Digital Gee

I've decided to toss my credit cards for at least a year. I'll pay cash (or occasionally use my debit card) and charge NOTHING.

Curious to hear from others who have beaten the credit card habit. What's been your experience? Any cautionary tales to share? Am I being foolish?

ro-monster

No, you aren't foolish. Years ago I ran up several thousand dollars in debt on credit cards. Then I was laid off twice within two years and couldn't make the payments, which caused the interest rates to increase from merely ridiculous to completely insane. That was when I swore off credit cards, and I've never looked back. Once you are free from them you realize how reprehensible the credit industry really is.

Brian Sharpe

We have become a society of debt slaves, our ancestors were right to avoid it. In modern banking jargon a "deadbeat" is someone who pays off their credit card purchases each month.

Credit cards are useful - I use mine for all my business purchases to collect travel points & my family gets at least one free trip a year.

JamieElenbaas

Done the opposite. Almost all purchases are done on a mileage card. The catch is the balance is zero at the end of each month.

What is there to buy on Pitcairn Island? ;-)

scroca

I find my credit card useful. My wife and I make all our purchases with it, unless the merchant doesn't take credit cards. We pay the balance due by the due date and never incur interest. It works for us.

bhchdh 

Not foolish at all. We gave up or credit cards ten years ago. No down side.

Rowan

I have a debit card with a modest line of credit with interest charged at much less than CC interest. The LoC is for emergencies, particularly so if travelling overseas. I"ve rarely tipped into the negative for several years now, and when I have, it's only been for a hundred bucks or so and for a day.

I, too, had a credit card balance and was jobless about 10 years ago. An auto teller machine "ate" my card, and it was the best thing to have happened.

All my on-line transactions are with a debit card, and I take out a lump-sum every week for various household expenses.

One thing that might bear checking is what happens to your credit rating if you pay down your account. I am led to believe America's fiscal system has an odd way of dealing with credit ratings when that happens.

scroca

You won't hurt your credit score by paying down your balance due. You can surely hurt it by running it up too high and by not paying debts that are due.

DnvrFox

Everything goes on a credit card. Gives me an accurate record of expenditures, and handy at tax time.

However, the balance is paid each and every month. I never incur interest and we get free airplane flights and notable cash rebates.

Fortunately, we have no need for additional credit beyond the two credit cards we use, so, I don't worry about credit rating, although I get enough "Please signup for our credit card" and "You are pre-qualified" and other similar advertisements, so I would guess the credit rating is pretty good.

Cyclist0383

I've never had one in my life, and have never had a problem not having one. Anything you can do with a credit card you can do with a debit card. The difference is that with a debit card you actually have the money to pay for it.

Oh, and before anyone asks we are debt free and own our own home, car, and mod-cons.

tsl

I went bankrupt back in the recession of '92. I haven't had a credit card since.

I've learned that

• if I can't afford an item, then I also can't afford that item plus interest.
• I spend less overall since I deal with objects (cash) instead of abstractions (figures on an account).
• it's easy to figure out if I can afford something, since I don't have to factor in interest or bill juggling.
• a pile of savings is infinitely more satisfying than a wallet full of plastic.
• I have more time since I have fewer bills, I pay them all on receipt, and don't have to track when to pay and how much.
• financial "emergencies" are simply the result of poor planning. I've learned how to plan better and haven't had a financial "emergency" in over 15 years.
• My "credit score" is only of interest to those who want me to pay them interest.

tsl

What the hell is a mod-con?

donheff

+1 I do the same. DW and I are looking at a frequent flyer trip to see friends in Hawaii to escape the winter in January or February.

Cyclist0383

Modern conveniences. We don't live in a shack.

ezdoesit

Wow I didn't know I was a deadbeat amazing and I like it cause I don't owe anyone anything and keep it that way.
I use the credit cards to extend my money in savings account to acquire interest then pay when the bill is due.
If I can't afford it I won't buy it PERIOD>
And I am retired so I have to watch my pennies so I know how much to spend on my bicycle he he.

gtragitt

I need credit cards for all my travel. I do pay them off completely when the bills arrive. My rebate on a Costco American Express card last year was over $2300. It will be over $1500 this year. I have stopped using it in foreign countries because American Express now charges a currency conversion fee.

I use a Capital One Visa for foreign countries to avoid this fee. None of my cards have an annual fee. I did cancel my Platinum American Express card due to the high fee. It was good for getting into airline lounges, but I never used it much because the Costco AMEX gave me a good rebate. I had previously been getting it free with my Ameriprise investment account.

Sometimes in foreign countries they only take MasterCard; so, I have one of them also. I used to have a GM MasterCard, but dropped it due to the fee. It had previously been worth it because I racked up huge rebates for purchasing GM cars. I am not planning to buy another car in the next five years; so, I had no desire to keep this card.

