My wife and I went to town today to do a little Christmas shopping. We went to four different stores, and at three of them, I was offered, “a discount for signing up for our store credit card.” Each time, I politely shook my head and said, “No thank you.”
What I really wanted to do was shout, at the top of my lungs, “Stop asking me if I want to apply for your silly credit card!”
I do not want to borrow money from you.
I do not want to make payments to you.
I do not want to give you my personal information, including my mailing address, so that you can stuff my mail box with advertisements.
I do not want to teach my kids that ‘swiping the magic card’ is how we ‘pay for things’.
I do not want to put my social security number on a form and then hand it to a part-time worker who looks as if she hates her job, hates me, and hates being at work. (Edit: After reading this post, I felt like this line was a bit harsh – but it comes from a real experience that I had today with a cashier who actually said, within earshot of 15 customers, “I hate this job!”.)
I do not want your credit card.
By the way, have you ever wondered WHY stores are so eager to give you a discount for signing up for their credit card? Because, they know that if you have a BRANDED credit card, a credit card that can ONLY be used at a certain store, that you will more likely to shop at that particular store. In other words, they give you a ONE-TIME discount, and then you become a “customer for life”.
While in one store, I counted ELEVEN people who were filling our credit card applications. My head almost exploded.
When I first started this blog, I would write about how much I hated credit cards. “Sophisticated” readers would leave comments about how “they paid off their balances each month” – and I felt some pressure to reevaluate my anti-credit card stance. But, after watching the sub-prime mess unfold and reading hundreds of articles (and emails from readers) about credit cards – I am convinced, more, now than ever, that credit cards are dangerous.
I realize that there are people who pay off their balances each month, and a select few that use credit cards and actually “make” money (from rewards, points, etc.) but I would submit that a larger number of people, perhaps even a majority, are burdened down with tremendous amounts of credit card debt.
For every person that I know who benefits from using a credit card, I know a dozen who feel trapped under the weight of high balances, payments, fees, and interest charges.
It’s funny to me that whenever I write about not using credit cards, I get comments about ‘not being responsible enough to use a credit card and pay it off each month’. For the life of me, I’ll NEVER understand what is MORE responsible than SAVING up enough money to buy a thing and then buying the thing with CASH
You tell’em, NCN! It drives me nuts to be asked that, and I am a bit more blunt: “I don’t DO credit cards!” instead of a simple “No, thank you,” mainly because many of these employees are now required to ask THREE times before they can give up. I went so far as to do the prescreen opt-out so my mailbox is no longer stuffed with credit card offers. Our credit card debt is GONE and won’t be coming back! And life is so much more peaceful and stress-free without it.
We’re debt free! 7 years and counting. I wouldn’t have another credit card ever.
NCN-I know you know this expression: “you have to live like no other now, so that you can live like no other later”. Won’t all of us be laughing ‘later’ like now at all the folks who are drowning in credit card debt?????
I think for some people, responsibility means not charging more than they can pay off; they make sure they have enough in cash to cover their charges, and they earn interest on that cash between statements in addition to rewards. For others, responsibility means not charging at all because they won’t be able to pay the charges off. I don’t side with either the cash-only camp or the “responsible charging” camp. To me, credit cards are a little like alcohol. The cash-only camp begrudges those who can drink responsibly. The “responsible charging” camp seems to be blaming alcoholics for being unable to control their drinking. I think both sides need to be a little more open-minded while doing what’s right for their pocketbooks.
As for retailers pushing store cards, I advocate a little patience. The cashiers hawking the cards work for the stores and are strongly encouraged to push the cards. Sometimes they get cash incentives for getting X number of people to sign up, a nice supplement to minimum wage. They’re not the problem. Just politely refuse and move on.
I’ll be honest and say that I’m one of those people who has always paid off their balance in full. But I’m not special, I just have different money issues, connected to security more than overspending.
Anyway, my point was, you should have “no credit needed” t-shirts. I’m sure they’d sell like hotcakes, and then you could spread the message in the shops as well as online.
My new (18 months) husband and I have this conversation regularly. He had credit cards when we married; I have eschewed them for over a decade. In the last 18 months, we have paid his cards off TWICE, with the ultimate goal of them not being used again.
