Does anyone live without using credit cards?

[Swimalie]

While using credit to takie advantage of promotions sounds like a good idea in itself, what happens when a crisis presents itself and you are not able to pay the balance off before it is due?

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Simple.... I have probably 40 times more money in my bank than I charge monthly on my credit card. I would never charge anything on my card and not have the money in the account to pay it off immediately, if needed. The 2 cards I own don't charge me an annual fee and both are cash rebate cards so both pay ME to own. Both are more secure than a debit card and can be used more often. I also carry cash but only to use for smaller purchases (under $20) and for those times when I can't use a credit card.

 

[disney1990]

My question is for those who use yours for everything all month, groceries etc. Do you keep track of that in your check register like it was a debit transaction and then when the bill comes add it up to match and then pay it off? I would love to earn more Disney Rewards and have thought about doing this but wasn't sure how to go about it.

I subtract my CC purchases from my checkbook just like I would if I wrote a check. That way the money is all ready accounted for in my account.

 

[Butterflies31]

We just paid cash for our Disney Vacation.. I am all for no credit cards. We use to use them and we did the same as you paid them off. now we just use a debit card. Come right out of the bank account...

Congrats on your achievement....

 

[ohlas]

I'm not sure what you mean by a large amount of money, but I keep what I feel is a large amount of money in each of our accounts - it still doesn't mean I want the hassle of either carrying large amounts of cash or using a debit card where my account could be cleaned out. Yes, you get the money back eventually, but think about trying to clean up the mess created in terms of bounced payments!

Additionally, if I want to get a large amount of cash out on a weekend, I am limited by my banks policy on withdrawals to something like $400 per day - definitely not enough for a really big purchase, should something come up. I do keep some cash on-hand in case of an emergency, but it isn't something I would nibble into for a purchase - it's for a true emergency.

And I do not pay someone/anyone to use their money, except the lender for our mortgage. I did have student loan debt in the past, but paid that off last year. It felt really good!

most places still take things called checks and most people plan large purchases, cc arent evil but most people cannt control themselfs..

.dear you are the perfect example of who should use credit cards someone that pays them before the due date to make sure you dont get the fees... but you are the exception,,,

do a goggle search on the levels of debt and credit card debt in the usa, it will floor you

 

[ohlas]

I agree with you 100% I have learned too many lessons the hard way with money. What if you have an emergency and you need the tax refund? The CC will NOT be paid off. It happened to us....thinking oh we can just pay it off when....Sometimes life just dosn't work the way you thought it would. My no CC trip is to celebrate the one year mark when my oncologist said, "you don't have cancer" When I was soooo sick I was on my laptop planning my trip I knew I would one day be healthy enough take. We have the money and we are going first class all the way! Ritz Carlton club level and on the beach!!

Good for you my mom and mother in law are both coming up on the 10 year mark of no cancer.. I hope you have/had a wonderful trip and are feeling well

 

[ZanyToes]

We do! We've never had a credit card and intend to keep that record. We use our debit card for anything that would need a credit card (air tickets, etc..)

 

[tink15823]

This is a big issue when traveling - many of the big chains either don't do debit cards or want to put a huge hold on it, from what I have seen and read. I definitely still use credit cards for travel, and I won't get rid of all of them for that reason. I won't use a debit card tied to my bank account since, if someone gets ahold of it, they could potentially wreak havoc with my automatic payments! What I do is charge, and then before the statement posts I pay it off. IMO this works pretty much like a debit card that way, except with less risk with my bank account being tapped without my knowledge or consent.

We have never had this and have been Credit card free for 13 years . We use our debit card or gift cards.

 

[nunzia]

In the worst case example, you can purchase an item with a credit card 30 days before you technically have to pay for it. If you are worried about a disaster occurring between the purchase date and the day the credit card company wants to be paid back, why not give them the money the same day? There is nothing preventing you from paying your balance in full at any point in your billing cycle. Or making multiple payments throughout the month.

