Credit card free??

[BABY_EINSTEIN'S_MOM]

With all of the credit card chaos going on, it got me to wondering...does anyone on here live credit card free? No credit cards whatsoever(Dave Ramsey style..lol)...or are there those that would be too scared and feel unprepared when traveling, etc??

 

[addicted_to_WDW]

My personal feeling is that debt free is awesome but credit card free is dumb dumb dumb.

Credit is important if you want a mortgage, a car, a cell phone, etc. Having just one credit card that you spend $50 a month on and pay off every month is better than living a cash only existence.

 

[crispychicky]

My personal feeling is that debt free is awesome but credit card free is dumb dumb dumb.

Credit is important if you want a mortgage, a car, a cell phone, etc. Having just one credit card that you spend $50 a month on and pay off every month is better than living a cash only existence.

ITA!! Especially with all the cc's that offer rewards, it doesn't make sense NOT to have one if you always pay it off in full every month. You're missing out on free stuff!!

 

[Where'sPiglet?]

ITA!! Especially with all the cc's that offer rewards, it doesn't make sense NOT to have one if you always pay it off in full every month. You're missing out on free stuff!!

I find that if I pay in cash - and know going into a store that I plan to pay in cash and I have x amount available to spend - that I spend far less than I would with a credit card. So yes, I'm missing out on the reward dollars, but I end up with more in savings.

That said...I do have a Discover card that gives 5% cash back and I do use that on occasion, and I have the Disney card and I have almost 100 points available right now so I do use them, but I'm finding cash is better for me because I spend way less in the first place.

And I believe Dave Ramsey says the same thing - something like you spend about 30% more if you use a credit card, even if you do pay it off in full each month.

 

[dawson5]

I know we have open lines of credit but as for having the credit cards themselves, we don't. If one of the open lines of credit sends us a new card, it automatically goes into the shredder. We have not used a "credit card" in almost 5 years. We have our debit card that has a mastercard logo on it. I guess technically it is one but it comes out of our checking. The only thing we have done that probably goes against Dave's credo is our line of credit. We have overdraft protection for $20/yr that covers us for $5,000 on our checking. $20/yr for peace of mind is a small price to pay for knowing that if hubby or I overspent, we would not be on the hook for the $30+ OD fee from the bank and whatever else the store would charge us.

 

[TheRustyScupper]

1) I am sure it can be done.
2) But, I can't see us going credt-card-free.
3) We pay the balances every month, so it is like paying cash.
4) But, we need the availability of credit.

 

[angwill]

I have a credit card for emergencies only. For purchases we use our visa bank card so if it is not in the account it does not get spent.

It feels wonderful not owing interest to credit card companies or worrying about living paycheck to paycheck.

Our credit scores are in the excellent range without credit card balances. We have a house and one car payment that will be paid off in the next two months and that has been plenty to keep our score up.

I don't understand why some people feel that a credit score can not be high and credit look excellent without credit card balances?

 

[addicted_to_WDW]

I don't understand why some people feel that a credit score can not be high and credit look excellent without credit card balances?

Who has said that?

You can't have good credit without having established credit, and you can't get a mortgage or car loans if you don't have a credit history. That doesn't mean you have to charge up your credit cards.

 

[jaminmd]

I have a credit card for emergencies only. For purchases we use our visa bank card so if it is not in the account it does not get spent.

It feels wonderful not owing interest to credit card companies or worrying about living paycheck to paycheck.

Our credit scores are in the excellent range without credit card balances. We have a house and one car payment that will be paid off in the next two months and that has been plenty to keep our score up.

I don't understand why some people feel that a credit score can not be high and credit look excellent without credit card balances?

There are plenty of us who use CC's and don't have balances. I don't think the OP was referring to people having balances, just not using CC's at all.

 

[tanyabanana]

I haven't used a credit card in years, but we do have a credit card open. We will use it next March when we rent a car in Florida. I checked into just using our debit card but decided it would be easier to use the cc and just pay it off when we get home. Our last 2 trips to Disney were completely credit card free and I LOVED it!

 

[angwill]

My personal feeling is that debt free is awesome but credit card free is dumb dumb dumb.

Credit is important if you want a mortgage, a car, a cell phone, etc. Having just one credit card that you spend $50 a month on and pay off every month is better than living a cash only existence.

It was this post that said credit card free is dumb, dumb, dumb. Which I take as saying people without credit cards are dumb. My personal feeling is that you can be credit card free and not be dumb because of it.

You can also have excellent credit and be credit card free. You can still get a mortgage, a car, a cell phone etc. You don't need to spend anything on a credit card and pay it off every month. It is not necessarily better than living a cash only existence. To each their own but I disagree.

I am adding that Dave Ramsey's method is to eventually get to the point that you have a line of credit that you loan yourself if you need it. You pay off all the credit and then roll what you were paying over into a savings account which is considered emergency money. Pay off the car roll that payment into an account for the next car so you can pay cash for it. etc. etc.

 

[tigereye]

It was this post that said credit card free is dumb, dumb, dumb. Which I take as saying people without credit cards are dumb. My personal feeling is that you can be credit card free and not be dumb because of it.

You can also have excellent credit and be credit card free. You can still get a mortgage, a car, a cell phone etc. You don't need to spend anything on a credit card and pay it off every month. It is not necessarily better than living a cash only existence. To each their own but I disagree.