I’ve been emailing various blog posts to him about personal finance and financial responsibility. Hopefully some of it will start trickling in soon. I have refused to combine finances until I feel that we are both on the same page financially. That may be awhile. 🙁
Oh, how very right you are! Of course, the bigger question is, why do people feel they need so much STUFF so very badly that they are willing to borrow against their future financial security? Maybe if we all learned to be a little more content with what we already have, we wouldn’t be so quick to want even more things we don’t need and can’t afford.
I have had the same credit card since 1988, I use the heck out of it, and I pay it off each month. If credit cards were the problem, I couldn’t do that. A credit card is a tool, like any other tool: if you can’t use it without breaking something, don’t use it, but if you can wield it with skill, you can accomplish much more in a given context than you can with your bare hands.
I completely agree with Honest Dollar on this one. His analogy is fantastic.
I’m one of the people that has always paid off my credit card balance each month. I use it to my advantage by getting some great rewards because of this. However, I find it incredibly difficult for me to understand the other point of view (just paying cash). To me, it seems like a lost opportunity to make some easy money.
I’m not saying that everyone should be using credit cards, but I’m frankly surprised that readers of personal finance blogs are unable to handle the responsibility. I feel like they should be able to handle it since they now have a much better understanding and appreciation for money. Just because you got burned before doesn’t mean it’s going to happen again.
So my question is this. Assuming you already have them completely paid off, why not start taking some baby steps with rewards credit cards? I think it’s a great opportunity to face your fears and grow (personally and hopefully financially too!).
Please don’t take my post as an attack on anyone. I never been under credit card debt and have never felt the pressure so it’s hard for me to relate. But I would love some insight and thoughts on my question. Thanks!
I am also like the posters above: I’ve used credit cards since I started my first job in 1983, and I’ve always been paying balances in full. This didn’t preclude me from buying my current (new) car for cash, paying off my mortgage or having savings. I also like alcohol analogy and used it myself on some blog posts.
I think there is nothing wrong in choosing not to use credit cards, much as there is nothing wrong in using cards and paying balance in full every month. I agree with mdebusk: credit cards are just a tool: they are convenient, they have advantages, but they can be dangerous if one looks at them as “extra money” instead of a convenience.
This is really just about how you look at cards and how you shop. People who pay their balances in full don’t consider the possibility of not paying balance in full -this is simply not an option; and credit card bill is just another bill much like telephone or electricity.
In terms of store cards – everyone wants to make money. Stores pay a couple of percent when customers use other cards, so it is natural they’d prefer their customers to use the store card. The person who offers it is an low level employee working hard to make ends meet. View it as yet another thing someone tries to sell it – say “no, thanks” politely and walk away.
One last thing. I read different statistics about how many Americans pay in full and how many carry debt. One statistics I read said about 42% paid in full which, while is a minority, is still a lot of people. But a quick search right now yielded this website: http://www.low.com/articles/debt_consolidation_explained that says 56% pay in full.
I agree, I hate being asked at every store.
But, I have used them to my advantage a couple of times. For instance, at Target you get 10% off for opening a card. I have now done this twice where I get a card, buy something expensive (an xbox360 for instance), and pay off the card as soon as it comes in the mail. Then, I close the card…and 6 months or a year later I open a new one and get 10% off again, pay it off, then close it.
It’s just a matter of using the tool of credit to YOUR advantage, not the credit card company’s.
Thanks for the responses –
After 3 years of blogging about this subject, I usually get many of the same responses. As a free-market guy, I support the RIGHT to have a credit card, but I just don’t see the NEED.
Let’s assume, as one commenter stated, that 56% percent of people who use credit cards ‘pay them off each month’. That means that 44% DO NOT! So, that would mean, 44% of consumers who use credit cards are paying INTEREST!! I don’t know about you guys, but that bothers me – and it causes me to worry about the long-term economic health of our families.
NCN
I know more people who pay their balances every month a collect the rewards than people who actually carry a balance. But I met most people through my job and we are engineers, so maybe not your average american.
But just as you hate being solicited to buy store cards (I don’t ever get them either), I hate the notion that paying by credit card == drowning in debt.
