistic… you felt the pain of the diminishing cash pile and thought twice ( sometimes three times, lol) before making that purchase. Even debit cards provide a buffer of unreality to transactions and it just doesn’t work for this man’s psyche. This goes deeper than a mere financial change it is a return to assessing value to what is truly life enhancing and sustaining to my humanity. Bottom line for me is this; I bought into a cleverly contrived philosophy that is unhealthy for many of us. Seems I have awoken from a nightmare and am determined to forge a wiser, reality grounded, healthier way. This unhealthy credit dependent philosophy is a cancer to not only individuals but has become the standard of nations… and it is becoming alarmingly obvious a collapse is coming… it will be hell for most of us and a dream come true for the Capstone chosen few of the lightbearer.

     
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