No credit cards – Here's why

By glblguy


“Nope, no credit cards for me. I don’t even carry one.”  I cannot tell you how many times I have said this phrase or something very similar to friends and family over the past 3 years.  Most recently it came up at the store while looking at a “great deal” on something in the electronics department.

I was talking with a guy there who was considering purchasing the same item. Since we hadn’t allocated the money for it in our budget, I decided to pass on it. I said something to the effect of  “I’ll have to pass this time, I don’t have the money.”  to which he replied “Heck, I’m buying it. That’s what credit cards are for right?”  I wanted to just walk away, but since he asked, I just couldn’t help but reply: “No. You’re using money you hope you’ll have in a few weeks. If you don’t or you elect to not pay it off, you’ll end up paying more for it than you would have without the deal…potentially way more.”  He looked at me with a deer in the headlight look, and I just walked away. It was obvious that he really wasn’t looking for an answer, nor did he want to hear a lecture on credit cards. His mind was made up.

My wife and I stopped carrying credit cards when we had our financial epiphany. We cut up our credit cards and haven’t carried one since. Unfortunately we still owe on them, but we haven’t used one in a long time. Here are just a few of the reasons why we stopped and why many of you reading this should consider stopped too:

Buying things you can’t afford

It took me years to realize it, but we (more myself than my wife) used credit cards to buy things we couldn’t afford. If we went to a store, saw something we wanted (and wanted now) and if we didn’t have the money to buy it, we would use a credit card.

I distinctly remember walking into an HH Gregg store looking at large screen TVs. I remember convincing myself “that I deserved it“. I worked hard right? I made sacrifices for my kids right? I deserved this TV. My wife applied for a zero % interest deal they were offering (I couldn’t apply as I wouldn’t have qualified due to the amount of outstanding debt I had). We walked out a few minutes later with a $3000+ big screen TV. I can’t believe how stupid we were.

Everything came to a head for me when I was buying groceries and gas one night on a credit card because we had no money in our checking out. A huge sign that you’re in big financial trouble is when you’re buying life basic items on credit because you don’t have the cash.

You can barely pay the combined monthly payments

A very common financial tool that myself and many other personal finance bloggers talk about frequently to assist with paying off debt is the Debt Snowball.  I have a debt snowball now, but the first one I had was a very different kind.

I had my first credit card as a teen. I got a few more in college, then a few more after I was married and employed, then a few more later. After a while I probably had more than 5-10 different credit cards, all maxed to the limit.

The initial minimum payment was easy, but the payments snowballed on me from there. Each minimum payment from a card added to the next and then all of the sudden one evening I had more minimum payments than I could make! Believe it or not, I actually used other credit cards to make minimum payments on my credit cards!

The worst part is that at the time, those minimum payments weren’t even enough to keep me ahead of the game. The credit card companies were loving me. I was paying huge amounts of interest on items I had bought years before and making zero progress on getting the balance down. I’m pretty confident I was on their list of top 10 best (read stupid) customers.

Living off of potential future income

After getting our finances under control, I realized at some point that when you make purchases on credit cards, you are using someone else’s money. In my case, I was literally using someone else’s money because I didn’t have any of my own. When that finally clicked with me, I felt terrible. I wasn’t good enough at managing my own finances, so in order to live I had to rely on someone else that could. Looking back, I still can’t believe I didn’t see that. If you are struggling with debt, please re-read what I just wrote and let it sink in.

Using credit cards, you are also borrowing off of your future income. If you buy something today on credit that you intend to pay off next month or maybe even over the next few months, you’re making the potentially dangerous assumption that you’ll have the money then. This is not a safe assumption to make, especially in today’s economy where lay-offs are becoming far too prevalent. Instead, live off of money you have now, not my money you hope to have sometime in the future.

Stop being slave to the lender

I realized this pretty quickly when I was calling credit card companies asking for reversal’s of $40 late fees and decreases in 28%+ interest rates that I was definitely slave to the lender. I had nights were I wouldn’t sleep due to the stress of having more than $60,000 – $70,000 dollars in debt (excluding our mortgage) and having no clue how in the world I would ever pay it off. I some how had convinced myself that it was normal, that everyone had a large amount of debt and that it was just the American way. I had a dark cloud of debt following me around everywhere I went.

I finally got tired of not sleeping, worrying and relying on those credit card companies. I finally did something about it. While I’m not debt free, I’ve paid off more than $50,000 in debt in the last 3 years by selling things, using a debt snowball, and through cutting up our cards to avoid going in the wrong direction.

