Credit-card free and loving it

I’ve tried to stay up-to-date on the credit-card legislation passed this week by Congress, but it’s all seemed a bit foreign to me. That’s because I haven’t used a credit card in 14 years.

I use a Visa check card. It works everywhere credit cards are accepted, but the money comes straight from my checking account.

I think of credit-card purchases as loans, because it seems to me that’s what they really are. Every time you buy something with a credit card, you’re essentially taking out a new loan. You’re using the credit-card company’s money to buy something and promising to pay the company back, at the risk of suffering interest charges if you don’t pay on time.

Let’s say you need to buy some milk and eggs. You run to the grocery store to buy them, and you use your credit card. You’ve essentially taken out a loan to buy milk and eggs. If you need a loan to do that, it would be my opinion that there’s something fundamentally wrong with your finances, and using a credit card is only going to make things worse. If you have enough money in your pocket or bank account to pay for the milk and eggs but are still using a credit card to buy them, you’re unecessarily risking interest charges if something happens that causes you to fall behind on your credit-card payments.

Perhaps my analysis is overly simplistic. I know there are many people who use their credit responsibly and build up reward points and get other benefits from their cards. And I can’t speak for businesses, because I don’t have any experience in using credit for a business. I can only say that I haven’t had a credit card in 14 years, and I haven’t ever felt that I needed one.

14 thoughts on “Credit-card free and loving it

  1. What do want, a pat on the back? You didn’t ask a single questions in that post, so what conversation are you trying to create?

    “Perhaps my analysis is overly simplistic.” Yes, I’d say so.

  2. Not all my posts contain questions, and I don’t think I need to ask one in order for readers to comment. Sometimes I just write what’s on my mind, and readers tell me whether they agree or disagree. The comment section is open whether I pose a question or not.

    If you think my analysis is overly simplistic, you ought to at least tell me why you think so. I explained my position; so far, yours is unsupported.

  3. Bully for you, Seth! I, for one, envy your freedom from the plastic. Question: has it affected your credit rating?

  4. right on seth. i don’t use credit cards either. a check card works just as well and doesn’t let me run up debt unaware. maybe you and i are oddities…we live within our means and go without if the money isn’t there!

  5. I’ve only ever needed a credit score to buy a house, which I did for the second time in September, and my score was great.

    I don’t pretend to know all the ins and outs of how credit scores work, though. I just know my score is good. How my lack of credit cards affects my score, I don’t know. I think my score is good because I’ve successfully paid off a couple of car loans, have bought and sold a house and bought another one, and have always paid my bills on time.

    Maybe my score would be even better if I had a couple of credit cards that I used responsibly. Or maybe the idea that you need to have successfully used credit cards in order to have a good credit score is just a myth.

  6. Well, obviously it’s created conversation anyway, starting with me. Good for you, I guess, but it seemed a little self-important.

    The last paragraph almost redeemed the post. A purchase on a credit card is not always a loan, like you mentioned in the last paragraph. (I think… I wish I didn’t have to open another window to reference the post. Please consider putting the comments be below the post.) Many people, myself included, use credit card to earn frequent flier miles and other rewards. If you are on top of your stuff, it’s also good to charge all your bills to one card. That way, you get one big bill once a month, that you pay off and earn rewards.

    However, I think it’s a little more involved than that. I also think that credit card companies can be extremely predatory. Have you been on a college campus lately? Especially during registration, they are everywhere, offering free this or that to college students for signing up. When I was in school, I was actually told by financial aid staff to consider a credit card as a solution to the remaining balance not covered by student loans or scholarships. ! I’m worried that my contemporaries have been sold credit cards as a quick solution to being broke.

    Do you buy online? I’ve also heard that debit cards are not as secure as credit cards online, especially when it comes to arguing fraudulent charges.

  7. I buy online with my check card quite a bit, and I’ve never had a problem. Whether it’s more or less secure than a credit card, I don’t know. I assume it has the same amount of security since it has the Visa logo.

    I’m sorry if I came off holier-than-thou. I didn’t mean for the post to come off that way. I too saw credit card companies crawling all over my college campus. I think that’s part of what scared me away from credit cards in general.

    I don’t think credit cards should be outlawed. Like I said, many people use them responsibly. I just think there are an awful lot of people who would be better off without them, and I don’t think there’s been near enough education to counter the assumption that everybody needs at least one card.

    I’m one of many people who can serve as living proof that life without credit cards is possible. That’s all I’m trying to say.

  8. You didn’t sound holier-than-thou to me, Seth. Meeps seems to have gotten up on the wrong side of the cranky-comment bed. Credit cards are exactly what you said: a loan.

    I am curious: do you have any idea of whether your credit-card-less-ness has had a negative impact on your credit rating? While I was writing on the topic this morning, I came across an article that said I could hurt my credit score if I cut up my credit cards.

