Getting rid of all of your credit cards is one of the strongest messages you get when you are trying to get out of debt. The reason is that credit cards allow us to spend more money that we should, essentially taking out a loan at a very high interest rate that compounds and compounds and can easily get out of control.
In previous generations, it would take a lot for someone to consider going in to debt for even something as substantial to quality of living as a house. Once credit cards came along, people were willing to go into debt for a new video game system, a new outfit or whatever else we think we need. I know a woman who rang up thousands of dollars worth of credit card debt buying craft supplies for herself and her kids.
Perhaps you only use credit cards for convenience and then pay off the entire bill at the end of the month? That is wonderful. You might want to consider instead, the debit card. It acts like a credit card, but the money is taken directly out of your checking account, so you really have to monitor your spending. There is no upping a credit limit, since you are essentially loaning the money to yourself.
In our household, I do not own any credit cards in my name. My husband has one and can’t imagine giving it up. After taking the Dave Ramsey class, though, he is starting to see how we could survive without it. As a disclaimer, we went into the class with zero credit card debt, so credit cards were never a huge problem for us. But the card represents security for him, as it does for many of us, should we find ourselves with a deep unexpected expense, such as a medical bill.
The answer to using a credit card as a security blanket is simple. We just really need to build up a healthy emergency fund in savings that will cover any crisis. By doing this, we would be able to cover the unexpected expense without having to take out a “loan” and pay interest on a credit card.
Are you surviving without credit cards? If so, please share your story in the comments.
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