We’re still slave to the lender, but far less than we were. If things go as planned, in 2-3 more years with the exception of our home, we’ll no longer be slave to the lender and will be debt free.

How about you? Do you use credit cards? Why or why not? Did you have a major turning point like I did? What did you do? Add a comment!

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50 Responses (including trackbacks) to “No credit cards – Here's why”

  1. Julia Says:

    I do use a credit card, but I do not carry a balance. I pay my card off each month. I was not smart enough to enroll in a plan with points, which would make this more profitable, but because of my discipline in this area, I have a very high credit score. My husband, who just came to this country 3 years ago, only started doing this about a year ago. His lack of credit history hurt us slightly when looking for a mortgage. Not a lot, but I can only imagine trying to get a mortgage today without credit history.

    That said, I do not think that one should even apply for a credit card if he or she is not committed to paying it off in full each month. I did carry a small balance some time ago. I probably ended up paying about $200 in interest on a balance of around $1500. That’s a lot!

  2. Chetan Says:

    I totally agree with Julia above. Your post should have been titled “Here’s why I cannot control my urges to live beyond my income”.

    Your problem isn’t the Credit Card debt, it’s that you don’t have control over yourself. How do you know that when you see the next 72-inch plasma, you won’t borrow money from friends to buy it?

    Like several other things in life, you need to exercise self-restraint at times. In case of some people, it takes the form of avoiding trips to the mall while in cases such as yours, it means cutting up your credit cards.

  3. Diana Says:

    Not using credit cards is a personal choice, and not the best according to my calculations.

    I’ve got 2 credit cards that have cash back. I pay off the balances each month so never pay interest and on top of that get $20 to $30 back each month. So using credit cards PAYS ME more than $250/year. Plus it has travel insurance for airplane tickets, car insurance for rentals and if a retailer cheats me I have protection.

    In addition I have 1 retail store credit card (also pay in full when I use) that entitles me to 15% savings when I’m geting stuff from there anyway.

    For big home improvements LOWE’S and HD credit cards have been quite beneficial. Use them with purchase over $299 and it’s interest free for 1 year, during which time the money allocated for this project earn interest in a savings account. For the roof replacement last year we saved more than $200!

    So just use the system carefully, that’s all.

  4. Baker @ ManVsDebt Says:

    It goes above and beyond simply controlling your urges. Don’t get me wrong this is a huge plus. Everyone has urges, temptations, and vices. My theory is that you should put as many walls between you and those things that stand between you and your financial goals. Not using credit cards is just another wall.

    The fact that you choose to not use credit cards doesn’t mean you lack a high degree of control over your spending. My wife and I have canceled all of our cards, yet I’m absolutely sure we have the control to be able to responsibly use them. We aren’t perfect, though and I’m not willing to bet we would spend even a little more due to convenience overtime. I’ve very wary of anyone who claims 100% control over their credit card usage.

    We also enjoy the peace of mind, lower risk of identity theft, simpler financial life, and other benefits that come from ditching credit cards. I have no desire to partake in that industry in any way.

  5. Michael Says:

    I believe it’s a bit presumptuous of anyone to assume because someone gets in credit card debt… they can’t control themselves. The credit card companies and banks spend millions of dollars each year to condition their customers. Why do you think they make all those great offers (cashback, travel miles, ect)?

    Like the author, I no longer carry credit cards. My story is very similar. I had conditioned myself to believe that I could buy stuff now and I would pay for it with future earnings. Each time I made more money, I allowed myself more monthly payments. That has ended and already the stress is off me. If I want to make monthly payments, I’ll pay myself *before* I make a big purchase. No interest. I also will never do business with the credit card companies again.

  6. Michael Says:

    @ Diana “Not using credit cards is a personal choice, and not the best according to my calculations.”

    That’s what I’m talking about when it comes to conditioning.

  7. tom Says:

    That was awesome
    “No. You’re using money you hope you’ll have in a few weeks. If you don’t or you elect to not pay it off, you’ll end up paying more for it than you would have without the deal”¦potentially way more.” He looked at me with a deer in the headlight look, and I just walked away.”

    That right there goes to show you that people are like sheep, just doing what others do and not thinking about it or even questioning it.

    My only problem with not using credit cards is (1) how do you continually build credit and (2) what if the payment processing becomes all electronic (in a few years that is)?

