We’re different, and proud of it! We are part of a minority of Americans who choose not to have any credit cards.
I haven’t always been different. My father gave me a credit card at age 13 “in case of emergencies”. A few weeks later I had an emergency need for a diamond and ruby ring. This made my father rethink his decision, but my mindset was formed: Credit was a good thing.
As soon as I graduated from college, I applied for my own card. I immediately used it to buy “necessities” like designer bedding and work clothes. I felt that I needed these things and by using credit I didn’t pay any attention to the price tag. Imagine my surprise when I received a bill three months later that said I owed $3000 to the credit card company!
I made minimum payments on that $3000 for years and even added to the balance. By the time I met and married my husband I had $6000 on the card. I would have had more, but $6000 was my credit limit.
Thankfully my husband had been wiser and never had a credit card. He didn’t have a strong conviction though, so when we married I just continued my minimum payments and went on with life. Going on with life meant having a baby in the first year and deciding to stay home inspite of our financial situation. We then added babies number two and three, a move to another state, a car payment and finally baby number four. We were in trouble.
We limped along for a few years until we decided to move back to our home state. Housing was cheaper and the sale of our home would provide enough money to pay off our car and our credit card debt. It seemed to be the perfect solution until we arrived and discovered that the job my husband had been offered didn’t exist.
Even though my husband was able to get another job relatively quickly, the pay wasn’t as good and we had used up the money we received from the sale of the old house for living expenses. Within a few months our new home was in foreclosure and after much anguish, we decided to declare bankruptcy. It was a humiliating experience and wrecked me emotionally for years.
I learned a few lessons from that experience, the primary one being that credit is not good for me. If I cannot afford to buy something with cash today, why do I think I will be able to pay for it in the future? Never mind the accrued interest and fees — it seems credit card companies tack on a $39 fee just for looking at the bill.
There are a few people who can keep one credit card, use it with discipline and pay it off at the end of the month. I am not that person so our family will continue to be credit card-less (and happier for it).
Great post. The current economic “downturn” has been a reality check
for many families( including mine). Not only does our financial habits
affect us currently,it forms our children’s attitude toward money. I once
heard the saying, “never owe another man anything but your love and
respect”.
Thanks Kim. We just had our reality check a little early. 🙂
Hello,
I’m loving your site! We’d like to go card free, too, but I was wondering how you buy items online, or how you reserve a hotel room? It almost seems like it’s a necessity to have one. Thanks!
Katie, I know this doesn’t work for everyone, but we almost always pay for things online with Paypal or, if we have to use a card, we use the debit card from our primary account because there is not very much money hanging around in that account. Also, a year ago we had to get a hotel room and we were able to use our debit card for that as well as a car rental. They required a $250 deposit on the car rental which was returned later, so we just used money from our second account.
Oooh! I didn’t realize you could use debit for all that! Thank you so much!
Your story sounds like mine. I had an amazing six figure job in NYC right out of college which led to being approved for an american express with a 15k limit (dumb idea for a 23 year old!). Within 2 years I owed 9000 on that card and in 2011 I lost my job and was left with 11k in total credit card debt not to mention 15k in student loans. My husband and I are putting off starting a family because of my credit choices before we were married. It took a year but I finally got a new job making 30k a year and my ENTIRE paycheck is going towards my bills until they are all paid off.
I cut up my american express, my visa, and my mastercard that I owe on and I doubt I’ll ever request a replacement copy. its just not worth the trouble.
Way to go Sarah! So few people are willing to sacrifice like you are to pay off their debt. I know you can’t wait to be debt-free!
I agree that you should not use a credit card, unless you are going to be very careful to monitor it and pay it off each month.
I do use a Upromise Credit Card, because it saves 1% for college. I have been monitoring it on-line though and making sure I don’t spend too much, and also always pay it off. I also like it because I don’t have to keep track of debit receipts and record them in my check book. It keeps track of all my spending for me.
My daughter is graduating this year and and so far there is $1,375 start her college life — books, supplies, or payment on tuition. (That is after 14 years of using the card.)