Not that long ago, cash was the only way to pay for your purchases. In fact, the first credit cards were used in 1951.
My, how times have changed in 60 years.
While my grandparents lived on a strict budget and did without things they could not afford, my generation and the generation behind me often find ourselves deeply mired in debt because of the ease of use of credit cards. Now, with the advent of the mobile wallet, which allows you to pay for your purchases with your smart phone, we as a society are becoming increasingly removed from using cash, and, consequently, feeling the pain of our purchases.
My husband and I are in the midst of paying down debt incurred from having two babies back to back, quitting my job to care for aforementioned babies, and getting my husband through a combined M.A./Ph.D. program. While the future looks bright for us, we still have to clean up the financial mess from our past. We chose to do so by not using credit.
We have not used credit for nearly 4 months now, and it has been an educational experience. Here is what we have discovered:
-Letting cash leave your hands is painful. There is a psychological aspect at work that makes handing over cash more painful than handing over a credit card. We recently bought my daughter a winter jacket and snow pants for next year on clearance, and both my husband and I equated what we spent with how many hours of work we had to complete to pay for them (1 hour). I typically did not think in such concrete terms when paying on credit card.
- Life without a credit card can be inconvenient. Credit card usage is so integrated into daily life, that it can be difficult to not use a credit card at times. In day-to-day life, I do not miss credit cards, but when I want to do any shopping online, I do miss them. I know I could use a debit card, but we are staying away from those, too, for the time being. Instead, I either forego the purchase or I use a gift card that I bought at a brick and mortar store.
-Not using credit can give you a sense of freedom. If your credit card usage is not carefully monitored, you can feel like you don’t have control of your finances or you don’t know where your money is gone. When I put away the credit cards, those feelings disappeared.
I know that there are advantages to using credit cards and that some people are able to earn money by using credit cards. I know the arguments, and I agree, credit cards can nicely fit into some people’s lives. They just don’t fit into ours currently. Since we have stopped using them, we feel more in control financially, and we are watching our debt rapidly disappear. Foregoing credit cards is not for everyone, but if you are looking to pay down debt and rein in spending, giving up credit cards may be the perfect solution.