  8. Michael Says:

    I agree with Dave Ramsey when he says you don’t have to worship at the alter of the almighty FICO score. Since I don’t plan to borrow, I’m not worried about my credit score.

    As for #2, I can use a debit card, but I believe that cash will still be around for awhile.

  9. GrannyAnnie Says:

    My turnaround came when I realized I had NO CHOICE but to work overtime. Every week. So I could pay all the credit card bills and loans and still eat. If the overtime dried up, or I lost my job, we would lose everything. There was no way out. I had no free time. I had no life. And I had no choice. I was struck HARD by the notion of “slave to the lender.” I stopped ALL use of credit cards. I said no to any more loans at all. I started searching online for ideas to get out of debt. I found Dave Ramsey’s site, and GLBL. And that began my debt reduction journey. I still have my credit cards. They are in the file cabinet. I kept them as backup for an extreme emergency (as a Critical Care Nurse, I’ve seen plenty of them), but somebody has to be dying to get me to consider using them. I’ve paid off the balances on all my cards, and have started on a snowball for my husbands cards. I still work overtime, but now it is all for the snowball. My slavery is easing just a bit. We still have a long way to go, but at least now I know we’ll eat…

  10. Gina Says:

    I can eco Michael & Glbl guy. I fell into the same mind trap … “I conditioned myself to believe that I could buy stuff now and I would pay for it with future earnings.” I even paid off my ccard in my 20s to only jump back into the trap in my 30s when I got married – 2 incomes can pay off balances faster than 1 – NOT. I spent more.

    Today, older & (hopefully) wiser, I no longer carry a ccard. I like the simplier financial life that Baker mentions. Diana makes a valid point about the “protection” that they offer. With debit card transactions out numbering credit transactions these days, I’m hoping that a debit card will soon offer the same “protections”.

  11. Kim Says:

    Really? People are defending credit cards? Even if they are as great as you say they are, these are generally not morally reputable companies. I avoid products in stores if I disagree with the companies business practises and the same goes for credit card companies. Why support these businesses?
    That being said I don’t use credit cards (mainly because I wouldn’t be able to pay the first bill that came to me) and I was still able to buy a house. #1 Because DH has a solid work history and #2 Because a lack of debt from cars and credit cards.
    Better yet wouldn’t it be great to save for everything and not even need credit or a FICO score?

  12. Pam Says:

    Yes, I do use a credit card. Actually, I love having the card to use. I’m one who pays it off every month (sometimes making a payment several times during the month) on the Internet. I have a card that gives a rebate. I earn more by using the card in one month than I’ve made in several years by having a savings account. I’m very disciplined. I’ve never paid any interest in 30+ years. I had a debit card for awhile, but I’ve heard such horror stories (people I personally know) about accounts being cleaned out and most of the money lost, that I cancelled it. I’ve pretty much decided to use automatic withdrawals for my local bills like electricity and phone and the card for all other purchases. I hate paying money for checks … they are expensive! There is no one shoe that fits everyone. We have to find out what works best for us and then do it.

  13. Marie Says:

    Our budget is separate from our instrument of payment. I update every day or two. I spend cash frivolously because there is no accountability for where we spend cash in our system. Our system was created around our own personalities. I log in to our card account every time we get paid and pay off the balance in its entirety. Our statements are typically issued with $100 due. Which is great for my credit utilization ratio.

    In general most people are not as detailed oriented as I am. They don’t update their spreadsheet budgets with all their transactions mulitple times a week. I use a card for the payment protection and we get 3% back on ALL purchases. This really helps keep our kids in diapers and has taken the sting out of many a home repair.

    We found the balance that is right for us. We just have student loan debt at 2% and a mortgage. We own both our cars outright. We have 3.5 months emergency fund which is growing. We’ve had to use our e-fund a lot this year which I guess proves its value.

  14. Michael Says:

    re Pam

    Dave Ramsey would argue that you actually spend more using your credit card than you get in rewards. The psychological effect of using cash offsets any money you earn on rewards. But, if you’re able to do it… more power to you. I prefer not to do business with companies.

  15. Michael Says:

    re Pam

    Dave Ramsey would argue that you actually spend more using your credit card than you get in rewards. The psychological effect of using cash offsets any money you earn on rewards. But, if you’re able to do it… more power to you.

  16. Coupon Artist Says:

    I think one of the dangers is that many people think if they an afford the monthly payment, they can afford the item. Then, they forget about the fact that they are making the item actually cost 10% more (or whatever the interest is).

