How You Can Live Without A Credit Card

[scrapquitler]

It's actual illegal for the merchant to pass that cost on to the consumer. They can offer a "cash discount" but cannot legally pass that fee along to you.

That's what I thought. Here in CT, there was a big thing about two years ago when the gas prices skyrocketed, and the state decided to let the gas stations charge a surcharge for using your credit (or debit) card to pay for gas (I think they actually call it is a 'cash discount' but tas I remember, the state legislature had to get involved to approve it.

Not all gas stations do it, and I don't go to those that do if I can possibly avoid it.

 

[allison443]

Chain stores of all types do not levy these charges on the consumer (you will find these charges at certain mom-and-pop shops), as chain stores leverage the swipe costs in their operating expenses.

So I guess "every store" does not charge the fee, then. I was wondering what that other poster was talking about

 

[crispychicky]

That's kind of what I think. We pay off our cards each month. Actually, I pay on the Disney VISA every 3 days (which is the allotted time frame) so I never have a balance at the end of the month.

KIM

Why do you pay your Disney visa every 3 days? I don't have one, so I'm not familiar with how it works. Wouldn't it be easier to pay the whole thing off at the end of the billing cycle?

Yeah, this article was pretty lame. No new info. If you stick to a budget, you won't have to use credit cards. We're like a lot of PPs in that we pay for just about everything with our cc's. We pay off the entire amount each month (carry no balance), and rake in the rewards. We have a few different rewards cards with no annual fees, no interest before due date, etc. I feel more comfortable not having to carry around a wad of cash and like knowing that the cc company will back me up if there's any fraudlent use or a dispute with a store. If I used a debit card or cash, we could be out of luck.

 

[crewmatt]

I'm pretty happy with my Amex. I love not having to carry cash. One christmas on black friday a car was broken into and the gifts stolen. Amex removes the charges from the account. Plus it does have quite a few perks with it. The downside is that annual fee, altho depending on deals you can get it converted to points/etc.

 

[Ava]

Just because you use a credit card doesn't mean you don't have the money to pay for it.

I don't know how many times and how many different ways that can be said.

Some people still don't get it.

Using a credit card doesn't mean you don't have cash in the bank to pay for things. We have cash in the bank; we also have (and use) credit cards. I'm saving cash for our Disney trip next year, but I'm still going to charge all the trip expenses to my Disney Visa. Then I'll pay it off with the cash I've saved. I don't pay any interest, and I get rewards. Seems like a no-brainer to me.

 

[cseca]

Using a credit card doesn't mean you don't have cash in the bank to pay for things. We have cash in the bank; we also have (and use) credit cards. I'm saving cash for our Disney trip next year, but I'm still going to charge all the trip expenses to my Disney Visa. Then I'll pay it off with the cash I've saved. I don't pay any interest, and I get rewards. Seems like a no-brainer to me.

I agree... I guess the best analogy would be what a PP's said about the alcoholic and keeping a bottle of drink in the house. If you have a spending problem, then not having CC would probably be the best way to curb the habit.

But for some people it's actually saving us $ by using CC. Plus the convenience of it. I can't imagine traveling outside the country bringing lots of cash (scary) or travelers check (which is rarely used nowadays). CC is much more secure.

And returning things are easier with a CC too. Some stores don't even require receipts anymore as long as you know what CC you bought the items with. Also, you can dispute some service or item purchases with the CC if something goes wrong. With cash it's rather impossible.

And who wouldn't want extra $ or free airline tickets or free points for no cost?

 

[SandrA9810]

Chain stores of all types do not levy these charges on the consumer (you will find these charges at certain mom-and-pop shops), as chain stores leverage the swipe costs in their operating expenses.

Most the stores are mom and pop, convenience stores, and gas stations. Which I go to more often than the grocery store, target, or wal-mart which do not put on the added surcharge.

And no, it's not a "cash discount" because they put little pieces of paper on the pin pad saying there's a charge, or even on the menu screen of the pin pad. The last time I brought it up, people just laughed and said deal with it.

 

[SandrA9810]

:
But for some people it's actually saving us $ by using CC. Plus the convenience of it. I can't imagine traveling outside the country bringing lots of cash (scary) or travelers check (which is rarely used nowadays). CC is much more secure.