Agreed. I'm 35 and haven't had a credit card since college. My roommate got caught up in all the credit offers back then and charged everything up and got so far into debt, he couldn't get out. I realized that I didn't trust myself not to do that, so I've been CC free since then. I've certainly had no trouble getting a mortgage or auto loans, but don't finance anything else.

Given everything else, I'm not sure I'd make the same decision again, and I plan to encourage my kids to start building their credit early and responsibly.

Mike

 

[addicted_to_WDW]

It was this post that said credit card free is dumb, dumb, dumb. Which I take as saying people without credit cards are dumb. My personal feeling is that you can be credit card free and not be dumb because of it.

You can also have excellent credit and be credit card free. You can still get a mortgage, a car, a cell phone etc. You don't need to spend anything on a credit card and pay it off every month. It is not necessarily better than living a cash only existence. To each their own but I disagree.

I feel that it is a dumb decision but not that people who make it are dumb. There's a difference.

This is what happens when you do not have ongoing credit. Eventually, generally in 10 years, the old accounts fall off of your reports and your average age of accounts goes down. That's about 20-30% of your credit score. Installment accounts (mortgages and loans) are not weighted remotely as heavily as revolving accounts per fico therefore your scores will drop.

Prior to the credit crisis, a score > 650 guaranteed you good rates on most credit products. These days it is 740 and eventually (imo) it will be >800. While choosing not to utilize credit now might not be hurting you, it will then and it will take you years for your scores to rise due to that average age problem.

I don't think anyone should ever charge more than they can pay off immediately, but using a card is in everyone's best interest from a credit building standpoint.

 

[wdwfan16]

I find that if I pay in cash - and know going into a store that I plan to pay in cash and I have x amount available to spend - that I spend far less than I would with a credit card. So yes, I'm missing out on the reward dollars, but I end up with more in savings.

That said...I do have a Discover card that gives 5% cash back and I do use that on occasion, and I have the Disney card and I have almost 100 points available right now so I do use them, but I'm finding cash is better for me because I spend way less in the first place.

And I believe Dave Ramsey says the same thing - something like you spend about 30% more if you use a credit card, even if you do pay it off in full each month.

That is not a CC problem but a self control problem. I can walk in knowing I will spend $X for item Y. I get it, go to the register and pay with my CC. I get a rebate too.

 

[Colleen27]

We don't have credit cards at all and haven't in years. I know that as our student loans and mortgage fall off our credit report, the lack of open credit accounts will lower our score but I'm honestly just not that worried about it. My credit score isn't something that impacts my life in a meaningful way at this point - we're long established customers with all our utilities, including cell phone, we're past the point in life where we're thinking about mortgage rates, and we don't finance our cars. So for our circumstances, we just don't see any need to have the temptation of an open credit card lying around.

 

[ICF]

ITA!! Especially with all the cc's that offer rewards, it doesn't make sense NOT to have one if you always pay it off in full every month. You're missing out on free stuff!!

I dont think I've paid for a hotel room in at least 10 years, and that's while staying in them 3-5 nights at least a year.

I don't pay interest on them and for me it would be very stupid to not use them and lose out on all the free stuff they have gotten me.

 

[TinkandAriel]

No credit card here either. We own our home too, so we're very blessed. We have no prob getting loans if or when we need them either. It's all a personal choice.

 

[dvcgirl]

We have no debt at all. We own our house outright. We own our cars. And we charge probably 50K or so a year on our AMEX card, which is paid in full each month of course.

I understand that this may not work for most people, but it does work for us. I like Dave Ramsey. I enjoy listening to his program. But credit scores do matter for those of us who aren't multi-millionaires. He will brag that his credit score is zero and that a credit check may show that he can't afford to rent an apartment when he could afford to buy the whole building. Well, that's fine for him. For the listener making less than seven figures, a credit score matters.

We don't borrow money....ever. However, your credit score matters for any type of insurance you purchase....homeowners, auto and disability. It also may matter for someone working in finance or handling money in their job/career.

I've also heard him talk about how you spend more than you normally would if you use plastic and not cash or a debit card. We're very disciplined with our money and honestly, that just isn't the case for us. We have a budget and we stick to it.

And one other thing. No matter how many times Dave Ramsey says that you have the exact same protection with a debit card as you do with a credit card. He talks about what it says on Visa's website regarding their protection. But listen to Clark Howard and he says exactly the opposite...and he's much more of a consumer advocate than Ramsey is. The reality is that if you dispute a charge that you've made with your debit card.....the money has already transferred out of your account. Now you have to go through the hassle of getting your money back. Same thing if the debit card is stolen and used by a criminal. They go on a spending spree....and now you have to convince your bank to give you your money back.

I've had several disputes over the years as an AMEX customer. Each time they backed us up and removed the charge.

Having said all of that.....if you don't have the ability to restrain your spending and are using the cards to live above your means......ditch the cards.

 

[Mrs. Charming]

We don't have one. Cars are paid for, we also have been long-standing customers with our utilities, and adequate savings for emergencies.

It's just our choice.

 

[portocall]

That is not a CC problem but a self control problem. I can walk in knowing I will spend $X for item Y. I get it, go to the register and pay with my CC. I get a rebate too.

I don't think it is a self-control problem, it is well documented that a lot of people do spend more when they use a credit card. I prefer to stick with my emotional attachment to money, since it keeps me spending less.