  17. GHolmes Says:

    Two years of not carrying a credit card. We have automated our finances and have done so without a credit card. We are also debt free except for the house. Glad we finally got out of the marketing trap of credit cards and car payments.

  18. Kim Says:

    Except for this month (I got a little off track) I track my spending on a spreadsheet. It doesn’t matter how I pay for it.

    If I do use a 0% promo, I divide the amount by the amount of months minus one. I then put that cost into the spreadsheet so I won’t overspend.

    I do have a harder time accounting for cash. I carry a small pad of paper in my purse to track to track it.

  19. dana Says:

    I have asked my husband about getting rid of credit cards. His argument is that there are places that will not take cash, debit, etc. One example are hotels. They just will not take cash and I’m not sure about debit but what do to if you are traveling and you stay at a hotel? How do you pay if you don’t have a credit card?

  20. mb Says:

    I have one credit card. So far, no intrest payments. I love having the float on the card and online protection. I hate having to watch for my everchanging payment due date. Result= tendency to leave the card at home every other month. One day I’ll pick a method and stay with it…

  21. Do You Dave Ramsey? Says:

    Great story… I’m sure that guy is still scratching his head over your comments to him… one day he’ll be writting a check to Visa and it’ll dawn on him….

  22. Kika Says:

    In our 15 years of marriage, my husband and I have used a credit card with cash back rewards and never carried a balance. Still, we are human and I tread carefully b/c none of us are immune to temptation. The credit card company likes to automatically increase our limit which we always have reduced again. Although we are very disciplined with our budget and spending I recognize there are times I spend more than I would with cash only (even if it is only a few sale items at the grocery store).

  23. Unemployment Benefits Says:

    I don’t have credit card but thinking of acquiring one, one day. I know that some of you may agree with me that it is useful sometimes, especially if you don’t have enough cash in your pocket when buying something? Still we have to be very cautious in using it though.

  24. Abigail Says:

    I don’t think I could ever feel safe without a credit card. Perhaps one day, when we have a huge emergency fund… Even so, I think it’s a good idea to have one in reserve. Freeze it in ice (in a baggie) or keep it in someone else’s safety deposit box if you need to avoid the temptation to use it.

    But my husband and I are paying down debt on very low income (unemployment for him, disability and a little contract work for me) and we both have chronic health conditions. We cannot afford to be without a credit card. We’re slowly bringing everything into a cash- or debit-based system. But there are times when we can’t afford things we need — a medication that’s not covered by insurance, for example — and so we have the credit card. So far, we haven’t put any new charges on the card for a couple of months. And we’re currently on a budget to put small amounts of money away each month against recurring large expenses, such as my husband’s monnthly $502 insurance premium. We don’t have a lot of options right now, other than to try and spend carefully and never charge anything unless it’s completely unavoidable.

    But make no mistake, there will be times when it’s unavoidable. After rent and insurance, we’re left with $1900 each month, not including my quarterly taxes ($400) and my medication that Medicare won’t cover ($337 every three months).

    I’m sure some people can live without credit cards, but I would never recommend cutting them all up. Can you truly never foresee an emergency wherein you’d need to pay money you don’t have? (This is coming from someone who was fine and then, four days later, in the ICU. I spent the next 3.5 months in various hospitals. My parents had excellent insurance, but they still had to pay for food and the occasional hotel when they needed a break from sleeping in my hospital room.) I just think that yours is a dangerous assumption to make.

  25. No Debt Plan Says:

    Credit card = piece of plastic

    Debit card = piece of plastic

    Both are inanimate objects. Credits cards don’t force you to be stupid.

    People with credit card debt were stupid with money before credit cards. Yes, there is a new avenue for them to waste even more money, but it isn’t the credit card’s fault. Your friend is a perfect example. “Hey, we’ll pay if off eventually!” It’s a mentality issue, not a piece of plastic issue.

  26. Kika Says:

    Another thought – we have an unsecured line of credit which is available in emergencies beyond our savings. The interest rate is currently just above 4% (though in normal economic times sits around 7%). This is much cheaper than a credit card. Is this not available to others who have typically relied on credit cards for genuine emergencies?