Credit card companies make their money from people who carry a balance and from the fees they charge retailers to process credit transactions. If you don't carry a balance, a credit card will never cost you a penny more than using cash. And in many examples given ad nauseum, will actually give you money in return for not using cash. A credit card (in the right hands) is win win. Further benefits are (for some cards) automatic warranty extension for purchases, conflict resolution for services already paid for, advance purchase opportunities, and fraud and theft protection.

As far as being a gambling man, it seems like walking around with all that cash is a bigger risk.

Great point..I do this with things I am focusing on paying. I have a loan for my DVC That said, I put down a very large sum (for me) so I don't owe much. DVC is my focus now, so when I get paid, or get extra money I instantly BillPay it to DVC. I should have them paid off this year. I don't like debt, but with our life we also use it sometimes. We ended up getting a car that we hadn't saved for (we really try to do too much but we've seen too many focused too much on one thing and lose out of other things), so after DVC is done I'll start hitting that one hard, and then the mortgage. That's all we owe on, and DVC has the highest interest so out it goes I commend all of you who are working so hard to be financially responsible..

 

[DISdreamin']

most places still take things called checks and most people plan large purchases, cc arent evil but most people cannt control themselfs..

.dear you are the perfect example of who should use credit cards someone that pays them before the due date to make sure you dont get the fees... but you are the exception,,,

do a goggle search on the levels of debt and credit card debt in the usa, it will floor you

I hear you about the average household cc debt. One thing I should mention is that I don't have a debit card tied to our household checking account. I have a separate account I keep a small amount of money in that has a debit card, but for our "real" account I have only an ATM card. Were it lost, I don't want someone to be able to clean out our account that our mortgage and insurance are automatically debited from.

tink15823 said:

We have never had this and have been Credit card free for 13 years .

Well, the local Avis I rent from frequently is a franchise location that will not accept debit cards without a significant hold. Since I keep only a minimal amount of cash in our debit-linked account, this doesn't work well for me. Additionally, I like the miles/points/dollars I earn on the only cards I do hold. I'm not entirely sure I make money on the deal - if I do spend a few extra dollars here and there because of convenience, but the convenience itself is worth it to me.

 

[bettymae1121]

I'm not CC debt free yet, but I hope to be in the next two years or so. All our CC debt is on a low interest card (6%) that is locked in (we opted out of the rate increase, the account is closed but the rate locked in as long as we are late. I pay it the day I get the statement, so no risk of that! ). Meanwhile, I have a second card that I charge all of our monthly purchases to and then pay off in full every month. We earn about 25k airline miles a year this way, enough for one free ticket a year.

Once the CC debt is paid off, I will continue using a CC with rewards, and will continue to pay it off each month. Our CC debt is not from overspending on every day items, but the large wedding we had in 2005, and have been slow to pay it off due to other events in our lives since then. We haven't added a dime to that debt in 5 years, I've paid our rewards card off in full every month for the same amount of time, so I don't see that changing once the debt is gone.

A PP asked how people that use CC's for everything track their purchases and make sure they stay on budget. I have Quicken, which downloads all my CC and bank account info so I have an up to date snap shot of not only purchases made, but future deposits (like pay checks) and future automatic payments (like the mortgage, car insurance, utilitlies, etc.). On top of that, I have a budget in Excel. Actually, I have 12 budgets in Excel because I don't use the same budget for each month, I make a budget for every month of the year. This is because, for us at least, no two months are the same for our spending. For instance, in Feb. both our AAA and Costco annual memberships are due. That's about $175 we will spend this month that we don't spend the other 11 months of the year. We account for that spending this month. March is usually when we take the dog to the vet for her annual exam and shots, so we budget that for March. April is an extra pay check month (we get paid 3x instead of the usual 2x) so I know how much extra money we'll have for large ticket "need" purchases and to put extra towards the CC debt that month. In May, we have a half dozen birthdays, Mother's Day, and two wedding aniversaries, so we have a huge gift budget for that month (we call it "Christmas in May" as a joke! ). You get the idea. Between Quicken and Excel, I know how much money will be available for each month (baring emergencies of course) for the whole year at a glance.