I also hate it…mostly because I shop regularly (at least once a month) at a store that consistently asks me to sign up for their card. But as someone who used to work for such a big box store, I can only sympathize with the cashier – not be angry at them.
Here’s how it works: Some bigwig in corporate assigns a signup quota for a store based on “whatever” factors. The general manager then has to meet this quota. He figures in the number of signups per day they need to make and hammers his managers to hammer their front end supervisors to meet it. The supervisors then hammer their cashiers to hit that number and usually assign individual quotas. Sometimes when things get tough, a cashier or floor worker will be slapped with card duty, who gets to walk around pestering customers to sign up for credit cards while they shop.
Everyone hates card duty. The cashiers hate asking customers to sign up for cards and that their hours will be cut if they don’t meet quota. The supervisors hate that their performance – and raises – depend on how many stupid credit cards they fill out. The managers hate it for the same reason. The general manager hates that his bonus is based on it – and ultimately his job – and that he always has to go to crazy lengths (like sending some random employee to chase customers with credit applications around the store) just to meet his quota.
And if its the end of the period and there aren’t enough credit applications filled out? Then the employees get to endure a meeting where the managers try to convince THEM to fill out credit applications, or to take them home to their family and friends.
Everyone in the store hates store credit cards. The only ones who really like them work in an office somewhere and won’t return your calls.
Until people stop using credit cards irresponsibly, it is not going to change.
Chris..
I used to work for a major department store and we had a minimum number of applications that we HAD to get each month… Even then, before I worried about credit card debt or personal finances, I never liked asking people to sign up for the cards…
I completely understand the pressure that cashiers / employees face…
NCN
I’ve only gotten one store credit card, and I do admit, they have done a decent job of getting me in the store. Especially when I earn enough points for a $10 coupon, which has to be spent by a certain time (and you have to spend at least $10, it doesn’t work with less). I usually go there because I know they’ll have dress pants that fit me.
I have other credit cards, and I’m probably going to wheedle them down (I pay them off every month) but I see no real point to having more than one credit card at a time (except I’m trying to figure out this whole “keep your oldest card” thing for credit scores).
So yeah, I pay them off each month, and earn a bit of money in benefits. And yeah, I worked at Macy’s in high school, and they rewarded you for opening new account, so that extra urging is hard (especially now, with people doing seasonal work at the mall).
“As a free-market guy, I support the RIGHT to have a credit card, but I just don’t see the NEED.”
True. We didn’t have credit cards where I grew up, and we survived. We didn’t have checks either, my parents were getting their salary in cash and had to go and pay bills in person and in cash. But the same can be said about many things – washer, dryer, dishwasher, microwave, disposable dipers among others. The only things we need is food, shelter, just enough clothes to keep warm, soap, water, medical care, education. I might’ve missed a few and put a few extra, but this is the idea. Other things are there for convenience or pleasure.
Same with credit cards. They are convenient, they are safer to carry around especially if you travel, they provide some protection in case of a disagreement with the merchant, some extend manufacturer warranty and/or give some money back. The flip side is that if you don’t pay in full by the end of grace period bad things will happen. For some people the temptation of having the ability to borrow is too much; others aren’t even tempted. The former are better off avoiding credit cards alltogether, the latter can decide what they like.
You may use it or not based on what is right for you.
I hate store cards too, but I do understand that the employees have no choice in the asking. It’s a corporate policy that none of us can do anything about (except, perhaps, stop shopping at that store?).
As for people and their credit card debt, here’s some interesting info:
http://moneycentral.msn.com/content/banking/creditcardsmarts/p74808.asp
Dear NCN. You are not responsible enough to…oh wait. Whoops! 😉
Eleven people is an awful lot!
I know the discounts are tempting, but I’ve never even found it to seem that financially worthwhile. Most of the time it wouldn’t make a real dent in my purchase price. Not enough to justify having the hassle of a credit card to worry about.
For $3? Nope.
For $15? Nope.
For $40? Nope.
For $100? Ok, maybe if I could just cancel it as soon as it arrived. It might be worth the time spent on paperwork and the hassle of canceling it.
What’s sad is that most people probably do it for $20 or less.
NCN –
I understand your frustration on commenting users who spread the avails of using credit cards responsibly and obtaining points, cash, rewards, travel, ad nauseum. There will be those who flame and defy and outrightly detest what I say, but I say it nonetheless.