  27. Abigail Says:

    No Debt Plan,

    Please be careful about generalizations. My husband and I didn’t get into credit card debt out of stupidity. We got into it out of necessity. We both have chronic health conditions that limit our ability to work. We still have to pay bills. And there were times when things came up that we could not afford. Like when he slowly gained about 40 lbs from steroids. That happened over the course of about 9 months, so twice we had to replace all his jeans he could no longer squeeze into.

    By and large, people in credit card debt were myopic. But some of us simply couldn’t make ends meet.

  28. DDFD at Says:

    People used to pay cash before credit and credit cards . . . somewhere we lost our way.

    Stick to your guns!

  29. Pam Says:

    Michael, Wow, someone responded to my comment. Cool. I’ve never attended a Dave Ramsey seminar; I’ve read about him and what he thinks on these pf blogs. I do like what I’ve seen for the most part. I guess I can truly say I can do it. That isn’t to say that I’ve never overspent my budget. I have done this but not very often. I’m not near a large town where shopping is readily available. The town I live nearest to is very small. I only “shop” about four times a year and that is when I’m visiting family members. I’m sure this helps! BUT, I also know what my budget is and I really try and stick to it.

  30. Janice Says:

    We haven’t used credit cards since 2006, and don’t miss them. Drink the Dave Ramsey KoolAid, folks! We have our 6 month emergency fund, no credit card debt, owe less than $60K on our house, and I just quit my job to take the summer off and “re-group” after 14 years. We have CHOICES and it feels marvelous!

  31. Brent Says:

    I haven’t used a credit card in over 2 years. We’ll never again have a credit card no matter what!

    My debit card is used just like a credit card except I don’t go in debt but can buy the same exact thing that anyone with an actual credit card can. For those who say you can’t pay cash at certain places – WHAT? I’ve never been turned away from paying cash and if they really don’t want cash then I really don’t want to do business with them.

    Credit card companies spend a lot of money to figure out ways to make their business work for them. Companies that offer all these “deals” aren’t doing it for us, they are doing it before it will benefit them and only them. For every person that pays off the balance there is another probably 10 who don’t. One day those who think they are smarter than the billion dollar company will end up on the wrong side of things.

    Why as a society are we always surprised when an emergency happens? Our car will break down, our clothes will need to be replaced, we will have health issues, we will be looking for a new job, we will have house repairs, etc…… favorite one is the oh crap Christmas is on December 25th this year?

    I’m sure this will piss some people off and that is fine with me.

  32. Craig Says:

    I agree using credit cards irresponsibly is terrible and can really damage your credit score and put into debt quickly, but I don’t think you should eliminate them all together. You still need to build your credit score, plus certain situations (especially any online purchases) really require credit cards.

  33. Fred Says:

    I agree its tough but it can be done. Every lender out there does not care about the little guy. Great Article! Keep it coming

  34. Otto @ Says:

    Hey! Man you hit it right on the nose. I too do not carry a card infact I just carry my interac and drivers licence. Never had a problem its been 4 years and going strong. We get pulled into these wonderfull deals and not fully understand the reprocussions.

    But all the best and keep fighting to be debt free!

  35. Paula Says:

    I have recently joined the ranks of the credit card free. I haven’t used my cards in some time (with two of three maxed out, one almost paid off). I’ve been spending a lot of time reading PF blogs lately, spurred by events in my own life that impacted my ability to pay my bills. I am spending far too much each month paying credit card bills – money I should have been budgeting and saving instead. It’s my personal finance epiphany – we’ll see how it goes. It’s a pleasant thought that I can get out from under this and stay out for the rest of my life! Thanks to GLBL and others for helping me see the light!

  36. Mary Says:

    I’d like to say “I wish I had read something like this years ago.” but I don’t think it would’ve made a difference. I really had to learn the lesson for myself. My father always told me not to get credit cards, and I found myself doing some of the same things you mention, including buying food on credit. I’ve recently gotten rid of all my cards. I am paying them all off and I have a budget that I stick to now. It’s a tough, extremely expensive lesson, but I’m glad I’ve finally learned it.

  37. Lauren Says:

    Thanks for the interesting article.
    I do use my credit cards. One in particular where I get points I use towards groceries. I don’t carry a balance. I prefer it to cash or debit as it is more secure, if I loose it, I can cancel it. If there is a fraudulent charge, it isn’t money out of my account that I’m trying to reverse.

    We recently moved to the US and between jobs and moving costs had to carry a balance for a month, wow. That scared the living day-lights out of me, especially when I saw the interest charges.

