Can you really live without credit cards and still live like a normal person? Well, yes and no. You can live without using credit cards, but you certainly won’t be a normal person if you do, and that’s a good thing.
Think about it, the average family has over $15,000 in credit card debt. When you have that much credit card debt, it’s costing you a huge amount of interest and fees to carry that debt every single month. That’s money you could be using for a lot of things other than the privilege of owing somebody money.
Plus, if you’re like most people, credit cards are causing you to spend more than you make, which is obviously not sustainable.
In this article I’ll show you how to live without credit cards for the rest of your life, and why it’s easier than you think.
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Credit Card Myths
The first thing to know is that, as a society, we are addicted to credit cards. Almost everybody has used one at some time in their life, and more than half of people carry a balance on their credit card from month to month.
That means a ton of us (maybe you) are spending money needlessly on interest and fees. On top of that, credit card spending is one of the main reasons so many people spend more than they make.
Why do we do that?
It’s because we’ve been convinced of the myth that credit cards are a necessary part of life.
That’s just a broad myth that way too many people believe. There are also several more specific myths about credit cards that most people believe. But when you consider reality, these myths just don’t hold up.
Myth #1: You Have to Have a Credit Card to Rent a Car
Untrue- Most rental companies are just fine with renting you a car using a debit card. I’ve done it probably a dozen times with no complications at all.
Myth #2: You Have to Have a Credit Card to Rent a Hotel Room
Untrue- Most hotels are glad to take a debit card as well. I only use a debit card when I travel and have used my debit card at cheaper and more expensive hotels alike. I’ve never had a problem or been inconvenienced at any hotel I’ve stayed in.
Myth #3: You Need a Credit Card In Case of An Emergency
Untrue- This is one of the biggest myths about credit cards. If you take the time to put together a proper emergency fund, even a small one, you just don’t need a credit card for an emergency. The funny thing about having a credit card “only for emergencies” is that it tends to get used at other times as well because of a lack of good planning.
Myth #4: You Need a Credit Card to Keep a Good Credit Score
Untrue- Although judicious use of a credit card can improve your score, it’s not absolutely necessary to have one to maintain a good credit score. You can maintain a good score using other forms of debt, which I don’t recommend. In fact, you don't need a credit score at all, it’s just a number that says “I love debt!”
Read why I believe having a credit score it totally unnecessary
Living Without a Credit Score- Your Questions Answered
As you can see, the common excuses for having a credit card just don’t hold up. Most people just blindly believe these myths because of good marketing by the credit card companies and the herd mentality of “everybody else has one”.
But does getting money advice from a credit card marketing campaign or the average broke person seem like a good idea to you?
I don’t think so, but too many of us still do it anyway.
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The First Thing You Have To Do Is Commit
So once you realize that credit cards are not necessary to your financial wellbeing, what do you do then?
The first thing to do is commit to getting rid of your credit cards for good.
Decide that you don’t want to be like everybody else out there, falling prey to the marketing hype and the paycheck depleting, never ending payments.
Commit yourself to laying down the credit cards for good and never using them again, not even for an emergency.
Go ahead, cut ‘em up and forget about them forever. I did it and you can too!
Make a Plan to Live Without Credit Cards
Once you’ve made the commitment and decided you’re never going back, it’s going to feel a little weird at first.
Your going to feel naked.
But that’s ok, this is a good kind of naked, not the mother-in-law-walking-in-on-you kind of naked.
Anyway, cutting up the credit cards and committing is only half the game. When you fully commit to a change in lifestyle like going cash only, you need to have a plan, and any good plan for going cash only should include at least two important parts:
- A Budget
- And an Envelope System
Why do you need a written budget when you get rid of our credit cards? It’s because now you are spending only what you have instead of not keeping track and spending more than you make, which is easy when you use credit cards.
Do a zero based, balanced budget, and give every dollar a job to do.
Learn how to do a killer, easy to understand budget on the CFF Budgeting Page
Check Out My Book on Budgeting Here
The Envelope System
When you go cash only, that means when you pay for something, you only use cash or cash based transactions such as checks, bank transfers, debit cards, or even an app on your phone that’s linked to your debit card. That way, you will never spend more than you have.
To pay bills you will probably want to use a debit card or bank transfer. But for most of your regular purchases, cash can be very handy.
You can learn how to start an envelope system here
Never Go Back to Credit Cards Again
When you finally commit to ditching credit cards and you change your habits accordingly, you’ll find that it feels weird at first. Any time you’re starting a new habit it feels foreign, but in a very short time it becomes normal and you will wonder why you didn’t start using cash only a long time ago.
When Angie and I finally cut up our credit cards for good, I’ll be honest, I was a little concerned.
It just felt weird.
But as we started doing a budget and using our envelope system for a few months, that became our new normal and it just made sense. We were no longer spending more than we made on crap we didn’t need.
We began to think more about how we spent our money instead of blindly swiping and signing.
That has made all the difference in our finances.
The great thing is that anyone can do it, even you.
I don’t care if you’re deep in debt and depend on credit cards to get you through the month, when you’re willing to commit to the process, you can make it work, and you’ll never have to give those stinking credit card companies another dime ever again!
Question: Have you ever decided to ditch the credit cards but didn’t follow through? What was it that held you back?
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