Actually travelers checks are used very very often at Disney World. It's not uncommon at all, and very secure. If you loose it, you can call and have them replaced.
If you get small denominations, like 20$ or 50$ ones, the change is given back to you in cash. Which then you only have a small amount of money to keep track of. And to be able to use it when CC are not available.

Like at Disney, the street vendors, like the light up toys or the balloons, and even the funnel cake stand in Epcot (used to, don't know if it's still true) do not accept credit cards. So with a cashier's check, if you cash it, you'll have the money for the little things like that.

 

[allison443]

Most the stores are mom and pop, convenience stores, and gas stations. Which I go to more often than the grocery store, target, or wal-mart which do not put on the added surcharge.

And no, it's not a "cash discount" because they put little pieces of paper on the pin pad saying there's a charge, or even on the menu screen of the pin pad. The last time I brought it up, people just laughed and said deal with it.

Aren't things usually more expensive at convenience stores anyway? That's what I have found. The markup on items is probably costing you more than the surcharge. It would be cheaper to go on a regular basis to a larger, cheaper store that doesn't have the surcharge.

 

[cseca]

Actually travelers checks are used very very often at Disney World. It's not uncommon at all, and very secure. If you loose it, you can call and have them replaced.
If you get small denominations, like 20$ or 50$ ones, the change is given back to you in cash. Which then you only have a small amount of money to keep track of. And to be able to use it when CC are not available.

Like at Disney, the street vendors, like the light up toys or the balloons, and even the funnel cake stand in Epcot (used to, don't know if it's still true) do not accept credit cards. So with a cashier's check, if you cash it, you'll have the money for the little things like that.

Maybe at WDW.
Anywhere else outside US (Europe, Japan, etc.) very limited on TC usage. Most places have limits on how much TC you can cash out which makes it extremely inconvenient. Not sure why...

 

[MrsPete]

Until you're living some place that every store charges you 45 cents to a dollar to use a debit card or credit card. That's one incentive to stop swiping so often.

I've never seen this personally; however, it doesn't sound too different from an ATM charge levied by bank at which you don't have an account . . . and plenty of people don't balk at paying that.

Using a credit card doesn't mean you don't have cash in the bank to pay for things. We have cash in the bank; we also have (and use) credit cards. I'm saving cash for our Disney trip next year, but I'm still going to charge all the trip expenses to my Disney Visa. Then I'll pay it off with the cash I've saved. I don't pay any interest, and I get rewards. Seems like a no-brainer to me.

Yeah, my husband used to think that way -- someone who's using a credit card must not be able to afford that bag of groceries. He's come around though. Must be all those free meals he's had from restaurant gift cards garnered through the credit cards. Literally free money since we pay our bill in full every month.

The last time I brought it up, people just laughed and said deal with it.

Why do you frequent a store where the employees laugh at you and belittle you for asking a legitimate question? I'd take my business elsewhere.

 

[Mellie2162]

This has been an interesting debate and Ive enjoyed reading both sides of the argument. I have a few questions.

For those of you who use CC:
1. You say you pay the balance each month (terrific!) does that mean you have an emergency fund in place or would you just rely on your CC for emergencies?
2. Do you ever fear that you might lose a job and have a balance on your cc that you wouldnt be able to pay?

For those who only use cash:
1. Why do you feel that CC are bad even if the person pays them off monthly?
2. If you ran through your cash due to a huge emergency or illness and needed essentials (food, gas) would you then use a CC to get them?

Not being judgemental to either side, Ive enjoyed reading both sides. I will say up front we use cash only, but we are irresponsible with cc and will not allow ourselves to have one again. With us, everything becomes an emergency or necessity so we just use cash and its harder to justify spending it.

 

[LovableGluttons]

Dave Ramsey gives some very good pointers on how to live debt free and without credit cards or for that matter credit. I believe that it can be done.

Right!

The credit card rewards thing is not something I want to do. That's my no brainer approach to finances If others want to do it, so what?

If I don't want credit cards, loans, or mortgages, how does that make me irresponsible?

I'm not costing anyone money by my actions.

Some entities may not get the revenue from me that they get from an average consumer.

If the average credit card user pays off the card each month, how would the card issuer stay in business?

