Why we don’t do “credit”
Posted By Kim on February 5, 2010
It’s been about 2.5 months since we stopped using our credit card totally. We’ve gone to a mixture of cash and using the debit card, and surprisingly; we have a lot more money on our hands. Granted, paying off the credit card bill and the car loan is helping that out; but not (over)spending the credit card is a BIG help.
For most of our married life, Greg has been the Accountant/Financial Guy. In that, he took care of the money and made sure we had a savings; and I paid the bills with the said money. This meant I was happily oblivious to our credit card, mainly those little things called FINANCE CHARGES.
In December I remember looking at the credit card statement for some reason and saw a line: “FINANCE CHARGE: $19.99″. $20 EXTRA that we had to pay to the credit card company.
$20 x 12 months = $240 in finance charges for last year.
That’s a lot of money that we could have used for MUCH better things. Like well, food. Date night. Anything but giving it to the credit card company.
Seeing that little line on the statement was my “credit card conversion” and basically; that was the end of the credit card for both of us. Now that we have 1) a budget 2) cash/debit card system and 3) paid off the card; we’re a lot more picky about what we spend our money on. It hurts to shell out cash or use the debit card a LOT more than using the credit card. We use the debit card at places that automatically take the money THAT MOMENT from our account, so it’s an instant “we better have needed X, because we’re Y poorer now.” instead of “la la la, just charge it and we’ll pay it later!” We did that so many times in our married life, and later always became MUCH later because Life Happened and suddenly; we were carrying a balance.
I know plenty of people who charge and pay, or use a card for the “rewards”. Personally; we’d rather not tempt Life and just cash flow what we need. If we don’t have the money, we can’t buy it. It’s amazing how many people have said “but why don’t you guys just charge X, Y, or Z?” or “Greg’s making good money now, you can afford to use a credit card.” or even mock us at the idea of saving up money for something. Saving up money has cut down on the amount of impulse buys (mainly me 
) happening and really making sure we get the most bang for our buck. Overspending is WAY down, and ta-da; our savings account is the beefiest we’ve ever seen it. Including when Greg and I were both working and bringing home about $25/hour combined.
I know a lot of people LOVE LOVE LOVE their credit cards (I was one!), so don’t take this post personally if you are one of those. It’s not my goal, but rather to flesh out in my mind why we don’t use credit cards as to appease those who think we are ABSOLUTELY INSANE for not.
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For all those saying you should use your credit cards, I’m one saying you are doing EXACTLY the right thing!! I wrote this process several years ago: http://www.tdbellenterprises.com/individuals.html which basically supports what you are currently doing. (Although I’m doubting you are at the level of insuring that you have more than what you need before you buy an item of any price.)
Thanks, Don.