I pray you rest peacefully at night dear rewards-lovers, because your rewards are coming at the cost of your fellow humans who are buried in debt. You preach to them the avails of using credit responsibly, all the while reveling in your rewards being sucked right out of their wallets.
Someone is paying for those rewards, and it is NOT the corporate purveyors of financial cocaine. It is your neighbor, friend, sibling, and coworker.
Your mentality is spot on NCN – keep spreading the truth. Those who are listening may just be too beat down to speak up, but they are still listening.
AMEN! That’s all I’ve got to say about that 🙂
I used to just say no thank you, but now I say “no thank you, I don’t use credit cards” or “no thank you, I’m living a debt free life” or something like that. I know the clerks are required to ask so I don’t give them a hard time but I like to provide just a little bit more info. to hopefully inspire someone who overhears me to perhaps make a change in their life. Not that I do much shopping these days, but when I make the above statements I’ve gotten a few follow up questions b/c people want to live a debt free or credit free life they just don’t know how to do so.
And as a follow up, now that I’ve read the other posts, I was one who paid my credit cards in full each month and rejoiced in my free airline tickets. However, since I’ve switched to using only debit (cash didn’t work for me, too hard to track) I spend a lot less money. Something about spending my current money vs. spending my future money helps me decrease my spending. I am more engaged with my money now, when I pull out my debit card I have to think about how much I have in my account. I don’t think credit cards are evil and I would consider using one for a big purchase to get a 0% offer or a 10% discount but not for day to day spending.
I have to agree with you! I get so tired of being asked. Usually I am only purchasing a small amount of stuff and they are desparately trying to lure me in by saving 10% off my purchase. That will only amount to about $3, who cares? not worth it, ever! We have one credit card – LL Bean. I order from there a few times a year and by using the card I get free shipping. The entire reason I signed up. I pay it in full whenever we use it.
I agree 100 percent. It is more responsible to save and pay with cash. Thanks for the great article.
NCN,
but do you like to eat green eggs and ham?
NCN — You rock!
I totally agree and have run in to it from time to time myself. And I do understand that you are not ‘angry’ with the cashier, just the policy that is in place.
Here’s another one for you… Every so often I get asked if I’d like to open up a line of credit while I am working with a teller at my bank. It drives me nuts, but I politely reply “No thank you, we don’t do credit anymore”.
Debt free and loving the cash only lifestyle!
@ Johnathan, You can buy something expensive take the $10% discount and pay the card off right then and there.
I know people that have done it.
No need to wait for the statement in the mail.
I personally don’t like to do it because of giving out my address and information, because of the junk advertisements they will send you
Even Kmart has gotten in the act. All I wanted to do was return some shoes that didn’t fit. When I wouldn’t respond positively to his plastic pitch, I got a very cold stare from the salesman at the entrance table.
Thanks, but no thanks. Two quality major credit cards is enough for me and my debt free lifestyle.
Kudos!!! Between my husband and I, we ended up with 8 different store credit cards. $50 on one card, $65 on the other, and so on adds up quickly… Thankfully, we’ve paid them off and closed each one of them. From now on I say “no, thanks” even before they can finish their sales pitch!
@ Brian (#19) – Right on!
The interesting thing about these people who are asking you if you want a credit card, they have to do it because their managers told them to. Their managers told them to because the corporate vice-president passed a memo down the chain of communication to remember to ask every customer if they would like to apply for a credit card.
I wonder what would happen if we all emailed the VPs of marketing for all the big companies to say “STOP! In the name of debt freedom!”
Myself, I always tell them, “I already have one.” That usually stops them.
I didn’t really want to add more to this thread because I really agree with Honest Dollar – everyone has a right to decide to use or not to use credit cards. But the Brian’s post above really caught my eye:
“I pray you rest peacefully at night dear rewards-lovers, because your rewards are coming at the cost of your fellow humans who are buried in debt.”
This type of statement to me, a first-generation immigrant, clearly illustrates typical American “victim” mentality. It wasn’t my fault I overspent, it was credit card company that made it easy. It wasn’t my fault I bought this $2000 vacuum cleaner, it was a pushy salesman. Brian, has any of us “rewards-lovers” ever had a gun to your head and forced you to buy stuff you couldn’t afford? It was your choice to take this card out of your wallet and buy stuff and it was entirely your responsibility. If you enjoy wine, is it your fault that some people are alcoholics and may even die of it?