The American Express lounges in foreign airports allowed access with the Platinum AMEX card. After I dropped it I can still get in with my Hilton Gold AMEX card. This card also increases my HiltonHonors points, which I use for free nights in hotels. I stayed in the NY Hilton last month for free (about $400/night) and in Nashville last week 2 nights for free.

Although I have no interest fees and annual fees, I probably spend much more by using them than by using cash.

BengeBoy 

I pay for every single thing I can with an Amazon.com credit card -- you earn points as you go, which you can cash in at Amazon to buy stuff.

Balance gets paid to zero every month, automatically out of checking. Keeps me from running up a balance.

There's nothing wrong with credit cards if you can be in a position enough not to carry a balance. Right when I got out of a college I would need to carry a balance for a few months (I bought my first serious bike that way!) but I haven't carried a balance since 1980 or so. My parents were both Depression babies so I grew up with an unnatural fear of carrying consumer debt; my parents pounded it into me. I passed up a lot of fun opportunities when I was in my 20's because I didn't have the money to pay cash for things like vacations w/my friends and I refused to run up a credit card balance -- I'm actually not sure if that was a good thing (example: pulled out of a bike tour down the California coast once because I was out of cash, so I stayed home...). It's nice now not to be in debt; but it would have been nice then to take the trip!

FunkyStickman

Finished with credit cards a few years ago, and now I am debt-free except for my house... no regrets.

jdon

I have one credit card I use for online purchases and travel but never carry a balance. Even then, I prefer to ask for a cash discount than collect reward points.

echo

I like that thinking, I always got by without a credit card...then one day my bank offered one to me and I accepted, charged a bunch of crap I would never spend cash on...racked up the limit, realized what I had done - shredded the card, paid off the balance and will never go back to plastic again...except for using my trusted debit card.

Shimagnolo

1. Get cards that have cash-back bonuses, and no annual fees.
2. Don't put any charges on a CC unless you have the money in the bank to pay for it.
3. Pay balance in full every month.

4. DON'T carry a debit card! The protections of a CC card against bogus charges don't apply.
It enables someone to reach directly into your bank account.

myrridin

I would be very cautious using a debit card. Unlike credit cards, debit cards do not usually include fraud protection. Once they take your money it is gone, and the bank will not feel any obligation to correct the problem. I've had issues when using my cards (credit) in retail locations, and then having numerous fraudulent charges immediately following. Since the only use of the cards was the retail purchase that week it seemed a pretty clear case of where the fraud occurred.

Use your debit card only at a bank ATM and just use cash elsewhere. If not, at least don't keep much money in the bank account linked to the card.

rck

Like others in this thread, I have one credit card. My card is also a cash back and the balance gets paid in full at the end of every month. The only downside is that I end up buying bicycling related toys that I might have passed on if I had to rely on cash on hand. On the other hand, there are worse problems to have!

CraigB

Like others here, I use my cards regularly, but always pay them off each month. I was a credit card abuser in my youth, and it took me many years to climb out of the hole I'd created for myself. Now nothing major gets purchased unless I can fit it into the budget. And that's pretty seldom.

On a related note, I have steadfastly avoided ATM cards for the past 20 years. I found I was getting cash at the drop of a hat. That behavior has changed as well.

It's a shame we can't be born with hindsight.

ModeratedUser150120149

The key is self discipline, not whether you have plastic or not.

Also, be very sure you understand the rules of Credit Card vs. Debit Card. I'm not sure what is happening now, but before the new rules took effect banks, contrary to what consumers thought, did not limit purchases to the amount of money in the person's account. The typical consumer agreed to "overdraft protection" which was used by the bank to assess overdraft fees and interest charges. Also, the protections for credit cards are not universally applicable to debit cards.

It is nearly impossible to travel without a credit card to rent cars, make airline reservations and so forth. Many hotels will not rent to you unless you have a major credit card. But, if you do travel you need at least two credit cards. One as a back up when the first is eaten in and ATM or there is some screw up. It has happened to me and others.

If you want to see why banks like consumers to have debit cards just pay attention at the check out at a store. Credit card folks generally keep their receipts where debit card folks don't. With no receipts people have no clue how much they are spending so people have a tendency to spend more.

In short, plastic is a valuable tool. Banks love it when the consumer can't exercise self-discipline and pass control to the bank by using a debit card.

Oh yes, I have multiple credit cards which I pay off each month as due. One is a fee card because I get a cheap airline ticket that is worth more than the fee. I never, never put a purchase on a card just to get airline miles. Airline miles are like cash except the airline determines that they are worth. I do put most purchases on cards that give me cash incentives.