4 reasons to not use credit cards

Today’s guest post was written by blogger, Jana Lynch. Jana and I are both living a very counter-culture lifestyle and loving every minute of it.

Photo by Daniel Oines

Photo by Daniel Oines CC

 

Confession: I don’t use credit cards. Neither does my husband. We survive fine, too.

We stopped using them about seven years ago when we decided to pay off all our credit card debt. We realized how out of control we were when we used them, and we realized we couldn’t be trusted with them in our wallets. It was how we got into debt in the first place.

At first it was difficult; we had become accustomed to charging any and everything and using cash or our debit cards seemed…weird. But we knew what we stood to gain if we refrained from using them so we stood firm in our resolve. It worked, too, because we paid off our credit card debt and have managed to remain that way for 3 years. And, seven years after our initial commitment, I’ve realized that, in addition to the debt, there are a few things I don’t miss about credit cards.

For instance:

  1. Having a bulky wallet. Carrying all those cards around bogged down my wallet and made my purse heavier than it needed to be. I’m pretty much resigned to having a ridiculously large mom purse, but I can slim down my wallet. Now I can find all the important cards (like my insurance or library card) when I need them and my purse is lighter.
  2. All those bills to pay and fees for late payments. I am not the most organize person and, even with having a list of bills written down, I sometimes manage to forget one. When I had credit card debt, it was more bills to remember to pay and not paying those had serious consequences. Plus, I’m fairly lazy and want to spend as little time as possible paying bills. Without the credit cards, that happens.
  3. One less worry about ID theft. Last year, my alma mater’s system was breached and identities dating back to when I was in school (mid-late 90s/early 00s) were compromised. Then there were all those breaches at Target and other stores I can’t think of right now. Not having credit cards, and not having to remember which card I used at which store, gives my paranoid brain a little peace of mind. It’s one card to keep track of, and it’s a debit, so I know instantly if there’s a problem. No waiting for a statement to figure that out.
  4. Less bills to pay. I’ll admit that I am not great at remembering to pay bills on time. I have the majority of our bills set up for an autodeduction and the ones that aren’t (utility bills) get paid once a month, on one particular payday. When there are credit card bills due, it’s one more thing to remember to pay, it’s more money going to someone else than staying in my account, and it’s one more chance to make a mistake that might, quite literally, cost us. Without them, it’s easier to pay the bills and I’m more efficient. Plus, the extra money helps out with other expenses.

This is not to say that credit cards are evil. If you can use them properly, then have it. I just know, and have a proven track record attesting to it, that I can’t. So I stay away.

Getting out of debt, and getting credit cards out of my life, was one of the smartest choices I made. And while it’s not easy, refraining from credit card use, I do it. I would love to walk into a store and buy all the things and not worry about how I’m going to pay for them that day. But I also know the stress it’ll cause isn’t worth it.

So I keep the credit cards at home, locked away.

Everyone is better off.

How about you? Do you use credit cards? Why or why not?

Jana Lynch is a blogger at Jana Says, where she talks about everything from parenting to pop culture to mental health issues, and runs the blogger mentoring program Bloggers Helping Bloggers. You can stop by and say hi on Facebook, Twitter, Pinterest, and Instagram.

 

My little cash experiment

I’ll start by saying that I really want to go on vacation. A real vacation. Over the past twelve years, Jeff and I have gone on one real vacation. That was our wedding in Vegas. All of our other vacations have been local, a family visit or a few days for an event. I decided that this year, I would start saving for a major vacation. I want to take a cruise to Italy. I’ve always wanted to see Italy and I’ve been looking at the cruises that visit the country. It looks like a lovely idea and it’s a lot of money.

Since we are still paying down debt, I did not want to divert any of those funds for the trip. I needed to find a new way to cut back my spending to save for this. In January, I started using cash again. I’ve done this periodically through the years to help tame my spending but always went back to the debt card. This time, I put my debt card away (aka one of the cats stole it) and have been using cash for the past month.

Each time we get paid, I take out a certain amount for gas, groceries, eating out and other things we’ll need for the next two weeks. I based this amount on what we’ve been spending in the past using the debit card. I can only use the cash I have. Once it’s gone, I’m done spending. When I’m about to take out money for the next two weeks, I count up how much money I have left. I deduct that amount from what I take out of the bank, bringing my total back to the fixed amount I should start my two weeks with. The money I saved goes into my vacation account.

In the first month, I saved $97.00. I’ve got a few days left until we get paid again and I’ve still got about $60 left. I’m going to need a few things this week and gas but I’m hoping to still put $30 in the account. I always tend to spend more at the beginning of the month, since that’s when we make the big trip to the warehouse club to stock up on cat food, litter and other things we need for the month. The majority of the money I put in the savings account last month was from the 2nd half of the month. I would be thrilled to put $30 in for the first 2 weeks.

I know $100 doesn’t seem like a lot, but when your total biweekly allotment is $300, I cut my discretionary spending for a four week period my over 16%. Not too shabby. It’s funny when you are holding something in your hand and realize that this could be money for Italy. I’ve put a lot of things back in the past month.

Credit and debit card issuers state that the average person spends 8-10% more when using plastic. I can’t tell you how many times I’ve made a purchase and not even known how much I spent. I know I had the money to cover it, so who cares right?

I know that if I would have had my debit card on me, I would have purchased a new vacuum last month. Mine needs a ton of repairs and it would be more cost effective to get a new one. Instead, I bought an $8 broom and dust pan. I’ve got all hardwood floors and it actually takes me less time to sweep, plus the broom gets into all the crevices in the floor. Oh how we think about things when we’ve got greenbacks in the wallet and a cruise on the mind!

I hate cash

I’ve posted here about trying to use cash for certain things, like groceries, because Dave Ramsey recommends it in FPU. Well, I’m here to tell you that I have given up on cash. I use my debit card for everything except purchases at small businesses that will accept checks. I write checks to save the business the credit card processing fees and I can write a check pretty fast. I hate using cash. I don’t like having cash on me, it’s slow and it’s more difficult to track. With my debit card, I know I spent $2 on a coffee and $1.50 on a copy of the WSJ. With cash, I only know I spent $3.50 today. With my debit card, I don’t have to count out the money and then hand it to the cashier and wait to get change back.  I know that statistics show that people tend to pay more with debit cards, but I’m on a very strict budget and have to stay within that budget. I am very good at sticking to that budget.

So, I tried. The only things I’m going to use cash for are large purchases. That way I can flash the cash to get a better deal. Other than that, it’s debit all the way.

How do you feel about cash? Does it drive you crazy? What’s your favorite way to pay for things?