Tell me, Brian, how come refugees from the Soviet Union like I, my family and friends who had not have even seen a credit card or even a check before coming to the US could figure out that credit cards shall not be used to buy stuff you cannot afford and that the only way to use one is to pay one’s bill in full and financially-savvy Americans like you couldn’t? Have your parents taught you that you must always return the money you borrowed?
“I wonder what would happen if we all emailed the VPs of marketing for all the big companies to say “STOP! In the name of debt freedom!â€
Why? They are trying to sell you something, in this case a credit card. They want to make money – their right. You can buy it or not buy it – your choice. If a salesman tries to sell you something you don’t need, do you feel obligated to buy it? This is freedom of choice.
I seemed to have seen a credit card advertising on this website too, by the way.
kitty –
You bring up some good points…
I wrote this post because I’m getting tired of being asked to sign up for a credit card…
That being said, I believe, FULLY, that these companies have the RIGHT to ask me to sign up for a credit card…
But, I have the right not to like it, the right to write about it, and the right to ask them to stop…
I am a CAPITALIST – and I believe in the power of supply and demand. Obviously, there is a demand for credit cards (and rewards and bonuses) or credit cards wouldn’t exist.
My primary goal is to live w/out credit cards – but I don’t think – unlike some – that folks who use credit cards are foolish or evil or whatever.
I just don’t think that credit cards are good for ME!
NCN
I am one of those who used credit responsibly and paid it off each month. I would put everyone on the card in order to get that coveted x% cash back. It was free money. I own my home, and have no debt. However. . .
Two months ago, I read Dave Ramsey’s book. (I don’t know why I have ignored him for so long!) He made a comment, and I cannot remember the exact number, that just the ease of spending that credit cards provide induce people to spend something like 30% (and I’m guessing at the number) more than they would have if they had to use cash.
As I thought about it, I realized that was exactly true of me. I was buying far more than I needed to get a couple of percent back. It was silly.
I am with you. I am learning to live without the “convenience” of credit. It really does cost too much.
Stephen Pollan in his book “Die Broke” instructs his readers to make spending as painful as possible. I agree. We need different hobbies than spending and collecting stuff.
Can I ask a question here? How do you go about canceling a credit card? I know you can just call, so I guess my real question is; for someone who is really “conflict adverse” is there a indirect way to cancel the cards? Will they die a natural death if when the “expiration date” is up and you never activate the new cards?
I love your blog! I’m in your camp.
I never want another credit card. I don’t have them and I don’t need them. I’m living a really nice life without them.I have everything that I need and a few things that I wanted. Been to Europe twice.
I know, amazing, right? How do I survive? How do I keep from falling over dead in the street?
I’m even happy. And engineers must be special and better than the rest of us normal people.
@Justin– I’m glad you’re asking those questions, and I appreciate your honesty.
I do find it amusing, however, that you praised honest dollar for his very apt analogy comparing credit cards to alcohol, but then a paragraph later, encouraged NCN to take “baby steps” with credit cards, to promote personal growth. That’s like telling a recovering alcoholic “Why not just start out with a strawberry daiquiri and then work your way up to the scotch. C’mon, be a grown up like the rest of us!” I’m not sure how familiar you are with AA and similar programs, but from my limited experience, I’m pretty sure they have their members work toward an alcohol-free existence. 😉
Regarding the actual credit cards, I find the comment that you are “frankly surprised that readers of personal finance blogs are unable to handle the responsibility” to be condescending, in the same manner that I find people who say “all credit card users are irresponsible and mired in debt!” to be condescending (sorry, NCN). I’ve noticed that in order to feel “okay” doing what they know is best for them, a lot of people need to believe that all other methods are faulty, and that the people who follow them are, in some way, faulty themselves. I’ve realized that credit cards don’t work for me. Even when I had them, I hated them. I hated using them, I hated paying them, I hated dealing with them. I believe the most responsible thing I’ve ever done was to realize that that was okay, and to move to a plan that worked for me. But that’s just me – I have friends who love their rewards cards, do quite well with them, and take vacations on their rewards miles. Good for them. I get my rewards from mypoints.com, my debit card, and my emergency fund, which is stashed in an online account that earns me decent interest as well as rewards points based on my monthly balance.