 

[ICF]

This has been an interesting debate and Ive enjoyed reading both sides of the argument. I have a few questions.

For those of you who use CC:
1. You say you pay the balance each month (terrific!) does that mean you have an emergency fund in place or would you just rely on your CC for emergencies?
2. Do you ever fear that you might lose a job and have a balance on your cc that you wouldnt be able to pay?

1. Yes we have a savings account with plenty of money to cover us for 6-9 months.

2. No....we would have money from the savings account to cover a bill. Typically we have the same amount put on CC's every month...probably $1500 - $2000 which we pay off each month. If for some reason a job was lost, we'd pay it like we would any other bill.

 

[ICF]

If the average credit card user pays off the card each month, how would the card issuer stay in business?

The merchants pay a fee to the companies to accept CC's. That is how, even though I pay it off every month, they can make lots of money off of me having their card.

 

[scrapquitler]

This has been an interesting debate and Ive enjoyed reading both sides of the argument. I have a few questions.

For those of you who use CC:
1. You say you pay the balance each month (terrific!) does that mean you have an emergency fund in place or would you just rely on your CC for emergencies?

Both.

2. Do you ever fear that you might lose a job and have a balance on your cc that you wouldnt be able to pay?

Nope. See above. And also, if we had an extreme emergency, we would carry a balance for a month or two if there was no other option. But only in an extreme emergency, and we would be working extra hard to pay it off ASAP. We did carry a balance for 3 months once.

 

[SandrA9810]

I've never seen this personally; however, it doesn't sound too different from an ATM charge levied by bank at which you don't have an account . . . and plenty of people don't balk at paying that.

Most the time, banks will reverse these charges up to a certain dollar amount per month. My credit union does this, I think it's 20 or 25 per month.
I go to the corner store to get drinks, a snack, or just paying for gas. And it's much cheaper to purchase a fountain soda from there than buy a bottled soda. Sometimes we'll go there as part of our afternoon walk to purchase a gatorade, just as cheap as the grocery store. As well, they usually have the milk at 2/5.50 gallon, which is actually cheaper than the grocery store, which is right about 3$ a gallon give or take a dime.
I usually do once a week or every two weeks at the grocery store. Stopping at a corner store can happen a few times a week. My perishables, fruits & veggies are bought at the flea market.

Why do you frequent a store where the employees laugh at you and belittle you for asking a legitimate question? I'd take my business elsewhere.

No, I got laughed at on the boards for making a topic about it. And the store clerk only says "well the bank charges us"... well duh, but you're not allowed to pass it off to me, that's your cost of doing business. Ok, the last part in my head.

 

[indimom]

This has been an interesting debate and Ive enjoyed reading both sides of the argument. I have a few questions.

I'm answering for both sides since we have lived both ways over the years....(And by the way, good questions...)