It did take a while to set up and get used to, and I still tweek it as our needs change or if I get a better idea on how to track it all. But on the average day, I only spend about 5 minutes down loading info to Quicken, making sure it all matches my own records, and updating the Excel budget if needed. It pretty much runs itself now.

 

[Shreggor]

I don't think I explained myself fully.

While using credit to takie advantage of promotions sounds like a good idea in itself, what happens when a crisis presents itself and you are not able to pay the balance off before it is due?

Well then, in the event of an actual crisis, you'd pay the minimum for a few months until the crisis is averted.

What if you used $1500 in cash to buy a new tv and then the day you got it home, your roof caves in? You'd probably have to rearrange your finances in some way for a crisis, whether you use cash or credit.

If you use cash for a big purchase, you're going to still be out that cash when a crisis comes. If you use credit, at least you can deal with the crisis with more cash in hand until the crisis is over.

The problem is not credit. It's idiots who charge more than is reasonably within their budget.

 

[bebelle]

Congratulations! We are cc free. We don't use them because we don't have them!! We have NEVER had a problem using our debt card or paying cash.

 

[hinodis]

Well then, in the event of an actual crisis, you'd pay the minimum for a few months until the crisis is averted.

What if you used $1500 in cash to buy a new tv and then the day you got it home, your roof caves in? You'd probably have to rearrange your finances in some way for a crisis, whether you use cash or credit.

If you use cash for a big purchase, you're going to still be out that cash when a crisis comes. If you use credit, at least you can deal with the crisis with more cash in hand until the crisis is over.

The problem is not credit. It's idiots who charge more than is reasonably within their budget.

Well, I don't think I am an idiot, but when I was sick DH had to take off 8 weeks of work to take care of me and DD and our income dropped so we did have to use our credit credit cards and charge more then was reasonably within our budget. Like I said before sometimes life happens. We now have a savings account that is earmarked as "emergency money" We did not have emergency money before because we were using our money to pay for the CC's. So, If we go out and buy a new TV with cash and the roof falls in we use our emergency fund to fix the roof. See, I am NOT an idiot.

 

[bebelle]

Well then, in the event of an actual crisis, you'd pay the minimum for a few months until the crisis is averted. What if you used $1500 in cash to buy a new tv and then the day you got it home, your roof caves in? You'd probably have to rearrange your finances in some way for a crisis, whether you use cash or credit. If you use cash for a big purchase, you're going to still be out that cash when a crisis comes. If you use credit, at least you can deal with the crisis with more cash in hand until the crisis is over.The problem is not credit. It's idiots who charge more than is reasonably within their budget.

...Unless you have an emergency fund to cover such catastrophic expenses. I think the problem is credit. It is too easily available. I have seen many lives torn apart by people that had no self-control. If you remove credit from the picture and only use cash, you will be much more careful in your spending. Some people say it is okay since they pay the cards off every month. But if you had to pull cash out of your wallet instead of plastic you would be more cognizant of how you were spending your money.You don't have to live with debt. We are a single income family that lives debt free except for our mortgage. It is not an easy road at first but it is a better road, IMHO.

 

[bonoriffic]

Some people say it is okay since they pay the cards off every month. But if you had to pull cash out of your wallet instead of plastic you would be more cognizant of how you were spending your money.You don't have to live with debt.

How does handing someone a $5 bill give you more of a sense of how you were spending your money compared to swiping a credit card? A $5 bill and $100 bill are made from the same piece of nearly worthless cotton. My bank doesn't have a stack of gold coins with my name on it in my account. If you are able to grasp the concept that putting a different presidents face on the same piece of paper increases its worth, then surely you can understand that swiping your magic piece of plastic also represents a financial transaction of equal value. Why is paying with a debit card good, and a credit card bad? Both transaction use the same concept. Not having the funds to cover your transaction is a different story, and financial recklessness isn't the topic it is the use of credit cards in general.