For my part, I liken financial well-being to physical health. Being physically healthy means you get some form of exercise on a regular (hopefully daily) basis. I love running, so for me, being physically healthy involves that. Many of my friends, on the other hand, positively hate running with a passion. But just because they prefer the stair-climber or the elliptical doesn’t make them lazy. They’re still fit–they just don’t go about it the same way I do.
“Will they die a natural death if when the “expiration date†is up and you never activate the new cards?”
No, they will not die a natural death. If you really want to close you have to call. Keep in mind that this hurts your credit score since part of it is “utilization ratio” i.e. the ratio of debt to available credit. Same debt, less available credit, lower score. Still, if you really want to close, you shall call or even write.
“And engineers must be special and better than the rest of us normal people.”
I don’t think we are special. We are, though, for the most part logical, practical, and have strong math background so understand high interest. Additionally, most engineers don’t need to dress up for work. I imagine there are some engineers who overspend, but at least in my experience there are very few of them. For example, I work in a research lab where there are mostly scientists and engineers. Even though the average salary in the building is probably over 100K, as I walk through the parking lot I see mostly Civics and Corollas, some old, some new, some very old. Also if I wear a suit to work, I am asked “do you have an interview?”. So sometimes I am at a store and I look at a jewelry item or a fancy dress that I like (and, by the way, could afford) and think to myself “yes, it is lovely, but where would I wear it to?”
“Will they die a natural death if when the “expiration date†is up and you never activate the new cards?â€
No, they will not die a natural death. If you really want to close you have to call. Keep in mind that this hurts your credit score since part of it is “utilization ratio†i.e. the ratio of debt to available credit. Same debt, less available credit, lower score. Still, if you really want to close, you shall call or even write.”
I thought this was true, but I cancelled both of my credit cards this year and my FICO score went up, I’m now at 804. I’m not saying the above isn’t true but I think it depends on the rest of your credit history.
I have to admit that I’m one of those people that LOVE their store credit cards! I have one for Macy’s that I don’t use very much (it started off as Marshall Field’s), but I pay it off immediately after I make a purchase. I also have a Victoria’s Secret credit card that I only use when I receive a $10 off coupon (I use it to buy their delicates laundry detergent–$10). However, my true love is my Banana Republic card. I used it about once a year until it switched to a Visa in November. Now, I’m earning 2% on all of my purchases and have received 2 free sweaters (through my reward gift certificates).
However, I totally understand why you wouldn’t want to open a store card. I side with the retail clerk though. I worked retail in college and we were forced to ask every customer if they would like to open a credit card. I knew it annoyed the customer, but I would have been fired if my boss heard me not mentioning the credit card…
I hear ya! But I’m on the otherside 🙁 Where I work it’s mandatory we ask and we are require to get an application filled out per 1000 customers or we’ll be fired. Just recently everyone had to sign a piece of paper acknowledging it. A retail company I work for previous to my current job was the same way, you had to get an application filled out for every 2o something hours you worked or you weren’t written up and or fired. Neither retail pays good wages nor do they give enough hours and yet they threaten with that! also in times like now where everyone is struggling, jobs are being lost, and the banks are being bailed out….CREDIT SHOULDN’T BE SHOVED IN PEOPLES FACES! Citi financial is the creditor for one of the retails and they’re among the bail out list. WTF?
Closing out a credit card is one of the worse things you can do. Being bothered and “bugged” to death to apply for a store credit card is bad enough..I do not want your cards, stop asking me for my phone number when I checkout and finally stop making your cashiers beg people to open accounts so they can earn a few bucks in their paycheck and you can hike up interest when ever you feel like it..enough already…
Employees aren’t even asking in order to get a few extra bucks. They’re asking or they will be fired. I, as someone who doesn’t like store credit must ask you and get a set number of applicants per week or I lose my minimum wage and can’t feed my kids. Sad state we’re in.
I work for home depot and i hate that we are required to ask people to do this and im close to being fired because i wont ask