    The comment on the minimum payments is something most people fail to understand – you can keep putting the minimum payment on, but you will never pay it off that way, you’ll be paying the minimum till you die. The goal isn’t to get you to pay it off, they make more off you if you keep money on your credit cards!

  38. Melanie Says:

    I have one credit card– and I keep it in my wallet in case something funky happens with the debit-card machine or I break down somewhere far from home, but other than that, I never use it. (My husband does *not* carry one in his wallet. If he breaks down without me, I’ll go get him.)

    We’ve clawed out of 15K of unsecured debt and I’m never going back. There are two things that I always think about when using the card– can I log on to the bank site and pay this off right now? If not, then I’m not using it. This is my MO with credit cards, always. No float, no bills due next month, no “free” money, because having experienced a layoff last year, we don’t know what’s going to happen next month. And if all of a sudden the income stopped, I’m not going to be stuck paying last months’ expenses off next month. I’m going to be free to slash the budget to the bone right this minute.

    In answer to the online purchases “exception,” not true. Paypal accounts linked to your bank gives you single-use generated MasterCard numbers, which debit the money straight out of your account. If you don’t have a debit card, which also works fine.

    The main problem is, the 20 or 30 dollars I could earn in “rewards” never make up for the amount I overspend (even with a debit card) so I mostly stick with cash–which I can’t seem to overspend. Ever.

  39. marci Says:

    I’m debt free, including the mortgages, but use a credit card for online and major purchases. Of course, it is paid off totally every month. It’s a convenience, and easier to use than a check.

    My debit card is linked to a very very small checking account, in case of fraud, and so is not an option for larger purchases.

    I also carry one when traveling – in case of emergency only. I wouldn’t be able to handle my emergency responsibilities, should one come up while traveling, without the card very easily.

  40. Rajeev Kumar Singh Says:

    I totally agree that living life without credit cards is the first and foremost step one needs to take in order to make his/her life debt free. The idea of credit cards is to encourage people into making purchases for stuff which they dont really need.

  41. Cindy Says:

    Nice that you realized you didn’t need it, some people still have to learn that. I do have a credit card but am not afraid to use it because i’m 18 and need to build credit. I know what im doing by the way; i made a goal in high school to learn about investing and personal finance before i turned 18(btw some kids are learning about the stock market in school when they’re 12 like i did). I advise others to learn about what they’re getting into before they get into it

  42. Bob Says:

    As of June 8, 2009, I have never and still refuse to use a credit card. I have always and will always pay with cash.

    Surprisingly, my credit score is near the 740s and all I have are a few bills and student loans.

    You DON’T need to be beholden to a credit card agency in order to have good credit. Besides, in this kind of economy, they could simply decide to slash you credit line and raise your interest in order to protect themselves against liability. Such an act could damage your credit by hundreds of points. So, some of you guys and gals in this room with 4 or 5 credit cards trying to artificially boost your score, consider yourself warned.

    BTW, I’m only 24 and have been in the work force for 2 years.

  43. Steve in W MA Says:

    Pam, it’s true that a credit card rewards program amounts to about 12-20% APR “earnings” on the money you spend on a monthly basis. (Because if you earn 1% in one month, that equates to more than 12% annually on the amount. However, you’re in your 50s (as you say, been using the card for 30 years) and you’ve never earned more than that amount in a savings account then you have *no assets* whatsoever to speak of.

    For your statement about your credit card bonus points outpacing your bank earnings, you’re basically saying that you don’t even have 12 times your monthly credit card bill put away in savings after 30 years of working.

    Tell me it ain’t so, Pam! And if it is so, you might want to start saving some money up.

  44. Steve in W MA Says:

    For the record, I love the cash only people. It’s true that when spending cash you can never ever go into debt, and in fact will likely accumulate savings at a record rate.

    I happen to use my credit card all the time, but as soon as I’m home I pull out the piece of paper from my wallet that contains my available budget figures and adjust them down for the purchase I just made.(using a simple pencil and piece of paper! I just erase the old, higher, figure and replace it with the new, lower figure.) Which basically is in the spirit of cash only because I make a point of not going over budget.

  45. Jonathan@Friends and Money Says:

    I’ve personally not gone down the route of not having credit cards. I do keep one and I use it to buy everything I can, as it’s a cash back credit card. However – and here’s the clincher, I never buy something that I can’t afford to pay for with cash in my bank. I always pay the card off at the end of the month and each January I look forward to a cash bonus of £100 from all the spending I’ve been doing throughout the year.