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Life Without Credit Cards

Updated on June 20, 2012
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When I was younger, the concept of credit and credit cards were alien to us. All of us went about our lives just spending the money that we earned. If we wanted something and we have spent all our cash, we would just wait until next month. Sometimes, we'd borrow a couple of dollars from our friends near the end of the month to tide us through until payday, but that was about all the credit that we had or know about.

But times have changed. In these days of instant gratification, it is no longer about how much money we have, but more about how much credit we have. Banks and financial institutions are falling over themselves to offer us the lifestyle of our choice before we can really afford it, and gleefully clap their hands when we repay only the minimum sum each month.

So, for some of us, all we know is credit card and paying off the credit card debt. Have you ever wondered what life would be like without a credit card, and the accompanying credit card debt? Well, as I have been self-employed the whole of my life, no banks have had the confidence to lend me a cent of their money. So, let me enlighten you on what a life without credit cards really is like.

Bank Interest
Bank interest is the money that the bank pays you for keeping your money with them. For those of you who are living on credit, I know that it's a revolutionary concept. All you know is that every month, you seem to owe the bank even more money. :(

Take my word for it - if you have money in the bank, the bank will give you even more money. Just for the satisfaction of getting money from the bank, instead of giving it, isn't it worth paying off that credit card debt?

Living Within Your Means
What this means is that there will be no more waving your credit card and charging everything in sight. It means that there will be no more keeping up with the Jones, even though they are in a completely different tax bracket from you. And splurging on that expensive dinner to be paid for with next month's pay will be but a fond memory.

You have to earn every dollar that you spend. There are no limits to the amount that you can spend, but you must earn every single dollar first. Rather quaint idea, I know, but isn't this the way it's supposed to be?

Fiscal Responsibility
Fiscal responsibility is about managing your limited resource, in this case, your money. It is about learning what your needs and your wants are and striking a balance. When your spending is limited by the amount that you earn, you learn the value of money and how to use it effectively.

When you don't have the "unlimited" money offered by the banks, and the limited amount that you earn is, well, rather limited, you start to seriously educate yourself about investments and take action on growing the limited amount that you have.

Early Retirement
Without a credit card, you will be spending prudently, not paying exorbitant interest rates, and investing wisely. Certainly sounds like you are going to retire early, right?

Credit cards have their function and they are very useful in many situations, but more often than not, we forget that credit is not free money but borrowed money - money that has to be repaid, with interest, at some time in the future.

Many of us do know of the pitfalls of credit cards, but when an emergency happens or desire strikes, and that piece of plastic is the easiest answer, we use it. And we promise ourselves to settle the balance within 6 months. Before the 6 months is up, something else happens. It's a matter of time before that initial tiny hole in your pocket becomes a gaping chasm.

My personal opinion? Get yourself a debit card. You get all the functions of a credit card and you spend only what you have. You get all the convenience of a credit card and none of the problems. And you sleep better at night. :)


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    • wandererh profile image

      David Lim 5 years ago from Singapore

      Jamie Murphy - That's very true. You should only spend money that you have already earned. An extremely basic and simply rule really, but it seems that even governments have trouble following that rule. :(

    • profile image

      Jamie Murphy 5 years ago

      Thanks for the advice on credit repair on this amazing web-site. A few things i would tell people is usually to give up the mentality that they'll buy at this moment and pay later. Like a society many of us tend to do this for many things. This includes getaways, furniture, in addition to items we'd like. However, you should separate your wants from the needs. While you are working to improve your credit score actually you need some sacrifices. For example you'll be able to shop online to save money or you can click on second hand retailers instead of pricey department stores regarding clothing.

    • wandererh profile image

      David Lim 7 years ago from Singapore

      alekhouse - Sorry to hear that. Other than the usual technique of consolidating your debt and contacting your creditors and asking for a lower rate, there might be one extreme option that you can consider.

      Simply swallow your pride and declare yourself bankrupt. I'm sure that there are tons of considerations and it might not be suitable for everyone, but doing so will get your creditors off your back and give you some peace of mind to really think about your life and what you want. Who knows? Years down the road, you might see this point in your life as where it all started. I would look at it as conceding the battle but eventually winning the war. :)

    • alekhouse profile image

      Nancy Hinchliff 7 years ago from Essex Junction, Vermont

      Good hub, Wandererh. I should have seen this a long time ago! Now it's too late.

    • wandererh profile image

      David Lim 8 years ago from Singapore

      Good for you. :) People don't realize it at the beginning but the interest really adds up.

    • k@ri profile image

      Kari Poulsen 8 years ago from Ohio

      Great Message! I gave up my credit cards about 8 years ago. I closed my accounts and paid them off over time. I owed way too much when I did it...I never want to do that again. It is tough sometimes living within my means, but I survive.

    • wandererh profile image

      David Lim 8 years ago from Singapore

      Well, it's true. If you have only $100 to your name and you spend $1000, thinking that all you need to do is pay back 5% a month, that's crack. It's addictive, it gives you a high, and you want more but it will do you in in the end. :)

    • tony0724 profile image

      tony0724 8 years ago from san diego calif

      Thank, s Buddy !

    • wandererh profile image

      David Lim 8 years ago from Singapore

      Well said!

      I dunno if Reader's Digest still have their Quotable Quotes column, but if they do, your quote about credit cards being crack with an interest rate certainly can make the column. :)

    • tony0724 profile image

      tony0724 8 years ago from san diego calif

      Really good hub . I call credit cards crack with an interest rate ! And there I s alot to be said for living within your means . The good news Is America Is learning the hard way our needs from our wants . I do not have everything I want ,but I definitely have more then I really need .

    • wandererh profile image

      David Lim 8 years ago from Singapore

      The world might not be in such a mess right now if everybody spends within their means, and that includes governments. ;)

      But then again, some of the world's richest people would not be where they are if not for credit.

      I wonder if I should change that to "Live within your means until you learn fiscal responsibility"

    • DarleneMarie profile image

      DarleneMarie 8 years ago from USA

      Great suggestions wanderrh. I especially like the 'living within your means' advice.

    • wandererh profile image

      David Lim 8 years ago from Singapore

      Credit can really be a godsend at times, and if used wisely, can actually save you money. :)

      Thanks for visiting, G-Ma.

    • G-Ma Johnson profile image

      Merle Ann Johnson 8 years ago from NW in the land of the Free

      Yes is all true...but you need something to back you up one way or the other...I have good credit and as good bank account..well as good as I point is do things right and you are rewarded. G-ma :O) Hugs & Peace

    • wandererh profile image

      David Lim 8 years ago from Singapore

      Thanks! :)

    • The Real Tomato profile image

      The Real Tomato 8 years ago

      Nicely done.