The vast majority of people on this thread seem to equate credit cards with debt. I equate it to cash, except it is easier to handle, manage, and use and provides me rewards that cash and debit cards can't. To not use a credit card baffles me. They are handing you cash to use them, and ultimately represent the same thing as cash. Again... spending beyond your means is a different topic. I can run up massive debt with a signature, credit cards aren't needed to ruin your finances.

 

[RN01]

We have lived without credit cards for about 10 years or so... have absolutely no desire to use them ever again. We use a debit card to make reservations then pay cash when we get there. We use cash for everything else. We hardly ever even use checks.

 

[DCLbrideSept2009]

Well then, in the event of an actual crisis, you'd pay the minimum for a few months until the crisis is averted.

What if you used $1500 in cash to buy a new tv and then the day you got it home, your roof caves in? You'd probably have to rearrange your finances in some way for a crisis, whether you use cash or credit.

If you use cash for a big purchase, you're going to still be out that cash when a crisis comes. If you use credit, at least you can deal with the crisis with more cash in hand until the crisis is over.

The problem is not credit. It's idiots who charge more than is reasonably within their budget.

That's what emergency savings are for. For those who follow Dave Ramsey, you start with $1000 baby emergency fund in the bank. Then you start working overtime to pay off all debt. Then you work on the "fully funded emergency fund" which is 3 to 6 months of expenses. On a cash basis such as this, you wouldn't buy a $1500 TV unless you saved specifically for that item and would only buy it if and WHEN you had the $1500 saved up. It wouldn't come out of your regular monthly budget at all and it wouldn't come out of any emergency fund for sure. So if after coming home with your $1500 paid in cash TV, your roof caves in, you use money out of your emergency fund to fix it, NOT credit. I just hope the roof doesn't cave in on the $1500 brand-new TV...

 

[punkin]

That's what emergency savings are for. For those who follow Dave Ramsey, you start with $1000 baby emergency fund in the bank. Then you start working overtime to pay off all debt. Then you work on the "fully funded emergency fund" which is 3 to 6 months of expenses. On a cash basis such as this, you wouldn't buy a $1500 TV unless you saved specifically for that item and would only buy it if and WHEN you had the $1500 saved up. It wouldn't come out of your regular monthly budget at all and it wouldn't come out of any emergency fund for sure. So if after coming home with your $1500 paid in cash TV, your roof caves in, you use money out of your emergency fund to fix it, NOT credit. I just hope the roof doesn't cave in on the $1500 brand-new TV...

But people who use credit cards (me for example) have emergency accounts too.

 

[jodifla]

But people who use credit cards (me for example) have emergency accounts too.

Well, exactly. So we have our short-term savings, our long-term savings, college accounds and our retirement accounts.


And we still have credit cards with open lines of credit, so we can easily charge the unexpected big car repair when we are on the road. We don't keep that kind of money in our checking account. It's in higher yield places.

 

[Shreggor]

That's what emergency savings are for. For those who follow Dave Ramsey, you start with $1000 baby emergency fund in the bank. Then you start working overtime to pay off all debt. Then you work on the "fully funded emergency fund" which is 3 to 6 months of expenses. On a cash basis such as this, you wouldn't buy a $1500 TV unless you saved specifically for that item and would only buy it if and WHEN you had the $1500 saved up. It wouldn't come out of your regular monthly budget at all and it wouldn't come out of any emergency fund for sure. So if after coming home with your $1500 paid in cash TV, your roof caves in, you use money out of your emergency fund to fix it, NOT credit. I just hope the roof doesn't cave in on the $1500 brand-new TV...

In all seriousness, I'm sorry but if that $1500 I was saving for suddenly went on sale for $1000 prior to having it saved for, I'm buying it with a cc. And then I'll pay it off. But if my roof caved in (hopefully not on said new tv) I'd pay it off over a few months.

As another person put it, the problem is people who have NO SELF CONTROL. But that doesn't mean people with self control shouldn't use cc's when the need for them arises.