Why We Choose to Live Without Credit Cards

I realize that a life without credit cards is not for everyone. There are many people who are responsible, paying their credit card bills monthly and reaping the benefits of rewards points. If you are one of these people, kudos to you! I really mean it. However, for us, living without credit cards has represented a peace of mind and a worry-free lifestyle that we love.

For much too long, credit cards were a huge part of our daily norm. We were a credit card company’s dream: charging regularly, paying partially, and charging some more. And then, one of us lost our job and making ends meet proved to be tremendously challenging. When forced to choose between paying our ridiculous monthly credit card bills and keeping a roof over our heads, we obviously chose the latter. We made minimum payments on our cards and the struggle was beyond stressful—bringing us close to bankruptcy.

It was our own fault, of course. We would never blame anyone else. After all, we were the ones who allowed ourselves to accumulate over $50,000 in credit card debt. No one else made us do it.

In the United States, credit cards are a normal part of society. They are promoted as one of the best ways to increase your credit score and if you don’t have a good FICO score you are almost insignificant. Try financing anything with a non-existent or low credit score and you almost can’t. Well, not unless you want to accept inflated interest rates and pay a ridiculous amount on interest charges.

Total credit card debt has reached its highest point ever, surpassing $1 trillion in 2017, according to a separate report by the Federal Reserve.

Credit cards create an impersonal relationship with money. When something is out of sight and out of mind, there’s really no emotional connection to one’s spending habits. This is where impulse shopping seems to happen. At least it did for us. I can’t tell you how many times my mouth would drop in utter shock after seeing my credit card bill. More often than not, I would think “WHAT ON EARTH DID I SPEND SO MUCH ON?” With credit cards, it is so easy to overspend.

After we nearly fell into financial ruin, we significantly decreased our credit score and became somewhat worthless as consumers. Thankfully, there is a way to increase one’s credit score without the stress of revolving debt loaming over one’s heads: secured credit cards.

A secured card requires a cash collateral deposit that becomes the credit line for that account. For example, if you put $500 in the account, you can charge up to $500.”

Since we understand that a good credit score is an important part of our culture, a few years back we decided to open a secured credit card, charge a very small amount each month, and pay off the total balance by the monthly due date. In doing so, we were able to increase our credit score significantly.

Today, we are at a point in our lives where we do very well financially and paying off our credit cards on a monthly basis is absolutely doable. And yet, we choose to keep only one secured credit card with a credit limit of $750 and we refuse to take out any other credit cards. In doing so, I’m happy to report that we have a healthy credit score, and most importantly, a sound peace of mind.

From a safety standpoint, we use our secured credit card to make various online purchases, and when traveling, we use it to hold incidentals on hotels and security deposits on rental cars. Once the transaction posts to the secured credit card (usually within a few days), we transfer and pay the full amount from our checking account.

Otherwise, everything else we do we pay for in cash (debit cards included). This applies to anything from grocery shopping to purchasing new cars. Our philosophy is that if we don’t have cash we simply can’t afford it.

Our cash-only philosophy has nothing to do with scarcity. We are not purposely depriving ourselves so that we can’t do or purchase what we want. Instead, we have a more personal relationship with money. One that makes us question how we want to spend our earnings. It makes us pay more attention to what we truly desire, and thus, what we value most. For us, we love to travel, so we choose to spend more money on travel and adventures. There is a tremendous peace of mind in knowing that each of our journeys is paid for in cash and that we won’t be receiving a shocking bill somewhere down the road.

People’s values are all different. So, of course, I’m not saying you need to only spend on travel and adventure. But I do urge you to determine what you truly value and try to consciously spend on that versus flushing your money on random purchases.

Wishing you peace, love, and adventure,

Jen