Living Without A Credit Card During Debt Payoff 

March 14, 2017

One of the hardest things I’ve had to do during this journey is live without a credit card during debt payoff.  I have been a heavy user of credit cards my entire life.  I’ll never forget the first credit card I got at the mature age of 16 … I was able to get approved for my first card with my Dad as a co-applicant.  The limit was $250 and I felt like I was rich!  Absolutely rolling in the dough.  The first thing I did was jump in the car and drive to (of all places ..) Best Buy.  I spent $240 on CD’s and DVD’s and felt awesome. Yep, I maxed it out right then and there on day one fresh out of the gate.  From there the debt cycle took off running.

Of course I would pay it off right? But when that bill came in the mail it was like magic.  The bill only said I had to pay $25.   You mean I could spend all that money but only pay back $25?? I was hooked.  And for the next 11 years I racked up debt, lost sleep over it, paid it off because I knew I had to change, and ran it right back up again.

The last few months have been the most freeing time of my entire life, and also the longest amount of time I’ve been credit card free since that day I stepped into Best Buy armed with my new card.  Spending within your means when you’ve been a compulsive spender your whole life is extremely difficult when you first give it a try, but you soon feel the power of cash.


My favorite part are people’s reactions when they hear you don’t use a credit card.  First a look of confusion, and sometimes just outright shock, covers their face. Next, the question firing begins, because how could I possibly be alive walking this earth without a credit card??  Below are common questions I get asked and the things I’m thinking while I smile and nod politely until they are finished.

  1.  “You’re wasting so many rewards points! Don’t you know you can get things like travel for free by using your card?”  This is by far the most common response.  Oh yes, I know ALL about rewards points.  I was racking them up like crazy for years when I was spending a god awful amount of money on my cards.  Those points came in real handy when I couldn’t pay my bills at the end of the month.  NOT! I completely understand that people use credit cards a lot of times because they want the points, but I’m not one of them nor will I ever be.  I don’t believe in the thought stream that you would have bought that item anyway so you might as well get points.  I’m a firm believer that you spent at least 20% more when you use your credit card on a purchase versus cash.  I was spending way more than that.  Most of the time you don’t need the item you are spending on to get the points!  Spending $2,000 to get 200 points (or whatever your deal is) is just not worth it to me.  I would rather save and spend my money on things I can afford and be in debt to no one.  If you can use credit responsibly and pay your card off each month, kudos to you!  You get those points!  But consumer debt in the U.S. is out of control which clearly reveals that all the people chasing a free trip with points are actually rolling over thousands of dollars of revolving debt each month and paying a ton in interest.  I’m just not taking a risk of joining that camp.  Nothing is worth paying 25% interest!
  2. “You can’t build credit without a credit card.”  There are a ton of other ways to build credit.  My mother has not used a credit card her entire life and her credit score is in the 800’s.  Since I paid my cards off last summer my score has actually gone up almost 70 points!   My rent payments are credited towards my credit score, as well as some utility bills.  My student loans obviously help but I definitely wouldn’t rely on those.  Also, living a debt free lifestyle means you aren’t drawing from any credit lines so honestly, why do you need a great score if you aren’t taking out any loans?  The only loan I would even consider is a mortgage but I plan to have a large down payment, cash reserves to show I can make mortgage payments after closing, and no debt at that time.  The process calls for more proof of income and savings than a regular mortgage would with a credit score, but if you’re living a debt free lifestyle and saving you should have absolutely no problem obtaining a mortgage.
  3. “How do you pay for travel or large purchases.”  YOU SAVE!  I had no idea how much I would get this one.  What the heck people?? You save up until you have enough money to buy the ticket.  I have two trips planned this year and I still plan to save up for them although I’m on my debt payoff journey.  If you can’t afford to go to Florida for vacation outright you don’t need to be going.  This is definitely a sensitive one for me because I used to travel a lot and justified it as an experience that was fulfilling my life.  Vacations are great but the fun really comes from who you travel with not where you go and how much you spend.  I travel now only with cash and my debit card and have never had any problems getting a hotel, rental car, or anything of the sort.  When you get back from vacation, after spending thousands of dollars, that fun time is usually remembered with resentment.  I want to be able to travel and know I set aside the money to pay for it.  I don’t want to come back and stress out because now I have thousands of dollars on my credit card I have to use the next months to payoff.  That is the opposite of relaxing!

So there you have it.  My most common responses when people come at me for not using a credit card.  I enjoy the cash life I’ve built and am happy knowing I’m only spending what I have allocated and fits my future goals.  I would love to hear how you feel about cash/credit, and how you use them or don’t use them!  It always helps to learn about how others manage their finances.

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