For those of you who use CC:
1. You say you pay the balance each month (terrific!) does that mean you have an emergency fund in place or would you just rely on your CC for emergencies?
Yes, we have a fully funded emergency fund. We also keep seperate accounts for smaller emergencies (home or car repairs, etc.) We have not used our credit card or home equity for anything "big" that might be considered an emergency by some at this point, but who knows, life changes sometimes.
Most of the time, we find that what one person considers an emergency, others do not. For example, we went all summer without A/C in our car because we decided not to get the repair done when we are saving for a new car next spring anyway. I had friends who couldn't believe we wouldn't spend the $750 necessary to keep it running until next year and a family member who couldn't believe we wouldn't just go get a new car now rather than waiting (We have a good down payment, but not enough to pay a car off).
It was really hot and not very fun, but no way were we going to pay that huge bill just for a couple months of comfort or buy before our car fund is maxed out.... On the upside, we saved a ton of cash on gas because we only drove when we had to.
2. Do you ever fear that you might lose a job and have a balance on your cc that you wouldnt be able to pay?
I will always fear a job loss, but not because of what we put on our credit card each month. It's usually less than $1,000 and we would pay that off immediately upon a job loss.
We also are NOT afraid of taking the axe to our other luxury items if a job loss came. We have in the past and would again. We've lived without cell phones, long distance calling, internet, cable (any TV whatsoever, actually), eating out, two cars, credit cards, A/C, and all the other little luxuries that can really add up and we would do it again in a minute if one of us lost our job. I am aware of what our minimum living expenses would be (utilities, house, car expense, groceries) and know that we could afford them on one of our incomes, it just would NOT be fun.
We learned all these lessons the hard way back in 2001 when we had credit card debt, a new car we really couldn't afford (once DH lost his overtime) and topped it off with a very sick child and thousands in medical bills. Thank God, we had decent insurance with a $5,000 cap out of pocket, or we might still be paying that off.... And thank God, we had family to help with our daughter, and were working two different shifts so we could be in the hospital with our son and continue working. If one of us had to take off all those weeks it also could have been a catastrophe.
For those who only use cash:
1. Why do you feel that CC are bad even if the person pays them off monthly?
I can give you one reason why even I think CCs could be bad even when you pay them off monthly. You still might be spending "more" each month just because it is soooo easy to buy thoughtlessly when you are not watching the money disappear directly from your wallet. Well, the Oreos aren't on sale this week, but DH really likes them so What the Heck, throw them in the cart, ad nauseum... Watching the cash in hand dwindle before your eyes is much more compelling.
2. If you ran through your cash due to a huge emergency or illness and needed essentials (food, gas) would you then use a CC to get them?
Can't even guess at this one since I think it would be very individual and not related to whether they use credit cards regularly or not....there are a lot of things people might consider in a serious emergency that they otherwise would not.

Not being judgemental to either side, Ive enjoyed reading both sides. I will say up front we use cash only, but we are irresponsible with cc and will not allow ourselves to have one again. With us, everything becomes an emergency or necessity so we just use cash and its harder to justify spending it.

We were once there also, back before 2001, using the cards for whatever we wanted at the time and not really worrying about the fact that it would then take months or a year to pay that item off, and that's what brought about our wake-up call. It was years before I trusted myself with a credit card again (I think we got ours in 2008??). DH and I both work very hard at monitoring our credit card use and tracking whether we are using it for what we need or if we're just buying for the sake of buying more things. I still don't really trust us...

 

[stich1fan]

We use our disney visa cc for everything....food, electrical, cable, gas....anything possible. i would put my mortgage on the card if they let you. I rack up as much as I can to ear those points, but always pay the bill off completely every month. Not that we buy things we don't need, because we don't.

I don't believe in paying interest or fees, so charge alot but know we will pay off in full every month. So we are just earning points....lots of points.

Right now I think we are in the 3x points promo so I even point out kitchen remodel on it. Don't think that qualify as 3x points but at least 1 point per 100 dollar. We took out a home equity line to pay off some loans we had at 8% and 11% so I charged our car loans and our dvc to it and then paid off the bill with the money equity. The home equity converted our annual interest to 4.25% instead of the crazy 7.8% car and 10.75% dvc. That will save us thousands.

Anyway we card alot but always pay off in full.

 

[MrsPete]

For those of you who use CC:
1. You say you pay the balance each month (terrific!) does that mean you have an emergency fund in place or would you just rely on your CC for emergencies?
2. Do you ever fear that you might lose a job and have a balance on your cc that you wouldnt be able to pay?

Whether a person has an emergency fund isn't related to whether they pay for their daily/weekly/monthly needs with cash or with a credit card. Regardless of HOW a person makes financial transactions, it's foolish to spend every penny you earn. Everyone SHOULD have something put away for a rainy day.

To answer your questions:

We pay for everything -- gas, groceries, everything -- with a credit card and pay it off each month.

Yes, we have an emergency fund.
In addition to that, we have short-term savings for things like vacations, replacing the TV that was struck by lightning, buying a new car. IF we were in financial trouble, all those things would become secondary and the short-term savings would become gas and grocery money.
In addition to that, we have investments that're meant for retirement. In a real emergency -- meaning, job loss for more than a year or two -- we could draw upon these.

No, I don't fear not being able to pay a credit card bill because of a job loss. We don't spend, spend, spend because we're using a credit card. We buy the things we'd need anyway: Household needs, etc. Regardless of HOW we paid for these things, we'd still need to pay for them.


I think some people have the idea that people who use credit cards over-spend just because it isn't "right now, see it here" money. I really and truly don't.