Is a life without credit cards possible? Is a life without credit cards better? Credit cards are such a part of our everyday society that sometimes we don’t even stop and think before we accept our first one.
After all, it was usually offered to us in college or as soon as we opened our first bank account, and we were young and we were offered a piece of the grown up world, so we snagged it.
Credit cards more often than not get young people into trouble. By the time we reach our thirties or forties, we have become accustomed to living in debt and we are not clear on whether or not we can afford to live without one. Living without a credit card means having the cash to pay for something before we buy it, and for about 83% of first world population, that is something we simply aren’t all that accustomed to.
By living without a credit card we are able to manage our finances as a priority list rather than a want or “think we need” list. This means the bills get paid first, and then if there is money left over we can get the things we want. For a lot of us, our credit would look a whole lot better if we lived this way.
It used to be that a credit card was necessary to rent a hotel room, a car, or even to rent the moving van to locate to an apartment across town. However, with the inception of bank cards, we no longer need credit cards to purchase any type of necessity, as they work nearly exactly the same with the exception that the money needs to be in the checking account first. For younger people with little or no debt, this is a definite advantage. This means that we are teaching young people to budget their money and their desire and balance them with their needs. This is an excellent lesson in responsible spending which can positively affect a young person’s fragile credit.
For people well into the throws of adulthood, chucking the credit cards can be a freedom they’ve never experienced. Credit means you have to pay for it when the bill comes in. Paying the minimum payment allows the credit card companies to earn nearly 1000% of the purchase price of the items purchased. That’s why the credit card companies love to hand out their cards and allow you to spend merrily along and pay just a small percentage of what you owe them, because then they have you for life.
Reducing credit cards or doing away with them altogether may mean an adjustment in the way we live, and waiting until the cash is available before buying something we really want. Yet in the long run, getting rid of credit card payments means there is more money available for spending on other things, and less chance of ruining good credit with a big “oops” expense.
Of course, credit cards are good for bailing us out of trouble or keeping us afloat if something unexpected happens. Cash advances can save more than just a few rainy days. Few people have the control to only use a credit card for emergency expenses, which is why few people who start out with just “one emergency credit card” end up with two or three in their wallet ten years later.
When deciding on whether or not to toss a credit card, examining what they are doing to your financial life will often give you the answer. Are you in that place where you keep thinking about calling a credit counselor or are you paying one credit card company with a credit card? What keeps the credit card in our wallets is fear. We are afraid to cut them up for fear we won’t have the resources if we need them. We obviously do, we are just sending those resources into interest payments. Belief in oneself and one’s ability to be creative and responsible is the first step to doing away with a credit card.
More and more people are turning to life without credit cards and are the happier for it. They manage their money more responsibly, and once they get out from under their credit card payments, they realize they have a lot more capital that allows them to purchase things they want, save money, and are much less stressed than they were when they were a slave to credit cards.
You can only decide to toss out the credit when and if you are ready. However, if you choose to embrace a life without credit cards, take a deep breath, know that you can sit down with a pen and paper and write out a reasonable budget, and pull out the scissors in a ceremonial start to a new debt free lifestyle.