  9. I don’t believe my credit-card-less-ness has hurt my credit score. I got a mortgage to buy a house in September, and my credit score was very good at that time. I had one prior mortgage and a car loan, and my credit score was very good when I obtained those.

  10. Okay, caheidelberger, you win. I’m back on the rational commenting now that I’ve had some coffee.

    “I don’t think there’s been near enough education to counter the assumption that everybody needs at least one card.”

    EXACTLY! Sorry to yell, but that point really resonated with me. There’s so much misinformation out there. Like caheidleberger, I’ve heard that paying off your cards can lower your credit score. And with the credit crisis, I have to wonder if my score event matters that much anymore. I’m a recent graduate and I’ll probably never be able to buy a house after all this mess.

    OTT: Caheidelberger, I appreciate your willingness to link to you own blog and put your own name on here. Using a consistent name, I think, helps facilitate better discussions.

  11. I had a credit card, but didn’t use it so I got rid of it.

    Now I have one that actually belongs to my parents, which I never use, but have for emergencies. Like being kidnapped, escaping and then needing to buy a plane ticket from Bali to Sioux Falls.

    I probably watch too much TV.

  12. MSD 17-2 Patrons, Taxpayers, & Voters,

    In TDR’s school board candidates article, Neal Putnam shared a sad, but factually important detail with the community, “The Sioux Falls School District’s recent election had a 3.5% voter turnout. Mitchell’s last school board race was only 8%.” Why only 8%? Why not 70%? Public participation in school board meetings is even worse.

    In TDR’s school board candidate article, I stated, “A vote for Guymon is a vote to promote the people’s agenda”. In order to effectively do so, I believe:

    1. Supt Joe must go.

    2. We must change how our school board candidates are elected, “Each of the four city wards would elect one board member. Each of the three rural districts would elect one board member.”

    Those who choose to talk with political politeness about “apple pies”, “blue skies”, & “horse flies” would never touch religion in a campaign out of fear of being labeled as a bigot by their opponents. I am not a politician! I am just a principled, hardnosed, honest man who talks straight at you! I do not care what Supt Joe supporters spew at me from their pews! Anyone who wishes to use political spins to try to label me as a religious bigot or racists will be told by me to stick their flat out lies where the sun does not shine! My hide is tough enough to discuss how people who share similar religious and political beliefs are electing members to our MSD 17-2 school board on a regular basis controlling the district’s decision-making process & the setting of district policies based on the group’s special interest agendas & not the public’s agendas!

    I hold no ill feelings towards any race of people or religious faith. I hold no ill feelings towards any Christian denomination. I was raised in the Lutheran Church. I attend church services twice a year at First Lutheran Church. I have also attended UCC & Catholic church services. My wife (Ronette Sullivan) was raised in the Holy Family Church. A Lutheran minister married us. A Catholic priest blessed our marriage. Our two sons were baptized at Holy Family. Our oldest son attended grade school at Holy Family. Ronnie Sullivan (Ronette’s dad) attends services at Holy Family. My best friend was raised in the Holy Family Church. I participated in the Catholic baptism of his daughter at Pine Ridge as her godfather.

    The MSD 17-2 current school board has 5 members. MSD 17-2 voters elect school board members at large – not by wards or townships. When only 8% of the voting public turns out to vote in a local election, secret society members are able to seat rubberstamping board members to promote their special interest agendas. Supt Joe is Holy Family’s deacon. Currently, we have three school board members attending the same church services as Deacon Joe. A fourth board member attends services on the west side of town at Holy Spirit. A board member who attends church services at Holy Family has decided not to seek re-election. In order to maintain his recruited quorum, Supt Joe has recruited another member from Holy Family to seek a position on JGSD 17-2 Board of Education ~ Theresa Kriese. Mrs. Kriese is a Eucharistic Ministers serving on the same alter with Deacon Joe. The facts speak for themselves, read between the lines & connect the dots.

    Here’s some home address information that further demonstrates why we need to change how MSD 17-2 board members are elected – Neal Putnam @ Augusta; Bob Everson @ Pinehurst; Brenda Freidel @ Bay Hill; and Dana Price @ Arrowhead. Four of MSD 17-2’s current school board members all live within a few blocks of each other along the west side of the Lakeview Municipal Golf Course. Eric Christensen’s home address is not listed in the phone book, so I’m not sure where he lives.

    The past 7 years of school board meeting minutes are posted on the District’s website. Review the posted board meeting minutes. See for yourself how many Supt Joe board actions have been rubber-stamped!

    Folks, if you want to change the status quo, then please vote in the upcoming election. To change the status quo, Supt Joe must go & we must change the way MSD 17-2 school board members are elected.

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