I have credit cards. There where two reasons I’ve used a credit card since after high school. One, with online statements you can download it was the easiest way to track my finances. Two, the cards I have give cash back, about 5% on groceries and gas. I think I’ve made a couple hundred dollars in the past few years. The number one rule in having a credit card is: Don’t spend what you don’t have, and pay off your balance every month (okay that’s sort of two rules).
Now I know that credit cards are a horrible thing for most people, that millions are in debt on their credit cards and spend money they don’t have. The credit card companies always seem to win, though I’m convinced I’ve come out on top with my cards.
But, a good friend pointed out to me that Credit Card companies probably love people like me, cause I tell others about how I use a credit card and it’s a good thing, luring them into a life in debt. I also read somewhere that you spend 12% more with a credit card then you would with cash (I don’t know if that’ s true for me, but those are the stats).
All this to say, I’ve officially zeroed out any balance I had on our credit cards and I will no longer be using them. Here are some of the reasons I think this is a good thing.
1. I want to be a good example to others in being a wise steward of my finances, and for most that means NO credit cards.
2. It’s one less payment to have to do each month. And my wife and I will both be happy about that.
3. If it’s true we spend 12% with a credit card then with cash, then my bank accounts gonna be 12% fatter. nice.
4. I can use my bank debit card for any online transactions or other things I have to have a card for.
5. I’ll quit stealing from The Man (it’s not nice to steal, even if it’s from The Man).
I’d like to encourage others to do the same. Don’t need to cancel your cards. Just pay them off and put them away. Let’s try it for about 3-4 months and then we can re-evaluate.
word hon! : )
min
I disagree. Credit cards can be a way for college students to build credit and for people like myself to track their expenses (I actually spent more CASH than I do with a credit card, not to mention the other benifits). Some people should not have credit cards, and usually those people know their tendencies. Credit cards can be an effective and convenient financial tool in the right hands.
i would love to put away my credit cards for good. unfortunately i really need to build up good credit. i’ll just keep them paid off for now. let me know if it’s true that even responsible credit card users spend 12% more with cards… i can’t imagine that being true of those who are already responsible with not spending money they don’t have, paying off balances, etc.
anyway just some thoughts.
While it is true that credit cards can be dangerous, they can also be very, very good. Before buying our home in Texas, my wife and I had never undertaken any major financial transactions before. I had a credit card at the age of 16, paid the balance off every month, and was cautious about spending with it. When it came time for us to buy our house, our credit was very good considering the limited information on our credit report. We were able to lock in a rate well below most first-time home buyers, which will save us thousands and thousands of dollars over the life our our home loan.
Spending what you don’t have is never a good idea, but keeping cards around for emergencies and building credit is a good idea, I think.
Wow, I just ran across this post again, over three years later.
We still don’t have any credit cards. And though I’m still not completely convinced not having credit cards is a good idea, it continues to work for us. I’m curious if anyone else has thoughts on the topic now that we’ve been through the economic crisis our country has recently seen. Any thoughts on credit cards today?